A report by Rainmaker Information showed 2021 investment returns were at a record-high in 34 years, whilst total fees paid were at historic lows.
The Superannuation Benchmarking Report reviewed 2,683 fee options offered by 175 superannuation funds, and also revealed the top ten lowest cost MySuper products on the market:
| Rank | MySuper Product | Total Expense Ratio |
| 1 | UniSuper | 0.65% |
| 2 | Bendigo SSSE | 0.70% |
| 3 | AMG Corporate | 0.70% |
| 4 | Virgin Super Employment | 0.73% |
| 5 | QSuper Accumulation | 0.74% |
| 6 | Suncorp ESB | 0.77% |
| 7 | AustralianSuper | 0.77% |
| 8 | AMIST Super | 0.81% |
| 9 | Rest Super | 0.89% |
| 10 | EISS Super | 0.89% |
Source: Rainmaker Information
The Total Expense Ratio (TER) is a measure of the total costs associated with managing and operating an investment fund, such as a mutual fund.
The total cost of the fund is divided by the fund's total assets to arrive at a percentage amount, which represents the TER.
Superannuation fees overall have fallen by a quarter over the past decade, according to the report, with almost half the decline happening during the past three years.
Executive director of research and compliance at Rainmaker Information, Alex Dunnin, said competition is driving cost cuts.
"Six in 10 default MySuper products cut their fees in 2020-21," Mr Dunnin said.
"For the average Australian, these lower fees translate into them getting better value from their super funds. The average Australian pays about $2,200 annually in fees.
"While that's gone up a bit in dollar-terms, so has their account balance. And let's not forget the record investment returns their super funds have delivered to them."
The future of super fees
Rainmaker expects the pressure on super funds to lower their fees will only intensify, and because investment costs make up a huge share of the superannuation fees fund members pay, this will force funds to change the way they invest.
"Products charging high fees will experience huge market and political pressure in the wake of the Your Future Your Super reforms to cut their fees. To do this, funds will have to consider indexing a bigger share of their portfolios," Mr Dunnin said.
"This pressure on super fund fees, if it stays on its current track, could mean that in five years' time, average super fund fees could be as low as 0.85%. Australia's sharpest priced funds by then could be charging total fees below 0.5%.
"If this was to happen, Australia could be on track to have one of the best value superannuation fund systems in the world."
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