Superannuation fees are one of the most consequential financial costs Australians pay, and one of the least understood. Unlike a visible monthly bill, super fees are deducted silently from your balance — reducing compound growth over decades without ever appearing as a line item in your bank statement. A difference of 0.5% in annual fees between two funds with similar investment strategies, on a $200,000 balance over 20 years, can cost more than $40,000 in lost retirement savings. This article explains what fees you are paying, how to find them, and what levels are considered acceptable.
Super funds charge fees in several forms. The most significant are:
Administration fee: A fixed weekly or monthly fee covering fund administration costs — member records, reporting, and fund operations. A common structure is a flat $1.50 to $2.00 per week (roughly $78–$104 per year) regardless of your balance size. For low balances, this can represent a high percentage cost; for large balances, it becomes less significant relative to percentage-based fees.
Investment (management) fee: Charged as a percentage of your account balance and deducted from fund earnings before they are credited to your account. This is typically the largest fee component for members with significant balances. For a balanced option at an industry fund, this is commonly 0.10–0.50% per annum. For a balanced option at a retail fund (bank or insurer-owned), it is more commonly 0.60–1.20% per annum. For an actively managed option at a retail fund, it can exceed 1.50% per annum.
Performance fee: Some investment options charge additional fees if investment returns exceed a benchmark. These are not universal — most industry fund options do not charge performance fees — but are more common in retail funds and alternative asset options. Performance fees can add 0.10–0.30% in years when the fund outperforms, and they can obscure the true cost of an option in fee comparison tables.
ASIC's MoneySmart and APRA both publish standardised fee comparison data. The figure to focus on is the investment option fee as a percentage of the account balance for your chosen option (typically balanced or growth). The fee cap rule introduced by the government in 2019 limits total annual administration and investment fees to 3% of the account balance — but this cap only matters at very small balances. For most working Australians, the relevant comparison is the actual percentage fee charged.
| Fund type | Typical total fee (balanced option) |
|---|---|
| Industry fund — MySuper default | 0.50–0.85% per annum |
| Industry fund — active investment options | 0.70–1.20% per annum |
| Retail fund — MySuper default | 0.80–1.30% per annum |
| Retail fund — managed investment options | 1.00–2.00% per annum |
| Low-cost index options (both fund types) | 0.10–0.40% per annum |
Source: APRA Annual Superannuation Bulletin; MoneySmart fee comparison data 2025.
The real cost of super fees is not what you pay today — it is what you lose through reduced compound growth over decades. A higher fee does not just cost you money this year; it costs you the returns that money would have generated for every subsequent year until retirement.
On a $150,000 balance with 25 years to retirement and an assumed gross return of 7% per annum: a fund charging 0.50% in total fees leaves you with approximately $755,000 at retirement. The same starting balance and returns at 1.50% in fees leaves you with approximately $635,000. The fee difference costs you over $120,000 in retirement savings — none of which appears as an explicit deduction on any statement you receive.
Since 2021, APRA has conducted an annual performance test for MySuper (default) products and, from 2023, for trustee-directed products. Funds that underperform a benchmark (which accounts for both net returns and fees) on a rolling 8-year basis are required to notify their members and, if they fail twice consecutively, cannot accept new members into the underperforming option. The test results are published annually at apra.gov.au. In the 2025 test, all 52 MySuper products passed — but the test identifies funds that are close to the threshold, which is also worth checking.
The performance test was specifically designed to address the problem of high-fee, underperforming funds surviving through member inertia. If your fund's option is close to the threshold or has failed in a prior year, that is a concrete signal to consider moving.
Most super funds automatically provide group life insurance, total and permanent disability (TPD) insurance, and sometimes income protection cover, with premiums deducted from your super balance. These are not investment fees — they are insurance costs — but they reduce your balance in the same way. For young members with a low balance, insurance premiums can consume a meaningful proportion of annual contributions. For members who have duplicate insurance cover (through employer benefits, another super fund, or standalone policies), paying insurance through super may represent unnecessary cost.
You can typically opt out of default insurance within super, reduce the cover level, or tailor it. Review the insurance section of your fund's annual statement to see what you are paying. Default cover is valuable if you have no insurance elsewhere, but is worth auditing rather than leaving on automatic.
Your fee information is in your annual member statement (posted or in your fund's app), your Product Disclosure Statement, and on the fund's fee comparison page. APRA's YourSuper comparison tool at mysuper.apra.gov.au allows side-by-side comparison of net returns and fees across MySuper products. You can also check ATO's YourSuper comparison tool which is accessible through myGov.
The case for switching is strongest when: your current fund's total annual fee is above 1% for a standard balanced option, your fund has failed or come close to failing the APRA performance test, your employer does not mandate a specific fund (most employers in Australia now allow employees to choose their fund under the "stapled super" rules), and the destination fund has better long-term net-return-after-fees performance across multiple market cycles. Switching super funds is relatively simple: your new fund handles the rollover process, and you do not lose accrued employer contributions or waiting periods on existing insurance (though new insurance waiting periods may apply at the new fund).
Check whether your super fund is charging fees that are costing you in retirement.
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