Editor’s letter
Depending on when you get a chance to read this month’s cover story, I suspect the royal commission inquiry into superannuation may have already kicked off. The hearings are set for August 6 and while no details of who is listed to appear were available at the time of going to the printers it was believed that fund executives and directors (among many other players) were to be grilled on their expenses and how those expenditures benefited members.
Why should we care about how much a chief executive spends on cab fares or how much a super fund spends on brand development to win new members? Well, superannuation is a $2.6 trillion honey pot and annual fees have surpassed $30 billion a year. Essentially there are two sets of fees. One goes to the super fund to run itself and the other goes to the investment manager.
While total fees have dropped somewhat there’s certainly room for improvement as these costs can vary widely. The lowest fee on a default MySuper fund is 0.65% while the highest is over three times as much at 2.16%. While we wait for fees to come down further, there is plenty we can do right now to ensure our nest egg isn’t depleted.
This month, with exclusive research from SuperRatings, Money magazine highlights just how important it is to pick the right fund – and the right fund may not necessarily be the same one for the rest of your life. As Susan Hely discovers, depending on your insurance
needs (which can be driven by your age), your earnings, the performance of your fund and its fees, the combined losses for each decade of your life can add up to $337,310 if you’re in the worst, rather than the best, fund.
While past performance is no guarantee of future performance, this theoretical exercise gives an insightful look at the funds that have performed well net of fees for each age bracket. It’s worth reading in its entirety regardless of which age bracket you fall into.
Money is also pleased to announce that we have united with some of Australia’s leading magazine brands, including The Australian Women’s Weekly, Empire and Elle, to support the “No Gender Selective Tax” campaign, an initiative of Bauer Media to remove the GST from the price of tampons, pads and sanitary items for all Australian women.
Since the introduction of GST in 2000, women have been paying tax on tampons. By contrast, condoms and Viagra have always been GST exempt.
I understand that the tax system could do with a complete overhaul, so why are we focusing on just one aspect? The estimated $1000 a woman can save across a lifetime isn’t a huge cost but that’s not the message. It’s about equality and fairness. We can chase a better deal here. In essence, we are asking women and men to say “I agree” to the fact that a tax on tampons is unfair.
Join the campaign for it to be removed by signing the petition at bloodyannoying.com. Effie Zahos, Editor, Money magazine