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Outsourcing drives up retail super costs

Alison Bell (SMH) | Feb. 28, 2011
Members of large for-profit superannuation funds pay more than two and a half times the average annual costs than their non-profit counterparts if their fund outsources business functions to affiliated service providers.

Members of large for-profit superannuation funds pay more than two and a half times the average annual costs than their non-profit counterparts if their fund outsources business functions to affiliated service providers.

A week after the Cooper superannuation review recommended the introduction of a low-cost MySuper product as mandatory default funds to cut industry fees, the prudential regulator unveiled the extent of outsourcing by trustees and its effect on costs.

Research by the Australian Prudential Regulation Authority (APRA) found outsourcing is widespread among 115 large super funds that dominate Australia's $1.23 trillion industry.

 

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