Nick Sherry vows to renovate superannuation fees

SUPERANNUATION Minister Nick Sherry has vowed to "renovate" superannuation fees and crack down on funds that double their fees for sacked workers.

SUPERANNUATION Minister Nick Sherry has vowed to "renovate" superannuation fees and crack down on funds that double their fees for sacked workers.

Employees were often shifted from corporate accounts to personal super accounts with much higher fees when they lost their jobs.

This was despite remaining in the same investment option and receiving the same level of service.

In most cases, Senator Sherry said, a person was shifted between funds without their knowledge or consent because it was buried in the fine print of a long disclosure document.

"This Labor Government is going to stamp out this unconscionable practice," he said.

Senator Sherry said he had ordered the Australian Prudential Regulation Authority to investigate the practice.

Until now, it had been a secretive practice, but the Government would get to the bottom of it and work out the most effective way to end it.

"This is an essential renovation that needs to be carried out on our superannuation system," Senator Sherry said.

"There are other contentious practices around fees in superannuation that hurt the retirement savings of Australians.

"We intend to carry out a renovation of the way the system is operating and, in particular, of some of these very bad fee practices, which are clearly not in the best interests of the member."

Senator Sherry said one option was to change the law so the default position was that people remained in the same superannuation fund when they lost their job.

Industry Super Network executive manager David Whiteley said the practice of shifting people between funds should be outlawed.

"It is a triple whammy for people who have been retrenched.

"They have just lost their jobs, so they are looking for employment," he said.

"They are not making contributions, so their savings are eroding, and they are being charged higher fees."