Unisuper - do they pay interest?

PChinna on 15/10/2018 - 19:54

Hi Guys

I was doing casual teaching during first 2 years of my PhD and from that Job I got some A$XXXX amount in my super account. Feom last couple of months, I'm not working and so they is so credit into my account. But I can see that they are charging some amount saying maintenance etc…

My question is, do they pay any interest for these savings(may not be good word to use)? For my XXXX, it may not be a big amount but if you have in 6 digits, it will be a big amount, isn't it?

Thanks in advance

Financial

Related Stores

UniSuper
UniSuper

Comments

  • MrHyde on 15/10/2018 - 19:56

    Depends on what your chosen investment options is.

  • dcep on 15/10/2018 - 20:42
    +1

    your 'interest' is the returns of your chosen investment product, which could be +ve or -ve/loss

    then there is investment fee , admin fee , insurance premiums , where applicable

    • Diji1 on 15/10/2018 - 23:31

      Fees of a mere 1% are devastating to compounding wealth over a long period. Like half a million dollars for the average wage earner.

      I certainly hope you are not forced into a situation where this happens by your own Government, that would be terrible to have all that wealth taken away so bankers got fatter.

      • HighAndDry on 16/10/2018 - 13:28

        There's a few reasons why this is so - I know the industry funds charge comparatively lower rates (I think)? But this is an unavoidable consequence of having a good welfare system: unless you force people to, they won't save for their own retirement. And if you have to force them to, there has to be a system where you can check that they have saved.

        Alternative is to change to a system where there's no welfare, and then people can live or die off their own savings. A great deal of people probably still won't save, but they won't be a drain on the public purse so it'll be none of the government's problem then.

  • toniyellow on 15/10/2018 - 20:46
    +2

    If you were employed on a short-term contract, it is most common that you would have been signed up for an Accumulation 2 account by default (the HR part of your university website or your employment paperwork should tell you, or you can log into your unisuper account online). The default investment option for that account is MySuperBalanced. You can view the fees and performance here https://www.unisuper.com.au/mysuper/mysuper-dashboard.

    You are free to choose any of the other investment options if they would suit you better. If you are not expecting to remain in Australia you should consider that. Most advice for super encourages investment for the long term, if you are expecting to leave in a few years and will want to request a Departing Australia Superannuation Payment you should do some research and make a choice suitable for the short term.

    The insurance they include by default is not compulsory. You should do some research to decide what the pros and cons of the insurance they offer are for you.

    If by any chance you were signed up for a Defined Benefit account by default, you should do A LOT of reading. That is an option not available from most super providers, and it has some distinct pros and cons depending on how long you expect to work at an Australian higher education institution.

    • SimbaGirl on 15/10/2018 - 21:13
      +1

      One important thing to be aware of with regards to Unisuper’s Defined Benefit division is the changes they made in 2006 - Four Corners did a story on it in 2011 and this report is still on the ABC website

      http://www.abc.net.au/news/2011-12-13/unisuper-members-at-ri…

      • HighAndDry on 16/10/2018 - 13:29

        Why isn't your username Nala…

        • SimbaGirl on 17/10/2018 - 09:09
          +1

          Username isn't related in any way to the Lion King movie LOL

    • PChinna on 15/10/2018 - 21:55

      Thank you very much @toniyellow

  • thetrain on 15/10/2018 - 23:58
    -1

    Get out of UniSuper ASAP!

    They are morally bankrupt, I actually put in a submission to the Royal Commission for their disgusting behaviour.

    I was losing money every month because the fees far outweighed the returns (balance of thousands of dollars in super). Moved the super out as soon as I could.

    • bobbified on 16/10/2018 - 09:02
      +1

      I was losing money every month because the fees far outweighed the returns (balance of thousands of dollars in super).

      How much fees were they charging each month?
      A lot of people see deductions from their accounts and automatically assume it's "fees". In most cases, those deductions are actually a combination of admin fees AND insurance premiums. Insurance cover and it's corresponding premiums are optional and that cover can be turned off on request if you feel the need isn't there.

