Is your super fund lying to you?
It is a confrontational question, I know. But in the current financial landscape of 2025, where every dollar in your retirement account is fighting against inflation and market volatility, it is the only question that truly matters.
For decades, the Australian superannuation industry has relied on a simple sleight of hand: look at the percentage return on the annual statement, and ignore everything else. If the number is green and in the double digits, the fund is “good.” If the number is low, the fund is “bad.” But what happens when a fund delivers spectacular financial returns while simultaneously rotting from the inside out?
This is the story of Mercer Superannuation in 2025.
In this brutally honest, deep-dive Mercer Superannuation review, we are going to look beyond the glossy marketing brochures and the smiling stock photos of retirees on yachts. We are going to look at the numbers they desperately want you to see, and the scandals they are paying lawyers millions to make you forget.
We are reviewing a retail giant that manages over $70 billion in assets for more than one million Australians. On paper, they have just delivered a “blockbuster” financial year. But behind the scenes, there is a historic $11.3 million Federal Court penalty for misleading members, an ASIC investigation into the alleged mishandling of death benefits for grieving families, and a user base that is screaming about an app that barely functions.
This isn’t just a review of fees and percentages; it’s an investigation into whether a global corporate titan deserves the custody of your life savings. Great returns, terrible service, and questionable ethics—that’s the Mercer story. Let’s strip it back.
To understand whether your money is safe, you first need to understand who is actually holding it.
Mercer Superannuation stands as a polarizing figure in the Australian market. It is not an “Industry Fund.” Unlike the member-owned giants like AustralianSuper or Hostplus—which exist solely to return profits to members—Mercer superannuation is a retail fund. It is a division of the colossal global professional services firm, Marsh McLennan (NYSE: MMC).
Historically, “retail fund” was a dirty word in Australian finance. These funds were often synonymous with high fees, commissions for financial advisors, and mediocre performance designed to skim profits for shareholders rather than retirees. However, Mercer superannuation has been fighting aggressively to change that narrative.
They argue that their connection to Marsh McLennan is their secret weapon. They pitch themselves as the sophisticated, “grown-up” alternative to the local industry funds. The sales pitch is seductive: because they are a global consulting powerhouse, they claim to offer everyday Australians access to elite investment opportunities—such as global private debt, unlisted infrastructure, and hedge fund-style strategies—that smaller domestic funds simply cannot source.
The "Inorganic" Growth Strategy
Mercer superannuation hasn’t just grown by being good; they have grown by buying the competition. In an era where the regulator (APRA) is forcing funds to “get big or get out,” Mercer has been a predator.
The most significant recent move was the merger with the Goldman Sachs & JBWere Superannuation Fund in May 2024. This acquisition injected another $635 million in assets into the Mercer superannuation ecosystem. Why does this matter to you? Because in theory, this “inorganic growth” is supposed to lower your fees by spreading costs across more members.
But as we will see later in this Mercer Superannuation review, while the fund has become massive, the customer service infrastructure required to support these millions of members appears to be crumbling under the weight of its own ambition.
Mercer Superannuation Performance (2025 Data): The Numbers Don't Lie
Let’s give credit where it is absolutely due. If you are a Mercer member, you likely opened your annual statement for the financial year ending 30 June 2025 and felt a wave of relief.
The 2024-2025 financial year was a minefield. Inflation remained “sticky,” geopolitical tensions were high, and interest rates stayed “higher for longer.” Yet, Mercer’s investment team, led by Chief Investment Officer Graeme Miller, didn’t just survive these conditions—they exploited them.
The "SmartPath" Lifecycle Model: A Winning Strategy?
Mercer superannuation differentiates itself from the “one-size-fits-all” approach of many industry funds through its Mercer SmartPath lifecycle model.
Most Australians are defaulted into a static “Balanced” option (usually 70% growth assets / 30% defensive assets) regardless of whether they are 25 or 60. Mercer argues this is lazy.
How SmartPath Works:
The Aggressive Phase (Under Age 52): If you are younger, Mercer automatically places you in a “High Growth” allocation. They take more risks with your money because you have time to recover from market crashes.
