An insurance and wealth giant has been forced to admit its superannuation fees were neither “low” nor transparent after being quizzed about its so-called “tax surplus” – member funds that were collected for taxation purposes but ended up with a surplus due to deductions.
Suncorp, represented by Maurizio Pinto, Suncorp superannuation executive trustee, was questioned by Michael Hodge, senior counsel assisting the commission, about the group’s administration fees and intra-company arrangements as part of the Hayne royal commission’s probe into superannuation trustees.
The commission heard that fees paid by Suncorp’s super members are not included in its product disclosure statement (PDS), and that any tax surplus accrued from investments are used to pay for administrative services instead of being returned to members as “many” other funds do, The Sydney Morning Herald and ABC reported.
The tax surplus has been paid to the Suncorp Life and Superannuation Limited (SLSL), since at least 2013, for a range of administrative and accounting services.
“While the amount and percentage are not disclosed, Suncorp tells members that funds in the tax surplus may be used to pay for Suncorp Portfolio Services,” Pinto said.
Hodge also noted Suncorp’s administration fee as being “rather high”. For 2016, Suncorp’s total administration fee, including the retained tax surplus and another administration fee levied by SLSL, was 1.05%. It was 1.27% the year before.
Pinto said Suncorp had removed the claim from its website that fees were low.
“It was done to align the wording on the PDS with the website, that is, the fees are competitive,” he said.