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Understanding the costs of super

When it comes to choosing the right super fund, it helps to know what you’re paying for.

No two super funds are alike – and the one thing that can set them apart is the fees they charge.  Understanding fees can help you make an informed decision when choosing your super fund. It can also help prevent your balance from being eroded by unnecessary or excessive fees and maximise your income in retirement.

Here’s a quick guide to how fees work on your super account.

Types of fees and costs

Super fund regulations mean all fees charged to members must be listed on their statement – and every super fund must use the same format so it’s easy to compare the fees of one fund against another. However, it can still be difficult to understand what you’re paying for and why.

Depending on your super fund, these fees may apply:

  • Administration fee. This covers the costs of operating the fund. It may be charged as a fixed fee, a percentage of your super balance, or a combination of both. 
  • Buy/sell cost. This is paid to the investment option when you invest, switch or withdraw part or all of your investment. The cost applies to the amount of your transaction.
  • Investment fees. These vary according to the investment options you choose.
  • Insurance costs. If you have insurance cover through your super, the premiums will be deducted from your balance. Many funds have a default level of cover which you can increase or decrease, affecting the premiums you pay. A number of factors will determine how much you pay, including how much cover you have, your occupation and your health.
  • Advice fees. These cover the cost of personal advice you receive about your super and investments. 
  • Indirect costs. Expenses paid by your super fund to third-party providers, such as investment managers. They may affect the value of your investment.
  • Exit fee. This may be paid when you leave the fund.
  • Additional fees. May be charged if the super fund offers extra services or support, or a greater choice of products.


Although each fee may appear to be small by itself, you need to think about how these will add up over the long term. These will be outlined in the Product Disclosure Statement (PDS) or Annual Report.

Other things to look out for

Some super funds may also offer extra benefits to their members, such as:

  • Educational tools and seminars. To equip you with the tools and knowledge you need to take control of your super and plan for the future.
  • Regular updates. Including personalised statements and a quarterly newsletter delivering regular market information and insights.
  • Dedicated support. Such as customer service or access to financial advisers online and via phone.


It’s also worth looking at the size of the super fund itself. While each fund must be assessed on its own merits, members can often benefit from the strength and scale of larger funds.

Comparing the costs

You can find a breakdown of fees and costs for each super fund in their Product Disclosure Statement (PDS). In 2017, new rules were put in place to ensure greater transparency in the way funds report their fees and costs.

Your member statement will also show details of amounts deducted from your super account, including:

  • lump sum withdrawals
  • account fees
  • insurance premiums
  • tax paid by your fund – usually 15% of your contributions

Get the right advice

How much you pay for your super fund is just one of the factors you should consider when choosing the right super fund. As your super may be your most valuable asset in retirement, you want to make sure you're choosing the best option for your circumstances. A financial adviser can help you navigate the market – and put you on track to a comfortable retirement.  

Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the issuer of the FirstChoice range of super and pension products from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. CFSIL also issues interests in products made available under FirstChoice Investments and FirstChoice Wholesale Investments. This document may include general advice but does not take into account your individual objectives, financial situation or needs. The Target Market Determinations (TMD) for our financial products can be found at and include a description of who a financial product is appropriate for. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. The PDS and FSG can be obtained from or by calling us on 13 13 36.