The Defensive Phase (Over Age 52): As you approach retirement, the fund automatically “glides” you toward safer assets like cash and bonds to protect your nest egg from a sudden market correction right before you quit your job.
In FY25, this strategy paid off spectacularly. Because younger members were heavily weighted toward equities during a massive global bull market (driven largely by the US tech sector and the “Magnificent Seven” stocks), they captured significantly higher returns than their peers in conservative “Balanced” options at other funds.
FY25 Performance Breakdown
Here is the data that Mercer’s marketing team is currently celebrating:
Source: Chant West & Mercer Annual Report 2025
Mercer SmartPath (Born 1974-2007): Returned 12.3% – 12.6%.
Mercer High Growth Option: Returned 12.2%.
Mercer Growth Option: Returned ~10.1%.
Mercer Conservative Growth: Returned 7.8%.
The Context: To put these numbers in perspective, the median growth fund in Australia returned approximately 9.9% to 10.1% for the same period.
This means Mercer Superannuation beat the industry benchmark by over 200 basis points (2.0%). On a $100,000 balance, that is an extra $2,000 in your pocket in a single year compared to an average fund.
The "Greenwashing" Scandal: A $11.3 Million Lie
In 2025, many Australians don’t just want to retire rich; they want to retire with a clear conscience. They specificn 2ally choose funds that promise not to invest in things that destroy the planet or harm society.
Mercer knew this. They marketed their “Sustainable Plus” investment options specifically to capture this ethical demographic. They explicitly claimed these options excluded companies involved in carbon-intensive fossil fuels (like thermal coal), alcohol production, and gambling.
It was a lie.
In August 2024, the Federal Court of Australia handed Mercer Superannuation a historic $11.3 million penalty for greenwashing. This was a landmark moment—the first time a court in Australia had imposed a penalty for greenwashing under ASIC’s new enforcement regime.
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What Did They Actually Invest In?
While their brochures were promising a cleaner, greener future, their portfolio managers were buying shares in some of the most controversial industries on earth.
ASIC’s investigation revealed that the “Sustainable Plus” options were holding investments in:
15 Fossil Fuel Companies: This included Glencore PLC and Whitehaven Coal Ltd—companies that are synonymous with thermal coal extraction and high carbon emissions.
15 Alcohol Producers: Including global giants like Heineken and Budweiser Brewing Company.
19 Gambling Companies: Including Crown Resorts and Aristocrat Leisure—companies that profit from the exact social harm many ethical investors try to avoid.
- ✔ No Thermal Coal
- ✔ No Alcohol Production
- ✔ No Gambling Companies
- ✖ Whitehaven Coal (Fossil Fuels)
- ✖ Heineken (Alcohol)
- ✖ Crown Resorts (Gambling)
The Breach of Trust
Justice Horan, in his judgment, was scathing. He emphasized that consumers rely on these ESG (Environmental, Social, and Governance) representations to make value-based decisions.
This wasn’t just a clerical error. It was a systemic failure to check if their marketing matched their reality. For a member who chose Mercer specifically to avoid funding coal or gambling, this is an unforgivable breach of contract. It raises a terrifying question: If they lied about where the money was invested, what else are they not telling us?
The "Death Benefits" Disaster: Failing Families
If the greenwashing scandal hurts your conscience, this next issue hurts your heart.
While the marketing team was dealing with the greenwashing fallout, the legal team was facing another assault from the regulator. ASIC has launched civil penalty proceedings against Mercer Superannuation, alleging “systemic failures” in its member services division.
The allegations focus on the most sensitive, painful aspect of superannuation: Death Benefits.
When a member dies, their superannuation is supposed to be passed on to their beneficiaries (spouses, children). It is money often desperately needed for funeral costs, mortgage payments, and basic survival during a time of grief.
ASIC alleges that Mercer:
Failed to process death benefit claims efficiently.
Failed to report delays to the relevant parties.
Failed to respond to complaints from grieving families.
