Members of smaller super funds being disadvantaged

Large superannuation funds are likely to enjoy a substantial reduction in charges related to the so-called APRA levy next financial year, with smaller funds being less beneficially treated, according to the major accounting groups.

Responding to Treasury’s proposals around the Financial Institutions Levies for 2025-26, the accounting groups making up the Joint Accounting Bodies said they support the levies for small APRA Funds and Single Member Approved Deposit Funds at $590 per fund.

However, the joint bodies made up of Chartered Accountants ANZ, CPA Australia and the Institute of Public Accountants (IPA) went on to point out the disparities with respect to the charging of larger and smaller funds.

“We note that for 2025-26, the proposed tiered charging structure in the Discussion Paper remains largely unchanged, with slight increases in the percentage rate of each component,” the joint bodies’ submission said.

“These adjustments would result in a large fund with total assets of $360 billion and 3.42 million member accounts being charged $10.3 million in 2025-26, a substantial reduction from $12.7 million in 2024- 25. This equates to an annual cost of $3.01 per member account, down from $3.71.”

“In contrast, a small fund with total assets of $349 million and 2,239 member accounts would pass on $15.26 to each member account annually, a reduction from $17.17 in 2024-25, representing over three times the proportional charge per member account of the large fund, and an 11.1 per cent discount on 2024-25. This reduction compares unfavourably to that applicable to each member account of the large fund, which would have been 18.9 per cent.

“ We note that the upper threshold on the restricted component was lifted least year, and welcome the further lifting of this to $950,000, representing a sort of unofficial indexation which will alleviate some of what was a severe disadvantage for members of smaller funds,” the submission said.

“The Joint Accounting Bodies acknowledge that current government policies aim to encourage mergers to reduce fees for superannuation fund members. However, we believe that there is more work to be done to ensure that members of smaller funds do not form collateral damage. Members of small funds already bear a higher burden of administration costs, and it is unfair to further increase this burden with a disproportionate share of the levies.”