| 02 9982 2466

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.

Posted on 22 February '15 by , under Super.

Leave a Comment

You must be logged in to post a comment.

Join Our Mailing List!

Subscribe to our mailing list to receive all the latest financial newsletter updates as well as information on important dates on our business calendar.

Recent Updates

Firm News

Amnesty means that 24,000 businesses own up to underpaying Aussies superannuation

An amnesty scheme which ended earlier this month has caused around 24,000 businesses to admit to underpayment of their worker's super. A total of 588 million dollars will be distributed to almost 400,00 individuals.

The scheme, which covered payments from the introduction of super in 1992, gave employers the opportunity to come clean without any consequences as long as they paid the unpaid super as well as 10% interest for every year the money was overdue.

The ATO will be directing its attention at any businesses that did not admit fault and these businesses will face severe penalties.

Many individuals are looking to access their superannuation early in order to have support during these times. Although there is criticism of early access to super, this facility has been helpful to many families to keep afloat.

Business Calender