The Fine Print Australia · PUBLISHED 27 JUN 2026 · VERIFIED 27 JUN 2026 · AU EDITION

Your Super Fund Merged: Will Fees Drop From 0.36% to 0.13%? 🇦🇺

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A single inactive super account can cost the system about $40 a year per account in extra costs, which the Productivity Commission paper estimated as the average marginal cost of keeping one inactive account open.

The number that matters

Australia’s super system has been estimated to carry about $100 million a year in extra costs from inactive accounts alone, based on around $40 per account per year.

How it quietly costs you

When super funds merge, the receiving fund typically adopts the lower fee basis of the two merger partners, but the Treasury review found there are usually no discernable short-term reductions in fee rates for members overall. The mechanism is scale: the merged fund may spread fixed costs over more members, but the same Treasury review noted that post-merger expenses are often larger than the sum of the pre-merger expenses because of merger costs, normal expense growth, and higher service levels.

A useful comparison is old vs better: the review says merger partner fees often settle on the lower of the two pre-merger fee bases, yet that does not necessarily translate into immediate member savings across the whole merged fund.

The second, compounding trap

A second cost layer is the persistence of multiple or inactive accounts, which continue to attract administrative overhead even after consolidation pressures push funds to merge. The Productivity Commission paper estimated the extra system cost at about $40 per inactive account per year, or roughly $100 million annually across the system, showing how inaction compounds over time.

The long-run cost is not just the annual fee drag: if an account stays open unnecessarily, the member also keeps paying a slice of the fund’s administration burden year after year instead of reducing it by consolidating balances.

What this looks like in practice

Emma, 39, nurse, $82,000 income, $96,000 in super, industry fund, 26 years to retirement.

• Emma discovers her fund merger does not automatically mean lower fees right away; Treasury’s review found mergers often do not produce discernable short-term fee-rate reductions, even if the merged fund adopts the lower fee basis.
• Emma discovers that leaving an old account open can cost the system about $40 per inactive account per year, which is money that could otherwise remain invested in her balance instead of being consumed by duplicate administration.
• Emma discovers that the average MySuper administration fee on a $50,000 balance was 0.26% overall in KPMG’s analysis, while the retail-fund average was 0.36% and the industry-fund average was 0.23%, showing a meaningful benchmark gap to compare against.

The full cost of doing nothing

For Emma, the combined lifetime cost of merger-related fee drag plus inactive-account drag can be modelled as a small annual percentage difference compounded over 26 years plus any duplicate-account administration she fails to eliminate. Using the KPMG benchmark of 0.26% average MySuper administration fee on a $50,000 balance, a move from a retail-style 0.36% to an industry-style 0.23% benchmark is a 0.13 percentage-point gap; over decades, that gap compounds materially even before any merger-related transition costs are included.

What to do about it

• Check your super transfer options in ATO online via myGov and find Super → Manage → Transfer super to see whether you have multiple eligible accounts.

1. Sign in to myGov and open the ATO service.
2. Go to Super, then Manage, then Transfer super.
3. Confirm whether you have more than one eligible super account and request a whole-balance transfer if needed. What good looks like: one active account, not multiple accounts paying duplicated admin drag.

• Compare your fund’s fee settings against the average MySuper administration fee using your annual statement and fund disclosure documents, then compare to the 0.23% industry average and 0.36% retail average benchmark figures reported by KPMG from APRA data.

1. Open your latest annual super statement.
2. Find the administration fee, investment fee, and balance-based charges.
3. Compare the total fee burden on a $50,000 balance to the benchmark figures. What good looks like: fees near or below the 0.23% industry average rather than the 0.36% retail average.

• Verify whether a merger changed your fund’s fee basis and services using your fund’s member notices and APRA-style disclosures, then check whether the promised savings actually appeared.

1. Read the merger notice or fund update from the receiving fund.
2. Compare pre- and post-merger fee schedules and service changes.
3. Confirm whether the merged fund adopted the lower of the two prior fee bases. What good looks like: a lower fee basis plus no duplicate account left behind.

A myth worth clearing up

Myth: A super fund merger automatically means your fees will fall right away. Fact: Treasury’s review found that merged funds often adopt the lower fee basis, but mergers usually do not produce discernable short-term fee-rate reductions for members overall.

Sources

• Treasury
• Australian Taxation Office

Researched 2026-06-27.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.