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Fund fees eating away at retirees’ cash

As interest rates plummet, retirees who are relying on interest from cash savings in their superannuation accounts may be losing out. The reason for this is that excessive fund fees can eat away at cash balances. Without decent returns from interest rates to offset these losses, the results for super funds can be grim.

Despite the fact that the Reserve Bank reporting that cash deposits in banks returned between 3.3%-3.7% in 2014, returns on cash deposits in super funds were hovering down at around 2.5%. For retirees, who so often elect to invest their super in cash for stability and a lower risk profile, this lower rate of returns can add up to significant losses.

You should always spend some time examining the fee structure of your superannuation fund and comparing it to similar funds. Do not be fooled by a fund that recently reported a year of high growth. To gain a comprehensive understanding of a fund’s performance, you should examine the returns from the past fifteen years, as there can easily be one-off flukes.

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News

Authority for super complaints introduced

December 14, 2018

The new Australian Financial Complaints Authority (AFCA) will make it easier for individuals and small businesses to make complaints about their superannuation financial firms.

The Coalition government has responded to criticisms of previous dispute resolution bodies by creating a new financial disputes framework. AFCA has been described as a “one-stop shop” that will improve outcomes for consumers and increase the efficiency of the dispute resolution process.

AFCA’s jurisdiction
AFCA has been given authority over a range of complaint areas including:

What you can make complaints about
Your super complaint to AFCA must adhere to its governing rules. AFCA has specific time limits for complaints but no monetary limits.

You can make complaints about: