Government's Protecting Your Super package must progress, says IPA

"Fee-gouging, particularly by the large superannuation entities, has to be dramatically wound back if we are to encourage a culture of superannuation contributions and savings as part of retirement planning," said IPA chief executive Andrew Conway.

The bills that form this package were announced in last year’s federal budget in May, but are yet to progress.

"The package starts to address some of the flaws in our superannuation system," said Mr Conway.

"It is staggering to think that the youngest superannuation members and others with the smallest balances will be hit with hundreds of millions of dollars in fees just over the next six months."

He explained that exorbitant fees erode faith in the superannuation system and discourages young people from voluntarily contributing more into future retirement funding.

"If the Protecting Your Super package goes ahead, fees charged to small superannuation accounts (less than $6,000) will be capped at 3 per cent per year, which is a far cry from what is being paid currently," Mr Conway noted.

"The package also stops default charging of life insurance with an opt-in option for people under 25 while the current default process erodes super balances with unnecessary insurance."

He judged that Australia must encourage people to build their superannuation retirement funds to alleviate the pressures that will exist on government paid pensions in the future.

"Too many Australians have multiple superannuation accounts. It is therefore encouraging to see the work by the ATO to educate the public over lost and unclaimed superannuation with promising results of $860 million found and consolidated just in the last quarter of 2018.  The worry is that there is $17.5 billion, reportedly, still in the lost and unclaimed category," said Mr Conway.