THE share of Australia's $1.4 trillion superannuation pool that is eroded by fees has fallen only slightly over the past five years, despite most funds making losses during the period.
A new report has found that while total superannuation costs are slowly falling, this is because consumers are seeking different products, rather than funds cutting fees.
Rainmaker's 2012 fee survey said total fees as a share of assets under management had dropped to 1.26 per cent, compared with 1.28 per cent in 2011.
But it said this reduction had occurred because more people were moving their money into low-cost funds, such as those that track a market index.
Rainmaker Information's director of research, Alex Dunnin, said the failure of funds to lower their fees substantially suggested the sector was "largely immune" from competitive forces.
"In an era of technological advancements and efficiency dividends, for superannuation fees to be reducing so slowly shows the sector to be largely immune from normal competition forces," Mr Dunnin said. "There's just about no funds out there that are saying, 'Hey guys, we are lowering our prices', it's just not happening," Mr Dunnin said.
Super fees have declined about 5 per cent in the past five years, from 1.32 per cent of assets under management to 1.26 per cent.
Over the same period, the rolling returns for a typical fund represent a loss of 0.2 per cent, according to figures from SuperRatings.
Analysts say super fees have little to do with performance because funds have fixed costs. However, the government's no-frills MySuper funds, to be available next year, are intended to force down costs.
The research manager at SuperRatings, Kirby Rappell, said some funds had instituted a freeze on member fees, but these were in the minority.
The key reason average fees had fallen was the growing popularity of lower-cost retail funds, he said.
For a $50,000 balance, low-cost retail funds cost $400 to $800 in annual fees, compared with $900 to $1200 for a "legacy" fund that had been opened earlier.
"The main trend is simply that the lower cost master trusts are significantly cheaper than historical master trusts were," he said. "However, not-for-profit funds, including industry funds, still offer compelling value and in many cases remain cheaper."
While other businesses such as retailers have been forced to cut their prices to compete with lower-cost online competitors, Mr Dunnin said there was less competitive pressure on super funds because people were not engaged in their savings.
Rainmaker's report was based on super funds worth $810 billion from a range of super funds and others covering 27 million accounts. It implied total fee revenue from super is worth $17.2 billion a year.