Legislative Updates

Home / Superannuation Products

Fees Definition

The following fees may be charged to a Superannuation product

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 Superannuation product or an investment option offered by a superannuation entity, is the ratio of the total of the indirect costs for the Superannuation product or investment option, to the total average net assets of the superannuation entity attributed to the Superannuation 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, or the trustees, of a superannuation entity in relation to a member or members of the entity;

(ii)        costs incurred by the trustee, or the trustees, 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 the superannuation entity from one class of beneficial interest in the entity to another.

The following fees may be charged to a Superannuation product

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 Superannuation product or an investment option offered by a superannuation entity, is the ratio of the total of the indirect costs for the Superannuation product or investment option, to the total average net assets of the superannuation entity attributed to the Superannuation 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, or the trustees, of a superannuation entity in relation to a member or members of the entity;
            (ii)        costs incurred by the trustee, or the trustees, 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 the superannuation entity from one class of beneficial interest in the entity to another.

Superannuation Guarantee Contribution (SGC)

Most Australian employers are required by Government legislation to make superannuation contributions for their 

employees – called Superannuation Guarantee (SG) contributions. SG contributions are presently 9.5% (for the 2014-2015 

financial year) of a person’s ordinary time earnings (subject to a maximum dollar limit).

The superannuation guarantee (SG) contribution rate will gradually increase to 12% over time.  

SG contributions are required to be paid by an employer to a superannuation fund at least quarterly.  SG contributions 

are concessional contributions and are subject to concessional contribution limits (refer to section 6 “How super is 

taxed” of this document for information about these limits). For further general information about SG contributions go 

to www.ato.com.au 

Contributions can only be made for a member who has completed an Individual Application Form.  If we receive a 

contribution for a person that has not completed an Individual Application Form, monies will be returned. Any 

contributions that you or your employer attempt to make to the Fund will be returned to you within 30 days if you have 

not completed an Individual Application Form, after taking into account (in relation to member contributions) any 

allowable adjustments for investment fluctuations and reasonable costs

Most Australian employers are required by Government legislation to make superannuation contributions for their employees – called Superannuation Guarantee (SG) contributions. SG contributions are presently 9.5% (for the 2014-2015 financial year) of a person’s ordinary time earnings (subject to a maximum dollar limit).

The superannuation guarantee (SG) contribution rate will gradually increase to 12% over time.

SG contributions are required to be paid by an employer to a superannuation fund at least quarterly.  SG contributions are concessional contributions and are subject to concessional contribution limits (refer to section 6 “How super is taxed” of this document for information about these limits). For further general information about SG contributions go to www.ato.com.au

Contributions can only be made for a member who has completed an Individual Application Form.  If we receive a contribution for a person that has not completed an Individual Application Form, monies will be returned. Any contributions that you or your employer attempt to make to the Fund will be returned to you within 30 days if you have not completed an Individual Application Form, after taking into account (in relation to member contributions) any allowable adjustments for investment fluctuations and reasonable costs.

Impact of making contributions without a TFN:

You or your employer will be unable to make any contributions to the Fund if we have not been provided with your TFN. The law does not allow us to accept or retain member contributions if we do not have your TFN, and the Trustee has decided that employer contributions will not be permitted if we do not hold your TFN, to more effectively manage the Fund’s tax liabilities. Any contributions that you or your employer attempt to make to the Fund will be returned to you within 30 days if you do not provide your TFN, after taking into account (in relation to member contributions) any allowable adjustments for investment fluctuations and reasonable costs.

Upper age limit removed for Superannuation Guarantee contributions:

From 1 July 2013, the upper age limit for the requirement to pay superannuation guarantee (SG) has been removed. This means, no matter how old you are, if you are still working and eligible, your employer is still required to pay SG contributions on your behalf.

Concessional contributions cap tax rate for 2014/2015:

A concessional tax rate of 15% will ordinarily apply to concessional contributions up to $30,000 per person per year for the 2014/2015 financial year (subject to indexation in future years), payable from the Fund (unless a rebate of this tax is available because you are a low income earner). However, from the 1 July 2014 if you are 50 years old or over at any time in a financial year, the concessional contributions cap for the financial year increases to $35,000. 

Increase to contribution tax for high income earners:

If your income and non-excessive concessional contributions exceed $300,000 in a financial year, an additional 15% tax will apply to the lesser of the member’s non-excessive concessional contributions and the amount of the member’s income and non-excessive concessional contributions that exceed $300,000.   Refer to www.ato.gov.au for more information.

Concessional contribution cap breaches:

Concessional contributions in excess of the concessional contributions cap will incur additional tax at your marginal tax rate (less a 15% tax offset) and count towards your non-concessional cap.  In addition, you will be liable to pay a charge in respect of the excess concessional contributions.  You will be required to pay this additional tax personally (you may, but are not required, to obtain the amount of additional tax from your superannuation savings).  You may choose to have up to 85% of your excess concessional contributions.  If you do, this amount will be sent to the Australian Taxation Office.  The amount of excess concessional contributions that count towards your non-concessional contributions cap will be reduced by the amount of excess concessional contributions you release from your account ‘grossed-up’ by 15%.

For futher information please click here

Privacy Policy | Disclaimers | Web Site Privacy

Copyright © 2001-2018 Grosvenor Pirie Management Limited. All rights reserved.