Administration fee reductions from 1 July 2023
ESSSuper - 22 Jun 2023
It's often said that a little of something can go a long way, whether it is kindness, peanut butter, or in this case; your super fees and costs.
Your super balance can continue to grow due to compound earnings, which is basically the principle that you receive investment earnings on top of investment earnings you've received previously. In other words: lower fees means more super in your balance, which means more super invested today, which (if investment earnings are positive) means even more super tomorrow, and ongoing even after retirement.
Which is why we are delighted to let you know that, as the result of our new administration systems being more efficient, from 1 July 2023 we are reducing the administration fees on our Accumulation Plan and Income Stream accounts.
What are we changing?
Administration fees and costs are made up of an account-keeping fee and an administration fee, and are capped at a maximum amount each financial year. From 1 July 2023:
- The administration fee will reduce from 0.25% to 0.20% of your balance each financial year, and
- Total administration fees and costs will be capped at $750 each financial year (reduced from $2,120).
These reductions will come into effect automatically, so you don't need to do anything to benefit.
At a time when everything else seems to be getting more and more expensive, the account-keeping fee will remain as just $52 a year – that's just $1 per week.
How will this be calculated?
To give you an idea of what impact this will have on your Accumulation Plan or Income Stream costs, here are two examples.
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Example 1
Sam has $100,000 in their Accumulation Plan. After the fee reduction from 1 July 2023, Sam will save $50 a year (compared to the financial years before 1 July 2023) due to the reduction in the administration fee.
Let's look at how this is worked out:
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Current account-keeping fee:
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$52
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Continued account-keeping fee:
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$52
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Current administration fee (i.e. $100,000 x 0.25%):
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$250
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New administration fee (i.e. $100,000 x 0.20%):
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$200
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Current total administration fees and costs:
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$302
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New total administration fees and costs:
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$252
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Example 2
Li has $400,000 in her Income Stream account. With the new reduced cap, Li will make a saving of $302 a year compared to the financial years before 1 July 2023.
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Current account-keeping fee:
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$52
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Continued account-keeping fee:
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$52
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Current administration fee (i.e. $400,000 x 0.25%):
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$1,000
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New administration fee (i.e. $400,000 x 0.20%):
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$800
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Don't forget that the new maximum amount is $750 per year!
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Current total administration fees and costs:
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$1,052
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New total administration fees and costs:
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$750
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Important notes:
- The examples above have been created to demonstrate the broad impact of changes to Accumulation Plan administration fees and costs prior to and from 1 July 2023 on different account balances.
- These examples are provided for illustrative purposes only and assume that each balance has been maintained in the fund for a full year. Fees and costs have been calculated in accordance with the administration fees and costs published in the relevant Product Disclosure Statement (PDS) issued 5 December 2022 and the new PDS to be issued on 1 July 2023. These examples do not include all fees and costs. You should review the Accumulation Plan PDS and the incorporated Fees and costs guide (AP.7) and/or the Income Streams PDS for more information about fees and costs.
- These examples are not a promise or guarantee of the savings you may receive.
Please contact us for more information.
A rebate for 2022-23 fees as at 31 May 2023
We've also given an administration fee rebate to members who had an open Accumulation Plan, Beneficiary Account, and/or Income Stream account at 31 May 2023, applied by adjusting the unit prices for all investment options.