17 May 2012: Self managed superannuation funds are paying the lowest fees of any the four superannuation sectors, according to the latest figures from the Australian Taxation Office’s Self-managed Super Fund Statistical Report – December 2011.
The ATO’s just-published report reveals that administration and investment fees have fallen in the three years to 2010, highlighted by the reduction of average fees per fund from 0.95% in 2008, to 0.67% in 2009, to 0.65% in 2010. The per member fees are about 40% less again then the total fund fees.
The ATO’s statistics also show that 38% of SMSFs have fees that are less than 0.25% per fund in 2010.
The comparison with the retail and industry sectors is stark with administration and investment fees estimated at 2.1% for retail funds and 1.1% for industry funds – and rising, although it should be added that it is widely recognised by APRA and the industry that comparisons about fees are difficult to measure.
Andrea Slattery, the chief executive officer of the SMSF Professionals’ Association of Australia (SPAA), says the ATO’s figures are confirmation that self managed super funds are a cost effective way for people to manage their super.
“The relevant fact is the ATO figures show the SMSF sector’s administrative and investment fees have been falling for the three years to 2010
and as such it would be reasonable to expect they are even lower now.
“Certainly it’s a welcome trend and proof positive that SMSFs are more than competitive with the other superannuation sectors in terms of fees.”
Mrs Slattery says the ATO report shows this superannuation sector to be in strong health – despite the continuing fallout in investment markets from the Global Financial Crisis.
“The number of funds being established each month has risen, on average, to 2700, up from an average 2500 over the past 10 years.
“Accompanying this sharp increase in the number of SMSFs has been the rapid rise in SMSF membership, with the number nearly doubling over the past eight years to nearly 90,000, up from just over 500,000 in 2004.”
Mrs Slattery says the report shows there has been a significant increase in women in the age range between 25 and 54 setting up funds.
“They also are a larger percentage in those age groups than the percentage of men starting an SMSF, although men still dominate the number of SMSFs starting for those over 54 years of age. Women starting an SMSF with an income of less than $60,000 dominate while men are larger in numbers who have incomes that are greater than $60,000.”