Additional explanation of fees and costs

The information on this page forms part of the Accumulation account Product Disclosure Statement (date prepared: 28 September 2017) and also applies to pension members.

Like all super funds, LGIAsuper charges fees to cover the costs of running the fund.

As a members-first fund, we work hard to keep our fees low.

Unlike many funds, the only fees we charge are those needed to run the fund. Lower fees means a bigger lump sum for you when you retire.

On this page you'll find detailed information about our competitive Administration and Investment fees, as well as a breakdown of the Indirect costs incurred by the fund which are not charged to members as a fee.

Investment and administration fees

The fees to manage your account are split into investment and administration fees.

Regardless of how your super is invested or what kind of account you have, LGIAsuper charges an administration fee of just 0.21% p.a.

Investment fees relate to the management of your super into different assets. These fees vary depending on how your super is invested:

Investment option Investment fee1 (% p.a.) Administration fee (% p.a.)
MySuper Lifecycle – Under 75 0.45 0.21
MySuper Lifecycle – 75 plus 0.39 0.21
Aggressive 0.47 0.21
Diversified Growth 0.45 0.21
Balanced 0.39 0.21
Stable 0.30 0.21
Defensive 0.23 0.21
International Shares 0.40 0.21
Australian Shares 0.39 0.21
Property 0.63 0.21
Diversified Fixed Interest 0.21 0.21
Cash 0.03 0.21
SR Balanced 0.90 0.21
SR Australian Shares 0.62 0.21

1. Estimates only.

Administration fee rebate

The Administration fee is capped at a maximum amount of $1,575 per annum across all LGIAsuper accounts you hold during a financial year (excluding the defined benefit component of Defined Benefit accounts). If you are charged total Administration fees above this cap in any financial year, we will rebate the difference to your active accounts at the time the rebate is applied.

Your eligibility for a rebate will be calculated at the end of each financial year while you hold an account with LGIAsuper, or at the time you close your last LGIAsuper account during a financial year.

If you hold more than one LGIAsuper account at the time the rebate is applied, it will be paid in direct proportion to the account balance at that time.

Insurance fees and premiums

An Insurance fee of 1% (including GST) of all Death, Total and Permanent Disablement and Income Protection premiums is retained by LGIAsuper to partially offset the administration cost of managing the insurance arrangements. For example, if insurance premiums deducted from your account total $300 for a year, this will include an Insurance fee of $3.

The insurance fee is included in the insurance premiums deducted from your account monthly in arrears and does not affect your sum insured.

For more information on LGIAsuper’s insurance arrangements, please see the Insurance guide.

Performance fees

Performance fees are paid to some investment managers when they outperform a set benchmark. These fees are calculated by comparing the difference between the benchmark and actual performance for each investment, and multiplying the outperformance by the performance bonus rate payable.

Performance fees of approximately $4.5 million were included in the Investment fees for 2016/17. No estimated performance fees are included in the Investment fees in the fees and costs tables as we do not expect the investment managers to outperform their benchmarks.

Fee changes

Administration and Investment fees only cover the actual costs of administration and investment management paid out of LGIAsuper, and as such, may vary from year to year. The actual investment fees deducted from investment earnings each financial year are reported to you in the Annual Report to members. LGIAsuper may change fees at any time without your consent.

Before the start of each financial year LGIAsuper estimates the Investment fees for the year ahead and these estimates only change where necessary to ensure costs are covered. LGIAsuper will provide you with 30 days’ prior notice of any increase in the Administration fee.

Any change in the Investment fee or Indirect cost ratio that is due to an increase in costs or an update to our estimates will be disclosed on our website.

Advice fees

The cost of providing general advice is included in the Administration fees charged to LGIAsuper members.

Financial advice fee

Some financial advice services are provided by LGIAsuper Services Pty Ltd (LGIAsuper Services, ABN 49 616 808 970) as a corporate authorised representative (no. 1255725) of LGIAsuper Trustee (ABN 94 085 088 484, AFSL no. 230511).

LGIAsuper Services does not charge for general or single issue personal advice provided over the phone.

A minimum appointment fee of $220 applies for broader superannuation advice. An additional fee of up to $660 (ie. $880 in total) may be charged depending on the level of advice required. Charges include GST.

The fee charged for advice that relates to superannuation may be deducted from your LGIAsuper account on request. The fees will be explained to you in detail if you ask for this advice.

For more detail on our financial advice services, please refer to our Financial Services Guide.

