Find out what fees you may be subject to with your superannuation fund and what you can do to avoid them
Superannuation fees are fees that you may end up paying on your superannuation fund. There are a variety of different types of these fees to take into consideration and it is also important to bear in mind that different funds can charge different fees. You should never assume, therefore, that one super fund is going to charge exactly the same fees as another, although it is worth remembering that if you have more than one fund you will most likely be getting charged two sets of fees, which can work out costly and unnecessary. In this event it may be worth considering account consolidation so that you have one fund and just one set of fees to go with it.
The fees that you get charged on your superannuation fund can make a big difference to how well your super fund grows, so it is always important to be aware of the fees that you are being charged on your super and whether there is anything that you can do to reduce these fees that you are being charged (such as the aforementioned consolidation of accounts).
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Disclaimer: Fees and performance figures are based on a deposit of $50,000 into the fund's default or MySuper option.
Different types of super fees that you may have to pay
There are a number of different superannuation fees that you may end up having to pay on your fund, although not all fees will apply to all funds. Some of the fees that your fund may be subjected to include the following:
- The establishment fee, which is a fee that is charged for setting up your superannuation fund
- Contribution fees, which are fees that may be charged each time you make a contribution or payment into your fund
- Withdrawal fees, which may be charged each time you make a withdrawal from your super fund
- Termination or exit fee, which may be charged in the event that you decide to close your account, such as if you leave one super fund to join another one
- Switching fees, which may be charged in the event that you decide to change the investment options in your superannuation fund
- Advisory fees, which may be charged by any adviser who offers you assistance and advice in relation to your super fund
- Management fees, which are fees that may be charged for any administrative work that goes into the management of your superannuation fund. There are a number of different management fees that may be incurred on your account such as member fees, expense recovery fees, investment management fees, administrative fees, and issuer fees, all of which may come under the umbrella of management fees
There are also other costs and fees that may be incurred as part of your super fund charges and this can include costs such as:
- Insurance premium costs
- Transaction costs relating to the selling, buying or switching of investments
- Maintenance fees relating to real property and direct investments
Finding out about the fees you are paying
Many people are not really aware of the various fees that they are paying on their super fund, which is something that is not ideal as you may be paying fees that can be avoided. The Product Disclosure Statement (PDS) of your superannuation fund should contain all details relating to the fees and charges associated with your fund – this is something that is required by law, so you should find a clear section of your PDS that contains full details about charges and fees. Some of the information that you should find in the PDS of your fund include:
- A listing of all fees laid out in a single section or table
- A separate table showing details of individual ongoing fees
- Other data relating to fees on your super fund
- Details relating to what the fees are
- Details about the amount of the fees or examples of fees in the event that they are percentage based
- Information about when and how these fees are charged
Familiarise yourself with your super fees
With all details about the fees that you are paying on your super fund laid out in the fund’s PDS in a way that should be clear and easy to understand, you should have no problem checking this document and familiarising yourself with all of the different fees, what they are, why and when they are charged, and if they can be avoided. Remember, the more you can avoid fees on your super the more you can look forward to your fund growing. Of course, some of these fees cannot be avoided but by ensuring that you check the PDS on your super fund you can at least work out what you are paying and see whether you can get a better deal on fees and charges relating to super funds elsewhere.