Calculation of fees

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. 

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.

The Financial Markets Authority (FMA) requires KiwiSaver scheme providers to allocate fees (charged at the fund level for the accounting period) to members using either:

• Total annual fund charge (TAFC) method
• Cents per unit (CPU) method.

TAFC 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.

CPU attributes fees to members at every fund valuation period (usually daily), 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.

Both methods deliver the same desired policy outcome and give members the information they need – the fees they pay as a dollar amount.

We use the TAFC calculation:

(Member's average daily balance x fund charges) ÷ average net asset value of the fund

We use an estimate for the fund charges component of this 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 use the annual fund charge set out in the product disclosure statement (PDS*). This means we may slightly underestimate or overestimate the amount of fees each member was charged. This could result in a slightly different investment return (or loss) to that shown on the account statement.

We're committed to providing you with the transparency and information you need to reach your savings goals. That's why we've also revamped 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 ANZ Default KiwiSaver Scheme, MFL Mutual Scheme, SIL Mutual Scheme and SIL Employer Scheme do not have a PDS and are closed to new members. The annual fund charge for these schemes is based on estimated fees for the scheme year.