      The "investment returns" that apply to your account are those from the conservative investments you've been put in by default (where you haven't made a choice) or those you've selected. All funds have a range of options to choose from depending on your risk profile.

      I don't work for unisuper, but I think that if everyone had a basic understanding of how it all works, we could then really weed out the bad providers.

      • thetrain on 16/10/2018 - 12:01

        I wish it was that simple. I'm reasonably well informed on financial matters.

        I made sure the insurance was not enabled. Investment was in high growth and returning a reasonable rate.

        Can't remember exact fee but was $100-$200 p.a. from memory.

        The biggest issue is casual staff in the higher education sector (like myself) must use UniSuper. If your super amount is relatively small the fee always outweighs the investment return.

        Fortunately the government legislated changes in 2018 which cap admin fees at 3% for balances under $6000.

        • bobbified on 16/10/2018 - 12:50
          +2

          Can't remember exact fee but was $100-$200 p.a. from memory.

          The administration fee for UniSuper Accum 1 and Accum 2 is:

          • the lesser of $96/year or 2%/year. (Yes, I went to have a look at the two PDS docs on their website because I was curious).

          Say you had a balance of $10,000, the fee would be $96/year (the lesser of $200 or $96).

          There are also investment fees and indirect costs, but they're based on percentages of your investment/return, so it shouldn't be enough to erode your balance.

          Investment was in high growth and returning a reasonable rate.

          Something is not right if your investment was returning a "reasonable rate" and the $96 administration fee (2% or less) was outweighing your investment returns.

          Disclaimer - I don't work at UniSuper - I do work in the industry and am by no way defending it. I know there are some dodgey practices out there as there are with all industries. I'm just really curious to understand.

          • thetrain on 16/10/2018 - 13:22

            @bobbified: From my time at UniSuper

            The administration fee for Accumulation 1 accounts is $115 per annum and deductions are made on a monthly basis. These fees cover the costs of administering a member’s account. Effective 1 July 2013, new government legislation requires superannuation funds to be more transparent with their fee structures. Consequently, we must apply fees on an equitable and cost recovery-only basis across our member base.

            lets say $2000 balance (~$20k of casual work). I know plenty of casual staff (students) with much less
            that is 5.75% p.a. worth of admin fees. That is now illegal!!

            It is this sort of behaviour that makes the public (including myself) lose faith in the financial sectors ethics. (not a personal attack, just the sector overall has left a bad impression).

            yes something is not right. I'm not even including the tax rate (15%). UniSuper only changed their unscrupulous behavior due to the changes in legislation.

            Note: I do have personal experience with UniSuper

            • HighAndDry on 16/10/2018 - 13:32
              +1

              @thetrain: Admin fees are flat costs. Just because you have a little money and so very little returns, doesn't mean it's any cheaper to administer it. Arguably, a $1,000 account and a $50,000 account takes the same amount of labour and time to administer.

              Also arguably, it should be less than $115 per annum, but that's about 2hrs of a competent/trained person's time, spread across a full year. Having someone just glance at your account once a month would probably take that much time.

              • thetrain on 16/10/2018 - 13:36

                @HighAndDry: so poor people shouldn't have super? I understand your point about fixed costs but most are managed as one or more funds, not individual accounts

                I'm glad the government thinks a flat fee is also unconscionable.

                And my current industry super doesn't charge flat fees either.

                • HighAndDry on 16/10/2018 - 13:51
                  +1

                  @thetrain: There's no "should" in this. Stuff costs money. You go start your own bleeding-heart-super-fund-for-the-poor and manage it yourself free of charge if you're so inclined.

                  • thetrain on 16/10/2018 - 16:01

                    @HighAndDry: I would if I could.

                    You have to use UniSuper in the higher education sector and pay their fees. No choice of super fund.

