Member Information Booklet - REI Super

example of annual fees and costs for
a balanced investment option **
This table provides an example of how the fees and costs
in REI Super’s Trustee Super Balanced Option can affect your
superannuation investment over a one-year period. You can
use this table to compare this investment option with other
superannuation products.
example – the trustee Super balanced
investment option
balance of $50,000
with total contributions of $5,000 during year
Contribution fees Nil For every $5,000 you put in, you will be charged $0.
Plus
Management costs
equals
Cost of fund
From 0.68% to 0.75% +
$85.80 ($1.65 per week)
For every $50,000 you have in the Fund you will be charged between $340 and
$375 each year, plus $85.80 in administration fees, regardless of your balance.
If you put in $5,000 during a year and your balance was $50,000, then for that
year you will be charged fees of between $425.80 and $460.80.*
What it costs you will depend on the investment option you choose and the fees
you negotiate with your fund and financial adviser.**
* Additional fees may apply:
If you leave the Fund, you will also be charged a Withdrawal fee of $90.
Buy/Sell spreads may apply to some investment options. See ‘Buy/Sell spreads’ below and the preceding Investment section for details.
** This is a standard format example required by Australian law. The term ‘Balanced Investment Option’ refers, in REI Super’s case, to the Trustee Super Balanced
Option. REI Super does not pay commissions to advisers. As an industry fund that returns all profits and costs to members’ accounts, it provides the same fees for all
members and does not allow negotiation on fees.
buy/Sell spreads
The Buy/Sell spreads for the Fund’s investment options are:
Super growth 0.50% (50 basis points)
trustee Super balanced 0.40% (40 basis points)
Super Stable 0.22% (22 basis points)
Super Cash Zero (0 basis points)
Australian Shares 0.60% (60 basis points)
international Shares 0.50% (50 basis points)
Australian Property 0.40% (40 basis points)
global Property 0.70% (70 basis points)
fixed interest Zero (0 basis points)
When a contribution is received or a benefit is paid, it is used
to purchase or sell units in your investment option. For some
investment options, the entry price for the issue of units may be
different from the exit price for the redemption of those units.
The difference between the entry and exit price represents
an allowance for transaction and operational costs, and is
commonly referred to as a ‘Buy/Sell spread’. This Buy/Sell
spread is paid to the external investment managers, and simply
reflects the cost associated with the investment transaction.
Buy/Sell spreads (if incurred) are additional costs and do not
form part of the management costs shown in the ‘Example of
annual fees and costs’ table above. They are included in the
unit-pricing process.
The Fund will, wherever possible, use available cash flow (e.g.
contributions coming in) to pay benefits to members leaving the
Fund. This will avoid costs associated with buying and selling
underlying assets. Any saving produced is distributed to members
of the Fund as part of the calculation of unit prices. This results in
a reduction in the management costs charged to members. See
above for the Buy/Sell cost for each investment option.
page 21
Additional explanation
of fees and costs
investment management costs
The percentage-based investment management costs shown
in the tables above and opposite are estimates and will vary
from year to year, reflecting actual expenses incurred, the value
of assets invested with each investment manager, and whether
performance based investment fees apply.
If the actual expenses incurred are greater than the estimate,
then the unit price would decrease. If the actual expenses
incurred are less than the estimate, the unit price would
increase.
Performance-based investment fees charged by some
managers are deducted from the portion of the Fund’s assets
invested in the underlying portfolio they manage, and are
reflected in the unit prices of the Fund. Performance fees are
typically between 10% and 20% of performance above a relative
benchmark index.
The estimated performance-based fees shown assume that:
the current strategic asset allocation to existing investment
managers with performance-based fees remains unchanged; a
performance fee of 10.25% applies; and a performance outcome
of 10% above the benchmark is achieved.
This is considered a conservative estimate that could be payable
in a year. However, they could be higher or lower, depending on
the actual performance outcome achieved by each manager.