Super fund admin fees to jump by up to 50%

Several major super funds, including AustralianSuper, are raising their administration fees to pay for member services such as financial advice and online infrastructure.


AustralianSuper, which has 1.4 million members, will raise its administration fee from $1 to $1.50 per week as of January 1, 2009. In July, MTAA Super raised its fee from $1.30 to $1.95 per week, while HESTA and Sunsuper have raised their fees by seven and five basis points respectively. Mark Delaney, chief investment officer at AustralianSuper, said that the administration fee had been at $1 per week since around 1986; the inception of the pre-merger funds, ARF and STA. “Every year we’ve tried to do a few more things [for members] and squeeze it within the dollar, and hope member growth would be enough to generate a bit more revenue, but we’ve reached the end of that road,” he said. Delaney said AustralianSuper had recently revised its insurance offering, established a pension, moved to daily crediting rates and was looking to offer limited financial advice. “Those are four big new initiatives, and if you continue to expand your services you eventually need to fund them,” he said. Increasing fees is a general pattern occurring in superannuation funds at the moment, Ian Fryer, research manager at Chant West, said. Fryer pointed out that three of the four funds to recently raise fees are stakeholders in, and administered by, SuperPartners. “SuperPartners are undertaking a serious (technology) revamp and have now begun a three–year project to transition all their systems,"; he said. ";That is a big project that will cost a lot of money; you are looking at the equivalent of 10 million members’ accounts being transitioned across."; The ratings agencies, in particular SuperRatings, have said for the past few years that administration fees have needed to be increased to improve the efficiency of the major administration firms.