SelectingSuper - Fees - More Information

Getting in fees

These are fees charged as a percentage of what you contribute into your super fund each time you make a payment. These are fees you pay when you join the super fund or every time you contribute money to the super fund. These fees can be called different things but look for words like entry fees, contribution fees, deposit fees, establishment fees, rollover fees.

On average, most individual investors can pay contribution fees of up to 5% but if you join a corporate master trust or an industry fund your contribution fee can drop to zero or sometimes just 1%. But not all super funds charge contribution fees. May be you're in one that doesn't?

Do not forget though that you pay 15% tax on your contributions before it gets to the fund. And if you earn a high salary you could be paying contributions tax as high as 30%. But these tax rates should still be lower than if you received this money as regular salary and paid normal PAYE tax.

There are also exit or withdrawal fees that some funds charge. The SelectingSuper fee calculator doesn't focus on these because we are only looking at the fees you are paying now. But, if you want to swap from one fund to another and the fund you want to leave charges a percentage type exit fee, say 3%, then this should be thought of as a de facto entry fee to the new fund which should be added to your new fund's normal entry fees just for this year because it is really the cost of putting money into your new fund. Most funds though do not charge exit fees anymore.

Staying in fees

These are fees charged as a percentage of your account balance each year. They include charges for asset administration, trustees, custodians, extra fund expenses etc.

These fees can be called different things but look for words like administration fees (where these are charged as percentages), asset administration fees, trustee fees, expense fees, expense re-imbursement fees, consulting fees. Also, these fees sometimes reduce as you have more in your account.

Sometimes there are several types of these fees charged by your super fund and you have to add them all up to give you a single figure.

On average, most individual investors can pay staying in fees of around 1.5% but if you join a corporate master trust your staying in fee can drop to much lower levels depending upon the size of your super account or the number of employees in your company that are with the super fund. Not all funds charge staying in fees.

Flat dollar fees

These fees are charged as flat dollar amounts, eg $1 per week or $4.33 per month.

These fees can be called different things but look for words like member fees, policy fees, account keeping fees, administration charges (if you are with a not for profit fund like an industry fund).

On average these flat dollar fees usually add to around $50-80 per year. Sometimes, if you are in a corporate master trust you will get a discount on this fee if the size of your super account is big enough or the number of employees in your company that are with the super fund is large enough.

To work out the yearly flat dollar fee, just get either the weekly flat dollar fee and multiply it by 52, or get the monthly flat dollar fee and multiply it by 12.

Investment fees

These are fees paid to the investment managers to look after your super fund's investments. These fees are charged as a percentage of your account balance.

Investment fees usually vary from 0.30% up to 2.5% depending upon the types of investments. The more complex the investment, the higher the investment fee. Eg, investment fees for international equities are higher than investment fees for cash.

If your super fund manages its own investments, sometimes the investment fee is bundled with the staying in fees and so it can seem large. If this happens in your super fund, don't worry as you can still see the overall fees you are paying. It's the size of the overall total number which is important not how the fees are broken up.

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