Fees and tax
We keep a close eye on the scheme’s costs to make sure they are fair and reasonable. The size of the scheme means we can negotiate competitive rates with our service providers. Fixed costs are spread among many members, which also helps keep the costs per member low. We are not compelled nor do we seek to make a profit.
Scheme fees and costs fall into two categories.
- Management expenses relating to investing the scheme’s assets.
- Expenses associated with operating and administering the scheme.
Investment and administration expenses are set out in the annual financial statements.
Investment management expenses
Investment management expenses include the fees charged in respect of the scheme’s investment in MITNZ and the investment managers it uses to invest the assets of the scheme. Investment management expenses are reflected in the unit price for each investment option.
Investment management expenses vary across options. The fees for Stable, for example, are lower than for Growth. The most significant reason for this is the rate of investment management fees in the underlying sectors that make up each option. For example, investment management fees for international equities are much higher than for bonds or for cash. Growth has the largest allocation to international equities, which is reflected in Growth having the highest investment cost.
See the product disclosure statement for more information about these charges. The latest investment costs for each option are listed below.
|Option||Fund changes per $100 invested (per year)|
|Cash Plus||21 cents|
|Super Steps (age 49)||70 cents|
|Super Steps (age 59)||54 cents|
Administration fees meet the cost of running the scheme. They cover a range of professional services, including secretarial services audit, legal, investment advice, tax and actuarial advice professional directors’ fees and directors’ expenses. See the product disclosure statement for more information about these fees.
Administration fees also cover the cost of providing member services. These include things like maintaining member and general scheme records, operating the member helpdesk and website and reporting to and communicating with members.
An administration fee is charged monthly based on the amount necessary to cover the cost of running the scheme. The administration fee is paid from your employer’s account if you receive employer contributions or from your member’s account if you don’t. The current fee is up to $5.50 per member per month.
A transaction fee will be debited from your employer’s account (or your member’s account if you are a savings contributor) if you:
- change your investment option(s) more than once in any scheme year (1 July to 30 June)
- request a benefit quote, or
- are paid a benefit.
This includes leaving benefits, partial withdrawals, significant financial hardship benefits and relationship property settlements. It also includes partial withdrawals made by a retained member.
There is no fee in Super Steps when your account balances and contributions are changed automatically on 1 April (from age 45).
If a registered charge is placed on your benefit, a fee will be debited from your member’s account. The annual account statement we send to you each year shows any amounts deducted from your accounts.
Current transaction fees are listed below (last updated 8 January 2019).
|Benefit payment fee||$64.33 per benefit calculation|
|Partial withdrawal fee (applies to active and retained members)||$64.33 per withdrawal|
|Registered charge fee||$32.12 per registered charge|
|Benefit quotation fee (check your account balance for free at any time by signing in to your account)||$10.00 per quotation|
|Investment switch fee||First switch each scheme year (1 July-30 June): free
Subsequent changes: $64.33 per switch
Contribution tax is deducted from employer contributions before they are credited to your employer’s account. The tax rate varies depending on the total amount of:
- your taxable income in the prior tax year (or an estimate of your income if you have worked for less than a year)
- employer contributions received during the year.
|Taxable income plus employer contributions||Tax rate (%)|
|Up to $16,800||10.5|
|Between $16,801 and $57,600||17.5|
|Between $57,601 and $84,000||30.0|
|$84,001 and over||33.0|
Tax on investment income
Investment income less deductible expenses is taxed at 28%. Under current legislation, you do not need to declare any payment from the scheme if you need to complete a tax return. This is because tax has been paid within the scheme.