Small super funds disproportionately punished by levy
Members of small superannuation funds will be paying disproportionately more than members of larger funds under the proposed new Financial Institutions Supervisory Levies for 2024-25, according to the major accounting groups.
The groups have pointed out to Treasury that members of small funds face having to pay four times more than their peers who are members of larger funds and have queried the motivation for such an outcome.
“For large superannuation funds regulated by APRA, the existing tiered charging structure proposed in the Discussion Paper remains mostly unchanged, with slight increases in the percentage rate of each component,” Chartered Accountants ANZ, CPA Australia and the Institute of Public Accountants said in a joint submission to Treasury.
“These adjustments would result in a large fund with total assets of $311 billion and 3.26 million member accounts being charged $11.4 million in 2024-25, up from $10.7 million in 2023-24. This translates to a cost of $3.49 per member account annually, up from $3.28,” it said.
“Conversely, a small fund with total assets of $141 million and 462 member accounts would pass on $44.38 to each member account annually, up from $36.62 in 2023-24, representing over four times the proportional charge of the large fund, and a 21.2 per cent increase on 2023-24,” the accounting organisations said.
“This compares unfavourably to the increase attributable to each member account of the large fund, which would have been 6.4 per cent.”
“We are aware that current government policy settings are aimed at encouraging mergers to reduce fees for superannuation fund members, but we are not convinced that the substantial difference in the levies, such as in the two funds in our examples, is proportionate in any context,” they said.
“Members of small funds already shoulder a larger than normal burden in respect to the administration costs incurred in running smaller superannuation funds, and it is unjust to further compound this with an inflated share of these levies.”
Now who’s gouging retirement funds?
This is deliberate by the government as they want to push these funds out, as they also worked to push small adviser businesses out during the royal commission. They target these so it’s easier for them to regulate. Completely unfair to smaller operators, and very destructive to competition and the entire industry. Depleting competition only means one thing. Higher costs to members and consumers. They simply don’t understand the businesses they regulate, and have destroyed many over the last ten years because they selfishly only care about their part at the expense of thousands of jobs.
I’m not sure why, but there has been a deliberate push from APRA to reduce the number of super funds. It is a socialist rather than capitalist concept and will not serve members well.
Spot on