                    Funnily enough my current super fund is fine, hence why I suggested leaving UniSuper based on my personal experience.

            • bobbified on 16/10/2018 - 14:22
              +2

              @thetrain:

              The administration fee for Accumulation 1 accounts is $115 per annum…

              …we must apply fees on an equitable and cost recovery-only basis across our member base.

              The administration fee is what the company charges to administer your account. It's no different to a bank charging a monthly fee. It also applies to accounts with low balances. They're not going to administer an account for free. I don't like to use this term, but they're businesses and not charities.

              The change in fees where members must be treated equitably (ie, all the members in a particular group must be treated the same) were actually a part of the MySuper legislation introduced by the government. It became illegal to charge some members less in admin fees and others higher.

              lets say $2000 balance (~$20k of casual work).

              Prior to 1 July 2013, there was this thing called member protection for accounts with balances of $1000 or less. The amount of administration fees charged could not be more than the investment earnings, thereby, protecting the balance. Again, the $1000 level was set by the government. They decided to remove this member protection from 1 July 2013, exposing all those accounts. At the same time, they forced funds to send the small (and what they called Lost accounts to the government under the pretense that members can claim back their funds at any time - which we know a lot of people don't.).

              yes something is not right. I'm not even including the tax rate (15%).

              Again, this is another government thing. The tax rate of 15% is set as the Contributions Tax. That money goes to the government as tax, not the fund itself. The fund would be in deep shit if they didn't charge and pay contributions tax to the government.

              I think our broke government has realised for a long time that there's a lot of money in Super that they could use, but don't (yet!) have the balls to do anything too obvious yet. They are no better than the super funds themselves and will eventually stick their hands in to get a piece of the pie.

              • thetrain on 16/10/2018 - 16:12
                -1

                @bobbified: well you were wondering how I was losing money with UniSuper. I think I've explained that now

                I don't know about you, but I'd be bloody annoyed if my employer forced me to use a certain bank account for my pay which required me to pay $100+ per year in fees.

                The change in fees where members must be treated equitably (ie, all the members in a particular group must be treated the same) were actually a part of the MySuper legislation introduced by the government. It became illegal to charge some members less in admin fees and others higher.

                Sorry I'm calling bullshit, and this is the same bullshit UniSuper told me before I left.
                Is my current industry super fund being run illegally since I pay a fixed percentage fee and not a fixed amount fee?

                Funny how changes in the latest budget include
                A cap on admin and investment fees on low balance super accounts (with less than $6,000) at 3% to prevent low super balances from being eroded by fees.

                Probably to stop exactly this issue. It is sad that it takes government regulation to bring superannuation funds into line with community expectations

                • bobbified on 16/10/2018 - 16:22
                  +3

                  @thetrain:

                  well you were wondering how I was losing money with UniSuper. I think I've explained that now

                  Your original comment was that you hate UniSuper. What I'm pointing out is that with the things you're angry at, there are elements that are UniSuper-specific but the bulk of it is industry or legislation based. Like I said before, I'm not trying defend the industry. I personally hate how the rules keep changing and it's our money that the government keeps playing God with, but doesn't allow us to access.

                  • thetrain on 16/10/2018 - 16:33
                    +1

                    @bobbified: thanks mate, I appreciate what you're trying to say.

                    The concept of super is fantastic but in many cases poorly implemented.

                    I'm just giving my opinion based on my terrible experience with UniSuper in similar circumstances a few years. In my case moving to another fund when I left the job was much better.

                    • bobbified on 16/10/2018 - 17:01

                      @thetrain: I have to admit - I often sit there wondering if there's a loophole that would allow me to get my money out early!

                      I've only been successful once (and I believe that loophole has been closed)! haha

      • HighAndDry on 16/10/2018 - 13:30
        +2

        if everyone had a basic understanding of how it all works

        As this thread shows, this is far too optimistic.

Login or Join to leave a comment
Login Join