Super fund cuts fees

An $8 billion industry superannuation fund has cut fees for accumulation members.

From today, Energy Super has decreased the asset-based administration fee charged to accumulation members by four basis points - from 0.22% to 0.18%.

The move will see fees decrease by $193.20 a year for members with an average account balance of $161,000, and depending on the investment option chosen, the overall indirect costs for each option will drop by anywhere between 0.04% and 0.12%.

Additionally, asset based administration fees for spousal accounts with an accumulation balance over $500,000 or more will be cut by $200, to $900 per year.

The fund said the changes were part of its effort to deliver long-term benefits for members, and pointed out the PDS example of total costs for a $50,000 investment in its MySuper option has dropped by 22.6% since February.

Energy Super chief executive Robyn Petrou said the fee cut was possible because the fund could take advantage of economies of scale generated by opening beyond only energy sector workers.

It's been more than eight years since Energy Super became a public offer fund, following the 2011 merger of ESI Super and SPEC Super. Then, it was worth $3.6 billion and served around 45,000 members. Its membership has increased by around 2000 since.

"At a time when many funds are increasing their fees, we're bucking the trend and ensuring our members only pay what's fair," Petrou said.

"Opening the fund to employees beyond the energy sector gives all our members the benefits of reduced fees because of economies of scale.

"As a profit-for-member fund, we exist purely for the benefit of our members - so it's fantastic we can continue empowering them to take charge of their super and support them throughout their financial journey."

Earlier this year the fund created a chief investment officer role, which was filled by former VicSuper head of real assets and alternatives, Kevin Wan Lum.

Read more: Energy SuperRobyn PetrouESI SuperKevin Wan LumMySuperSPEC SuperVicSuper
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