Additional explanation of fees and costs
The information on this page forms part of the Accumulation account Product Disclosure Statement (date prepared: 29 January 2016) and also applies to pension members.
Super funds can vary greatly when it comes to the types and amounts of fees they charge members. Even a small difference in fees can have a huge impact on your super savings over time.
The low down on LGIAsuper's fees
Luckily, LGIAsuper’s fees are among the lowest in the industry, so you’re left with more money to enjoy in retirement. Because we’re run only to profit members, we only charge fees to cover the costs of running the fund.
Let’s take a closer look.
- 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 fee1 (% p.a.) MySuper Lifecycle – Under 75 0.51 0.21 MySuper Lifecycle – 75 plus 0.43 0.21 Aggressive 0.49 0.21 Diversified Growth 0.51 0.21 Balanced 0.43 0.21 Stable 0.35 0.21 Defensive 0.27 0.21 International Shares 0.41 0.21 Australian Shares 0.39 0.21 Property 0.61 0.21 Diversified Fixed Interest 0.23 0.21 Cash 0.09 0.21 SR Balanced 0.90 0.21 SR Australian Shares 0.84 0.21
1. Estimates only.
- 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 $3.1 million were included in the Investment fees for 2014/15.
Due to the difficulty in predicting performance fees for future years, performance fees have not been included in the estimated Investment fee.
- Advice fees
LGIAsuper does not charge a fee for providing general advice, or for limited single issue personal advice (e.g. salary sacrifice or super co-contribution) where a limited Statement of Advice is provided after a face-to-face or phone discussion with an LGIAsuper representative.
If you receive more comprehensive personal advice and/or meet with an LGIAsuper advice representative, you will be charged an advice fee, which ranges from $220 to $660 including GST. The fee charged for advice directly relating to your LGIAsuper account may be deducted from your LGIAsuper account on request.
Type of advice Appointment fee Advice fee Total fee Single issue advice on contributions or investment choice $220 No charge $220 Superannuation health check, transition to retirement and redundancy (pre-retirement) $220 $220 $440 Retirement planning, income sources, Centrelink entitlements and estate planning issues $220 $440 $660
- Insurance fees and premiums
If you have insurance with LGIAsuper, premiums are deducted from your account.
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 $3.00.
The Insurance fee is included in the insurance premiums deducted from your account monthly in arrears and does not affect your sum insured. As everyone’s insurance cover is different, you should read the Insurance guide for full details on LGIAsuper's insurance arrangements and how to calculate your premiums.
- Transactional and operational costs
Net returns declared by investment managers reflect the transactional and operational expenses of investing, such as brokerage, stamp duty, direct property repair and maintenance costs and buy-sell spreads where applicable. These net returns are, in turn, reflected in the final earning rates determined each year. No brokerage or buy-sell spreads are charged directly on your money.
- 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.
LGIAsuper does not need to deduct any other amounts from investment returns other than those we disclose above.
- Fee changes
LGIAsuper may change fees at any time without your consent. Administration and Investment fees only cover the actual costs of administration and investment management, and as such, may vary from year to year.
Before the start of each financial year LGIAsuper estimates 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 or Investment fee.
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 fee||What LGIAsuper charges|
|Investment switching fee
A fee for changing a member’s investment strategy.
A fee charged on each withdrawal you make from your super.
A fee charged when a member withdraws their whole super balance from a fund.
A fee for the transaction costs involved in selling or buying assets.
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.
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.
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:
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 fee is an advice fee if:
|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.
An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes:
|Switching fees||A switching fee is a fee to recover the costs of switching all or part of a member’s interest in the superannuation entity from one class of beneficial interest in the entity to another.|