Nick Sherry superannuation Minister has promised to review superannuation fees and eliminate the practice of doubling fees for sacked workers.
Employees once they have lost their jobs were often shifted from corporate accounts to personal super accounts with much higher fees. This was despite remaining in the same investment option and receiving the same level of service.
Senator Sherry made a point of mentioning that a person was shifted between funds without their knowledge or consent because it was overlooked in the fine print of a long disclosure document. Mr. Sherry stated that the Labor Government was going to stamp out this unacceptable practice.
Mr. Sherry stipulated that he had ordered the Australian Prudential Regulation Authority to investigate the practice. Until now, it had been a hidden agenda, but the Government would get to the bottom of it and work out a plan to eradicate it. This is an important adjustment that needs to be carried out on out superannuation system.
There are other discreditable practices around fees in superannuation that damage the retirement savings of Australians. Government intend to review the way the system is operating and in particular some of these bad fee practices, which are clearly not in the interest of the members.
Senator Sherry said that one option could be to change the law so that the default position was that people remained in the same superannuation fund even when they were no longer employed.
David Whiteley Industry Super Network executive manager stated that the practice of shifting people from one fund to another should be outlawed. It is a triple whammy for people who have just lost their jobs. Because they are not contributing to their superannuation, their savings are being eaten away, and they are being charged higher super fees.