An account based pension (allocated pension) is one of the most tax effective ways you can access your superannuation benefits. Even though investment income and capital gains are tax free, there are still fees that apply on pension accounts which will affect the amount of money you have to fund your retirement. It is worth understanding the fees and costs associated with account based pension funds.

The most common fees are outlined in the table below:

Fee	How it's charged
Contribution fee	Also known as an entry fee. Contribution fees of up to 4% apply on pension accounts when you open a new pension account or when you switch from super to pension with the same fund manager. Contribution fees are paid to your financial adviser as a commission, or is retained by the pension fund manager if you don’t have an adviser. 2020 DIRECTINVEST rebates 100% of entry fees on allocated pensions.
Withdrawal fee	In a pension account, a withdrawal fee may apply when you make lump sum withdrawals from your account. A withdrawal fee is more likely to be charged on ‘nil-entry-fee’ options.
Administration fee	This is charged for the general running of your fund and can be charged in addition to the management costs of your chosen underlying investment options. A member fee may also be charged in addition to an administration fee.
Adviser service fee	If you invest via a financial adviser you may be charged an adviser service fee, usually an annual percentage based fee between 1% pa - 2% pa. This is agreed between the investor and the adviser and is paid to the adviser regardless if ongoing service was provided or not. This fee is in addition to the fees charged by the pension fund. Adviser service fees are unnecessary. 2020 DIRECTINVEST maintains that you should separate financial advice from product by paying a professional hourly fee for advice and execute your own investment decisions.

The actual fees you pay are dependent on the allocated pension fund you choose and the relevant information is available in the product disclosure statement’s Fees and Other Costs section.