No fee superannuation funds
Search for a super fund that charges no administrative fees. Compare fund rates and performance to find one that suits your needs and budget today.
Is there such a thing as a no fee super fund?
While there are certain types of super funds in Australia that limit the amount of fees they charge members, it's unlikely you'll find a fund that's completely fee-free. After all, super funds need to make money in order to cover the costs of managing your retirement savings.
The fees you're charged by your super fund will generally depend on the type of fund it is, the type of account you hold, and the balance of your account.
You might already have a super fund that you’re happy with, but it doesn’t hurt to reassess whether that fund is giving you the best results. And the fees attached to your super account can make a significant difference to the amount of money you end up with at retirement.
Popular super funds in Australia
Australian Retirement Trust Super Savings (formerly Sunsuper for Life) Balanced
QSuper - Accumulation Balanced
Which superannuation funds charge no fees?
When it comes to the kinds of fees you may be charged by your super fund, the type of fund it is plays an important role. So, it's important to understand the different types of funds there are, and why they charge the fees that they do.
The five main types of super funds in Australia are as follows:
- Retail super funds
- Industry super funds
- Corporate (or company) funds
- Public sector super funds
- Self-managed super funds (SMSFs)
The fees charged by each of these funds can vary greatly, with some funds charging no fees under certain categories.
In general, industry super funds charge their members low fees compared to other funds, due to being not-for-profit mutual funds. This means that their profits are returned to members rather than shareholders.
In contrast, retail super funds - which are typically run by banks or investment companies - aim to keep some of the profit they make and distribute it to shareholders. They can come at a higher cost than other funds, but many offer a lower cost MySuper option.
Public sector funds also offer members lower fees, although these funds are often restricted to state and federal government employees.
SMSFs may offer the most flexibility when it comes to fees, as you choose the investments, insurance, and manage it yourself. But keep in mind, SMSFs do tend to come with a lot more work and often a higher level of risk.
Are super fees still charged if you have no balance?
If, for whatever reason, you have a super account in your name with a zero balance, the fund shouldn't be charging you any fees.
In fact, under the Treasury Laws Amendment (Protecting Your Superannuation Package), inactive low-balance super accounts are to be transferred to the Australian Taxation Office (ATO). The ATO will then, where possible, proactively consolidate your super on your behalf in an effort to protect the account from fee erosion.
This applies to inactive accounts with balances of less than $6000. For more information on what criteria determine an account to be 'inactive', visit the ATO website. It's also worth checking your super account balance to see what fees you are being charged, and consolidating multiple accounts into one.
What fees may be charged to superannuation accounts?
Keeping in mind that not all super funds will charge the same fees, here’s a list of the standard types of fees that you might expect to be charged:
- Member or administration fee - General ongoing admin fees charged as either a fixed fee or percentage of your account balance.
- Establishment fee - A fee charged upon setup of your super account.
- Contribution fee - A tax charged by the government on contributions made to your fund.
- Investment management fee - Ongoing fees charged to cover costs associated with investing your money.
- Switching fee - A fee that may be charged when switching investment options.
- Insurance premium - An ongoing fee or premium charged for insurance coverage such as Death, Total and Permanent Disability, and Income Protection.
- Financial advice fee - A fee that may be charged if you access superannuation-related financial advice through your super fund.
- Activity-based fee - A fee charged for other activity on your account, such as a request to split your super contributions with your partner.
- Rollover or exit fees - Fees associated with closing or consolidating super accounts can no longer be charged, as of 1 July 2019.
The most significant fees in the list directly impacting your super balance are the ones that are recurring – for example, admin fees, insurance fees and investment fees.
If you want to analyse your super account fees to compare them against those of other funds, have a look at your super account statement to see which ones keep cropping up.
Keep in mind, you don’t always have to switch super funds to alter the fees you’re paying on your account. By understanding the fees applied to your account, you can make a decision as to their relevance.
For example, look at the cost of your super insurance premium; you might find a cheaper insurance policy elsewhere, or you may simply prefer to opt out of the coverage. The same applies to paying fees for advice from a financial adviser - does your bank offer an alternative?
Why do superannuation fund fees matter?
The main reason superannuation fees are so important to consider is that nearly all of them are automatically deducted from your super balance. Given you will typically hold a superannuation account for the duration of your career, the fees will have a compounding effect on your net savings.
It’s worth noting that lower fees don’t always translate to higher investment returns. In fact, some fees, such as financial advice coupled with investment management and/or switching fees, may even reap rewards.
