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How is your super fund spending your money?

Super Consumers Australia is calling for funds to provide more useful data.

Last updated: 18 December 2023


Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • Super funds may spend members' money on promotions, sponsorship and marketing for the fund
  • The law requires super funds to disclose their spending but Super Consumers Australia says the way this is currently happening isn't helpful to members
  • Super Consumers Australia analysed the disclosed spending of the 15 biggest super funds based on member numbers

Your super fund charges you fees for managing your super, which they debit directly from your account balance. How much your fund spends directly impacts those fees and, consequently, your super balance. In stands to reason that funds with lower expenses can charge lower fees, meaning you have more to spend in retirement.

The Productivity Commission's deep dive into superannuation highlighted how even a seemingly minor 0.5 percentage point increase in fees could cost a typical full-time worker $100,000 by retirement. So, understanding how much your fund is spending, and what they're spending it on is important to understand. 

How funds currently share information on spending

Every year, your super fund has to run an annual member meeting where you can ask senior staff about how the fund is doing and what it's spending. 

When funds publish a notice of the member meeting, they also have to include a summary of all the money they've spent. In theory, members can use this information about spending to ask questions at the meeting. Funds don't have to reply on the spot; they can provide written responses later.

But Super Consumers Australia says the government and regulator must revise this process as the information funds have to provide doesn't give a clear picture of how they are using members' money.

What funds have to disclose about their spending

Up until February 2023, funds had to disclose a dollar amount for their spending in each of the following categories in their short form expenditure summary:

  • remuneration expenditure (e.g. salaries for executives and board members)
  • political donations
  • promotion, marketing and sponsorship (which can include educational material, membership to advocacy bodies and strategic partnership arrangements) 
  • industrial body payments (which can include payments to trade unions and employer organisations, including for education, marketing and advertising services and directors' fees)
  • related party payments (payments to other organisations the fund has a financial interest in, which can include consulting, management and operational work).

But Super Consumers Australia says it's easy for funds to hide spending, and there are worrying examples of funds spending well beyond what members might expect on things like marketing and sponsorship. 

Furthermore, the current reporting format isn't helpful for fund members to determine if their fund is spending efficiently.

How useful is this information?

If you want to look into whether your fund is spending responsibly, you'd need to do some serious digging and analysis.

Firstly, you'd need to be across the process for disclosing spending to know that these figures are included in a fund's notice of an annual member meeting. You'd then need to track down these notices for other funds – not a simple task.

Then, you'd need to comb through both current and archived spreadsheets from the regulator, the Australian Prudential Regulatory Authority (APRA), and calculate how much a fund is spending per existing member. Only by doing this analysis can you get any meaningful information – given some super funds have millions of members and some have only a few thousand, the spending numbers can vary widely. Comparing funds on their total spending makes little sense unless you factor in the fund size.

In some cases, you'd need to be across the APRA-registered name for your super fund, which may differ from its common name.

You'd also need to hunt for records of how much your fund spent in previous years (which aren't readily available) to determine how your fund's recent spending compares.

Finally, spending may be recorded in multiple categories, meaning the same payment may be counted twice.

Funds spending $0 on promotion?

A closer look at the promotions, marketing and sponsorship category underlines the problem. Some funds report that they didn't spend a cent on promotion, sponsorship and marketing. 

Australian Ethical ran advertising campaigns during this financial year but reported a $0 spend in this category. Australian Ethical was contacted for comment, but did not respond.

Australian Ethical ran advertising campaigns during this financial year but reported a $0 spend in this category

To add to the confusion, Commonwealth Bank told Super Consumers Australia their group super (which listed no spending for promotions, sponsorship and marketing) did spend some money on educational materials for their existing members but this was captured in the 'related parties' spending category.

Proposals to make funds disclose more on spending

The good news is that the regulator, APRA, is already looking to make changes. In October 2023, APRA wrote to super funds outlining new proposals to change the disclosure regime.

APRA explained that better disclosure will make it easier for people to compare super funds. Further, it will ensure funds are spending wisely to achieve better outcomes for their members.

In September 2023, APRA said it would strengthen the relevant guidance document for super funds to ensure fund spending is in line with the best interest duty that funds have. 

APRA is now consulting on these changes.

mature couple checking their investments

Some members aren't happy with how their funds are spending their money.

Our investigation reveals problems with the current system

Super Consumers Australia looked into the disclosed spending of the 15 biggest super funds (based on member numbers) for the 2021–22 financial year and analysed it based on the number of members the regulator (APRA) reported the fund had at the beginning and end of the 2021–22 financial year.

Our investigation found that at some annual member meetings, enterprising people grilled their funds on spending, particularly around promotions, marketing and sponsorship. Funds such as Aware and HESTA said they couldn't reveal how much they spent on individual sponsorships because they had agreed with other parties (e.g. sports teams and events they sponsor) not to disclose this information.

