New reforms to smash major super funds

AMP, Hostplus and ANZ OnePath will be hit hardest by the Protecting Your Super package, according to latest Rainmaker insight.

More than five million superannuation accounts are set to benefit from the new legislation passed through the Senate last week, which includes the capping of fees at 3% for all accounts with a balance of $6000 or less.

According to Rainmaker data, about 34% of AMP's total accounts hold less than $1000. For Hostplus and OnePath the numbers are 32% and 41% respectively.

Rest, Sunsuper, BT Financial Group and AustralianSuper are also expected to be impacted by the changes if legislated.

The top 10 is rounded out by MLC Super, Commonwealth Bank and Cbus, based on APRA statistics for the September 2018 quarter.

Rainmaker executive director of research Alex Dunnin said if successful, the reforms are a real win for consumers.

"Many of Australia's leading super funds each have hundreds of thousands of small accounts owned by young people. For these members just starting out in super, if their fund has a flat dollar member fee of say $100 per year it can translate into extremely high percentage fee rates," Dunnin said.

"It's time younger super fund members stopped having to subsidise older super fund members. It's simply a matter of doing what is fair."

Fee reforms should either see the end of flat dollar fees, or the introduction of account balance and age thresholds by funds for newly designed fees, he added.

Earlier this month, AMP confirmed it would take a $30 million annual hit if forced to send its 370,000 low balance accounts to the ATO.

AMP said the figures were estimates, and could change depending on the administrative cost efficiencies it might achieve and the extent to which low balance super accounts are consolidated into active accounts it manages.

Read more: RainmakerHostplusANZ OnePathAlex DunninMLC SuperAPRAAustralianSuperBT Financial GroupCbusSunsuper
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