But remember, you don’t have to accept the level of fees charged by your fund. There is a wide range of superannuation funds available to choose from. Comparing your options will allow you to find one that works best for your personal financial situation.
If you want a simple, no-frills superannuation account with a single diversified investment option, a minimum amount of life insurance cover and standardised disclosure of fees, you could consider a MySuper fund. MySuper products are designed to be simple, low cost, and easy to compare.
To get started on your super fund comparison, consider conducting a quick super health check by looking at the fees you’re currently paying. There may be other super funds that could offer you a similar level of return minus certain fees.
Where can I find information on my super fund’s fees?
As with any financial product, the product disclosure statement (PDS) is the first place you might look for your super fund's terms and conditions.
Additionally, if you have online access to your super account, you should be able to easily access your super statements. You'll find that your statements will itemise all the transactions on your account within a specified timeframe, including the fees.
You could also reach out to your super fund directly and get them to talk you through their fees and charges. They may also be able to provide you with general advice or suggestions on how you could lower the fees you’re paying.
How do I switch super funds to a low or no fee option?
If you're considering switching to a fund with lower fees, it's important to first make a comprehensive comparison. This will help you weigh up all of the key factors involved in choosing a super fund that will give you the best chance at a comfortable retirement.
How to compare super funds
- Fees - By now you should have a good idea of the range of fees that different super funds may charge. When comparing fees, remember that it's not just about finding the fund with the lowest fees. Sometimes funds with higher fees can still offer better value than ones with lower fees.
- Investment options - You may want to research the different investment options being offered with different super fund products. It's important that you're comfortable with the risk level, the asset classes you would be investing in, and how much of your super would be divided into each asset class. Your age and how close you are to retirement can also play a big part in determining what investment option could be most suited to you.
- Investment performance - It's worth researching how each fund's investment options have been performing, such as by looking at their long-term returns. Moneysmart suggests comparing the performance of different funds over the last five years. But keep in mind that past performance isn't a reliable indicator of future performance.
- Insurance options - Your fund may offer insurance coverage such as Death, Total and Permanent Disability, and Income Protection. Be mindful of what fees you may be charged for this coverage and whether it's right for you.
- Customer service - It can also be helpful to learn more about what sort of customer service you might receive from different super funds. This might involve comparing the promises made by funds in their marketing with the feedback left on online review sites.
RateCity's superannuation comparison tables, like the one on this page, can take some of the hassle out of shopping around. Using our comparison tables, you can quickly compare the rates of return for various super funds over the past five years, as well as fees, features, benefits, and relevant SuperRatings awards.
How to switch super funds
If you want to open a new super account with a new super fund and rollover your existing balance, there are a few different ways you can go about it:
- Use your myGov account - Once you've logged in, select 'Super' and then 'Manage' to get started.
- Contact the new fund directly - The fund's customer service team will be able help you set up your new account and rollover your existing super balance.
- Use an ATO rollover form -Visit the ATO website and download the form: 'Request for rollover of whole balance of super benefits between funds'.
What fees do superannuation funds charge?
Superannuation funds can charge a range of fees, including:
- Activity-based fees – for specific, irregular services, such as splitting an account after a divorce
- Administration fees – to cover the cost of managing your account
- Advice fees – for personal investment advice
- Buy/sell spread fees – when you make contributions, switches and withdrawals
- Exit fees – when you close your account
- Investment fees – to cover the cost of managing your investments
- Switching fees – when you choose a new investment option within the same fund
What is a superannuation fund?
A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:
- Retail funds
- Industry funds
- Public sector funds
- Corporate funds
- Self-managed super funds
Retail funds are usually run by banks or investment companies.
Industry funds were originally designed for workers from a particular industry, but are now open to anyone.
Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.
Corporate funds are arranged by employers for their employees.
Self-managed super funds are private superannuation funds that allow people to directly invest their money.
How do I choose the right superannuation fund?
Different superannuation funds charge different fees, offer different insurances, offer different investment options and have different performance histories.
So you need to ask yourself these four questions when comparing superannuation funds:
- How many fees would I have to pay and what would they cost?
- What insurances are available and how much would they cost?
- What investment options does it offer? How would they match my risk profile and financial needs?
- How have these investment options performed historically?
How do you create a superannuation account?
Before you create a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.
Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.
Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).
How many superannuation funds are there?
There are more than 200 different superannuation funds.
Personal Finance Editor
Georgia Brown is a Personal Finance Editor and journalist for RateCity. Before venturing into the world of personal finance, she worked as a reporter for realestate.com.au and Smart Property Investment. She now works truly amongst personal finance, while also writing about other areas, such as sustainable finance and super.