Super Fund Fees Explained
Synopsis
Super fund fees can quietly eat into your retirement savings over time. Learn how administration and investment fees work, what Australians are typically paying, how to compare funds, and practical ways to cut unnecessary costs.
Most Australians know their super exists. A lot fewer know what it costs to keep it there. That's not entirely their fault, fee structures in superannuation aren't exactly designed for easy reading. But the difference between a cheap fund and an expensive one slowly over many years, and by the time you notice it, it is a big part of your retirement savings has already been lost
Here's what the fees actually are, what they cost you, and what to do about it.
The Two Fees That Matter Most
Super funds charge several types of fees, but two account for the bulk of what most members pay.
Administration fees cover the cost of running your account record keeping, member communications, online access, customer service. These usually come in two parts: a flat weekly dollar amount regardless of your balance, and a percentage of your balance. Australian Retirement Trust charges $1.10 per week plus 0.10% per year on balances up to $500,000, capped at $557.20 annually. AustralianSuper currently charges $1 per week plus 0.10% per year, capped at $350 though from 31 October 2026, the percentage fee increases to 0.12% and its cap rises to $600 per year, bringing the maximum total annual administration fee to $652. This adjustment reflects the combined cost of the increased percentage component and the ongoing $1 per week flat fee.
Investment fees cover the cost of managing the actual investments inside your fund. These vary significantly depending on whether you're in an index option or an actively managed one. AustralianSuper's Balanced option investment fees and costs fell from 0.57% to 0.53% per year during the 2025-26 financial year, a good example of how investment fees can move from year to year.
Other fees include switching fees if you change investment options, advice fees if you receive personal financial advice, insurance premiums if you hold cover through your fund but for most members, administration and investment fees are where the real cost sits.
What the Numbers Look Like in Practice
On average, people in a super fund's default MySuper investment option pay between 1% and 1.5% of their account balance in fees every year. Fees higher than 1.5% are generally considered expensive.
On a $50,000 balance that's $500 to $750 a year. On a $200,000 balance it's $2,000 to $3,000. The percentage stays the same but the dollar amount keeps climbing as your balance grows.
ASIC's MoneySmart fee calculator makes the long-term impact concrete. On a $50,000 balance over 30 years, a difference of just 0.5% in annual fees adds up to tens of thousands of dollars in lost retirement savings money that would otherwise have compounded inside your account.
Industry vs Retail: Does It Matter?
It used to matter more than it does now. The difference between industry funds and retail (bank-owned) funds has narrowed in recent years, partly because of regulatory pressure and partly because competition has forced retail funds to sharpen their pricing.
That said, industry funds which return profits to members rather than shareholders still tend to run at lower cost. The YourSuper comparison tool on the ATO website lets you compare MySuper products side by side, including fees, returns and performance ratings. It's the cleanest starting point for any comparison because the data comes from APRA and applies consistent methodology across funds.
Index Funds vs Active: The Fee Difference
Most people in super are sitting in their fund's default "balanced" option, which is typically an actively managed mix of assets. Active management costs more fund managers are paid to make investment decisions, and those costs flow through to your fees.
Index options track a market benchmark rather than trying to beat it, which means lower management costs. Many major super funds now offer low-cost index investment options alongside their actively managed defaults. If you're comfortable with market returns rather than paying for someone to try to beat them, switching to an index option within your existing fund can reduce your investment fees meaningfully without requiring you to move funds at all.
The trade-off is that in years where active managers outperform the index, you're not capturing that upside. In years where they underperform which happens more often than the marketing materials suggest you're paying more for a worse result.
How to Actually Compare Fees
The ATO's YourSuper comparison tool is the right place to start. It shows MySuper products side by side with standardised fee and return data pulled from APRA. What you're looking for isn't the cheapest fee in isolation, it's the best combination of fees and net returns over a meaningful time period, typically five to ten years.
A fund charging 0.8% that consistently returns 8% net is better than one charging 0.5% that returns 6.5% net. The fee is only one part of the equation.
One thing worth checking that most people miss: if you have multiple super accounts, you're paying administration fees on each one. Consolidating them into a single fund eliminates duplicate fees immediately. Just check whether any accounts hold insurance cover before you close them that cover doesn't automatically transfer.
What You Can't Negotiate (and What You Can)
You can't negotiate fees the way you might negotiate a bank rate. Super funds set their fees through their product disclosure statement and they apply to all members equally.
What you can do is choose a fund with lower fees, choose lower-fee investment options within your existing fund, consolidate multiple accounts, and check whether you're carrying insurance cover you don't need. Death and TPD cover through super is valuable, but some members, particularly younger members with small balances are paying premiums for insurance they'd never practically claim on. Worth reviewing.
FAQs
What is a reasonable super fee?
Most people in a MySuper default option pay between 1% and 1.5% of their balance annually. Fees above 1.5% are generally considered expensive. Low-cost industry funds and index options can come in well below 1%.
Do super fees change over time?
Yes. Funds update fees periodically. AustralianSuper's administration fees are increasing from October 2026 the first change since 2022 while investment fees fell for most members during 2025-26. Checking your fund's current PDS annually is worth doing.
Where can I compare super fund fees in Australia?
The ATO's YourSuper comparison tool is the most reliable starting point; it uses standardised APRA data across all MySuper products. Canstar and Finder also publish regular super comparisons, though these may include sponsored placements.
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