Thursday 16 November 2006 LAWFUEL – Legal News, Legal Jobs Network – The Australian Securities and Investments Commission (ASIC) today released Monitoring superannuation fees and costs: an ASIC report, its first report monitoring trends in superannuation fees and costs. When superannuation choice was introduced, the Government asked ASIC to monitor and report on trends in superannuation fees and costs in the five years following the introduction of Super Choice legislation.
The report collects and analyses information provided to ASIC between 1 October 2005 and 30 June 2006 on fees and costs of 1270 superannuation products offered by 191 superannuation trustees, aggregated by type of fee and type of fund. The fund categories ASIC uses are based on those defined by the Australian Prudential Regulation Authority. When a superannuation trustee issues a new product disclosure statement (PDS), they lodge an ‘in-use notice’ with ASIC, summarising the information that the enhanced fee disclosure regulations (which commenced in mid-2005) say must be in a PDS. The regulations require up to five types of fees to be disclosed.
To make comparison easier, contribution and management fees are based on an assumed contribution and fund balance of $5,000 and $50,000, respectively. The fee information from in-use notices is publicly available on ASIC’s consumer website, FIDO (www.fido.gov.au). ASIC’s report is based on the in-use notices received between October 2005 and June 2006, and the PDSs to which the notices refer. ASIC has added some information about retirement savings accounts, and about fees in the form of ‘buy-sell spreads’ (or margins) charged by some funds. Being the first report, it contains baseline information on selected fees and costs included by superannuation trustees in their Product Disclosure Statements (PDSs). Information on trends in fees and costs will be provided in future reports.
It is important to stress that the information in this report: a) represents only a time-limited sample of current superannuation PDSs; b) reflects only the fees and costs information set out in those PDSs; c) will not in every case reflect the fees that will be payable in a superannuation transaction, because of fee rebate and other arrangements widely used in the industry; and d) does not take account of the fact that fees and charges are likely to change over the life of superannuation products. It is also important to bear in mind that the report deals only with fees and costs disclosed in PDSs. It does not deal with any other aspects of superannuation products. A full copy of the report is available at www.asic.gov.au. For further information contact: Angela Friend ASIC Media Unit Telephone: 03 9280 3338 Mobile: 0412 058 800