3 changes to your superannuation you need to know about

New ‘Protecting Your Super’ package laws are now in effect. The changes include:

  • Super funds will only be allowed to charge a maximum of 3% of administration and investment fees for accounts under $6000.
  • Super funds will be banned from charging you an ‘exit fee’ if you transfer your account (or part of your account) to another fund.
  • ‘Inactive’ accounts under $6000 will be closed down and the money transferred to the Australian Taxation Office (ATO).

Read more:


A long overdue change to super.

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A ‘4th change’ worth watching! The coalition’s attack on industry funds continues with unabashed pride.


How is it an attack. The media release from the Minister state:

The final performance test methodology will see the administration fee component of the test based on the administration fee charged by the product over the most recent financial year, benchmarked against peers.

This approach for the performance test addresses historical anomalies, including with respect to millions of multiple unintended and inactive accounts, and will create a strong incentive for superannuation funds to reduce fees in order to avoid failing the test. In doing so, this change will enable the reforms to deliver immediate benefits to consumers in the form of lower fees.

It appears that Superannuation Funds (either Industry or corporate/commercial) which have recently reduced fees won’t be penalised through using 7 prior years where higher fees may have biased the result. It should encourage both industry and corporate/commercial funds to compare current year fees against other comparable funds, which should place downward pressure on fees if they wish, along with performance considerations, be benchmarked as a high returning fund for its members.

It may disadvantage the owners of industry or corporate/commercial superannuation funds (they won’t like it) as they may end up charging their account holders less fees in the longer term…which may reduce the profits that they make from these fees. If this occurs, the change should be a win for consumers.


Semantics are, but there seems an ongoing double standard for industry funds for performance and transparency, concurrently with an opaqueness being imposed for retail funds. If that is not an attack I’ll be happy to use a more appropriate word next time.

Would ‘unbalanced approach’ suit better?

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But the rules apply to each equally. They have ‘attacked’ the industry and corporate/commercial/super funds equally potentially in the interests of the consumer.

Both the Industry and corporate/commercial funds won’t like the change if it is effective and places downward pressure on fees (providing a better outcome to consumers). The Guardian has only sought response from super funds, and not those organisations which look after the interests of the consumer (Such as Super Consumers Australia). The Guardian report is not what one would call balanced.

I will wait for a consumer organisation’s detailed assessment of the change before relying on what super funds say.


Balance or bias is in the eye of the beholder, and sometimes exposed or supported by respected third parties. And so we each go…

This seems to be a case of legislation passed by Parliament to put rules on Super funds for the benefit of members, being able to be watered down by regulation provisions in the act.
Hardly surprising that the relevent Government Ministers in a party long opposed to union participation in Super funds would try to change the rules to benefit the for-profit sector.
If this is a major change to the intent of the legislation, then we could well expect to see a disallowance motion passed in the Senate killing the regulation move.

If politics worked that way I would agree, but horse trading is their game when there is a horse to trade :expressionless:

You’ve checked the legislation to confirm that such a regulation is a “disallowable instrument”?

No I have not. If you have please enlighten me on how the general provisions of disallowance would not be available.

Refer Legislation Act 2003 s44 (Legislative instruments that are not subject to disallowance) and in particular (2) which allows an Act to result in legislative instruments that simply cannot be disallowed i.e. providing that the Act specifically states that.

Is that “democracy best practice”? Probably not - but that has not stopped the government in the past.


So is this superannuation legislation subjectable to a disallowance motion or not?
You have not explained, and you posed the question.
To find out, one would need to trawl through it, and I would hope there are some Senators doing just that now. Mind you, I would be surprised if any legislation got through the current Senate that gave Ministers unrestricted ability to regulate out all parts they didn’t like.

Sorry, I am not motivated to trawl through it.

As you say, the Senate should do that and decide whether it is acceptable to them.


The Commonwealth Government is planning to wind back some of the superannuation consumer protections…

It is possibly one for Choice (@BrendanMays ) to get involved in as it has the potential to be against the interests of industry and retail/corporate superannuation account holders.


Or they could suspend the further expansion of some measures intended as consumer protection. Not exactly the same.


Thanks for flagging this, I the Super Consumers team will be following this closely.


The sort of hairsplitting discussed in the article is what keeps lawyers in a job. :wink:

the best financial interests of members

spending members’ funds on things such as corporate hospitality or wellbeing services or news websites

Is the never-ending tide of advertising in the best financial interests of members?

Eleven of the 13 [funds that failed] have merged or are in the process of merging with better funds, which is how the system is supposed to work.

Is it in the best financial interests of members for such “mergers” to occur? I mean it may well be in the interests of the members in the failing fund but is it in the interests of the members of the acquiring fund? (It may be more closely in the best financial interests of the government i.e. to ensure that the super fund members don’t in their retirement become a burden on the taxpayer.)

I have a horrible feeling that what we will eventually get out of this is … reduced choice. Funds will go by the wayside and get merged into other funds, leading to only a few, bland megafunds - an oligopoly that is typical of Australia.

Once you have only a few megafunds, the test of failure becomes less relevant. It becomes harder for such a fund either to outperform or underperform the market (the relevant index) - or for that matter to outperform or underperform each other. Effectively there is an incentive to play it safe, and follow the herd.

I would have liked to see the disclosure requirement retained. Who doesn’t love a bit of embarrassment? The media could surely generate some headlines out of embarrassment:

Jones has drafted regulations that remove the requirement for itemisation while leaving in place the requirement for funds to report the totals to members.

It won’t save the funds work (they still have to itemise each payment in order to prepare the totals), but it will save them embarrassment.

I don’t think any of the changes by the former government were exactly terrible, and neither is winding them back (or pausing their implementation).

Ultimately I think the government (either colour) is operating under a misapprehension that Australians take an interest in their super i.e. that they care.

Why do you say that? Do you have any data on concentration of funds? Is it changing dramatically?

Another perspective is that smaller funds have higher costs as they have to do the same research as the larger ones but have fewer customers to spread the cost across. If that is true the overall returns to the punter may benefit from curtailing the least efficient.

Seems to be a sensible approach to review the operation of the Super rules and fund performance tests as they currently apply to the default funds before moving on to all Super funds.

Clearly issues have been flagged and need to be looked at according to the article.

I would think the new Government would be reviewing a lot of changes implemented by the previous one.