Indirect costs

Indirect costs are any amounts that we know, or reasonably ought to know, will directly or indirectly reduce the return on your investments that are not charged to your account as a fee, such as transactional and operational costs, costs of derivatives and management costs charged by interposed vehicles.

The Indirect costs in the fees and costs tables are based on the indirect costs incurred for 2016/17.

Investment option Indirect costs ratio1 (% p.a.)
MySuper Lifecycle – Under 75 0.41%
MySuper Lifecycle – 75 plus 0.36%
Aggressive 0.36%
Diversified Growth 0.41%
Balanced 0.36%
Stable 0.28%
Defensive 0.18%
International Shares 0.08%
Australian Shares 0.14%
Property 1.00%
Diversified Fixed Interest 0.10%
Cash Nil
SR Balanced 0.47%
SR Australian Shares 0.58%

1. Estimates only

Transactional and operational costs

The transactional and operational expenses of investing, such as brokerage, stamp duty, property operating costs and buy-sell spreads where applicable, are included in the Indirect costs and Indirect cost ratio in the fees and costs table. Transactional and operational costs of approximately $38.2m were incurred in 2016/17 across these investment options:

Investment option Transactional and operational costs included in Indirect costs
LGIAsuper MySuper Lifecycle – Under 75 0.40%
LGIAsuper MySuper Lifecycle – 75 plus 0.35%
Aggressive 0.35%
Diversified Growth 0.40%
Balanced 0.35%
Stable 0.27%
Defensive 0.18%
International Shares 0.08%
Australian Shares 0.14%
Property 0.98%
Diversified Fixed Interest 0.09%
Cash Nil
SR Balanced 0.39%
SR Australian Shares 0.58%

No transactional and operational costs are charged directly to your account.

Borrowing costs

LGIAsuper does not borrow money but we invest in fund managers that borrow money to facilitate the purchase of certain investments, such as real property and infrastructure. These costs are recovered from the earnings of the assets purchased with the borrowings. Borrowing costs are not included in any of the fees and costs outlined here and are an additional cost to members.

In 2016/17, LGIAsuper incurred borrowing costs of approximately $8.2m across these investment options:

Investment option Borrowing costs not included in Indirect costs
LGIAsuper MySuper Lifecycle – Under 75 0.08%
LGIAsuper MySuper Lifecycle – 75 plus 0.08%
Aggressive 0.08%
Diversified Growth 0.08%
Balanced 0.08%
Stable 0.08%
Defensive 0.04%
International Shares Nil
Australian Shares Nil
Property 0.61%
Diversified Fixed Interest Nil
Cash Nil
SR Balanced 0.04%
SR Australian Shares Nil

The fees we don't charge

We think it’s just as important to know what fees LGIAsuper doesn’t charge because even though we don’t charge for these things, other funds might. If you have super with other funds it’s a good idea to see if you’ll be charged any of the following fees.

Type of feeWhat LGIAsuper charges
Investment switching fee
A fee for changing a member’s investment strategy.
Nil
Withdrawal fee
A fee charged on each withdrawal you make from your super.
Nil
Exit fee
A fee charged when a member withdraws their whole super balance from a fund.
Nil
Buy-spread fee
A fee for the transaction costs involved in selling or buying assets.
Nil

Defined Benefits

Different fee arrangements apply if you have an LGIAsuper Defined Benefit account. For full details of these fees and costs, see the relevant Defined Benefit guide on our PDSs and guides page.

Defined fees

Legislation allows superannuation funds to charge members various fees, as defined below. However, LGIAsuper does not charge members all of these fees.

The information in the table below provides definitions of the fees super funds are legally allowed to charge. It does not outline the types or costs of fees LGIAsuper charges. To find out more about what fees are charged to your LGIAsuper account please click on the blue headings above for an explanation of LGIAsuper's fees or see the Fees sections of the Product Disclosure Statements and guides that apply to your account.

Fee Definition
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 that relate to that administration or operation, other than:
(a) borrowing costs; and
(b) indirect costs that are not paid out of the superannuation entity that the trustee has elected in writing will be treated as an indirect costs and not fees, incurred by the trustee of the entity or in an interposed vehicle or derivative financial product; and
(c) costs that are 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.

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 that relate to the investment of assets of the entity, other than:
(i) borrowing costs; and
(ii) indirect costs that are not paid out of the superannuation entity that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the entity or in an interposed vehicle or derivative financial product; and
(iii) costs that are 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 for a MySuper product 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.

switching fee for a superannuation product other than a MySuper product, is a fee to recover the costs of switching all or part of a member's interest in the superannuation entity from one investment option or product in the entity to another.