Understanding fees and costs of super

Regulatory requirements mean all fees and costs charged to members must be listed on their statement – and every super fund must use the same format so it’s easy to compare the fees and costs of one fund against another. However, it can still be difficult to understand what you’re paying for and why.

Depending on your super fund, these fees may apply:

This covers the costs of operating the fund. It may be charged as a fixed fee, a percentage of your super balance, or a combination of both.

These cover the cost of personal advice you receive from your financial adviser (if you have one) about your super.

This is paid to the investment option when you invest, switch or withdraw part or all of your investment. The cost is deducted from your investment.

If you have insurance cover through your super, the premiums will be deducted from your account balance. Many funds have a default level of cover which you can increase or decrease, affecting the premiums you pay. A number of factors will determine how much you pay, including how much cover you have, your occupation and your health.

These are fees and costs that relates to the investment of the assets of a super fund and includes indirect costs. Indirect costs are expenses paid by your super fund to third-party providers, such as investment managers. They may affect the value of your investment.

These are costs associated with the sale and purchase of assets of the super fund other than costs that are recovered by the super fund charging buy/sell spreads.

May be charged if the super fund offers extra services or support, or a greater choice of products.
 

Although each fee may appear to be small by itself, you need to think about how these will add up over the long term. These will be outlined in the Product Disclosure Statement (PDS) or Annual Report.