Superannuation, often called super, is designed to help Australians save for retirement. Throughout your working life, both you and your employer contribute money into your super fund. Over time, these contributions are invested to help grow your retirement savings so you can access them later in life.
While super is designed to build long-term wealth, it’s important to understand that superannuation funds charge a range of fees. These fees may be charged as a fixed dollar amount, a percentage of your balance, or a combination of both.
Even small differences in super fund fees in Australia can have a significant impact over time because they are deducted regularly and compound across decades. Understanding the different types of super fees can help Australians better understand how their retirement savings are managed.
Super fees are typically deducted from your account automatically, often monthly. Some fees may also apply when specific actions occur, such as switching investment options or making certain transactions.
Because fees reduce your overall balance, many people review their super fund fees periodically to understand what they are paying and what services they receive in return.
If you have lost track of your super accounts, you can view them by logging into myGov, selecting the ATO, and navigating to the Super section. This area lists your super accounts and provides tools for managing them.
Types of superannuation fees to understand
Not all super funds charge every fee listed below. The types and amounts of fees can vary between funds and investment options. Details about fees are typically available in a fund’s product disclosure statement or member portal.
Below are some of the most common superannuation fees charged by super funds in Australia.
Establishment fee
An establishment fee is an administration charge that may apply when setting up a new super account. Some funds charge this fee when an account is first opened.
Membership or administration fees
Membership fees, sometimes called administration fees, are charged by super funds to manage and maintain your account. These fees help cover operational costs such as record keeping, reporting and member communications.
Investment management fees
Investment management fees are charged for managing the assets within the super fund. These fees are often referred to as the management expense ratio (MER).
The MER is usually expressed as a percentage of the amount invested and may vary depending on the investment option selected. Investment management fees can vary widely across funds and investment strategies.
Performance fees
Some investment managers charge performance fees when their investment returns exceed a specified benchmark or market performance.
Performance fees are sometimes bundled into the broader investment management fee structure.
Contribution fees
Contribution fees may apply when money is paid into a super account. These fees cover the administrative costs of processing and investing contributions.
Not all super funds charge contribution fees, and in some cases they have been removed from many modern super products.
Adviser service fees
Adviser service fees may apply when personal financial advice is provided in relation to your super account. These fees may be charged as a fixed amount or as a percentage of the contribution or balance.
Insurance premiums in super
Many super funds offer insurance cover such as life insurance, total and permanent disability (TPD) insurance and income protection insurance. The cost of these insurance premiums is typically deducted directly from the super account balance.
Investment switching fees
Investment switching fees may apply when members change their super investment options, such as moving funds between different investment portfolios.
Contribution splitting fees
Contribution splitting fees may apply when super contributions are transferred or split with a spouse’s super account.
Issuer fees
Issuer fees are charges applied by the provider responsible for overseeing the investment product within the super fund.
Expense recovery fees
Expense recovery fees allow the super fund trustee to recover certain operational expenses associated with managing the fund.
Family law split fees
Family law split fees may apply when superannuation is divided following a separation or family law court order.
Exit or termination fees
Exit or termination fees may apply when money is withdrawn from the fund or when transferring super to another provider. Many super funds have reduced or removed exit fees in recent years.
Why super fees matter for retirement savings
Over time, superannuation fees can reduce the growth of your retirement savings. Because super is invested over many years, even small percentage differences in fees can compound and affect the final balance available at retirement.
For this reason, many Australians compare super fund fees, investment performance and services when reviewing their retirement savings.
Independent comparison resources are available to help review super funds, including:
Canstar
Chant West
Morningstar
RateCity
SelectingSuper
SuperRatings
The Australian Taxation Office also provides the YourSuper comparison tool, which allows Australians to compare certain MySuper products through their myGov and ATO accounts.
Reviewing your super investment and insurance options
Super funds typically offer a range of investment options and insurance arrangements. These choices can influence both the fees charged and the long-term growth of super savings.
Reviewing how super is invested and understanding the associated costs may help Australians better understand how their superannuation works.
Some digital tools and financial platforms allow users to explore how their super is currently invested, review insurance costs within super, and see how different choices may affect retirement savings over time.
Understanding superannuation fees, insurance costs and investment options can help Australians make more informed decisions about their retirement savings and long-term financial planning.