HESTA reduces fees, minimum balance for income stream

HESTA will reduce administration fees and lower the minimum balance required to start an income stream account from September 30.

The fixed administration fee for all retirement products will be reduced by 16.7% to $65 p.a., while the asset-based fee will be cut from 0.23% to 0.18% per annum.

The $108 billion fund will also cut the current $10,000 minimum balance requirement for starting a HESTA income stream for better accessibility, with only a 'residual balance' of $250 required to process pension payments.

The changes mean a HESTA retirement income stream member with a $50,000 balance will see the total of these two fees fall by more than 18% to $170 per year, the super fund said.

The announcement follows the reduction of investment fees last year and an average 12% drop in insurance fees across all cover types delivered on July 1 this year.

Notably, the super fund also introduced an option for members to make a non-lapsing binding death benefit nomination earlier this month.

Commenting, HESTA chief executive Debby Blakey said the changes would make a real difference for members.

"These are significant changes for our members in, or about to enter, retirement," Blakey said.

"We understand the challenges many Australians face in retirement and it's terrific to be able to deliver lower fees at a time when persistent inflation is driving cost-of-living pressures.

"We are also pleased to be able to offer income stream accounts to even more members, so they have the opportunity to take advantage of tax-free investment returns."

HESTA said it is continuing to advocate for changes that support modernising the retirement system, including the ability to top-up income stream accounts.

"We want to support more flexibility in retirement and in line with that focus, continue to advocate for changes that would allow retirees to top up their retirement income streams with money earned from work," Blakey added.

"Right now, retirees who return to work need to open a new super account, which is a needless inconvenience that often comes with a financial cost."