Fees
Superannuation
schemes and retirement savings plans commonly charge fees
for activities such as administration, investment management
and the performance of the trustees' duties.
The fees for the Individual Retirement Plan are shown upfront
with no surprise add-ons and no commissions - and we won't
try to sell you other products.
The IRP offers one of the lowest fee structures in the market.
For full details of all Individual Retirement Plan fees,
please refer to pages 9-12 of the Plan's
Investment Statement [PDF].
Compulsory
fees:
- Establishment
(or joining) fee - A one-time $40 set-up or joining
fee applies when you first join the IRP. It is deducted
from your Member Account or paid separately on joining the
IRP. The Trustees can claim a tax deduction on behalf of
the Plan in respect of this joining fee, if it is deducted
from your Member Account, and the reduction in tax reduces
your fee to a net $26.80.
It is important to note that while other managers may not
charge a joining fee, some managers charge commission or
contribution fees on your contributions. That means, that
for every dollar you invest they take out a fee, which affects
the amount of your savings. This will over time, amount
to much more than a one-off joining fee of $26.80.
- Administration
fee - A monthly administration fee is payable
with respect to all Plan members. This monthly fee deducted
from your Member Account of $3.00 if your contributions
are paid from your salary, and $4.00 if your contributions
are made from your bank account. This fee is charged whether
you make a contribution or not.
The Trustees can claim a tax deduction on behalf of the
Plan in respect of this administration fee, if it is deducted
from your Member Account, and the reduction in tax reduces
your fee to a net $2.01 or $2.68 per month. That means your
fees are just $36 or $48 per year, or $24.12 or $32.16 after
the tax reduction!
Other managers' much higher monthly administration fees
will easily offset the one off joining fee.
- Investment
Management fees - These fees are a percentage of
the value of members’
funds invested in each investment fund. The investment
management fee for each investment fund is:
| Investment
Fund |
Investment
Management Fee% per annum of funds invested |
| Stable
Fund |
0.469%
net |
(or
0.70% gross) |
| Balanced
Fund |
0.503%
net |
(or
0.75% gross) |
| Growth
Fund |
0.536%
net |
(or
0.80% gross) |
- These
fees are deducted monthly from total IRP funds (rather
than directly from your Member Account).
This fee effectively reduces the net investment return
you receive on your Member Account. The fee covers
payments to Mercer and all investment managers. Depending
on the
total market value of the assets [and those of the
Employee Retirement Plan, (another former member scheme
of the Global
Retirement Trust) if applicable], there may be a rebate
on the investment management fees.
The Trustees can claim a tax deduction on behalf of the
Plan in respect of these investment management fees and
the reduction in tax reduces the fees you pay - to the
net amount shown above.
- Other
expenses - such as auditing, legal, accounting and communication
expenses. These are deducted directly from IRP funds (not
your Member Account).
Other
fees:
- Fund
transfer fee - $40 per transfer of savings from
one investment fund to another. The
first transfer you make in any IRP Plan year (between
1
July and 30 June) will be free and thereafter further transfers
made during the Plan year will incur the $40 fund
transfer
fee.
- Benefit
calculation fee - a $50 fee for each withdrawal you
make from your Member Account.
- Insurance
premium - if you've chosen life or life and disablement cover, premiums
will be deducted from your Member Account.
- You
pay no commissions or termination penalties if you leave
the Plan.
- Subject to certain qualifications (see
pages 8 and 9 of the IRP’s investment statement)
Mercer has given an undertaking to the Trustees in relation
to
its fees that the current fee structure will remain unchanged
until 1 October 2010.
- The administration fee may be adjusted
at each 1 November by a percentage amount no more than
the then latest percentage
increase in the index for the national average ordinary
time weekly wage over the index published in respect of
the same date one year earlier.
- The fund transfer and benefit
calculation fee may be adjusted from time to time.
|
