Your guide to superannuation fees

Fees are an important consideration when deciding where you want to grow your retirement savings.

Your guide to superannuation fees

First published: 5 June 2020

Superannuation funds charge a mixture of different fees, covering items such as administration, investments and insurance. Each has its own way of doing this, and they are all different.

When comparing superannuation funds, it is important to look at which fees are being charged, and which fees are not being charged. A fund’s administration fees may look good, but are there other fees that could cost you more in the long-term?

We are all different

A superannuation fund’s fees may depend on what type of fund they are. Retail, industry, public sector and corporate funds all have a different approach to fees.

LGIAsuper’s fee model has been shaped from being a public sector fund that is open for people in other sectors and industries. We don’t have any shareholders, and we don’t pay commissions to financial advisers. We can put our profits back into the fund for the benefit of all our members.

Being a profit-for-members fund means we only charge fees to run the fund and provide services to our members, and we work hard to keep our fees as low as possible. 

Understanding our fees

LGIAsuper fees cover these four categories, which are common across other superannuation funds: administration, investment, advice and insurance – these are explained in further detail below*.

LGIAsuper does not charge withdrawal fees, investment switching fees, or buy-spread fees. We do not charge exit fees, which are now prohibited for all superannuation funds.

Different fee arrangements apply if you have a defined benefit account.

Below is a brief description of LGIAsuper’s fees.

Administration fee
This fee covers the costs of administration needed to run your account throughout the year. This includes processing transactions, telephone support, Member Online, general advice, preparing statements, and sending communications.

LGIAsuper charges an administration fee consisting of two parts: a percentage-based fee of 0.18% of your account balance per annum, deducted from investment earnings before they are applied to your account; and a flat fee of $1.50 per week per account, deducted directly from your account. 

The administration fee is capped at a maximum amount of $1,575 per annum across all LGIAsuper accounts that you hold during a financial year (excluding the defined benefit component of Defined Benefit accounts).

Investment fee
This fee covers the costs of managing how your superannuation is invested. Fees will vary depending on how your superannuation is invested, with each investment option charging a different percentage of your account balance.

Indirect costs
Expenses incurred by external providers in managing your investments are called indirect costs, such as brokerage and stamp duty. Indirect costs are not charged to you as a fee but are reflected in your investment returns. An indirect costs ratio is used to calculate any deductions from returns.

Advice fee
This fee is only charged when you receive personal advice and a statement of advice that outlines your superannuation strategy. It covers the costs of a financial adviser providing personal advice on your situation and financial goals.

LGIAsuper does not charge a fee for general or single-issue personal advice provided over the phone, which is covered in the administration fee.

Insurance fee
If you have insurance within your LGIAsuper account, a fee is charged to partially cover the administration costs of managing your insurance arrangements. The insurance fee is included in your insurance premium, which is deducted from your superannuation account monthly in arrears and does not affect your sum insured.

Further information

Detail information about our fees is also available on these web pages:

Fees and costs

Guides and Product Disclosure Statements

 

* This article contains information that is up to date at the time of publishing. Some of the information may change following its release. Any questions can be referred to LGIAsuper by calling us on 1800 444 396 or by emailing us at info@lgiasuper.com.au.