Super fees: Top 10 cheapest funds in Australia

Note: This article contains the latest available fee information as at September 2014. In this article you can find the cheapest super funds and the cheapest pension funds. We update this article periodically with fee data issued by SelectingSuper rating company. Latest update was September 2014, using June 2014 data.

We are often asked which super fund is the cheapest super fund in Australia. As you would expect, SuperGuide’s preliminary response is: “It depends…”. How much your super fund may charge in fees can depend on many factors, including:

  • whether you join your super fund via your employer or independently
  • what type of investment option you choose (or whether you opt for the default investment option)
  • how much insurance cover you have (if any) within your super fund
  • whether you are taking a pension from your super fund

Rating agency, SelectingSuper, regularly publishes data on the cheapest super funds. In the 3 tables set out below you can discover:

  • Table 1: Cheapest super funds available for anyone to join (doesn’t include non-public offer funds)
  • Table 2: Cheapest super fund that employers can choose for their employees (some super funds are only available to employees of companies)
  • Table 3: Cheapest pension funds

Rating agency, Selecting Super has conducted some handy research on the fees that super funds charge, and in generous fashion SelectingSuper regularly releases the highlights of this research for free access by the general public.

So, well done to SelectingSuper and Alex Dunnin for creating the three tables (tables 1, 2 and 3) that appear in this article. The fees listed relate to the default investment option of the particular super fund, typically a balanced or growth option. (For an explanation of balanced and growth options see the article Investment performance: We’re the best super fund. No, we’re the best…). The fee comparisons are based on a fund member earning $50,000 a year and who has $50,000 in their super fund’s default investment option.

Note: Although important, cost is not the only factor when selecting a superannuation product. High costs do eat into overall investment returns however so knowing what super funds charge in fees is important information for helping you determine the quality of your super fund or pension option.

Table 1: Cheapest super funds available for anyone to join

The award for the cheapest super fund in Australia that anyone can join goes to ANZ Smart Choice Super according to SelectingSuper.

The fee comparisons are based on a fund member earning $50,000 a year and who has $50,000 in their super fund’s default investment option.

Table 1: Best fee deals across super funds that anyone can join
Total Expense Ratio
Rank Fund name Segment Can anyone join? TER % TER $
1 ANZ Smart Choice Super Retail Yes 0.60% $310
2 Bendigo SmartStart Super Retail Yes 0.64% $332
3 First State Super – Personal Industry Yes 0.66% $343
4 Club Plus Super Personal Division Industry Yes 0.68% $353
5 The Emerald Super Wrap Retail Yes 0.70% $363
6 AMIST Super Personal Division Industry Yes 0.73% $379
7 Yellow Brick Road RetireRight Retail Yes 0.75% $389
8 StatewideSuper Personal Industry Yes 0.77% $400
9 Netwealth Super Accelerator Personal Retail Yes 0.80% $415
10 AustralianSuper Personal Plan Industry Yes 0.81% $421

Table source: SelectingSuper (www.selectingsuper.com.au) According to SelectingSuper, the table represents the top 10 out of 145 personal superannuation products, that anyone can join, covering all market segments. TER stands for Total Expense Ratio. Visit www.selectingsuper.com.au for more information on TER. Table represents fees as at September 2014 (with table updated by SelectingSuper in June 2014).

Table 2: Cheapest super fund that employers can choose for their employees

If you’re concerned about the fees that you pay in your existing super fund and you want to change to a super fund that your employer doesn’t currently contribute to, then generally you must join a super fund as an individual (rather than via your employer) which generally means different fees (see Table 1) and possibly more expensive insurance. Alternatively, you may be able to arrange for your employer to sign up to your preferred super fund (in certain circumstances) which may give you access to cheaper group life insurance cover and in some instances, potentially lower fees.

The cheapest fund of all the super funds that employers can choose for their employees is a non-public offer government super fund, Australia Post Superannuation Scheme (APSS). If you’re a member of APSS, you pay minimal fees on your super account. Unfortunately, if you’re not an employee (or a spouse of an employee) of APSS, then forget about joining the cheapest super fund in Australia.

The top 6 cheapest funds in this category are government or corporate super funds, available only to employees of the relevant company or public service organistion. The fees for this type of super fund are often subsidised by the employer, as is the case with APSS.

The fee comparisons are based on a fund member earning $50,000 a year and who has $50,000 in their super fund’s default investment option.

