Fees and Charges
As with most investment products, there are fees for investing in the SIL Mutual Scheme.
The fees for the scheme are rolled into one annual fund charge, which is made up of the management fee, trustee fee, fund expenses, and the fees and expenses of underlying funds. Fees are calculated daily as a percentage of the net asset value of the fund.
Fees are deducted from your investment and will reduce a fund’s unit price.
You won’t be charged any contribution, switching, exit or withdrawal fees.
You can see the fees actually charged during the most recent financial year for each fund in the latest fund update.
Information about calculation of fees on account statements
All KiwiSaver scheme providers are required to show on the account statement the fee that each member has paid, as a dollar amount. Because we support greater fee transparency, we believe we should also apply it to the SIL Mutual Scheme.
The 'Annual fund charge' percentage you see in the 'Account summary' is the percentage of your balance that we will charge you. The percentage you pay will vary depending on the fund your savings are invested in.
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 the SIL Mutual Scheme, 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. Because we support greater fee transparency, we have also applied it to the SIL Mutual Scheme.
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 for the SIL Mutual Scheme:
Member’s average daily balance x fund charges
average net asset value of the fund
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 total fund charge from the previous year.
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 investment 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 account.