Retirement
How much is your super fund ripping you off?
Australians would be nearly $200,000 better off at retirement by aligning with a super fund that charges fees at a rate of less than 1 per cent, compared with fees charged at 2 per cent of the balance, new research has revealed.
How much is your super fund ripping you off?
Australians would be nearly $200,000 better off at retirement by aligning with a super fund that charges fees at a rate of less than 1 per cent, compared with fees charged at 2 per cent of the balance, new research has revealed.
StockSpot’s Fat Cat Funds report found that $7 billion of Australians’ super is being eroded each year in fees, with $150 million simply due to funds charging costs of more than 2 per cent.
Commenting on the findings, the report’s author, StockSpot CEO Chris Brycki, said that “urgent action from the government is needed to make it easy for Australians to see how much super funds charge and compare returns to suitable benchmarks, like a low-cost index option”.
A highlight from the report was that research showed that index funds had beaten 90 per cent of all super funds in 2019.
“Aussies in default super funds would benefit if all their super money went into a low-cost index fund,” Mr Brycki stated.
Similarly, investors would be better off if they simply opened their own index funds, according to the CEO.
“People who manage their own super via a self-managed super fund and invest in index funds have been able to beat even the largest super funds by indexing,” he offered.
Who are the fat cats?
The report labelled any fund charging more than 2 per cent in fees as a “fat cat”.
A number of fat cat funds were listed in the bottom 10 funds of their categories over five years.
The report highlighted ANZ/OnePath as topping the list for the seventh year running, with 11 fat cat funds.
The group also controls 27 per cent of the 40 worst-performing funds, it was reported.
AMP was also in the firing line, with 11 fat cat fund options.
MLC and Zurich came in third place for poorest performance, with three funds charging more than 2 per cent in fees.
Who are the fit cats?
The fit cats – funds that charged less than 1 per cent a year – gave their members 20 per cent more over five years than fat cat funds, the report showed.
The “Fit Cat Funds” were also the top 10 funds of their categories over a five-year period.
StockSpot’s research considered QSuper as the top-performing fund in the country, with nine options falling into the fit cat category.
This was followed by UniSuper, with six fit cat options; and Australian Super, which has four options available with fees lower than 1 per cent.
“One of our golden rules of superannuation is: the less you pay, the more you get,” Mr Brycki said.
“Always pay less than 1 per cent p.a. in fees so your super isn’t eroded by high fees.”
About the author
About the author
Superannuation
Actuaries propose three-tier superannuation tax reform
The Actuaries Institute has outlined major reforms to Australia's $4.1 trillion superannuation system, proposing uniform tax rates and new levies on high retirement withdrawals. Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Actuaries propose three-tier superannuation tax reform
The Actuaries Institute has outlined major reforms to Australia's $4.1 trillion superannuation system, proposing uniform tax rates and new levies on high retirement withdrawals. Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more