POWERED BY MOMENTUM MEDIA
No exit fees could end up costing members more
The removal of superannuation fund exit fees, as announced in this week’s Federal Budget, may just result on all members paying more as “cross-subsidisation issues” arise, NGS Super acting chief executive, Laura Wright, has warned.
Wright said removing fees would not change that fact administrators charged for the provision of that service.
“It’s an activity and that has a cost,” she said.
Someone would need to be paying those amounts, and Wright warned that the money could come from higher fees for all members.
She said that this would result in long-term members unfairly “cross-subsidising” the exit costs of those who changed funds every few years.
While Wright understood the Government’s possible incentives, such as consolidating accounts and minimising fees for low balance accounts, she did not believe that exit fees posed a barrier to consolidation in practice.
The chief executive also said that in her long career working with super funds, she had heard very few complaints regarding exit fees.
Recommended for you
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
Hi. Due to growing medical costs I am considering making a financial hardship withdrawal from my current fund for the maximum 10k. I have a legacy account with the fund, and I am 5 years from retirement age and the age that was set in the policy. Although I am allowed to make this withdrawal, I have been told that there will be a +$600 exit fee. I have since discovered a new legislation that states all super funds to be banned from charging exit fees. Will this affect me? Is this law now applicable and if not when will it be? Thank you, David.