The Federal Government did listen about Regressive Super fees
Back in January 2018, I made a submission to the Federal Government in respect of the 2018-19 Federal Budget.
I was pleased to see that one of my submissions regarding regressive super fees was accepted by the Federal Government.
For years, the superannuation balances of young and low income workers have been inappropriately eroded by unfair and regressive super fees and charges.
And part of my submission was that the Federal Government should
“remove the ability for superannuation funds to charge fixed fees like monthly administration and exit fees”.
Pleasingly, the Federal Government has recognised this issue. It is now putting in place new rules around the regressive super fees most funds charge. These rules, effective 1 July 2019 are:
- All exit fees on superannuation accounts are banned. No longer can your fund charge you to take your money out.
- A 3% cap applies on the administration fees on all superannuation accounts with balances below $6,000. That means someone with a superannuation fund balance of $1,000 can only be charged $30 in fees for the year. When they are currently paying at least $75 per year.
These new mandatory rules, will go a long way towards helping stop the inappropriate erosion of the superannuation balances of young and low income workers currently getting paid super. Now all the Federal Government needs to do, is to remove the $450 monthly superannuation guarantee threshold so all low income earners, especially women can benefit.
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Wayne Wanders
The Wealth Navigator
wayne@thewealthnavigator.com.au
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