Understanding the true dollar cost of your super fees is one of the most valuable things you can do for your retirement. Even a 0.5% difference in fees can mean tens of thousands of dollars less at retirement. Here’s how to calculate exactly what you’re paying.
Step 1: Find Your Fee Rates
You need three numbers from your fund’s PDS or member statement:
- Administration fee (dollar amount per year + percentage of balance, if applicable)
- Investment fee (percentage per annum for your chosen option)
- Indirect cost ratio (ICR) (percentage per annum)
Performance fees can be added if disclosed, but they vary year to year.
Where to find them:
- Your annual super statement (in the fees section)
- The fund’s PDS → “Fees and Costs” section
- The fund’s online member portal
- APRA’s heatmap (total fee percentage shown per fund/option)
Step 2: Calculate Your Annual Fee in Dollars
Formula:
Annual fee ($) = Fixed admin fee + (Admin % + Investment fee % + ICR %) × your balance
Example for a $100,000 balance:
| Fee component | Rate | Dollar cost |
|---|---|---|
| Fixed admin fee | $60/year | $60 |
| Admin % | 0.15% | $150 |
| Investment fee | 0.45% | $450 |
| ICR | 0.08% | $80 |
| Total | 0.74% + $60 | $800/year |
As a percentage of balance: $800 ÷ $100,000 = 0.80%
Step 3: Use the Long-Run Fee Impact Calculator
The formula to estimate the drag of fees on your balance over time:
Approximate future cost of fees:
Fee drag ≈ Annual fee % × balance × years × 1.5 (approximate compounding multiplier for 10 years, 2.2 for 20 years, 3.5 for 30 years)
This is a rough estimate. For precision, use the ASIC MoneySmart Super Calculator or a financial planning tool.
Worked example — difference between 0.5% and 1.5% fees over 30 years:
| Scenario | Starting balance | Annual contribution | Gross return | Fee | Approx. balance at 30 years |
|---|---|---|---|---|---|
| Low-cost fund | $50,000 | $10,000 | 7% | 0.5% | ~$800,000 |
| High-cost fund | $50,000 | $10,000 | 7% | 1.5% | ~$650,000 |
| Difference | ~$150,000 |
This estimate does not account for tax — actual results will vary.
Step 4: Compare Against Other Funds
Once you know your current fee rate, compare it:
- APRA heatmap: Shows total fees for each MySuper product on a $50,000 balance
- YourSuper comparison tool (moneysmart.gov.au): Compare up to 4 funds side by side
- Fund’s own PDS: Check the “Fees on a $50,000 balance” table (required disclosure)
Quick Reference: Competitive Fee Benchmarks
| Balance | Competitive annual fee (balanced option) | High fee warning |
|---|---|---|
| $10,000 | < $150 | > $250 |
| $50,000 | < $400 | > $700 |
| $100,000 | < $750 | > $1,200 |
| $250,000 | < $1,500 | > $2,500 |
| $500,000 | < $3,000 | > $5,000 |
These are rough benchmarks — some options (alternatives-heavy, ethical, or managed accounts) will legitimately cost more.
When Higher Fees May Be Justified
Higher fees can be worth paying if:
- The net return (after fees) materially exceeds lower-cost alternatives over 10+ years
- The option provides access to unlisted assets (infrastructure, private equity) not available through lower-cost options
- Embedded financial advice services provide value beyond the fee
The test is always: are you getting value for the extra cost?
For more: How Are Super Fees Calculated?, How Much Are You Paying in Super Fees?, Total Cost Ratio, Indirect Cost Ratio. For advice on your situation, speak with a licensed financial adviser via MoneySmart.