Australians collectively hold over $3.9 trillion in superannuation. It is the largest pool of retirement savings in the world relative to GDP. And a significant proportion of it is quietly being eroded by fees that most account holders have never thought about.

The Numbers Are Significant

The difference between a fund charging 0.4% per annum in fees and one charging 1.5% per annum doesn't sound dramatic. Over 30 years, on a balance that grows from $50,000 to the median retirement figure, the compounding impact of that fee difference can exceed $120,000. Not in extra returns — simply in fees not paid.

APRA's annual super fund performance data, published each year, shows that the gap between the best and worst performing funds over 10 years — adjusting for fees and risk — is more than 2 percentage points per annum. That gap is not explained by investment strategy. It's mostly explained by costs and operational efficiency.

Who Charges Too Much

The funds with consistently high fees relative to their performance are primarily retail funds operated by the major banks and financial planning groups. Industry super funds — AustralianSuper, Hostplus, Rest, Cbus, UniSuper — have consistently outperformed their retail counterparts on an after-fee basis over 7 and 10-year periods according to APRA data.

How to Check Your Fund

The ATO's YourSuper comparison tool (ato.gov.au/yoursuper) publishes fees and returns for every MySuper product in Australia in a standardised, comparable format. It takes five minutes to use and the information is current. Most Australians who check it for the first time are surprised by what they find.

What to look for:

  • Total annual fee as a percentage of balance (target: below 0.7% for a balanced/growth option)
  • 7-year and 10-year net return after fees (compare against the average for your risk category)
  • Insurance premiums included in fees (these can be substantial and may duplicate cover you have elsewhere)

Switching funds has been made deliberately simple by the ATO — most transfers can be completed entirely online through your myGov account in under ten minutes. There are no exit fees on MySuper products.