In this guide
Nobody likes paying fees, particularly when you can’t see what you’re paying for. When it comes to your super fund, it’s worth learning a bit more about the fees you’re paying and why.
As the Productivity Commission has pointed out, fees are “the biggest drain on net returns” for super fund members and can have a “substantial impact on members … by the time they reach retirement.”
It’s worth pointing out here that fees should never be looked at in isolation, as the most important measure of your fund’s performance in the long run is net returns after all fees and taxes.
The actual fees you pay will depend on the type of super fund you are a member of and which investment option you’ve selected. But if you want to wise up about the super fees you’re paying, check out our guide below.
Why fees matter to your super balance
How much you pay each year in fees on your super savings will have a big impact on the amount you have to spend in retirement.
The Productivity Commission has estimated an “increase in fees of just 0.5% can cost a typical full-time worker about 12% of their balance (or $100,000) by the time they reach retirement.”
With that in mind, it’s worth regularly checking what fees you’re paying to ensure you’re not paying too much, as many super funds compete to offer the lowest fees.
If you want to learn more about the fees your super fund is charging, a good place to start is to check your fund’s current product disclosure statement (PDS). Every fund is required to set out their fees in the same standard table, using the same names for each fee. This makes comparison much simpler. However, if you have not chosen the default investment option and insurance, you may need to look at separate investment and insurance guides. There may also be a separate guide to additional fees. These guides are published separately because they contain too much detail to fit into the main PDS document, however they are legally part of the PDS.
Armed with this information, you can compare the fees you pay with other super funds. If your balance is invested in your fund’s MySuper investment option, there are some additional sources to help you out:
- Your fund’s MySuper dashboard. This contains a statement of fees and costs for a member with $50,000 invested as well as information on past returns (including how those returns compare with the target) and the level of investment risk. To find it, search for ‘dashboard’ on your fund’s website
- The ATO’s YourSuper comparison tool. This allows you to compare your fees with other funds’ MySuper options based on your personal super balance (rather than just a $50,000 balance example). The comparison tool will display investment returns at the same time to help with your choice.
Watch our review of the YourSuper comparison tool.
Need to know
Some super fund fees and charges are individually listed on your transaction statement (such as the administration fee and any insurance premiums). These fees are deducted from your balance.
Other fees (such as the various fees charged by the fund’s investment managers) may be bundled together and deducted from your investment return or crediting rate before it’s added to your super account. These fees are not deducted from your balance, so you won’t see them in your transactions.
Super fund fees and charges you need to understand
1. Administration fee
This account management fee represents the cost to your super fund of looking after the various administrative tasks relating to your super account, such as sending out account statements, providing online services and recording your account transactions and contributions. If your fund provides intra-fund advice it also covers this service.
Read more about the advice offered by super funds.
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