Industry-commissioned research shows superannuation fees have fallen over the last decade, with a substantial drop in the past year.
The report by Rice Warner Actuaries shows total annual super fees averaged 1.2 per cent of assets under management in the 2011 financial year - that is down 5 per cent from 1.27 per cent the year before, and is 12 per cent lower than the 1.37 per cent charged in 2002.
Rice Warner's report was commissioned by the Financial Services Council, which represents for-profit or retail funds.
However, the report found that personal retail superannuation accounts had much higher fee levels (1.87 per cent) compared to more generic superannuation products sold by fund managers to large corporations for their employees (0.83 per cent).
Likewise corporate (0.79 per cent), public sector (0.82 per cent) and industry (1.13 per cent) super funds all had lower fees than the average super account someone could open privately with a fund management company.
The FSC's chief executive John Brogden says that is due to the economies of scale enjoyed by large generic funds.
"Individually managed superannuation is more expensive simply because it is both individually managed and individually advised," he said.
"The more direct advice that is received clearly there is a higher cost because there is more service being offered." However, Mr Brogden concedes some of his members' fees could come down more.
"There is room for further reduction in the cost of personal superannuation administration," he added.
The FSC argues that is likely to happen due to more mergers creating bigger, more efficient funds, and because of the Federal Government's MySuper and SuperStream changes.
"We think fees will only continue to decline, in fact there is the potential that they could decline quite quickly in the next two to five years with the implementation of this new legislative regime - MySuper and SuperStream," Mr Brogden said.
However, he says the industry will have some increased costs over the next couple of years as it updates its IT systems as part of the SuperStream changes.
"The industry's going to have to spend some money to save some money," Mr Brogden commented.
"Spend money in areas like IT in order to make the provision of advice, the provision of services cheaper and quicker." Another factor driving down super fees was the increasing prevalence of so-called passive index funds, which just track certain financial markets, such as the ASX 200 index.
These funds require no active fund manager, so one would think they could be offered very cheaply, but Mr Brogden says many administration costs remain.
"There's still a level of assessment and analysis that is required to ensure that they are administered properly, and the investments are managed properly," he said.
"There will always be some cost attached, and much of that will simply be in terms of ensuring there is the right level of regulation and protection of members' funds." Self-managed super funds scored well in comparative level of fees, averaging just 1 per cent.
However, those figures do not account for the time the trustees of these self-managed funds spend on managing their investments.
The report also highlights the divergence between the costs for large self-managed funds (which can be just 0.5 per cent of assets per annum) versus the cost of managing a fund with a balance of less than $100,000 which can be over 3 per cent.
Similar variations occurred in all the superannuation industry segments, with the cheapest funds within each group often charging fees that were a quarter or less than the fees of the most expensive funds.
The take home message for investors is that you pay for what you get, even if you do not use it, and large, generic superannuation funds tend to offer the lowest fees for people who are not interested in actively managing their retirement savings.