Additional explanation of fees and costs as at 30 June 2008

Management costs

The amount you pay for a specific investment strategy reflects the actual investment management expenses incurred, and cannot be precisely calculated in advance. These expenses are taken into account when the value of the investment strategy is reviewed and the unit price determined. The amounts estimated will change from year to year. The table below shows estimates of these fees (and corresponding $ amounts) as at 30 June 2008 based on the fees including performance fees) paid in the six months prior to 30 June 2008 as a guide.

Investment Strategy	Estimated amount	$ per $50,000
High Growth	0.36%	$180
Diversified	0.30%	$150
Balanced	0.24%	$120
Capital Guarded	0.19%	$95
Australian Equities	0.27%	$135
International Equities	0.42%	$210
Property	0.48%	$240
Australian Fixed Interest	0.06%	$30
International Fixed Interest	0.24%	$120
Cash	0.05%	$25

Service fees

The only service fees that the Fund currently charges (apart from an investment switching fee) are as set out in the table below:

A buy/sell spread

The Trustee does not currently apply a buy/sell spread (also known as an entry/exit spread) to its unit prices. A buy/sell spread is effectively a fee that covers the costs incurred when buying and selling assets as a result of contributions, switches or withdrawals from, the investment strategies. The Trustee may choose to apply a buy/sell spread in the future. As the Trustee does not apply a buy/sell spread, members do not incur direct transaction costs when making contributions, switches or withdrawals. Transaction costs (such as brokerage and commission) are taken into account at the time the assets of the Fund are valued.

Additions or alterations to fees and charges

The part of the management fee that is expressed as a percentage relates to investment costs and is an estimate only because it cannot be precisely calculated in advance. At the end of each financial year, we calculate the actual management fee for the previous financial year.

All other charges are actual fees and costs. All fees and costs are current . All fees and costs may be revised by the Trustee from time to time. For example, fees and charges may increase when there are changes in superannuation law, or there are increases in fees charged by the Fund's service providers. The Trustee may also introduce new fees and charges, but will give members at least 30 days prior notice if there is an increase in fees and charges or if a new fee or charge is introduced that affects your account.

Reserves

The Trustee may maintain reserves to manage the Fund’s liabilities. The reserve accounts may be made up of interest earned on contributions received by the Trustee but not yet allocated to members’ accounts and administration fees. The Trustee uses this account to pay the administrator’s fees and any other administration and operating expenses of the Trustee or Fund. Any excess retained in the account is ultimately applied for the benefit of the membership as a whole.

Member protection

Federal Government legislation limits the amount of fees and charges that can be applied to certain small superannuation account balances. If you are a member and your account balance is less than $1,000 at the end of a member reporting period (generally 30 June each year or at your date of exit from the Fund) and your account includes any employer superannuation guarantee or award contributions, the Trustee currently applies member protection to limit the total fees (excluding investment management fees, insurance premiums and taxes) charged to your account in a member reporting period. Member protection may result in an administration fee or withdrawal fee being partly or fully rebated.

Tax

For more information on the amount of tax payable, go to the Tax and Super section of this website.

Performance fees

The Trustee has negotiated performance fee arrangements with several of its investment managers. These investment managers are entitled to a base percentage fee which is usually below the normal active manager fee.

A performance fee may be payable once performance above an agreed level has been reached and is capped at an upper percentage limit. These arrangements are subject to change. 

The method of calculation may vary from agreement but generally, these fees are calculated as a percentage of the investment returns which exceed the agreed level of return.

Estimated performance fees are included in the estimate of management costs above.

Tax deduction benefits

The administration fee of $52 per year is levied before any rebates of the tax credits.

The benefit of any tax deduction the Fund may receive on fees and costs is passed on to the members in the form of a rebate. Any such rebate is calculated and attributed to members' accounts in the Fund at the end of the financial year (or the date you exit the Fund).

Insurance costs

For more information on the cost of insurance, go to the insurance cover section of this website.

No adviser remuneration

First State Super does not pay any commission to advisers.

Hypothetical example

This table shows how the fees may apply to Mike with a $5,000 account balance and Liz with a $50,000 account balance, if both invested in the Diversified investment strategy over a year.

The examples assume an unchanged balance for the full year, and are shown only to illustrate the impact of fees on a fixed amount.

Diversified Investment Strategy	Mike has $5,000	Liz has $50,000
Administration fees	$52.00	$52.00
Investment management expenses*	$15.00	$150.00
Total fee	$67.00	$202.00
Total as a % of account balance	1.34%	0.40%

*The investment management expenses are an estimate only.