What are your super fees really costing you?

By Philippa Billings, Chief Advice Officer, Otivo

Half a percentage point sounds like a rounding error. On a $310,000 super balance it's $1,550 a year, deducted quietly and in instalments, whether markets rise or fall. And here's the part most people miss: fees are the only variable in the retirement equation you can find out in advance. Returns are a forecast. Fees are a contract. This is what you're actually paying, why a one percentage point gap compounds so hard over three decades, and the four numbers on your annual statement that tell you where you stand.

Super fees are the administration, investment and transaction costs deducted from your super account before you ever see a balance. As at August 2026, ASIC's Moneysmart notes that total annual fees and costs of 2% rather than 1% could reduce a final super benefit by up to 20% over a 30-year period — on a $100,000 outcome, roughly $20,000 of it.

What fees are actually coming out of your super?

Super fees are the charges a fund deducts for running your account and managing your money, and they're taken from your balance rather than billed to you. That's the whole reason they slip past people. Nobody transfers money to their super fund each quarter, so the cost never appears as an expense — it appears as a slightly smaller balance than it would otherwise have been.

Under ASIC's fee disclosure rules, funds must set out what they charge in a fees and costs summary in the product disclosure statement. The categories are consistent across the industry:

• Administration fees and costs — often a flat dollar amount each week or month, plus a percentage of your balance, sometimes capped.
• Investment fees and costs — charged for managing the assets in your chosen option, expressed as a percentage.
• Transaction costs — the cost of buying and selling assets inside the option.
• Buy-sell spreads — a small charge applied when money moves in or out, recovering the fund's trading costs.
• Activity fees — charged for specific one-off actions, where a fund applies them.
• Insurance premiums — not technically a fee, but a deduction from the same balance, and often the largest one on a small account.
• Adviser service fees — where an ongoing advice arrangement is in place and deducted from super.

One rule works in favour of smaller balances. Under the Protecting Your Super measures, if your account balance is below $6,000 at the end of the financial year, certain administration and investment fees and costs are capped at 3% of the balance, and anything charged above that must be refunded.

Why does a one percentage point difference in super fees matter so much?

Because the fee is charged on the whole balance, not on the earnings — and every dollar deducted also stops earning from that point on. That second effect is the one that does the damage. A fee isn't a one-off subtraction; it's a permanent removal of a dollar that would have compounded for the remaining 20 or 30 years.

ASIC's Moneysmart illustrates the scale with a worked example. A 30-year-old librarian earning $50,000 with $20,000 already in super, compared across two fee levels — 2.5% and 1% — for the same level of performance, arrives at roughly $336,000 at age 65 on the lower fee level, against about $255,000 on the higher one. The gap is around $81,000, on a starting balance of $20,000. The example holds contributions, returns and every other variable steady, which no real working life does, so it isn't a forecast of anyone's outcome. It's a clean read on the size of the fee variable itself.

The same arithmetic works in the other direction, which is worth knowing before deciding a fee is trivial. For a 42-year-old with $120,000 in super, a total fee of 1% is $1,200 this year. Not alarming on its own. Compounded across another 25 working years, on a balance that keeps growing, it becomes one of the larger numbers in the whole retirement calculation.

Where do the highest super fees usually sit?

Fee levels vary widely across the super system, and the widest variation sits in the choice segment rather than in default products. MySuper products are the low-cost default accounts people land in when they don't choose a fund. Choice products — including those offered through investment platforms — typically carry more features, more investment menus, and higher costs to match.

APRA's annual performance test gives a useful read on where the pressure is. In the 2025 test, released on 29 August 2025, APRA assessed 563 products. All 52 MySuper products passed, as did all 374 non-platform trustee-directed products. Of the 137 platform trustee-directed products assessed, seven failed. APRA also noted that since the test began in 2021, the number of members sitting in products that did not pass had fallen from around 1 million to 8,500. The test measures net investment performance and administration fees against tailored benchmarks on a $50,000 balance, so fees are built into the result rather than assessed separately.

Then there's the quieter source of excess cost, which has nothing to do with any fund's pricing. The ATO points out that holding multiple super accounts means paying multiple sets of account fees and duplicated insurance premiums. Someone who has worked across five employers and never nominated a fund can be paying a full set of administration fees and a full set of premiums on accounts they've forgotten about entirely.

