How Much Are You Paying in Super Fees? — Australia Guide

Super fees are one of the biggest factors affecting your retirement balance — and most Australians have no idea how much they are paying. Even small differences in fees compound significantly over decades.

What the Average Australian Pays in Super Fees

According to APRA data, total fees across the super industry represent approximately 1.0–1.5% of assets per year for the average member, though this varies widely between fund types and options.

A rough guide for a balanced (growth) option:

The Real Cost of Fees Over Time

Fees compound in reverse — every 1% you pay in fees is 1% that doesn’t compound for 30+ years.

The difference between 0.5% and 1.5% in fees is approximately $152,000 over 30 years on a $100,000 balance — before accounting for ongoing contributions.

What’s a Reasonable Fee?

For a diversified (balanced or growth) option:

• Under 0.75%: Competitive — typically large industry funds or indexed options
• 0.75%–1.25%: Average — review whether you’re getting value for the fee
• Above 1.25%: High — scrutinise what services or alpha (outperformance) justify this
• Above 1.5%: Very high — consider whether the option is appropriate

Always compare fees on a like-for-like basis — a balanced option vs a balanced option, not balanced vs high growth.

Why Are Some Funds More Expensive?

Higher fees are not always unjustified — some funds with higher fees provide:

• Access to unlisted assets (infrastructure, private equity) with higher management costs
• Financial planning services embedded in membership
• Defined benefit components with additional administration
• Platform features (investment choice, reporting, adviser fee payments)

However, higher fees do not reliably correlate with higher returns after fees and costs. APRA’s annual performance test specifically accounts for both returns and fees.

What the APRA Performance Test Measures

APRA’s annual performance test measures net returns (after fees) against a benchmark. A fund that earns 8% gross but charges 1.5% in fees will only score on 6.5% net — the same as a fund earning 7% gross with 0.5% fees.

How to Check Your Super Fees

1. Log in to your super fund’s online portal
2. View your annual statement or fee disclosure
3. Check the “Total annual fees” expressed in dollars and as a percentage of your balance
4. Compare against the APRA heatmap or YourSuper comparison tool at moneysmart.gov.au

Action Checklist

• Find your fund’s PDS and locate the “Fees and Costs” table
• Add up: admin fee % + investment fee % + ICR % to get your Total Cost Ratio
• Convert to a dollar amount: TCR × your balance + fixed admin fee
• Check if your fee is below the “competitive” benchmark for your balance (see Quick Reference table)
• Use the YourSuper tool (moneysmart.gov.au) to compare your fund against peers
• If your fund has failed the APRA performance test, consider switching

Frequently Asked Questions

Do super funds charge fees even if my investment goes down? Yes. Administration fees, investment fees, and the ICR are all charged regardless of investment performance. Some performance fees are only charged when the manager outperforms, but base fees continue regardless of returns. This is one reason fees compound so powerfully against you — they are a constant drag whether markets go up or down.

Is a higher fee ever worth it? Occasionally. Some funds with above-average fees deliver above-average net returns (after fees) over the long term, particularly those with exposure to unlisted assets like infrastructure and private equity. The test is not the headline fee — it’s whether net returns (after all fees) exceed comparable lower-cost alternatives over 10+ years. APRA’s performance test measures exactly this.

Can I negotiate my super fees? No — super fees are set by the fund and applied equally to all members in the same option. You cannot negotiate individually. The only way to reduce fees is to switch to a lower-cost fund or option. Some funds do offer fee waivers for large balances (e.g., capping fees above $500,000) — check the PDS.

Are fees tax-deductible in super? Super fees are not directly tax-deductible by you personally. However, fees paid by the fund reduce the fund’s taxable income inside the super environment, indirectly reducing the fund’s tax bill. This is handled automatically and does not require any action from you.

What is the APRA performance test and how does it relate to fees? APRA annually tests MySuper products against benchmarks on net returns — that is, returns after fees. A fund that earns high gross returns but charges excessive fees can still fail the test. Funds that underperform on a net basis for two consecutive years must notify members that they have failed and explain the options for switching.

How often do super fund fees change? Funds can change fees with 30 days’ written notice to members (or less for some changes). Fee increases must be disclosed via a “significant event notice.” If your fund raises fees materially, it’s a good trigger to re-compare against alternatives. Check your email inbox and member portal for any recent notices.

For more: How Super Fees Are Calculated, Total Cost Ratio Explained, Indirect Cost Ratio, How to Read Your Super PDS, APRA Heatmap Guide. For advice on your situation, speak with a licensed financial adviser via MoneySmart.