Section 2 – Fees and Other Costs
 

Consumer Advisory Warning

DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fund or your financial adviser.   TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (www.fido.asic.gov.au) has a superannuation fee calculator to help you check out different fee options.

This section shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the TIC Plan assets as a whole.

Taxes and insurance costs are set out in another part of this document.

You should read all of the information about fees and costs because it is important to understand their impact on your investment.

Fees and costs for particular investment options are set out in Section 4 of this PDS.

Please ensure that you read all the information about fees and costs before deciding to invest in this product.Our fee structure has been designed to be flexible.

The fees quoted in this section are inclusive of GST and net of any Reduced Input Tax Credits.

 

Additional Explanation of Fees and Costs
 

Tax Deductions

As tax is payable at 15% on income of superannuation funds, including investment earnings, the Trustee is allowed a tax deduction on the fees relating to investment in the TIC Plan. Any available tax deduction may reduce the actual impact of fees on your account by 15%. This tax deduction is generally passed on to you.

All fees and costs shown in this section are before any allowable tax deduction. Important note: Tax deductions are claimed by the Trustee and (if allowed) are generally credited as follows: a. Investment related costs (i.e. manager fees, brokerage, custodian and asset consultant fees): claimed as a deduction against taxable investment income before net earnings are credited to members; b. Account administration fees (includes withdrawal fees, family law fees and binding nomination fees): not allowed as a deduction in members’ individual accounts. 

Management Costs

Management costs are made up of a Member Fee and Trustee Administration Fee (deducted directly from your account) and an Investment Management Fee (deducted from the assets of each investment option) payable on an ongoing basis. 

Member Fee 

The Member Fee of $57.20 p.a. (including GST) is paid to the Administrator for its services to the TIC Plan. From this fee, up to 11 cents per member per week may be paid to the Sponsor for the provision of support services to the Plan. 

INVESTMENT SWITCHING FEE

You are entitled to one free investment switch and one free investment rebalance each financial year. For each subsequent investment switch or investment rebalance a $44.00 (including GST) Investment Switching Fee is paid from your account to the Administrator for this service. 

Trustee Administration Fee The Trustee Administration Fee is calculated on the value of each account and deducted monthly in arrears. This fee includes: 

•  a Trustee Fee of 0.15% of the account balance which is paid to CCSL to provide administrative and other trustee services to the TIC Plan; 
• an Administration Fee of 0.033% of the account balance which is paid to SMA Consultants for administration services to the TIC Plan; 
• a Custodian Fee from 0.015% to 0.03% of the account balance which is paid to RBC Dexia for custodian services in relation to the TIC Plan; 
• an Expense Recovery Fee of up to 0.10% of the account balance which reimburses costs that CCSL incurs in connection with proper performance of its duties required for the day-to-day operation of the Plan; 
• a Distributor Fee of up to 0.45% of the account balance which is paid to TIC for the provision of support services to the TIC Plan;
• and  a Sponsor Fee of up to 0.202% of the account balance which is paid to ISA for the provision of support services to the TIC Plan.

These costs include but are not limited to printing and postage costs, advertising expenses, tax and bank fees, accounting fees, audit fees, small account protection fees, actuarial fees, consulting fees and legal fees. 

The percentage charge is adjusted at the end of each year if expenses are above the estimate. If the estimate proves too high, any excess will be retained in the Plan and the following year’s estimate may be reduced.

Less frequently, CCSL also incurs additional abnormal expenses, such as the cost of member meetings, changes to the Trust Deed and costs incurred as the result of changes in superannuation law. CCSL may also recover these abnormal additional expenses, as set out in the ISARF Trust Deed.

Investment Management Fee

The investment option profiles included in Section 4 show the current estimated Investment Management Fee for each investment option. These fees are the Trustee’s estimate of the cost of investing in the underlying funds for each investment option as at the date of this PDS. They are based on the weighted average investment management and other fees charged by the current investment managers for each component of the investment option. The estimate assumes that allocations within each option are made in line with the benchmark asset allocation for each pool.

These investment management and other fees can vary from time to time, if the Trustee invests outside of the benchmark asset allocations, if an underlying investment manager varies its fees, or if the Trustee adds, removes or replaces any investment manager.

Investment Management Fees are not deducted from your account balance but are reflected in the unit prices of each investment option.

From the Investment Management Fee, up to 0.25% may be paid to the Sponsor for the provision of support services to the TIC Plan. This payment is included in the Investment Management Fee and is not an additional charge to you or your account. 

Investment Management Fees are not deducted from your account balance but are reflected in the unit prices of each investment option. 

It is important to note that, if you are invested in more than one investment option, you will incur the Investment Management Fee for each applicable investment option. 

The actual investment option costs are listed in Section 4.

The estimated Investment Management Fees for each investment option as at the date of this PDS are listed in Section 4.

What Is Paid to Your Financial Adviser? 

