Fees and other costs. MySuper. Member Booklet Supplement. 20 August 2016

Transcription

1 Member Booklet Supplement Fees and other costs 20 August 2016 The information in this document forms part of the First State Super Member Booklets (Product Disclosure Statements) for: 55 Employer Sponsored members dated 15 August Police Blue Ribbon Super members dated 15 August Ambulance Officers Super members dated 20 August Personal members dated 15 August 2016 MySuper MYSUPER AUTHORISATION NUMBER Prepared and issued by FSS Trustee Corporation ABN , AFSL Level 21, 83 Clarence Street, Sydney NSW 2000 as trustee of the First State Superannuation Scheme ABN Unique Superannuation Identifier (USI) MySuper Authorisation Number

2 This document has been prepared by FSS Trustee Corporation (referred to in this document as the trustee, we, us or our ), the trustee of the First State Superannuation Scheme (referred to in this document as First State Super or the fund ). This document contains general information only. It does not take into account your specific objectives, financial situation or needs. You should consider the information having regard to your personal circumstances. It is recommended that you consult a financial adviser if you require financial advice that takes into account your personal circumstances. The information contained in this Member Booklet Supplement was accurate at the time of its preparation. However, some of the information can change from time to time and the trustee can change matters which are the subject of representations made in the Member Booklet and Member Booklet Supplements. If the change is not materially adverse, the updated information will be available on our website at firststatesuper.com.au/pdsupdates. A paper copy of this Member Booklet Supplement and any update will be available free of charge by contacting us on We may change any matter about First State Super without member consent, but in the case of an increase in fees and charges we will notify members at least 30 days before the change occurs. This offer is only made to persons receiving this Member Booklet Supplement and the applicable Member Booklet (electronically or otherwise) in Australia. This document shows fees and other costs that you may be charged. These fees and other costs may be deducted from your money, from the returns on your investment or from the assets of the superannuation entity as a whole. Other fees, such as activity fees, advice fees for personal advice and insurance fees, may also be charged, but these will depend on the nature of the activity, advice or insurance chosen by you. Taxes are set out in the Member Booklet Supplement: Tax and super and insurance fees and other costs relating to insurance are set out in the applicable Member Booklet Supplement: Insurance. You should read all the information about fees and other costs because it is important to understand their impact on your investment. The fees and other costs for each MySuper product offered by the superannuation entity and each investment option offered by the entity, are set out on page 5. Our members have access to financial advice 2 Member Booklet Supplement

3 First State Super Type of fee or cost Amount How and when paid Investment fee 1 Administration fee A percentage currently ranging, depending on the investment option selected, from 0.07% to 0.76% per year ($35 to $380 per $50,000). See page 5 for more information. MySuper Life Cycle strategy: Growth option: 0.42% per year Balanced Growth option: 0.39% per year $52 per year ($4.33 per month) plus an asset-based administration fee of 0.15% per year ($75 per $50,000). The investment fee is deducted from the assets of the option or the assets of underlying vehicles before the unit price for an investment option is determined. Deducted from your account at the end of each month. Fees for part of a month are calculated daily. The asset-based administration fee of 0.15% per year is charged from the month your first contribution is received. Buy-sell spread Nil The fund does not charge a buy-sell spread. Switching fee Future contributions: Nil Deducted from your account at the time of the switch. Current account balance: No charge for the first switch in a financial year then $25 per subsequent switch. Exit fee $36 Deducted from your account each time a benefit is withdrawn, rolled over, paid to the ATO or for spouse contribution splits if your spouse s account is with another fund. Advice fee relating to all members investing in a particular MySuper product or investment option Nil No advice fee is charged for providing general and simple advice limited to your First State Super account. Additional fees may be paid to a financial adviser if a financial adviser is consulted. If you obtain more comprehensive financial advice from us you will be informed of the cost before you proceed. If you are issued with a Statement of Advice, it will contain details of the fees, which may be deducted from your account when the advice is received (or you may need to pay the fee directly). For more information see Financial planning on page 6. Other fees and Family law application fee of $110 Payable to the trustee by the person making the request for costs 2 information at the time a request is made. Indirect cost ratio 1 Family law splitting fee of $88 No-TFN tax recovery fee of $100 If you have insurance, insurance premiums will apply. In addition, to offset the costs of administering your insurance, for unit-based cover the trustee retains $1.20 per year per unit of death and total and permanent disablement (TPD) cover, and $0.60 per year per unit of death only cover. A percentage currently estimated to range, depending on the investment option selected, from 0% to 0.27% per year ($0 to $135 per $50,000). MySuper Life Cycle strategy: Growth option estimated at 0.12% per year Balanced Growth option estimated at 0.11% per year. Shared equally between both parties and deducted from each party s benefit at the time the benefit is split unless all of the benefit is going to the non-member spouse (in which case the non-member spouse pays the full fee). Deducted at the time of the refund being applied to your account. Deducted from your account at the end of the month. Fees for part of a month are calculated daily. Indirect costs are deducted from the assets of the option or the assets of underlying vehicles before the unit price for an investment option is determined. 1 Investment fees include performance-related fees payable by the fund. The indirect cost ratio includes performance-related fees in underlying investments. 2 Activity fees (including advice fees for personal advice) may also apply. See page 6 for more information. firststatesuper.com.au Call enquiries@firststatesuper.com.au 3

