What do we know about superannuation fees? Some core data

APRA publishes detailed information on individual superannuation funds and their basic superannuation products (called MySuper products). Bringing those datasets together provides a useful starting point for understanding how large Australia's major funds are, what they charge members for administration, and whether greater scale is associated with lower fees.

This analysis covers 36 public-offer superannuation funds offering eligible MySuper products. APRA formally describes each regulated superannuation fund as a registrable superannuation entity, or RSE. Fund size is measured using the total assets of each RSE, including assets held outside MySuper, while the account and fee measures relate specifically to eligible MySuper products.

MySuper Large Employer products are excluded. The fee measures also cover administration fees and expenses only. They do not include investment fees and costs, which are generally charged as a percentage of a member's balance.

The 36 funds analysed hold almost $2.38 trillion in total assets and contain 16.05 million MySuper accounts. Average fund assets are $66.1 billion, although the median is substantially lower at $30.0 billion because several very large funds lift the average.

Across funds, the average MySuper administration cost is 29.4 basis points, equivalent to about $147 a year on a $50,000 balance. Weighting the calculation by the number of MySuper accounts produces a lower figure of 24.4 basis points, or around $122.

Fund size appears to matter, but only modestly.

Fund size does appear to matter, but considerably less than might be expected.

Because fund assets range from around $1 billion to more than $400 billion, the statistical analysis uses the logarithm of assets. Put simply, this measures how administration costs change each time fund size doubles.

A doubling in fund assets is associated with administration costs around 1.36 basis points lower, equivalent to just $6.81 a year on a $50,000 balance.

The largest quarter of funds also charge less than the smallest quarter: median administration costs of 23.1 basis points compared with 27.1 basis points, a difference of around $20 annually.

But the overall relationship is weak. The correlation between fund size and administration costs is only −0.24, with fund size associated with just 5.8% of the variation in fees.

The initial conclusion is therefore modest: scale appears to help, but fund size alone tells us surprisingly little about what members ultimately pay.

Correlation measures association rather than causation; these results do not establish that making a fund larger would itself cause its fees to fall.