Super fees

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:

  • Smart tip

    A 1% difference in fees now could be up to a 20% difference in 30 years.

    Member fees - General administration fees to cover the cost of keeping your super account.
  • 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 contributions.
  • 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 details.

Case study: Gerri chooses lower super fees

Young woman reading up on a range of different superannuation fundsGerri 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.

Bar chart showing the difference in super fund returns over 35 years, and how Gerri could save $81,000 in management fees.

Assumptions: Calculated using the superannuation calculator, assuming 8% returns, no other fees, no insurance premiums and no changes to salary.

How to tell if you're paying high fees

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.

Compare fees

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.

Superannuation calculator

Secondary fees

Smart tip

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 you.

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 account
  • Performance fees -additional fees that may be payable if your investments perform better than market benchmarks
  • 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.

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Last updated: 18 Apr 2017