The way super funds communicate your fees is changing
The super industry regulators have introduced new rules for all super funds. Find out what these changes mean for you.
The regulators have introduced new rules around communicating super fees.
But don’t worry, there’s no change to investment returns or what you pay.
All super funds are simply showing you behind the scenes expenses.
You’ll still benefit from strong long-term performance.
And rest assured you’re still only paying for what you need.
Understanding your fees
With an industry super fund like Cbus, the fees we charge go to supporting members and not to shareholders. Your fees cover costs like:
- the administration of your account
- online services, and
- the costs of investing your savings to earn strong long-term returns.
Your fees are either:
- deducted directly from your account, or
- deducted from your investment earnings before these are applied to your account.
For example, an administration fee – called your account keeping fee – is paid out of your account balance at the end of each month, whereas investment fees are paid out of your investment earnings.
Other fees and costs apply depending on the choices you make, like paying for any insurance cover you have or other transactions you make.
What changes will you see from 30 September 2017?
The changes introduced by the Australian Securities and Investments Commission (one of the super industry regulators) mean super funds will start communicating some investment fees that haven’t previously been reported. For example:
- the costs of brokerage to buy and sell shares
- stamp duty on transactions
- currency costs.
Rather than showing your investment fees and Trustee operating costs together as an indirect cost ratio, these will now be shown separately as an investment fee and Trustee operating cost – see the fees for your membership category below for details.
| Fee shown before 30 September | Fee shown after 30 September |
|---|---|
| Administration fee | Administration fee - account keeping fee Administration fee - Trustee operating cost |
| Indirect cost ratio | Investment fee (including other investment fees not previously reported) |
Fees for super members
Changing the way your fees are communicated won’t affect the fees you pay or the actual return you receive from Cbus.
What are the updated fee amounts?
The table below outlines how your fees will be shown from 30 September 2017. From this date, you can find comprehensive fee details in our fees and charges section.
| Type of fee | Amount | How and when paid |
|---|---|---|
| Investment fee* | The investment fee varies for each investment option:
|
Deducted from the investment returns before the crediting rate is applied to your account. |
| Administration fee | Account keeping fee of $1.50 per week Plus Trustee operating cost of 0.15%* per year of your account balance |
Deducted from your account at the end of each month or when you close your account. Deducted from the investment returns before the crediting rate is applied to your account. Cbus claims a tax deduction for administration costs each year which is used to reduce the Trustee operating cost. The current estimate for 2017/18 is 0.21% (gross of tax). |
* Fees deducted from the crediting rate are estimates based on the actual costs from the 2016/17 financial year. They usually change from year to year and may be different for each investment option. Other fees and costs such as activity fees, insurance fees and tax may apply.
Example for the 2016/17 financial year
The chart below shows what these changes would have meant for a member with $50,000 invested in the Growth (Cbus MySuper) investment option in the 2016/17 financial year. As you can see, the total fees paid and investment earnings received haven’t changed. Funds are simply communicating more of the fees that already apply.
This example is provided for illustration purposes only. The figures shown are based on the net investment return for the Growth (Cbus MySuper) investment option for the 2016/17 financial year of 11.85% (after all fees and costs). Past performance is not a reliable indicator of future performance. The information in this article is based on our understanding at the time of publishing. Check the latest Product Disclosure Statement for the most up to date fee information.
Fees for income stream members
Changing the way your fees are communicated won’t affect the fees you pay or the actual return you receive from Cbus.
What are the updated fee amounts?
The table below outlines how your fees will be shown from 30 September 2017. From this date, you can find comprehensive fee details in our fees and charges section.
| Type of fee | Amount | How and when paid | |
|---|---|---|---|
| Investment fee* | The investment fee varies for each investment option: | Deducted from the investment returns before the crediting rate is applied to your account. | |
| Transition to retirement options: Cash Savings – 0.12% Conservative – 0.39% Conservative Growth – 0.58% Growth – 0.85% High Growth – 0.94% |
Fully retired options: Cash Savings – 0.12% Conservative – 0.39% Conservative Growth – 0.58% Growth – 0.86% High Growth – 0.94% |
||
| Administration fee | Account keeping fee of $2 per week Plus 0.08% per year of your account balance (capped to $640 per year) Plus Trustee operating cost of 0.08%* per year of your account balance |
Deducted from your account at the end of each month or when you close your account. Deducted from the investment returns before the crediting rate is applied to your account. Cbus claims a tax deduction for administration costs each year which is used to reduce the Trustee operating cost. The current estimate for 2017/18 is 0.09% (gross of tax) for the Transition to Retirement option and 0.08% (gross of tax) for the Fully Retired option. |
|
* Fees deducted from the crediting rate are estimates based on the actual costs from the 2016/17 financial year. They usually change from year to year and may be different for each investment option. Other fees and costs such as activity fees, insurance fees and tax may apply.
Example for the 2016/17 financial year
The chart below shows what these changes would have meant for a member with $50,000 invested in the Conservative Growth investment option in the 2016/17 financial year. As you can see, the total fees paid and investment earnings received haven’t changed. Funds are simply communicating more of the fees that already apply.
This example is provided for illustration purposes only. The figures shown are based on the net investment return for the Conservative Growth investment option for the 2016/17 financial year of 9.62% (after all fees and costs). Past performance is not a reliable indicator of future performance. The information in this article is based on our understanding at the time of publishing. Check the latest Product Disclosure Statement for the most up to date fee information.
Remember, your investment returns aren’t affected
It’s important to remember that changing the way your fees are communicated won’t affect the returns we deliver you.
Cbus has a history of strong long-term investment performance. Our default Growth (Cbus MySuper) option has outperformed the industry average, year after year.
Since inception 33 years ago it has returned an average* each year of 9.24% (to 30 June 2017).
The new rules won’t reduce the returns you receive from Cbus as there is no change to the fees you pay. You can check how your investments have performed by exploring:
* Since inception to 30 June 2017, the crediting rate is the return minus investment costs and taxes, the Trustee operating cost and reserves. Excludes administration fees. Past performance is not a reliable indicator of future performance.
What's next?
The regulator has outlined further changes to fees planned for 2018. The details around these changes are still under discussion, so we’ll update you when more is confirmed.
We're here to help
Call our Cbus Advice Team on 1300 361 784
8am to 8pm Monday to Friday AEST/AEDT
Email: advice@cbussuper.com.au
Or use our online form to book a time for our Advice Team to call you.