4 Additional explanation of fees and costs Defined fees Below is a definition of the fees and costs that may apply to your superannuation: Activity fees A fee is an activity fee if: a) the fee relates to costs incurred by the trustee of the superannuation entity that are directly related to an activity of the trustee: (i) that is engaged in at the request, or with the consent, of a member; or (ii) that relates to a member and is required by law; and b) those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee. Administration fees An administration fee is a fee that relates to the administration or operation of the superannuation entity and includes costs incurred by the trustee of the entity that: a) relate to the administration or operation of the entity; and b) are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee. Advice fees A fee is an advice fee if: a) the fee relates directly to costs incurred by the trustee of the superannuation entity because of the provision of financial product advice to a member by: (i) a trustee of the entity; or (ii) another person acting as an employee of, or under an arrangement with, the trustee of the entity; and b) those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee. Buy-sell spreads A buy-sell spread is a fee to recover transaction costs incurred by the trustee of the superannuation entity in relation to the sale and purchase of assets of the entity. Exit fees An exit fee is a fee to recover the costs of disposing of all or part of members interests in the superannuation entity. Indirect cost ratio The indirect cost ratio (ICR), for a MySuper product or an investment option offered by a superannuation entity, is the ratio of the total of the indirect costs for the MySuper product or investment option, to the total average net assets of the superannuation entity attributed to the MySuper product or investment option. Note: A dollar-based fee deducted directly from a member s account is not included in the indirect cost ratio. Insurance fee A fee is an insurance fee if: a) the fee relates directly to either or both of the following: (i) insurance premiums paid by the trustee of a superannuation entity in relation to a member or members of the entity; (ii) costs incurred by the trustee of a superannuation entity in relation to the provision of insurance for a member or members of the entity; and b) the fee does not relate to any part of a premium paid or cost incurred in relation to a life policy or a contract of insurance that relates to a benefit to the member that is based on the performance of an investment rather than the realisation of a risk; and c) the premiums and costs to which the fee relates are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an advice fee. Investment fees An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes: a) fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and b) costs incurred by the trustee of the entity that: (i) relate to the investment of assets of the entity; and (ii) are not otherwise charged as an administration fee, a buy/sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee. Switching fees A switching fee is a fee to recover the costs of switching all or part of a member s interest in a superannuation entity from one class of beneficial interest in the entity to another. 4 Member Booklet Supplement

5 Estimated investment fees, performance-related fees and indirect costs The amount of investment fees, performance-related fees and indirect costs 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 investment fees for each of the pre-mixed investment options (i.e. the High Growth, Growth, Diversified SRI, Balanced Growth and Conservative Growth investment options) also includes the trustee s charge of 0.04% per year and transaction costs. Investment fees are an additional cost to you. The amount of investment fees, performance-related fees and indirect cost ratios will change from year to year. As a guide, the table below shows estimates of these fees and costs (and total estimated corresponding dollar amounts). Investment option Investment fees % per year 2 (excluding performancerelated fees) Estimated performance-related fees % per year 3 Estimated indirect cost ratio % per year 4 (excluding performancerelated fees) Estimated total investment fees and indirect cost ratio expressed as $ per $50,000 5 High Growth 0.46% 0.03% 0.10% $295 Growth % 0.03% 0.09% $270 Diversified Socially Responsible Investment 0.51% 0.04% 0.12% $335 Balanced Growth % 0.03% 0.08% $250 Conservative Growth 0.27% 0.02% 0.04% $165 Australian Equities 0.08% 0.00% 0.00% $40 Australian Equities Socially Responsible Investment 0.57% 0.00% 0.00% $285 International Equities 0.09% 0.00% 0.00% $45 Property 0.76% 0.09% 0.18% $515 Australian Fixed Interest 0.07% 0.00% 0.00% $35 International Fixed Interest 0.10% 0.00% 0.00% $50 Cash 0.07% 0.00% 0.00% $35 1 The fees shown are the same for MySuper and Choice members. 2 Investment fees are estimated for the 12 months to 30 June Performance-related fees are the sum of performance-related fees of the fund estimated for the 12 months to 30 June 2017 and the performance-related fees of underlying investments calculated for the 12 months to 30 June The indirect cost ratio is calculated for the 12 months to 30 June This is the combined total of the investment fee, performance-related fees and total indirect costs expressed as dollars for each investment option. First State Super gives you the choice of 12 investment options firststatesuper.com.au Call enquiries@firststatesuper.com.au 5