Nothing. The TIC Plan does not pay commissions to financial advisers. Your adviser (if any) may directly charge you a fee for service. Your adviser will provide a Financial Services Guide and/ or a Statement of Advice to you, which will detail their remuneration and other benefits they may receive.

Family Law Information Fee 

This fee is charged prior to the completion of the Superannuation Information form that accompanies the Family Court Form 6 declaration. This fee is usually paid by the non-member spouse seeking the information and is not normally deducted from your account. However, if you are requesting the information, the fee can be deducted from your account. The family law information fee is $100 (GST inclusive).

Family Law Split Fee

A member’s superannuation benefit may be divided upon the breakdown of marriage or de facto relationships (which includes same-sex relationships). Laws enable a member’s benefit to be ‘split’ or ‘flagged’. ‘Splitting’ means the superannuation benefit is split between separating parties. ‘Flagging’ prevents the superannuation benefit from being paid by the Trustee until the parties or the court have decided how to split the benefit between the separating parties. Splitting or flagging can be achieved by agreement between the separating parties, or by court order. We charge a fee of $80 (GST inclusive) if we receive a court order or agreement to split your super with your spouse*. This fee is split between your account and your spouse’s account.

Transaction Costs

When you invest, withdraw or switch your investment into or out of an investment option, you may incur a transaction cost through the difference between the ‘buy’ and ‘sell’ unit prices of the investment option/s. This is called the unit price ‘buy/sell spread’. This cost is not included in the Management Costs shown in the fee table on page 6; it is an additional cost to you. The buy/sell spreads for each investment option cover the estimated transaction costs of buying and selling the underlying assets, which may include brokerage and stamp duty. It is not a fee paid to us, instead they remain in the TIC Plan to meet these transaction costs. These costs are reflected in the unit prices of the investment options. If you move your investment in or out of the investment option, you bear these transaction costs directly through the unit price buy/sell spread which allows members to share more equitably the costs of transactions they generate. Where there is no unit price buy/sell spread, these transaction costs are reflected in the overall performance of the investment option.

Example: If the buy/sell spread for an investment option is 0.23%, for $1,000 you invest or withdraw from that investment option, the estimated transaction cost, reflected through the unit price buy/sell spread, will be 0.23% x $1,000 = $2.30. The investment option profiles included in Section 4 show the current buy/ sell spread for each investment option. We may vary these buy/sell spreads from time to time to ensure they reflect our best current estimate of actual transaction costs. Updated unit price buy/sell spread information is included on our website (details on the inside front cover). It is important to note that, if you invest in more than one investment option, you will incur the buy/sell costs of each of your investment options.

Member Protection (Employer Sponsored and Personal Super Members Only)

Generally, if your account balance is less than $1,000 at the end of a reporting period and includes, or has included, Superannuation Guarantee or Award contributions, government regulations limit the charges that can be deducted from your account. CCSL reserves the right to transfer accounts of less than $1,000 to an Eligible Rollover Fund (ERF). See page 57 for information on the Eligible Rollover Fund.

Insurance Premiums

If you take out insurance you will also be charged insurance premiums. The amount of insurance premiums charged will generally be based on your age, gender, occupation, health, type and level of cover. A premium quote can be obtained on request. The insurance premiums are deducted from your account and credited to the insurer on a monthly basis.

The Sponsor may be paid up to 20% of any insurance premiums paid to the Insurer. This payment is included in your insurance premiums and is not an additional charge to you or your account.

Stamp duty is payable in addition to premiums for Salary Continuance insurance and is based upon the state of residence for individual members. Refer to Section 5 for current rates of stamp duty.

We will provide insured members with at least 30 days’ prior written notice of any increase to premium rates. You can obtain a quote for any life insurance cover by calling our Client Service Line (details on the inside front cover).

For information on the insurance cover available refer to Section 5.

Variations to Fees

The Trustee may pass on, without notice, any government taxes or charges currently applying or which may apply in the future. We may also pass on, without your consent, any increases or decreases in Investment Management Fees or buy/sell spreads if the underlying investment managers vary their fees.

Estimated fees may vary from time to time depending on the actual experience of the Plan. We reserve the right to change any of our fees and costs or introduce new fees and costs without your consent. Any increase will take effect only after we have provided you with a minimum of 30 days prior written notice.

Bank and Government Charges

You will be required to pay for any bank fees or charges we incur as the result of a cheque being dishonoured or a direct debit being rejected from your nominated bank account. You will also be required to pay any government charges. We will deduct these costs from your account.

Example of Annual Fees and Costs for the Balanced Investment Option

This table gives an example of how the fees and costs in the balanced investment option (TIC Balanced Fund investment option) for this product can affect your superannuation investment over a oneyear period. You should use this table to compare this product with other superannuation products.

 * Based on the current estimated Investment Management Fee of 1.25% p.a. for the TIC Balanced Fund. This fee may vary depending o n the investment option chosen.
** The figures used to calculate the Management Costs are estimates only and are subject to change. The amount you pay will depend on movements in your account during the year. Please note that the TIC Plan does not pay any commissions to financial advisors.