April: Hello and welcome to this update on the fee changes coming into effect on the 1st of July 2024. My name is April, and this is Kane, and we are part of the Education Team here at Australian Retirement Trust. We would like to take you through some details about the fee changes and give you some examples and illustrate what that will look like for you with these changes. But before we do begin, I would like to acknowledge the Traditional Custodians of Country throughout Australia and pay my respects to both Elders, past and present. The content of today's presentation is general information only and it does not take into account your personal circumstances or needs. It should not be relied upon as legal or taxation advice. We recommend you consider the appropriateness of the information for your circumstances and read the relevant Product Disclosure Statements before making any decisions. Our Product Disclosure Statements and Target Market Determinations are all available to download on our website. Our Financial Services Guide is also available to download on our website and this sets out the services we provide, who is responsible for those services and how we get paid. So, Kane, can you please share with our viewers what to expect from this update?

Kane: Certainly, thank you, April. So today we're going to cover four key things. So, the first part we're going to go through is the change to the QSuper administration fee comes into effect on 1st of July this year. Second, we look at, why is it changing? Then we'll actually run through a couple of examples and that will help you see what that change looks like depending on what account you've got, your account balance. And lastly, we'll let you know how you can find out more details. Firstly though, this information, I can't stress this enough, is for members who have a QSuper Accumulation Account or a QSuper Income Account. So, if you have a Super Savings account or a different type of QSuper account, you can tune out now, go and grab that coffee, that's fine. There are changes for Super Savings account holders as well, but we're not covering those in this video. So, look, let's jump straight in. April, would you like to run us through what is actually changing?

April: Thank you, Kane. So okay, firstly, at a very high level, the way it currently works is that you pay an admin fee that's a percentage of your account balance. It's currently 0.15% per annum of your account balance and that fee is deducted directly from your investments. So, you don't actually see that fee listed in your transactions, but from the 1st of July this year, the admin fee is changing to a smaller percentage than it currently is, plus a dollar value fee per week. And these costs will be deducted directly from your account. So, this means you'll be able to see in your transaction listing on Member Online more transparency for you. So, the dollar fee will be deducted weekly, the percentage fee will be deducted weekly from an Accumulation Account and monthly for Income Account holders. Kane, can you please take it away and break down those fees into dollar value?

So, look, there are other fees and costs that you'll pay on your account. All our fees and costs, you'll find them in our Product Disclosure Statement or on our website and you'll also see them in your Annual Statement. We'll be going through a couple of examples shortly and then you'll be able to see how those fees apply based on your accounts and your account balance. But firstly, why are we actually making this change, April? Over to you.

Kane: Sure can. Look, if we look at it in more detail, for each QSuper account that you have, you'll now be charged $1.20 per week plus the 0.06% per annum, which is less than half the current percentage amount. And that percentage amount will be capped at $500 per account per year. This means you won't have more than $562.40 in administration fees deducted from your account next financial year, regardless of your balance.

April:Thanks, Kane. So, the first reason is for consistency. So, as you know, QSuper and Sunsuper merged in 2022 to become Australian Retirement Trust. So, we're making our structure consistent across our products. So, this aligns the way that we charge our members. It also makes our admin fee more transparent. So, as you said earlier, it's currently deducted from your investment. So, you don't actually see that coming out of your account. But under the new structure, you'll see that fee coming out as a transaction. So, it makes it more transparent for you. You'll be able to see the fee deduction on your Member Online and in your Annual Statement.

And this way of charging an admin fee, dollar and percentage, it's pretty standard across the industry, so it makes it easier for you to compare our fees with other super funds. It also helps make sure that each member is paying a fair amount. So, Kane, can you please explain what I mean by charging a fair amount?

Kane: Thank you, April. Look, there are a lot of services that every single member can use that are covered by the admin fee. So as a member you can access financial advice, you can attend all our seminars, manage your account 24/7 through the app, you can call us for help. It also covers our cost to keep your account safe and processing transactions - a whole heap of things. So, it helps to distribute that cost in a fair way across the membership. One other point I do want to mention as well is that we’re what's called a profit-for-member fund. So, what does that actually mean? It means that we're a fund that works for members, not for shareholders. So, we can reinvest profits back to members via better value products and services. And the reason I say that is because these changes we're making isn't in order to increase the amount of fees that we collect from our membership. Some members will pay more under this new model, some will pay less. But it's not about the fund collecting more money.

April: Okay, thank you very much for that, Kane. So that's a really good point that you make. So, it's about consistency, fairness, transparency and value for money. So that's the what and the why. I do want to just quickly though, touch on what it might mean for me. So, we have heaps of information online and we’ll give you a link to that information. We have a calculator, heaps of examples, frequently asked questions, lots of information. We can't show it all here because, of course, the admin fee costs will be different for every single member. So, I just want to run through two common examples and then I'd encourage everyone to jump on the website and have a look at it in more detailed information. So, Kane, can you please do the honours and take it away with Kirra?

Kane: Sure. So, let's look at Kirra for this case study. So, Kirra has one account with $50,000 in it. Currently, there's no weekly dollar fee, but she is paying 0.15% on her balance and that works out to $75 per year. Under the new administration fee structure, she's going to pay slightly more. She's going to pay $62.40 as the dollar fee, plus $30 as a percentage fee. That $30 is the 0.06% of her account balance. So, her fee is going up regardless of balance. All our members, remember I said earlier, you have access to the same services like the seminars, access to the web, the webinars, the website, financial advice, Contact Centre, administrating in your accounts, that kind of thing. So, this is why we believe that this fee structure changes, makes it a fairer system. April, can you please take us through another example for Sarah?

April: Thank you, Kane. So firstly, now let's look at Sarah. So, Sarah has two accounts. She has $100,000 in an Accumulation Account and $1million in a Retirement Income Account. So, I chose this case study because it shows two important things. The first thing is the fact that Sarah has two accounts, which means two lots of dollar fees because they're charged per account. So, if you look at the After 1st of July column, you'll see $62.40 written once for the Accumulation Account and once for the Retirement Income Account. If you have multiple accounts, you may wish to consider if you need to keep those accounts separate. There are really good reasons though why some people do have multiple accounts. They might be for paying insurances or maybe a certain financial strategy, for example estate planning reasons. The other thing this case study shows nicely is the change in the percentage fee cap. So, Kane, can you please talk us through that change?

Kane: Sure can. So, look, if you look on the left towards the bottom in the Before 1 July column, you'll see there that the percentage fee is $1500 and $775.00 of that is currently being rebated. That's because the annual fee cap per member is currently $875.00. So, if they pay more than that, they get it rebated. Now if we look into the right column, the After 1 July column, we see there is no fee cap rebate. That's because instead of a rebate, the percentage fee is just capped at $500 per account. So, you don't have to pay it first and then get it rebated. It's just capped.

And we can also see that this cap applies per account. This means if you had two accounts with very high balances in each, you could still pay more. But in Sarah's case, the accumulation account has a separate percentage fee of $60.00, so she'd pay less overall. Finally, you'll see these fees deducted from your account shown in the statement you get at the end of the year. That's that transparency that April talked about earlier.

April: Thank you for that, Kane. So, we have gone through what is changing, why it's changing and given you some examples of what it will look like, but where can you go for further guidance and support? So, here's how you can find out more. Go to the URL on the slide or scan the QR code. You have a whole lot more case studies, a calculator, frequently asked questions and of course, if you can't find what you need, you can call us or email us. Our contact details will be on the screen in a moment. And on that note, I think that's about it. And so, we hope this video has helped and remember to check out our other videos on superannuation. Thank you so much, Kane, and thank you everyone for your time and joining us today.