Fees decline for 8m super members

There are five super funds with ‘significantly high’ administration fees and costs, according to the latest Australian Prudential Regulation Authority (APRA) heatmap, but total fees have declined for over eight million members.

The decline in costs was driven by lower investment fees and transaction costs.

The annual heatmaps evaluated MySuper product performance over the past eight years in investment returns, fees and costs and long-term sustainability of member outcomes.

APRA estimated 8.1 million members had experienced a drop in disclosed total fees and costs in the past year, creating a total saving for members of $210 million per annum.

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For a representative member with a $50,000 account balance, total fees and costs fell from $523 per annum in the 2021 heatmap to $488 per annum for the median product.

Administration fees and costs had declined for most MySuper products and were now $143 per annum for a representative member with a $50,000 account balance in the median product, down from $160 per annum in the 2021 heatmap.

APRA said: “APRA expects RSE licensees to continue to prioritise delivering reduced fees and costs, particularly for those with more expensive MySuper products.

“It is important that RSE licensees that offer MySuper products with high fees can demonstrate these products deliver robust member outcomes. If RSE licensees are unable to do so then they must consider alternatives which may include transferring members to better performing, lower cost products.”

However, there was still one fund with ‘significantly high’ total fees and costs and five with ‘significantly high' administration fees.

The sole fund with significantly high total costs was Qantas Superannuation Glidepath while significantly high administration costs were seen on Prime Super MySuper, IOOF MySuper, Equity Trustees smartMonday Lifecycle, Suncorp Lifestage funds and Diversa Trustees MySuper Passive Balanced.

These funds were identified as being above the upper limit outlined in the methodology across three or more balances.