Additional explanation of fees and costs

No adviser commission

First State Super does not pay any commission to advisers.

If you receive advice from FSS Financial Planning relating to your First State Super account, by arrangement and with agreement, a fee for this advice will be deducted from your First State Super account when the advice is received, unless you choose to pay for the advice directly. For more information about FSS Financial Planning, click here.

Investment management fees

The amount you pay for a specific investment option 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 option is reviewed and the unit price determined. The amounts estimated will change from year to year and you can contact us or go to our website for the most recent figures. As a guide, the table below shows estimates of these fees (and corresponding dollar amounts) based on the fees (including performance based fees) paid in the 12 months prior to 30 June 2011. The Trustee charges a fee of 0.03% in respect of each of the pre-mixed investment options (ie the High Growth, Diversified, Balanced and Capital Guarded investment options) to recover its costs in managing those investments. The estimates of investment management costs for the pre-mixed options in the table below are inclusive of this charge.  

Service fees

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

Transaction costs

You do not incur direct transaction costs when making contributions, switches or withdrawals, other than the investment switching fee and withdrawal fee shown in the fees and costs table here. Transaction costs (such as brokerage and commission) are taken into account at the time the assets of the Fund are valued.

Performance fees

The Trustee has negotiated performance fee arrangements with several of its investment managers. Estimated performance fees are included in the estimate of management costs above. A performance fee may be payable once performance above an agreed level has been reached and is typically capped at an upper percentage limit. These arrangements are subject to change. The method of calculation may vary between agreements but generally these fees are calculated as a percentage of the investment returns that exceed the agreed level of return. Investment managers with performance fee arrangements are entitled to a base percentage fee which is usually below the normal active manager fee.

Additions or alterations to fees and charges

The part of the management fee that is expressed as a percentage relates to investment costs. It 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 and report this figure on our website under What’s new at First State Super. You can also call Customer Service for information on the actual management fee. 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 increases in fees charged by the Fund’s service providers. The Trustee may also increase fees and charges or introduce new fees and charges but will give you at least 30 days prior notice.

Tax deductions

The Fund receives a tax deduction in respect of insurance premiums paid by members, which is credited to the accounts of the members who paid those premiums. The benefit of any other tax deductions the Fund may receive in respect of the administration fee and costs paid by members is not passed on in the form of a reduced fee or cost, but is retained in the Fund for the benefit of the membership as a whole.

Reserves

The Trustee may maintain reserves to manage the Fund’s liabilities. Interest earned on contributions received by the Trustee but not yet allocated to your account and administration fees deducted from your account are credited to the Fund’s reserve account. 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.

Tax

For more information on the amount of tax payable, see the Tax and super section here.

Insurance costs

For information on the cost of insurance, see the Insurance section here.

From 1 July 2011, $0.10 of the $5.00 per month cost of each unit of death and total and permanent disablement (TPD) cover, and $0.05 of the $2.38 per month cost of each unit of death only cover, will be retained by the Trustee to offset costs in administering TPD and death benefits and claims.

Protection for small account balances

Federal Government legislation limits the amount of fees and charges that can be applied to certain small superannuation account balances. If 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), the Trustee currently applies member protection to limit the total fees (excluding investment management fees, insurance premiums and taxes) charged to your account during the period. You will be charged the lesser of the two amounts - the earnings on your balance or the administration fee of $52 for the year.

In the event that the total earnings of the Fund are less than the total administration fees for all members in a year, we may debit each account in the Fund to pay for the operating costs of the Fund. In these years, account balances below $1,000 may be charged a maximum of total earnings (if less than the normal fee) or $10 in fees, whichever is the greater of the two. Member protection may result in an administration fee or withdrawal fee being partly or fully rebated.