Information about calculation of fees on account statements
More information on how we calculate the annual fund charge
The annual fund charge:
- covers our services in administering and actively managing the investments of each fund, access to expert international fund managers, and regular communications.
- is made up of our management fee, the supervisor’s fee, fund expenses, and fees and expenses of underlying funds, and includes GST where applicable.
- is paid out of the fund and reduces a fund’s unit price. Previously, it was shown as part of the ‘Investment performance’ amount on your statement – i.e. return after fees.
KiwiSaver scheme providers are required to show the annual fund charge as a separate amount on each member’s account statement. The following information explains how we’ve done this.
Calculation methodology options
The FMA issued a notice requiring KiwiSaver scheme providers to allocate fees (charged at the fund level for the accounting period) to members using either the total annual fund charge (TAFC) methodology or the cents per unit (CPU) methodology.
The TAFC methodology requires a provider to apply the total fund charge, as a percentage of the average net asset value of the fund, to the member’s average annual balance. In contrast, the CPU methodology attributes fees to members at every fund valuation period (usually on a daily basis), using the member’s actual balance at the time the fund is valued. Any withdrawals and contributions made throughout the year are fully taken into account.
Ultimately, both methods deliver the same desired policy outcome and give members the information they need: the fees they pay as a dollar amount.
We have used the TAFC calculation:
We have used an estimate
We have chosen to use an estimate for the fund charges component of the above formula because the total fund charges for the year are not available as a final audited figure until after account statements are sent out each year.
As an estimate for this figure, we have therefore chosen to use the annual fund charge cap as set out in the PDS*. Using the cap in this way means we may overestimate very slightly the amount of fees each member will actually be charged.
We support transparency and education
We fully support this change as we are committed to providing you with the transparency and information you need to reach your savings goals. That's why we've also taken this opportunity to revamp our statements, making it easier for you to understand and keep track of your KiwiSaver account
If you want to compare the fees you’re paying for your chosen funds with those of other providers, it’s best to look at the fund updates and product disclosure statements of those providers. These documents provide a case study using a fixed balance ($10,000) to allow you to compare between providers.
* The MFL Mutual Scheme, SIL Mutual Scheme and SIL Employer Scheme do not have a PDS because they are restricted schemes and are closed to new members. The annual fund charge for these schemes is based on estimated fees for the scheme year ended 30 June.