If actuaries get hot under the collar about the Cooper review, then Trevor Thompson is in meltdown mode.
The president of the Institute of Actuaries Australia said the main item he’s trying to get on Cooper’s “menu” is that investment costs must be separated out from other costs.
“All superannuation fund expenses and superannuation fees and costs which affect member benefits should be sub-divided into an ‘investment’ component and an ‘administration’ component for all purposes – including plan and member reporting.”
Not to put too fine a point on it, he said, “without this separation it is impossible for members to compare funds. The institute believes this separation is not difficult for the industry to achieve.”
The admin component of fees should instead be called “superannuation fees and costs”. This should be mandatory and specified in legislation and regulatory guidance with effect from a date for all other super review proposals.
“Superannuation fees and costs” (formerly administration costs) must include advice costs which are not covered by specific advice fees,” he said. “However, specific advice fees (for seeing a planner etc) must be disclosed separately as a component of fees and costs.”