ASIC described Mercer’s conduct as “falling well below” the standard expected of a trustee of its size. This suggests a fund that has become too big, too complex, and too focused on profit, losing sight of the human beings behind the account numbers.
Mercer Superannuation Fees: Are They Too High?
One of the biggest criticisms of retail funds is that they eat your returns with fees. Has Mercer solved this?
Let’s break down the costs. Super fees are often deliberately confusing, hidden in the fine print of the Product Disclosure Statement (PDS). We have done the math for you based on the 2025 data.
The Cost Breakdown (For a $50,000 Balance)
If you have $50,000 in the default Mercer SmartPath option, here is what you are paying:
Administration Fee (Fixed): Approx $76 per year.
Administration Fee (Asset-Based): 0.152% of your balance (approx $76).
Investment Fee: ~0.66% (This covers the cost of the underlying investment managers).
Transaction Costs: ~0.07% (The cost of buying/selling the assets).
Indirect Cost Ratio: ~0.002%.
The Total Bill
When you sum these up, the total cost is approximately $517 per year, or roughly 1.03% of your balance.
Is this expensive?
The Industry Standard: The general rule of thumb is that you want your total fees to be under 1.0%. Mercer is sitting right on that borderline at 1.03%.
The Competitor Comparison:
Hostplus Indexed Balanced: Charges an investment fee of just 0.04%. Total cost is significantly lower.
AustralianSuper Balanced: Charges roughly similar admin fees but often has lower investment costs due to their sheer scale.
The Verdict on Fees: Mercer is not “highway robbery,” but it is certainly not cheap. You are paying a premium for their “active management” style. Given that they returned 12.6% this year, you might argue the fees were worth it. But in a year where markets are flat, those 1.03% fees will eat away at your balance regardless of performance.
Furthermore, the structure is complex. Unlike some industry funds that offer a simple “all-inclusive” fee reporting, Mercer’s fee structure involves multiple layers (fixed, percentage, indirect, transaction). It feels designed to be difficult to calculate, which is never a good sign for transparency.
User Experience: The "Pension Freeze" and App Nightmares
If the investment team is the engine of a Ferrari, the customer service team appears to be driving a broken-down Corolla.
While the financial returns are excellent, the day-to-day experience of being a Mercer member is reportedly miserable. Our research into user sentiment across independent platforms like ProductReview.com.au and Trustpilot reveals a disturbingly consistent pattern of dissatisfaction.
The App is a "Disaster"
In 2025, we manage our lives on our phones. We expect banking-grade apps that let us see our balance, switch options, and update details instantly. Mercer reviews Australia paint a picture of digital incompetence:
Users report the app “hardly ever works,” with frequent crashes upon login.
Basic functions, like checking a balance or updating an address, often result in error messages.
The “technical loops” regarding password resets are a frequent complaint, locking members out of their own money.
For a fund that charges over $500 a year in fees for an average balance, having a non-functional app is unacceptable. It signals a lack of investment in basic technology infrastructure.
The "Pension Freeze" Horror Stories
The most visceral and heartbreaking complaints come from retirees. These are members in the “Allocated Pension” division who rely on Mercer to pay them a monthly income to buy groceries and pay bills.
Reviews cite multiple instances where pension payments have been “pushed back month by month” without explanation.
One reviewer described Mercer as “the worst financial institution I have ever dealt with” due to these delays.
Another mentioned spending hours on hold, only to be told their payment was “stuck in the system.”
When these members try to call for help, they hit a “wall of silence.” They report being bounced between departments, waiting hours on the phone, and often having to escalate their case to the Australian Financial Complaints Authority (AFCA) just to get a response.
This qualitative data strongly correlates with ASIC’s legal action regarding death benefits. It suggests a systemic rot in the back-office operations. Mercer seems to have focused so much on acquiring new funds and boosting investment returns that they forgot to invest in the support staff to look after the human beings they serve.
Mercer vs. Competitors: The Showdown
How does Mercer stack up against the two titans of the industry sector? Let’s look at the data head-to-head.
