Note: This article contains the latest available fee information. In this article you can find the cheapest super funds and a link to the cheapest super pension funds. We update this article periodically with fee data issued by SuperRatings, Latest update was February 2017, using September 2016 SuperRatings 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
Ratings agency, SuperRatings, regularly publishes data on the cheapest super funds. In the table set out below, you can discover the cheapest super funds available for anyone to join (doesn’t include non-public offer funds). We also provide you with a link to a website listing the cheapest pension funds.
The fees listed in the table below 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 comparison for super funds (accumulation phase) are based on a fund member who has $50,000 in their super fund’s default investment option.
Top 10 cheapest super funds available for anyone to join
The award for the cheapest super fund in Australia that anyone can join goes to Bendigo SmartStart Super according to SuperRatings.
The fee comparisons are based on a fund member who has $50,000 in their super fund’s default investment option.
Table 1: Top 10 lowest super fees as at 30 September 2016
|Rank||Fund name||Fees based on $50,000 account balance||In percentage terms (%)*|
|1||Bendigo SmartStart Super||$313||0.63%|
|2||ANZ Smart Choice Super||$320||0.64%|
|3||Energy Industries Superannuation Scheme Super||$320||0.64%|
|5||Club Plus Superannuation||$374||0.75%|
|6||ING DIRECT Living Super||$375||0.75%|
|8||brightday Complete Super||$395||0.79%|
|9||First State Super||$397||0.79%|
*Percentages are calculated by Trish Power. For example, $374 in fees on a $50,000 account balance is 0.748%, and rounded to 0.75%, likewise $368 in fees on a $50,000 account balance is 0.736%, and rounded to 0.74%
Source: SuperRatings, although percentages are calculated by SuperGuide.
Top 10 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, ratings agency, SelectingSuper has produced a table listing ten of the cheapest pension options. See this link.
Note: At the time of writing, the fee data for cheapest pension funds behind the link in the previous paragraph is current as at June 2015. We are waiting for more current fee information on pension (retirement) funds. We will update this article when we receive this information.
Do cheaper fees mean better performance?
During 2015, ratings agency, SuperRatings conducted some handy research on the fees that super funds charge, and after studying 162 super funds over a 10-year performance history, SuperRatings CEO states: “In the majority of cases, the funds with the lowest fees do not necessarily provide a better retirement outcome or return for its members.” For more information on this study, see SuperGuide article Fees: Can cheaper super funds deliver bigger retirement balances?
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. Assuming all other criteria are equal, a super fund that charges higher fees than another super fund, can mean the more expensive super fund delivers you a much smaller retirement balance.