Investors in ASB's KiwiSaver scheme should not expect fees to rise more than $5 a year under the new two-tier fee structure.ASB Group Investments will change the way it charges fees on its ASB KiwiSaver scheme when it introduces the more transparent, two-
Investors in ASB’s KiwiSaver scheme should not expect fees to rise more than $5 a year under the new two-tier fee structure.
ASB Group Investments will change the way it charges fees on its ASB KiwiSaver scheme when it introduces the more transparent, two-tier fee structure in April.
An annual membership fee of $30 will then be directly deducted from the investor’s account, rather than from the investment fund before returns were credited to investors.
A second investment management fee is based on the size of the member’s fund and the level of risk of the fund invested in. The cost would range from 0.35 annually for conservative fund to as high as 0.70 for the growth fund.
A customer with $4800 invested in the ASB KiwiSaver scheme’s default conservative fund would pay $49.20 in fees next year – an increase of 24c, while a customer with $10,000 would pay $70 in fees or 50c more.
ASB relationship banking chief executive Stewart McRobie said for the majority of investors the increased fee would be less than $5 and fees on ASB’s KiwiSaver scheme would continue to be among the lowest of the major Kiwisaver providers.
“The highest increase anyone with $10,000 invested in any fund will pay will be $21 next year. This would b an investor in the growth fund.
Mr McRobie said the two-tier fee structure, with direct deductions, was more transparent as the fees charged were more clearly visible and understood.
Trustee fees and other management fees currently charged directly to the fund would be absorbed within the investment management fee.
The charges were based on ASB Group Investment’s three-year experience of the costs of running a Kiwisaver scheme.
“Continuing scheme changes, such as the introduction of member tax credits and compulsory employer contributions have major technology implications and are costly to implement. KiwiSaver has changed considerably during its history, requiring further technology development and increased communications to members,” he said in a statement.
Although the new fees more accurately reflected costs of operating a KiwiSaver scheme, ASB Group Investments was still not expected to break even on providing Kiwisaver scheme until 2015, he said.
There are more than 250,000 investors in the ASB KiwiSaver scheme, with 150,000 of those in the conservative fund.
