Super and pension funds with the lowest fees

In the recent Productivity Commission (PC) review of superannuation, the high fees paid by too many super members became a principal focus for the report. A key issue identified by the PC was that “balances are eroded by fees and insurance”, and the PC also claimed that fees were “the biggest drain on net returns”.

It’s critically important that the fees you are paying are good value because what may initially appear to be a small percentage can grow to make a huge difference over time due to the magic of compounding interest.

Super tip: SuperGuide’s fees and return calculator can help you estimate how fees (and returns) could impact your super balance over time.

The PC estimated an increase of just 0.5% a year in fees would reduce the retirement balance of a typical worker (starting work today) by a projected 12% (or $100,000).

The PC also reported that “Higher fees are clearly associated with lower net returns over the long term”, although SuperGuide has also published analysis from SuperRatings that suggests the full story is more complicated than that. Read SuperGuide article Super fund fees: Do lower fees mean better net returns? to learn more.

SuperRatings has also kindly provided us with the following list of the ten super and pension funds with the lowest fees.

10 cheapest super funds (balanced investment option)

The crown once again goes to the Hostplus Indexed Balanced option, which reduced fees even further in 2019 although REST’s Balanced Indexed option (unchanged from the previous year) is not far behind.

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Behind them, there was a lot of movement over the year as funds including AustralianSuper increased fees or dropped out of the top 10 entirely, while others such as NGS and ClearView lowered their fees and moved up the low-fee rankings.

The fees for the super funds listed below is based on a $50,000 balance.

Rank	Fund name	Investment option	Fund type	Fees	Fee as a percentage of balance
1	Hostplus	Indexed Balanced	Industry	$103	0.21%
2	REST	Balanced Indexed	Industry	$118	0.24%
3	NGS Super	Indexed Growth	Industry	$150	0.30%
4	ClearView	Wealth Foundations Super – IPS Index Base 70	Master Trust	$155	0.31%
5	Media Super	Indexed Balanced	Industry	$170	0.34%
6	Energy Super	Indexed Balanced	Industry	$172	0.34%
7	AVSuper Fund	Diversified Index	Industry	$185	0.37%
8	AustralianSuper	Index Diversified	Industry	$187	0.37%
9	Vision Super	Sustainable Balanced	Industry	$238	0.48%
10	Sunsuper Superannuation Fund	Balanced – Index	Industry	$248	0.50%

Source: SuperRatings. The funds above have the lowest fees within the balanced investment option for public and limited public offer funds only as at 31 December. Fees include percentage-based administration fees, member fees, investment management fees (including performance-based fees), indirect cost ratios and taxes, but exclude any applicable employer size rebates.

Important: Balanced is the most common investment option and is generally the default investment option when joining a super fund. Balanced in this context refers to the risk profile of the investment option and means that 60–76% of the fund’s assets are defined as ‘growth assets’ (such as shares and property).

Learn more about risk and investment options in the SuperGuide article Super investing: What is your risk profile?.

10 cheapest pension funds (balanced investment option)

Hostplus, REST and NGS also top the list for the lowest fees in the Pension category, albeit in a different order. In fact, nine of the ten funds in the pension top 10 also appear in the ten super funds above, four of them newcomers to the top 10. There is a marked drop in fees across the board, with NGS cutting fees by more than half to take top spot.

Note that the fees listed below are based on a $250,000 balance to reflect the fact that those drawing a pension will generally have had longer to accumulate a larger balance. The fees for the super funds above is based on a $50,000 balance.

Rank	Fund name	Investment option	Fund type	Fees	Fee as a percentage of balance
1	NGS Super	AP – Indexed Growth	Industry	$490	0.20
2	Hostplus	AP – Indexed Balanced	Industry	$515	0.21%
3	REST	AP – Balanced Index	Industry	$518	0.21%
4	AvSuper	AP – Diversified Index	Industry	$560	0.22%
5	Media Super	AP – Indexed Balanced	Industry	$565	0.23%
6	AustralianSuper	Choice Income Account – Indexed Diversified	Industry	$742	0.30%
7	Energy Super	Income Stream – Indexed Balanced	Industry	$752	0.30%
8	ClearView	WealthFoundations AP – IPS Index Base 70	Master Trust	$775	0.31%
9	Sunsuper	AP – Balanced – Index	Industry	$928	0.37%
10	UniSuper	AP – Sustainable Balanced	Industry	$1,146	0.46%

Source: SuperRatings. The funds above have the lowest fees within the balanced investment option for public and limited public offer funds only as at 31 December 2019. Fees include percentage-based administration fees, member fees, investment management fees (including performance-based fees), indirect cost ratios and taxes, but exclude any applicable employer size rebates.