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Government to crack down on super fund fees that ‘erode’ savings of Australians

The government is moving to restrict charges superannuation funds can place on low balance accounts.

Financial Services Minister Kelly O’Dwyer tells Ross Greenwood she’s “very concerned” Australians with low balance accounts worth $6,000 or less, are being charged “high effective fees”.

Ms O’Dwyer says millions of people are having their superannuation savings eroded, with fees reaching “around 9.25%”.

One of the funds that could be hit the hardest by the move is Hostplus, with the government reporting about a third of its 1.1 million accounts hold a balance of under $1,000.

Hostplus CEO David Elia tells Ross their company has approximately 227,000 accounts that currently hold less than $1,000.

He says Hostplus charges a $78 flat fee rather than “percentage-based” administration fees and will support a proposal to protect members’ super packages.

“Hostplus does support the proposal with regard to protecting your super package, which is ultimately about protecting the savings of members and ensuring that they’re not eroded by fees and insurance premiums.

“We’ll certainly work with the government to ensure that that’s… implemented appropriately.”

Click PLAY below for the full interview with Hostplus CEO David Elia

Click PLAY below to hear Ross’s interview with Financial Services Minister Kelly O’Dwyer