Mercer vs. AustralianSuper
AustralianSuper is the behemoth. It is the default choice for millions of disengaged Australians.
Performance (FY25): Mercer SmartPath (12.6%) absolutely crushed AustralianSuper’s Balanced option (9.52%). This is a clear win for Mercer’s active strategy this year.
Long Term: Over 10 years, they are neck-and-neck (both around 8% p.a.).
Service & Trust: AustralianSuper, while big and sometimes bureaucratic, has not faced a $11.3 million greenwashing fine or a death benefits scandal of this magnitude. It is the “safer” pair of hands.
Mercer vs. Hostplus
Hostplus is the darling of the low-fee movement and typically attracts younger, savvier investors.
Performance: Mercer (12.6%) beat the Hostplus default Balanced option (10.81%).
The “Indexed” Threat: However, the real threat to Mercer is the Hostplus Indexed Balanced option. This option returned 12.02%—virtually identical to Mercer—but charges an investment fee of just 0.04%.
The Logic: A sophisticated investor could switch to Hostplus Indexed Balanced, get almost the same return as Mercer, and pay a fraction of the fees.
| Fund Name | FY25 Return | Fees ($50k) | Verdict |
|---|---|---|---|
| Mercer (SmartPath) | 12.6% (High) | ~$517 (Exp) | Good returns, high risk/fees. |
| AustralianSuper | 9.5% | ~$390 | Safe, reliable, lower fees. |
| Hostplus (Indexed) | 12.0% | ~$60 - $100 | Best Value Winner |
The Competitor Takeaway: Mercer wins on raw FY25 performance numbers. But Hostplus wins on cost-efficiency, and AustralianSuper wins on stability and reputation.
Conclusion: Should You Switch to Mercer?
We have looked at the data, the scandals, the fees, and the reviews. Now, let’s answer the question: Is Mercer Superannuation right for you?
Mercer in 2025 presents a massive dilemma. It is a fund with two distinct faces.
Face #1: The Financial Powerhouse If your sole metric for success is the net investment return on your annual statement, Mercer is currently a winner. The investment team has proven their worth. A 12.6% return is exceptional. The SmartPath model works; it is a sophisticated, “set-and-forget” solution that has served younger members incredibly well in the recent bull market. If you are purely profit-driven, Mercer delivered the goods this year.
Face #2: The Ethical and Operational Failure However, superannuation is about more than just this year’s percentage point. It is a decades-long relationship built on trust. In this regard, Mercer is failing.
The Greenwashing Scandal ($11.3m penalty) reveals a cynical approach to marketing and a disregard for ethical promises.
The ASIC investigation into death benefits suggests a callousness toward grieving families.
The Service Complaints (app crashes, frozen pensions) suggest a company that is broken operationally.
Final Verdict
Who should join Mercer?
The “Growth-at-all-Costs” Investor: If you are young (under 45), disengaged, and unlikely to need to interact with customer service for 20 years, the SmartPath returns are compelling. You might be willing to overlook the ethics for an extra 2% return.
Who should AVOID Mercer?
The Ethical Investor: Do not touch this fund. The gap between their “Sustainable” marketing and their coal-heavy portfolio is too wide to ignore.
The Retiree: The risk of administrative stress is too high. If you need reliable monthly payments, the reports of frozen pensions should terrify you. Look at AustralianSuper or UniSuper instead.
The Cost-Conscious: If you hate fees, switch to an Indexed option at Hostplus or Vanguard. You will get similar returns for a quarter of the price.
Mercer has the financial muscle of a global giant, but right now, it lacks the heart of a trustee. Until they fix their culture and their customer service, their excellent investment returns will always be overshadowed by their operational failures. Proceed with extreme caution.
Is Mercer Super good?
What is the Mercer Superannuation ABN and USI?
| Fund ABN: | 19 905 422 981 |
| USI (SmartSuper): | 19905422981888 |
| USI (Tailored): | 19905422981261 |
What is the Mercer Superannuation contact number?
What is the Mercer Superannuation address?
Mercer Super Trust
GPO Box 4303
Melbourne, VIC 3001
