Like most of us, Gen Hallot wasn’t too concerned with her super.
The New Zealander, who was living and working in Australia for several years, thought she could set and forget her super fund account and it would steadily grow without her interference.
However, the 33-year-old had a massive shock when, five years after she’d relocated, she realised her super account balance had been dwindling instead of increased in that time.
Determined to find out why, Gen discovered a hidden fee had been zapping her super account of $109 month – meaning over the course of five years she’d lost more than $5000.
And we don’t mean to alarm you, but it’s a fee many Aussie workers are unwittingly paying right now.
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You see, as Gen discovered, many super providers include an opt-out life insurance policy in their service – or one that customers unknowingly opt-in to when they sign up.
Meaning that unless you cancel that life insurance policy, you are paying monthly or quarterly fees for it. And if you’ve got no dependents or debts, that’s a service many of us really don’t need.
Gen also learned that just because she never asked for the policy, didn’t excuse her from paying it.
“I was completely taken by surprise. I tried to stay calm and picked up the phone to [her super provider],” she said.
“I thought ‘I definitely didn’t ask for this policy, so when AMP can’t prove I asked for it to continue when I left my employer, they’ll probably have to refund these fees’.”
But a customer service representative explained to Gen that no permission was required.
“I was extremely frustrated. These were my savings that a company seemed to have carte blanche to dip into!”
Then Gen had a worrying thought – what about her other super account? Sure enough, she found another super balance being slowly shrunken by life insurance policy fees.
“Here it was harder to see the exact monthly fees but I again could not believe it. This policy has been in existence since about 2004 I think.
“I’d hate to know what I’ve paid in insurance fees over the last 14 years.”
Gen said she didn’t believe the opt-out insurance policy was in the customer’s best interest, which as we’ve been learning through the banking royal commission this week, is a fairly common complaint.
On Wednesday the inquiry heard that National Australia Bank’s superannuation trustee has continued charging advice fees after customers after they had died.