Industry funds more cost-effective on MySuper

Industry fund-backed MySuper products will still be cheaper than those produced by the retail banks, according to new research released by specialist superannuation ratings house SuperRatings. 

The SuperRatings analysis also claims industry funds are likely to transfer members to the cheaper MySuper environment more quickly. 

In an analysis of the evolving MySuper fee environment released today, SuperRatings has pointed to average fees in the retail sector dropping from $932 a year to just $593 a year on an account balance of $50,000, but notes that this compares to the not-for-profit funds where the average fee on the same balance would be $498.  

Further, SuperRatings chief executive Jeff Bresnahan claimed that retail funds would take the longest to transition members whereas the “great majority” of not-for-profit funds “have indicated that members will be transferred immediately”.  

The SuperRatings research suggested that many Australians were set to save over 30 per cent a year on their superannuation fees, but that the implementation time-frames being allowed on MySuper meant that in many cases these savings would not be experienced before 1 July, 2017.  

“The sting in the tail for many Australians is the fact that funds do not have to transfer their members to the cheaper MySuper options until 1 July 2017,” the analysis said.