Less fees, more super
Super funds charge you fees for the services they provide. All
funds charge fees, though some less than others. Generally, a super
fund with low fees will build your savings faster.
Main types of fees
There are many different types of fees associated with your
super fund. Fees are typically deducted from your account at the
end of each month or when an action is taken. Super fees can be
either a dollar amount or a percentage.
The main types of fees are:
Member fees - General administration fees to cover
the cost of keeping your super account.
A 1% difference in fees now could be up to a 20%
difference in 30 years.
- Management or investment management fees (also known as
MER) - Fees for managing your investment which can vary
for different investment options.
- Contribution fees - Fees to cover the
administration expense of receiving and investing your
- Adviser service fees - Fees for personal
advice provided about your super and other investments. Your
adviser may also receive commissions for certain investments that
they recommend to you.
- Insurance premiums - The cost of insurance
provided through your super fund. Many super funds have a set
default insurance option. You can usually choose to lower or
increase your level of cover based on your needs.
If the fee you're looking for isn't mentioned here, see secondary fees.
Super funds offer other services which may attract special fees.
Refer to your super fund's website or read the fund's product disclosure statement for
Case study: Gerri chooses lower super fees
Gerri is 30 and earns
$50,000 per year as a librarian. She already has $20,000 in her
super. After shopping around for another super fund, she changed to
one with only 1% management costs. Her old super fund charged 2.5%
(including adviser fees).
By changing to a super fund with lower fees, Gerri will have
$81,000 more in her super when she retires at age 65. Her super
account balance will be $336,000 instead of $255,000.
How to tell if you're paying high
The only way to know if you're paying high fees is to find out
what your super fund is charging you, and comparing the cost to
other similar funds.
Comparing the fees on your super fund with those of other funds
can help you decide on a fund that's good for you. Remember, it's a
combination of low fees and high returns that will give you the
best outcome, so look for a fund that offers both low fees and
higher than average returns.
Compare the impact of fees on your super fund.
MySuper accounts generally have lower fees and can only charge
certain types of fees. If you're looking for a low fee option talk
to your super fund about whether a MySuper account is right for
Here are some other fees to look out for when considering which
super fund to choose:
- Establishment fees - an administration charge
for setting up your account in the fund
- Withdrawal or termination fees - you may be
charged fees when you take money out of your super account, for
example when you retire or rollover to a different fund
- Investment switching fees - fees for changing
investment options within your super account
- Contribution splitting fees - charged when you
split off some of your contributions to your spouse's super
- Performance fees -additional fees that may be
payable if your investments perform better than market
- Issuer fees - fees charged by the investment
issuer for overseeing the fund.
- Expense recovery fees -out-of-pocket expenses
your trustee is entitled to recover from your super account
- Family law split fee - fees charged to split
your super following a separation and family law court order
How much super you have will determine the kind
of lifestyle you'll have when you stop working. Choose a fund with
low fees and you may end up with a fatter nest egg.
Last updated: 18 Apr 2017