SuperRatings said while MySuper is set to save Australians around 30 per cent each year in superannuation fees, members deemed eligible for MySuper will not have to be transferred till the final implementation date, 1 July 2017.
This three and a half-year MySuper transition period means member’s assets will in many cases be retained in their existing accounts with fees being charged at the old rate.
SuperRatings founder Jeff Bresnahan said the only way for members to ensure they are not paying unnecessarily higher fees is to actively contact their fund.
He said this was ironic given that MySuper was designed for those members who are disengaged or have little interaction with their fund.
According to SuperRatings, retail funds are expected to take the longest to transition members.
By delaying this transfer process, the corporate retail sector will generate an extra $700 million in fees from members.
Retail fund members will be the biggest beneficiaries of MySuper once they are transferred, with fees on average set to drop 36 per cent on a $50,000 account balance from $932 to $593.
The not-for-profit sector, including industry funds, has reduced costs by five per cent in the past 12 months, with the average MySuper fee on a $50,000 account balance currently at $498.
A majority of this sector has indicated members will be transferred immediately.
Mr Bresnahan said the MySuper products have largely achieved the Super System Review’s objective of decreasing fees to one per cent per annum, with the industry average now sitting at around 1.02 per cent.
“What will be interesting is how they perform investment wise,” he said.
According to Mr Bresnahan, there has been an unfortunate trend towards passive investments purely to reduce fees.
“If that impacts future earnings, then the whole exercise of forcing MySuper into the industry will be not only negated, but detrimental to Australians’ future retirement benefits,” he said.