Table 2: Best fee deals for super funds that employers choose for their employees
Total Expense Ratio
Rank Fund name Segment Can anyone join? TER %  TER $
1 Australia Post Superannuation Scheme Government No 0.05% $26
2 ESSS Defined Benefit Fund Government No 0.34% $177
3 State Super (NSW) Government No 0.43% $222
4 ANZ Australian Staff Superannuation Corporate No 0.48% $249
5 Holden Employees Superannuation Fund Corporate No 0.52% $270
6 SA Ambulance Service Super Government No 0.57% $296
7 ANZ Smart Choice Super – Employer Retail Yes 0.60% $310
8 EISS Super Industry fund Yes 0.63% $327
9 Bendigo SmartStart Super – Employer Retail Yes 0.64% $332
10 Meat Industry Employees’ Super Fund Industry fund No 0.65% $338

Table source: SelectingSuper (www.selectingsuper.com.au). According to SelectingSuper, the table represents the top 10 out of 160 superannuation products that an employer can choose for their employees, although not all employees can choose all products, because some are restricted to selected employers only. Table represents fees as at September 2014 (with table updated by SelectingSuper in June 2014). 

Cheapest pension funds

Generally speaking, the information publicly available on pension funds is not as comprehensive as the information that exists for super accounts in accumulation phase. Fortunately, SelectingSuper has also produced a table listing ten of the cheapest pension options.

According to SelectingSuper, the table below describes the fees payable on a pension account for a fund member with an initial deposit of $100,000 and who receives 12 monthly pension payments. The money is invested in the pension products default investment option (typically a balanced or growth option).

Half of the cheapest pension funds are open to the general public, and all pension funds in Table 3 below charge under 0.7%of your account balance in fees, that is less than $700 on an account balance of $100,000. If you shop around you can expect to find a few pension offerings that charge the equivalent of around 1% of fund assets. If you want to invest your pension savings in non-standard investments (for example, emerging overseas markets or hedge fund investments) then you can expect to pay a lot more in fees.

Table 3: Best fee deals across all retirement (pension) funds
Total Expense Ratio
Rank Fund name Segment Can anyone join? TER%  TER $
1 Australia Post Super – Pension Government No 0.18%  $180
2 ANZ Staff super Acc Based Pension Corporate No 0.53% $530
3 ANZ Smart Choice Pension Retail Yes 0.55% $550
3 AUSCOAL Account-based Pension Industry fund Yes 0.55% $550
5 Meat Industry Employees’– Pension Industry Fund No 0.59%  $588
6. Club Plus Pension Industry Yes 0.59% $594
7 MTAA Super Pension Industry Yes 0.64% $643
8 AMIST Pension Industry Yes 0.65% $649
9 QSuper Income Account Government No 0.65% $650
10 CBA Group Super Retirement Access Corporate No 0.69% $689

Table source: SelectingSuper. According to SelectingSuper, the table represents the top 10 out of 219 retirement products covering all market segments. Table represents fees as at September 2014 (with table updated by SelectingSuper in June 2014).

SelectingSuper also provides a very useful explanation on how super funds charge fund members. For example, if your super fund charges 2% in fees rather than 1% in fees, that 1% difference in fees over more than 40 years can mean a final retirement balance that is 30% lower than if you had chosen a cheaper fund, assuming investment returns are the same for both super funds.

© Copyright Trish Power 2009-2014

Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.

IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.

Comments

  1. Kathryn says:

    For those of you considering rolling over small super fund accounts into one fund please consider the TPD and Life Insurances aspects. If you rollover you may lose these insurances, should you wish to retain the insurances from your outgoing fund check with the Fund accepting incoming accounts that you may reserve these insurances. Also, when paying out TPD from superannuation, tax is payable and part of the formula to calculate the taxation is based on the ‘eligible service date’, so if you rollover an older fund account to a new fund the date utilised will be the older fund date therefore increasing the amount of taxation payable on a TPD payout held by your superannuation fund, it is always best to have a short eligible service date if you are holding TPD in super, otherwise you may have to increase the TPD insured amount to factor in the taxation which could be tens of thousands.

  2. Hi,
    I want to roll several funds into one. I have a First State Super, Media Super, AMP and Sunsuper.
    Currently I am using Media Super for contributions. As I don’t have much in all of these funds it appears to be vital to do this, but which one? For me it appears to be either First State or Media Super.
    Best return was on First State Super and fees are less ($240/admin and insurance premium).
    Media Super fees: $140/tax and admin, $443/Death and TPD) The death benefit with Media Super is $500 000 and TPD $12 200, wheras First State Super gives $120 000 for both.
    I have never looked deeply into the matter and consider myself illiterate.
    Any suggestions are welcome.
    Cheers
    Manu

  3. Help I have approx 70,000 in ioof, fees galore. I want income protection insurance and death as I will be working for the next 5 years Any suggestions? It’s all a maze!

  4. I have so many super funds and am trying to work out with one to roll into.. Recruitment super seems the best and the next ANZ.

    Any advise??

  5. Hi Please note that in one of your tables you have recruitment super and Australian Enterprise Super which has both been merged under Kinetic.
    Also, the MER for ANZ is 0.50% and is is not

    • Robert Barnes says:

      Hi Vish – Thanks for your comment. The table is information as at 31 March 2013 – we rely on SuperRatings for the data.
      Cheers
      Robert Barnes
      GM – SuperGuide

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