The timing could not be worse. When IOOF, one of the country’s biggest superannuation funds, tried to impose higher fees on its 326,000 members, even its own advisers attacked the hike as “inconceivable”.

“The fact that IOOF is prepared to do this in the middle of a Royal Commission on Financial Services shows a complete lack of judgement, and we would even argue arrogance,” said a letter from Bridges financial planners to IOOF Board.

Now IOOF has backed down. At least with the advisers who complained.

But for consumers, the questions is: what are the management and service fees you can expect to pay to your superannuation fund?

According to comparison website superguide.com.au, HOSTPLUS, Indexed Balanced fund has the lowest fees at $108 based on an account balance of $50,000, AustralianSuper, Indexed Diversified is second at $188, Sunsuper for Life Balanced Index is third at $243 and Vision Personal, Sustainable Balanced is a joint third at $243.

According to ASIC’s Money Smart website, all super funds charge fees and costs, some more than others.

There are many different types of fees associated with your super fund.

Fees are typically deducted from your account on a regular basis at the end of each month. The fees can either be a dollar amount or a percentage.

The main types of fees are

  • Administration or management fees which comprise general administration fees to cover the cost of operating the fund and keeping your super fund.
  • Investment fees for managing your investment which varies for different investment options.
  • Advice fees for personal advice provided about your super fund and other investments.
  • Switching fees for changing your investment option within the fund
  • Transaction fee – every time you make a transaction in your fund you have to pay a fee.
  • Exit fees are charged when you leave the fund.
  • Indirect costs – these costs are paid by your super fund to external providers and investment managers which affect the value of your investment.

Money Smart advises that you should always check your annual statement to see if you are paying for financial advice. Make sure you are happy with what you are paying. If you are not happy or unsure about any fee, contact your fund and ask how you can stop the fees being deducted.

“The only way to know if you’re paying higher fees and costs if to find out what your super fund is charging you and compare the fees and costs to other similar funds.

“In addition to comparing fees and costs, weigh up other important things including returns, risk and the services the fund provides.

“Comparing the fees and costs on your super fund with those of other funds can help you decide on a fund that’s good for you. The expected returns on your investment are also important as well as how much risk you are taking.

“However, it does not make sense to compare funds that are quite different just on the basis of fees and costs.

“The best way to compare the fees and costs is by looking at the fee example shown in the Product Disclosure Statement (PDS) your super fund has sent you,” said Money Smart website.

Three essential things to look out for when comparing super funds:

  1. The lower the fees, the better
  2. Make sure the investment options suit your needs and you are comfortable with the risk
  3. Pick a fund that has performed well over the last five years