Posted on Tuesday, 26th July 2011 by Sarah Sullivan
A significant number of Australians could be forced to raid their savings accounts in order to fund their retirement should the gap between the largest and the smallest superannuation funds keep growing apace.
That is the suggestion of new study into the sector carried out by the independent research company SuperRatings.
According to the latest research, as many as half of the smaller funds open to Australian workers could soon close as managers struggle to deal with rising costs and falling membership numbers.
Notably, the bigger funds are taking advantage of such a situation, winning new members at the expense of their smaller counterparts, with SuperRatings managing director Jeff Bresnahan explaining that this situation “is escalating and is beginning to bite, big time”.
“Some of the smaller funds are really struggling, they are just getting crunched,” he said.
As a result of this trend, the firm has noted that it expects to see a marked increase in the number of superannuation funds merging over the next 12 months, potentially meaning individual Australians will have fewer options to choose from.
This comes as a piece in the Herald Sun newspaper has warned that “hidden fees are chewing a big, nasty hole” in the superannuation nest eggs of many workers, with many likely to struggle for money and even likely to turn to credit cards for everyday costs once they retire.
Tags: Retirement, Threatens Retirement
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