The change, from $7.50 a week to $4.50, is forecast to save members $156 a year.
Hostplus said its reduction will pressure others in the superannuation industry, when many competitor funds have increased their fees.
The fund has pointed to its scale benefits for enabling the change. It merged with Club Super last year, gaining around $600 million in funds under management (FUM) and around 22,000 members. Before the amalgamation, Hostplus had around 1.2 million members and $45 billion in FUM.
Commenting on the decision, Hostplus chief executive David Elia said the lower pension administration fee would make the company one of the lowest cost and best value pension product providers among major super funds in the Australian market.
“Hostplus’ growth in both, in both members and assets under management, has been a material factor in its successful investment program, which in turn has seen it deliver market-leading net returns to its members for over 30 years,” Mr Elia said.
“That scale and performance [have] now contributed to the fund being able to [realise] and pass on its retired members this significant fee reduction.”
Mr Elia said that Hosplus has successfully maintained its core member administration fees at the current levels of $1.50 per week, or $78 per year, for the last 16 years.
He added the fund, unlike many rivals, does not charge asset-based administration fees on its super or pension products.
“Unlike a straightforward, fixed, weekly dollar-based fee; asset-based fees which are a percentage of your account’s balance, are often charged in addition to fixed fees by many funds and, and typically increase as your account balance does,” Mr Elia said.
“Our super account fee freeze, now a significant reduction in our pension administration fee, [continues] to support our market-leading performance in both fees and net return performance.”
Colonial First State last week signaled it would similarly be slashing fees across super products, passing on savings to its customers as it eliminated grandfathered commission from its business model.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
