The top 20 super funds that may really be ripping you off

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The Productivity Commission has had super under the microscope for a while now, and the banking royal commission is also currently grilling Australian funds over issues such as lack of transparency on fees charged, as well as concerns over insurance, advice given to members and the types of investments being made.

The top 20 super funds in Australia alone charge their members around $3.4 billion combined in fees, according to analysis of official data.

And that’s not including fees paid to fund directors and boards.

For that you can add more than $44.65 million each year across 100-plus funds. Then, on top of that, you can add another $5 billion in administrative and operating expenses.

While super funds have largely escaped scrutiny over the years, the spotlight is now on them. Australians losing billions every year in fees, insurance and low returns should be the beneficiaries of this investigation.

According to 2017 data from the Australian Prudential Regulation Authority (APRA), when it comes to total administration and operating expenses, retail fund BT’s Retirement Wrap tops the list charging a total of $588.5 million, followed by another retail fund, MLC, which charged $301.3 million and, in third, industry giant AustralianSuper with $296.02 million.

But when you break down the sheer number of members in the top charging funds, the fees charged per member by BT are actually at the low end of the scale.

Members of a BT fund, which has 1,226,524 accounts and $86.18 billion in total assets and total expenses at $588,498,000 would pay about $480 a year each, compared to the $9580.78 a year paid by members of Perpetual Super Wrap, which has 1207 members with total assets of approximately $1.2 billion (as at 30 June 2017).

 

“Incredibly we found 11 funds who charge more than $1000 per member per year on operating and administrative expenses,” said Mr Brycki.

“Ask anyone who has tried contacting their super fund for information and you’ll hear a common story of long waiting times and canned responses that don’t answer the question. This type of service isn’t worth $10 a year let alone $1000.”

Only 15 funds were efficient enough to charge under $100 per member in annual fees for operating costs.

Read a full analysis on www.businessinsider.com.au

Do you know how much you’re charged in fees? Do you pay for insurance when you probably don’t need to?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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1 Comments

Total Comments: 1
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    0

    I had to smile. Nearly all of the funds listed above were RETAIL FUNDS. These are of course NOT the top 20 based on performance. The fact that they can steal your money is the reason we need a separate Royal Commission into the industry. If that happens hopefully common sense rather than corporate greed can be brought about and the thieves in suits can have their grubby snouts dragged out of the feeding trough.
    Whilst I live in hope I understand that the top end of town looks after itself always and likely little will change.


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