This page will show you how to work out the super fund fees you are paying. The example may be a bit longer than you'd like, but that's the point - and the problem - with super fund fees. The steps however are simple.

Please spend a few minutes working through the example and you'll probably end up knowing more about super fund fees than most super funds. Who knows, 10 minutes here could save you $300,000. Now that's not a bad investment return.

Example
You are a member of The Terrifik Super Fund which has the following fees:

Getting-in fees 1% of contributions
Ongoing fees 1.2% of your account balance
Member fees $1.25 per week
Investment fees 0.85% of your account balance

To work out the total fees you are paying to be a member of Terrifik, you need to know how much you are contributing each year and how much is in your superannuation account balance.

To get things started, let's assume your annual salary is $50,000 and that you have $20,000 in your superannuation account.
To make the example easy, we'll also assume your account balance stays the same all year. (Yes I know some of you in webland may think I've over simplified things, but not everyone reading this is an accounting expert. But from this example we should all get a good idea of what 's going on.)

Step One	To work out your getting-in fees, you first need to work out how much you are paying into your super fund each year. If you are paying your compulsory Superannuation Garrantee of 9% into your super fund, then your annual contribution is: Annual contribution = 9% x Salary = 9% x $50,000 = $4,500 Now you can work out your getting-in fees by taking out the 15% contribution tax and then multiplying the remainder by the 1% contribution fee. Contribution tax = 15% x Annual contribution = 15% x $4,500 = $675 Getting-in fees = 1% x (Annual contribution - Contributions tax) = 1% x ($4,500 - $675) = 1% x $3,825 = $38.25
Step Two	Now work out how much you pay in ongoing fees, which are 1.2% of your account balance. Ongoing fees = 1.2% x Account balance = 1.2% x $20,000 = $240
Step Three	Now work out how much you pay in member fees, which are $1.25 per week. Member fees = $1.25 x 52 weeks = $65
Step Four	Now work out how much you pay in investment fees, which are 0.85% of your account balance. Investment fees = 0.85% x Account balance = 0.85% x $20,000 = $170
Step Five	Now add up all your fees to work out your total fees. Investment fees = 0.85% x Account balance = 0.85% x $20,000 = $170 Getting-in fees + Ongoing fees + Member fees + Investment fees = $38.25 + $240 + $65 + $170 = $513.25 Total Expense Ratio = $513.25 / $20,000 = 2.57%

So what does all this mean? Simple. Your total super fund fees this year are $513 which is equivalent to 2.57% of your account balance. Another way of looking at it is that you have to earn 2.57% on your investments to get back your fee so you are credited with 0% in your account - remember, your crediting rate is what you earn less all your fees.

Also remember some funds give fee discounts and some funds don't charge all these types of fees, meaning that some funds will have lower fees than these. 
Also, please let us know if you found this example helpful or if you would like other examples. The more feedback you give us, the more useful we can make this website.

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