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Admin fees hidden from product dashboard
Members cannot make a meaningful comparison of funds using the product dashboard as it does not include insurance administration fees in proposed drafts, according to Australian Ethical.
Insured members might be unaware of the additional administration fees some industry funds charge, Australian Ethical general manager distribution Adam Kirk said.
Kirk said the latest draft superannuation regulations did not require the fee to be reported in the product dashboard, which undermined members' ability to consider the whole cost of the fund.
"Under the new proposed regulations, we're concerned that insured members will not be aware of the additional administration costs they may pay for insurance if they rely solely on the product dashboard information when comparing funds," he said.
Members might be unaware of the extra fees unless they had an adviser or read all member communications, due to the need to opt-out of insurance under MySuper default arrangements.
"A member has to choose to opt out of automatic cover, so the issue of some fund charging an additional fee for a feature (insurance) already being included seems out of touch with the current regulatory requirements for better disclosure/transparency of member costs," he said.
Kirk said many super funds were undergoing the tender process for insurance as premiums increased. Having engaged members, no unidentified members and records of insurance history had helped Australian Ethical keep rates down so that they would not increase on 1 July, he said.
In March, the Actuaries Institute said the product dashboard should unbundle investment and non-investment costs such as administration fees to allow members a sound basis for comparison of multiple superannuation funds.
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