“Secondly, yes, default fund issues should be considered as part of renovating the house, because I would argue there’s a strong duty of care on government in a compulsory system, [and] there’s an even stronger duty of care where a member doesn’t make any decision, but however the default fund decision is exercised for a person that doesn’t choose a fund – and we know the majority don’t – we need to make sure the way in which that decision is exercised is in the best interest of the member and no-one else.” Price vs value At a time when negative returns are the norm rather than the exception, fee reductions can have a material impact on the end result for members.

According to Bresnahan, a 1 per cent reduction in fees is the same as earning 1 per cent extra per year for the duration of a member’s super fund. In other words, he says, if you’re 40-years-old, it’s probably going to make around 30 per cent difference to your end benefit. However in debating what fee is appropriate for the super industry to charge, it is perhaps more pertinent to ask ‘is the member getting value for money?’, rather than ‘is the member paying too much?’. “You really have to burrow into the offering and critically scrutinise whether real value is being obtained,” Australian- Super’s Silk says. “Some of the more expensive offerings are providing poor outcomes for their members.

In our case, the standard account balance is $50,000. At the moment we’re already under that 1 per cent figure and we’re looking to further improve that. “There’s no question that it can be achieved. It’s easy enough to get under it; you also want to be providing high quality service and performance at the same time.” Michael Rooney, general manager of operations at Media Super, which was created last year after the merger between the industry funds for journalists/ entertainers and printers, agrees. Members of Media Super pay $1.10 per week plus 10 basis points, which was the existing fee structure of the larger fund, Print Super.

Prior to the merger, JUST Super members were paying $1.50 per week plus 35 basis points for administration. “Cheaper is not always better,” Rooney says. “You have to be careful that you [don’t] put so much pressure on cheapness that you actually stop providing a service and a good mix of investments to provide that discounted rate, which ultimately is at the detriment to the member because the member ends up with a lower benefit than what they would have got if you were willing to pay a bit more for better services and better options.”

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