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The accounting body is urging the treasury to reconsider its superannuation funding model as it imposes an unfair burden on members of smaller super funds.
CPA calls on Treasury to ditch ‘unfair’ super funding model
01 May 2025
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8 minute read
In response to the annual Proposed Financial Institutions Supervisory Levies for 2025–26, CPA Australia has called on Treasury to rethink its formula that allows superannuation funds to recover regulatory costs from members.
In the response, CPA highlighted that the current funding model was forcing Australians with smaller funds to continue to pay more than their fair share, as more than 1.5 million Australians held superannuation accounts with a super fund with less than $20 billion in assets.
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Richard Webb, CPA Australia superannuation lead, said members of small and medium-sized funds appeared to have become collateral damage in an “imperfect model”.
“The Financial Institutions Supervisory Levies are designed to recover costs incurred by the agencies responsible for regulating the super industry, and are therefore a key component to the integrity of the system. However, the current model for recovering these costs is unfair and change is long overdue,” Webb said.
“Despite the total levies for next year falling, members of smaller funds continue to make significantly greater contributions than those of large funds. What’s more, the reduction passed on to members of small and medium-sized funds is less than the reduction for members of larger funds. This is simply rubbing salt into the wounds.”
CPA revealed it was responding to the Financial Institutions Supervisory Levies as adjustments made this year would result in a large fund with total assets of $360 billion, and 3.42 million member accounts would be charged $10.3 million in 2025–26.
The professional body said, for example, a medium-sized fund with total assets of $9.3 billion and 26,063 members would be charged $909,000, a small fund with assets of $349 million and 2,239 members would be charged about $34,000.
Based on this example, this would mean an annual charge of $3.01, down from $3.71 in 2024–25 for members of large super funds, an annual charge of $34.87 reduced from $39.24 for members of medium-sized funds and an annual charge of $15.26 down from $17.17 for members of a smaller fund.
CPA said based on the previous year’s levies, this would result in a reduction of 18.9 per cent for large fund members, 11.8 per cent for medium-sized fund members and only 11.1 per cent for those with a small super fund.
Webb added that members of smaller funds were already bearing a higher burden of administration costs, and that it was unfair to further increase this “with a disproportionate share of the levies required to fund the regulation of the system”.
“We acknowledge that current government policies aim to encourage mergers of super funds to reduce fees for members. However, we believe that there is more work to be done in the meantime to ensure that members of smaller funds do not continue to pay more than their fair share.”
Webb also expressed concern that the funding allocation for the Gateway Network Governance Body was not sufficient to prepare the organisation for the much-needed investment required for upcoming payday super requirements.
“The levies attributable to the GNGB are forecast to increase by just $100,000. However, in addition to an increased focus on cyber threats and data security, the GNGB also oversees the work undertaken by the STN in preparation for payday super.”
“We would have expected to see around a five-fold increase in this funding.”
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