6 Financial planning First State Super members have access to financial advice 1. If the advice is about your First State Super account, the fee for this advice may be deducted from your First State Super account when the advice is received or you may need to pay for the advice directly. The Statement of Advice (SOA) issued to you whenever you are provided with personal advice will detail the fees applicable. First State Super does not pay any commissions to advisers. The table below describes the services and the fees charged for these services. Service Details Fee Personal advice limited to your interest in your First State Super account Comprehensive advice Ongoing review service Single issue advice about investment choice, life insurance, salary sacrifice, voluntary contributions and starting an income stream. If your situation is more complex, we will discuss our comprehensive advice service with you. You will receive a SOA whenever you are provided with personal advice. Advice that is more comprehensive and needs to factor in more than one element of advice is able to be prepared for you. This will be provided to you in a detailed SOA. If you wish, the SOA can include advice about your broader financial circumstances outside superannuation. The advice that is initially provided in the SOA may need to be monitored and adjusted over time as your personal circumstances change. The ongoing review service includes a structured ongoing review program, proactive contact with you by your dedicated financial planner, access to your dedicated financial planner for additional advice and regular newsletters. No charge. An advice fee is payable on a fee-for-service arrangement payable by the individual member. The fee varies depending on the complexity of your financial affairs. A fee is payable on a fee-for-service arrangement payable by the individual member. 1 Financial planning services are provided by First State Super Financial Services Pty Ltd (ABN , AFSL ). First State Super Financial Services is wholly owned by the FSS Trustee Corporation and is responsible for the advice that they provide. The trustee pays First State Super Financial Services a fixed fee to provide a limited advice service (both face-to-face and over the telephone) to all members. The cost of providing this service is deducted by the trustee from the administration fee it charges its members. The trustee is not a representative of First State Super Financial Services and receives no commissions when making referrals to this service. For more information about financial planning, see the relevant Member Booklet Supplement: About First State Super. Activity fees An activity fee is a fee for the particular service you choose to use and is not part of the ongoing management costs. The only activity fees that the fund currently charges (apart from an investment switching fee) are set out in this table: Type of fee or cost Amount How and when paid Family law fees: Application for information This fee is for providing information as required under the Family Law Act. Splitting an account This fee is for processing the splitting of accounts. $110 Payable to the trustee by the person making the request for information at the time a request is made. $88 The fee is shared equally between both parties and deducted from each party s benefit at the time the benefit is split unless all of the benefit is going to the non-member spouse (in which case the nonmember spouse pays the full fee). No-TFN tax recovery fee $100 This fee will apply if we arrange a refund of the tax deducted from your account for failing to provide a TFN. The fee is deducted at the time of the refund being applied to your account. 6 Member Booklet Supplement

7 Performance-related fees The trustee has negotiated performance fee arrangements with several of its investment managers. An underlying investment may also have performance-related fees. The total performance-related fees per option are shown on page 5. A performance-related fee may be payable once performance above an agreed level has been reached and is typically capped at an upper percentage limit. If performance-related fees are payable by the fund then they will increase the investment fees payable for that investment option or, if charged to an underlying investment, the indirect costs of the option. 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-related fee arrangements may also be entitled to a base percentage fee which is usually below market rates. It is important to remember that the amount of performancerelated fees, if applied in any year, cannot be accurately predicted because they depend on the allocation of our assets to these investment managers and underlying investments and the actual investment performance in any financial year. Additions or alterations to fees and charges All fees and costs may be revised by the trustee from time to time without your consent. 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 introduce new fees and charges. The trustee will give you 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. This excludes fees which are estimates as the actual fees charged may be more or less than estimated. Tax rebates on your account You receive a 15% rebate on amounts deducted from your account for insurance premiums and fees, except for the administration fee and asset-based administration fee. The 15% rebate is credited to your account effective 30 June or at the time you exit the fund (if you leave before the end of the financial year). The tax benefit received by the fund for administration and asset-based administration expenses is retained by the fund for the benefit of all members. Reserves The trustee maintains an administration reserve to manage the costs associated with the management of the fund. Interest earned on contributions received by the trustee but not yet allocated to members accounts and administration fees deducted from members accounts, are credited to the fund s administration 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. The trustee is required to maintain an Operational Risk Financial Requirement (ORFR) reserve. The ORFR reserve is held separately from members accounts and the administration reserve maintained by the trustee. The ORFR reserve is only used to cover losses arising from operational risks. Tax For more information on the amount of tax payable, see section 7 of the applicable Member Booklet and the Member Booklet Supplement: Tax and super. Insurance costs For information on insurance fees and other costs relating to insurance, see section 8 of the applicable Member Booklet and the applicable Member Booklet Supplement: Insurance. To offset costs in administering TPD, death benefits and claims, the trustee retains $0.10 of the per month cost of each unit of death and total and permanent disablement (TPD) cover, and $0.05 of the per month cost of each unit of death only cover. First State Super members have access to financial advice firststatesuper.com.au Call enquiries@firststatesuper.com.au 7

8 Service and advice Phone Fax Web firststatesuper.com.au Post PO Box 1229, Wollongong NSW 2500 MBS Fees and costs 20 August 2016 MBS Fees&Costs 08/16