Spirit Super said that it supports a wide variety of organisations via sponsorships, partnerships and impact investing so they can "make a difference to the communities our members live and work in".

I just can't see one advantage this sponsorship can return to members

CHOICE reader Micheal

CHOICE reader Michael contacted us to say he was unhappy with his fund, Hostplus, sponsoring a rugby league team. "I just can't see one advantage this sponsorship can return to members," he said. "I don't believe this is the correct use of members' funds."

In another example, media reports had previously revealed that EISS Super, a fund which has since merged with CBUS, used members' money to sponsor housing organisation Argyle Housing when Terrence Downing was chair of both the fund and Argyle Housing. The regulator also warned the fund about sponsoring a celebrity golf day linked to the CEO's brother-in-law. 

Super Consumers Australia policy manager, Rebekah Sarkoezy, says the short-form expenditure summaries and annual member meetings aren't providing useful transparency on fund spending, or forcing funds to spend members' money wisely.

"Members can't have confidence that funds aren't still engaging in the ridiculous and wasteful spending we've seen in the past. It's all too easy for funds to evade tough questions and use the member meetings for self-promotion."Even when members take the initiative to look into fund spending and ask questions of their fund, the responses lack the context needed to know how a fund's spending compares to their peers, whether it is tracking up or down, and whether members are getting value from this spending," says Sarkoezy.

Is spending on marketing delivering value for members?

One reason funds may spend money on promotion and marketing is to increase the fund's size. 

"We believe that size and scale are important to unlocking benefits for our members," Australian Retirement Trust told its members after its 2022 annual member meeting. "To help achieve this growth, we invest in a range of national marketing activities such as advertising, sponsorships, events, and community partnerships to help us raise our profile in the community and attract new members and keep existing members."

Getting more members can allow a fund to achieve greater economies of scale. Funds say this means they can run more efficiently and lower fees for members.

But APRA has previously found that many funds "failed to rigorously measure and assess anticipated benefits to fund members of expenditure on marketing campaigns and related activities". The regulator also found examples where funds entered into  sponsorships and received additional benefits for fund staff, but couldn't show how this arrangement helped fund members.

Super Consumers Australia found multiple examples where funds spent excessive amounts on promotion, marketing and sponsorship, even though their total member numbers went backwards. 

Super Consumers Australia found multiple examples where funds spent excessive amounts on promotion, marketing and sponsorship

The table below shows what each fund spent in this category, how much they spent per existing member and how much they spent for each person added to their total number of members.

For example, Spirit Super spent $18,142 per net member acquired; the fund spent more than $5 million on promotions, marketing and sponsorship and only added a net total of less than 300 members. 

This level of spending per change in total member numbers was much higher than other funds, such as Australian Super ($76 per net member acquired) and Hostplus ($83). 

Spirit Super rejected this finding, disputing the methodology. It claimed that it gained more 'actual members' than 'net members' used in the calculation, though this would suggest that it also lost members during the period.

One of the funds that lost members, AMP, told Super Consumers Australia in an email that it supports APRA's proposal to increase the visibility of super fund expenditure reporting, and this move will improve transparency for fund members. 

Insignia, the trustee of ANZ's super funds, said there were "fixed, structure and people costs involved in member engagement, such as the provision of websites and member communications. These costs remain unchanged regardless of member numbers."

Towards transparency to help you compare funds

Stephen Jones, Minister for Superannuation, said the government is looking to introduce an annual Super Fund Transparency Report. He said this report will include "a single source of granular, consistent information for members to compare funds' performance and expenditure." 

The government is yet to release details of this report or when it will begin. Super Consumers Australia says if done right this report could be a big step forward for fund members and correct issues with the current reporting."The report should let the public see how a fund is performing, what it's spending, what benefits the spending is delivering to members and how its expenditure stacks up compared with other funds," says Sarkoezy.

The report should let the public see how a fund is performing, what it's spending, what benefits the spending is delivering to members and how its expenditure stacks up compared with other funds

Super Consumers Australia policy manager Rebeka Sarkoezy

"A successful transparency report would also allow people like analysts, journalists and public interest groups such as Super Consumers Australia to look under the hood at super funds' expenditure and hold them accountable.

"For most Australians, super is their biggest asset after their home. The funds have been entrusted to build up our retirement income, it is right that this comes with big responsibilities, such as being transparent about what they spend our money on. Funds have a legal obligation to act in their members' best financial interests, which includes making prudent decisions about how they spend members' money."

We care about accuracy. See something that's not quite right in this article? Let us know or read more about fact-checking at CHOICE.

This content was produced by Super Consumers Australia which is an independent, nonprofit consumer organisation partnering with CHOICE to advance and protect the interests of people in the Australian superannuation system.

We care about accuracy. See something that's not quite right in this article? Let us know or read more about fact-checking at CHOICE.

Stock images: Getty, unless otherwise stated.