19th Sep 2013
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Super fees bite into balance
Super fees bite into balance

Three-quarters of Australians know their superannuation balance off the top of their heads, but half don’t know what fees they are paying, which is a costly error.

A new report from the Financial Services Council (FSC) and ING Direct (ING), Superannuation – Australia’s view 2013, found that 72 per cent of Australians know their superannuation balance but 52 per cent do not know how much they are being charged in fees. Many Australians simply take a cursory glance at their superannuation statement, without querying how much it is costing to run their account.

What is worrying, is that 73 per cent of the 1000 working-aged people surveyed don’t think they will have enough for retirement, with 38 per cent believing they will need a balance of $1 million to see them through retirement. The average balance for women is $112,000, while men fare better with an average of $198,000, according to the two bodies. However, the Association of Superannuation Funds of Australia (ASFA), state that the average balance is $70,000.

With Australians often having more than one superannuation fund, even low fees can bite into the balance, so it pays to shop around and consolidate your superannuation funds. For more information on consolidating your superannuation funds, or finding lost superannuation, visit MoneySmart.gov.au.





    COMMENTS

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    UNCLE FESTER
    25th Sep 2013
    4:38pm
    My wife and I have some funds left in an IOOF super account that we have been trying to clear. The amounts total $1026.94 in Cash and $689.95 in Property. The Property fund is "frozen" and from time to time they redeem some amounts and place in Cash. I asked that the Cash amounts be withdrawn and paid into our bank. The response from our financial adviser was:
    "IOOF informed me the APN unlisted property fund remains frozen for redemptions and they can not give me any planned date as to when this may change. There is a small amount of cash on account but they refuse to allow a withdrawal as the figure is below $2k withdrawal minimum."
    The average return on Cash is shown as 4.74%. Even if this % was applied to the total amount it would only provide a return of $81.10. The total Fees and Taxes is shown as $93.55. I pointed out that this would mean we would never be able to reach $2k to redeem the monies as they are taking more than it earns!
    Their response was - "Just to clarify, where an account holds frozen funds we are required to maintain a minimum Cash Account balance of $2,000. Please note we have previously received approval to reduce both of your minimum Cash Account balances from $2,000 to $500. The assets in the Unlisted Fund will be progressively sold over the next 3-5 years to maximise value and provide further liquidity to unit holders.
    I am getting on in life and must regrettably be losing some brain function. I have always understood that the monies invested/held in super funds actually belong to me but it seems they believe it belongs to them. I have no objection to funds maintaining a minimum Cash Account balance in any amount they see fit, but why is it that I must keep a minimum Cash Account balance with them when my preference is to have NO monies belonging to me in their possession!
    And I thought Banks were bad enough!!!!
    AlanM
    9th Nov 2013
    10:34pm
    I turn 66 this month and can remember many years ago my parents had all their life savings with IOOF, back then it was your typical friendly society – and honest. Not so today in the retail sector of super, they all have one common objective...to bleed/pilfer the retirement savings of working (and non-working) Australians.


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