There is little doubt that the Australian superannuation system is a terrific boon – well at least to banks, superannuation managers, trustees, consultants and just about everyone associated with the system other than the people whose superannuation savings the aforementioned siphon off in fees, charges and other things.
Each year the blog gets an annual look at how bizarre the system is when it gets a benefit statement from UniSuper. The blog manages its own super but on the odd occasion it does some paid teaching at RMIT University super payments are deducted and deposited in a UniSuper account. Unfortunately you can’t have it sent to your SMSF although you can close the UniSuper account soon after the payment goes in and transfer it to the SMSF.
Normally the blog forgets to do anything about it until the farcical benefit statement arrives – too late of course. The latest statement had an opening balance at 1 January 2014 of $59.86 –about enough to pay for a few tram trips with the benefit of the blog’s Seniors Card.
By the 30 June balance date the closing balance was $1.35 which seems to comprise $1.25 in investment returns and some other undisclosed sum. The total in administration charges UniSuper levied on the account was $57.50 which the blog thinks represents about 96% of the opening balance which is rather more than the 2.08% investment return it got. But just imagine how bad it would have been without the $1.25 investment bonanza. The fund also deducted insurance premiums of $12.80. If the blog had a choice that would also go as it’s at least two tram trips to and from RMIT and at the blog’s stage of life any insurance other than travel insurance is useless.
The benefit statement says that the amount the blog has available when retiring or after reaching preservation age is $0.00, the amount available if the blog stops doing paid teaching at RMIT is $0.00 and – if the blog asks for it now – it gets $1.35. There will probably be a fee for sending it.
Now obviously fees and charges eat up all small super account balances. And as an industry fund UniSuper does better than almost all the non-industry funds in terms of investment returns. The blog’s experience of private sector funds is far worse with both very high charges and very poor returns – particularly when compared with its SMSF performance and the average of industry funds. Moreover, as an Adjunct the blog is expected to, and does, provide most of the things it does for the university voluntarily without payment. But if you give a series of lectures, or teach a specific course, the custom has always been that you get paid – particularly if they are for fee-paying post-graduate courses.
The blog can be alternatively amused and outraged by the situation but the problem is much more serious if you are a sessional lecturer or teacher and that’s how you make your living. As universities are increasingly relying on sessional teachers the admin charges can be excessive if you are not earning much.
From now on the blog might be asking for a case of red instead of more conventional payment – cheaper for the university and less annoying for the blog – but for hard pressed sessional teachers trying to scrape together a living that is not going to be the answer. And if Christopher Pyne and Mathias Cormann have their way cutting back education funding even further while helping the banks help themselves to your savings it is only going to get worse.