The four-number fee check

Most fee reviews stall because people go looking for a single percentage that doesn't exist on their statement. These four numbers do exist, and together they give a complete picture. Call it the four-number fee check.

1. Total annual fees and costs in dollars, for your actual balance. Percentages hide the size of things. Dollars don't.
2. The split between administration and investment fees. Administration is what you pay for the account to exist. Investment is what you pay for the strategy. They move for different reasons and are worth seeing separately.
3. Insurance premiums deducted over the year. On smaller balances this is frequently the biggest single deduction, and it's the one most likely to be cover nobody chose.
4. The number of super accounts in your name. This one isn't on your statement at all — it's in ATO online services through myGov.

Do lower super fees always mean a better outcome?

No, and this is where fee awareness can tip into something less useful. What lands in your account is the return after fees and costs have been taken out, so the meaningful comparison is net outcome, not the headline charge. A cheaper option with a different asset mix isn't a like-for-like swap; it may carry a different level of risk and behave differently through a downturn. Two options at the same fee level can also be doing quite different jobs.

There are also consequences that sit outside the fee line entirely. Insurance cover held inside a super account generally ends when that account is closed, and cover can be harder or more expensive to replace later, particularly after a change in health. Some people choose to consolidate accounts to stop paying duplicated fees; a common consideration before doing so is what cover exists in each account and whether it can be replaced. This is one of the areas where general information runs out and personal circumstances take over.

The fair conclusion is narrower than "lower is better". It's that fees are knowable, they compound, and a fee level that can't be explained by what the account actually delivers is worth a closer look.

How can you find out what you're paying?

Four sources cover it, and none of them take long.

1. Your annual member statement, which sets out fees and premiums deducted over the year in dollars.
2. The fees and costs summary in your fund's product disclosure statement or fees and costs guide, which gives the current rates rather than last year's deductions.
3. The ATO's YourSuper comparison tool, which ranks MySuper products by annual fees and net returns over a rolling seven-year period and flags performance test results. Accessed through myGov, it also shows the accounts held in your name.
4. ASIC's Moneysmart superannuation calculator, which lets you change the fee assumption and see the effect over time. Its default fee assumptions are based on an actuarial review of APRA data reported as at March 2026.

Many Australians find the whole exercise takes about twenty minutes, most of it spent finding the login.

Frequently asked questions

Are super fees deducted from my balance or billed separately?

They're deducted from your super balance. Administration and investment fees, transaction costs, insurance premiums and any adviser service fees all come out of the account itself, which is why they're easy to miss. Your annual member statement shows the total deducted over the year in dollars.

Is there a limit on how much a super fund can charge?

There's a cap for small balances. Under the Protecting Your Super measures, where an account balance is below $6,000 at the end of the financial year, certain administration and investment fees and costs are capped at 3% of the balance for that year, and any excess must be refunded. Above that threshold, there's no general cap — which is why disclosure and comparison tools exist.

Do I pay fees on every super account I hold?

Generally yes. Each account attracts its own administration fees, and often its own insurance premiums. The ATO notes that multiple accounts mean multiple sets of fees and duplicated insurance costs. Accounts held in your name can be viewed in ATO online services through myGov.

Are insurance premiums inside super counted as fees?

No, they're a separate category of deduction, though they come from the same balance. Funds report them separately from fees and costs, and on smaller accounts premiums can exceed the administration and investment fees combined. It's worth reading the two lines on your statement as one total cost of holding the account.

Sources

• ASIC Moneysmart, Choosing a super fund
• ASIC Moneysmart, Superannuation calculator (assumptions based on APRA data as at March 2026)
• Australian Taxation Office, Keeping track of your super online, and the YourSuper comparison tool
• APRA, 2025 annual superannuation performance test results and product insights, 29 August 2025

Fees are one of the few levers in super that can be measured today rather than estimated. Otivo's super investment options advice looks at your current option, your age, historical returns and the fees you're paying, and Otivo's own advice outcomes suggest customers who follow that advice in full could be better off on average by $138,645. If you'd rather start with the bigger picture, Otivo's retirement planning module works through what your position looks like at retirement age, and the personal insurance inside super module covers the premium side of the ledger. Otivo Pty Ltd holds AFSL and Australian Credit Licence No. 485665.

Disclaimer

The information in this communication is current as at August 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.