Self-managed superannuation funds remain the cheapest segment, with average fees of 0.65 per cent per annum.

Rainmaker Information's Superannuation Benchmarking Report analysed 1,500 super fund fee options offered across 354 products and found that Australians pay $32 billion in fees. MySuper is the most competitive segment, covers the most members, and has average fees of one per cent per annum as at 30 June 2023.

“MySuper fund fees fell from 1.05 per cent pa to one per cent pa over the year to June 2023, a significant reduction,” said Pooja Antil, research manager at Rainmaker Information.

“This is the biggest fall in the MySuper benchmark fee since 2014. Of the MySuper products, fees are now level for retail and not-for-profit funds.”

Assessing MySuper fees further, not-for-profit funds offer lower administration fees, while retail products have lower investment fees on average.

Personal and retirement products still lag on fees, charging 1.16 per cent per annum and 1.07 per cent per annum respectively.

While the total expense ratio for fees decreased, the overall fees paid to superannuation funds increased by 3 per cent, reaching $32 billion.

Super funds are managing approximately $3.5 trillion for Australian fund members, while funds under management (FUM) have grown from $3.3 trillion to $3.5 trillion over the past year.

An interesting trend that has emerged is the fact that total fees paid are growing twice as fast as funds under management.

While fee revenue increased by 3 per cent, super FUM only increased by 1.5 per cent.

“This discrepancy highlights a potential diseconomies of scale effect, which may attract regulatory attention in the near future,” said Ms Antil.

“While fee revenue increased three per cent over the past year, this is lower than inflation and the overall pool of funds under management in superannuation has also increased in that time.

“Any reduction to the average fees is a good result for consumers, and we should encourage a healthy and competitive superannuation market that continues to put downward pressure on fees.”