We’ve identified an error with the fees applied to Transition to retirement (TTR) Income accounts.
From 1 April 2020, the crediting rate applied to TTR Income accounts included an additional administration fee, up to 0.04% of the account balance, which was incorrect – this fee only applies to superannuation (accumulation) accounts. As a result, you’ve paid more fees than you should.
The following information provides additional detail about this error and what it means for members with a TTR Income account.
Information about the TTR fee refund
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What is the error?
We’ve identified an error with the fees applied to your Transition to retirement (TTR) Income account - this means you’ve paid more fees than you should.
The investment return for TTR Income accounts is based on the crediting rate for super (accumulation) options as they are subject to the same 15% tax rate. From 1 April 2020 this crediting rate includes an administration fee of up to 0.04% pa of account balances that only applies to super (accumulation) accounts and doesn’t apply to TTR Income accounts. This means TTR Income accounts have incorrectly paid this fee.
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What is a crediting rate?
AustralianSuper calculates the performance of your investments using crediting rates. We calculate crediting rates for each investment option, except Member Direct. They may be positive or negative, depending on investment markets. They’re determined daily and applied on 30 June, or earlier if you change investment options, close your account, make a withdrawal or transfer your account. For more information download the How crediting rates and investment returns work fact sheet at australiansuper.com/CreditingRates.
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Why doesn’t TTR Income have its own crediting rate?
Unlike your super (accumulation) account, TTR Income is an account-based pension. However, it is treated differently by the Australian Taxation Office to other account-based pensions, such as Choice Income, because the money held in TTR Income accounts are invested in a taxed environment, which is the same as super (accumulation) accounts.
This means that TTR Income accounts share the same crediting rates as superannuation (accumulation) accounts, and the additional administration fee you were charged is applied during the crediting rate process.
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How is the refund calculated?
You will be reimbursed for the additional fee charged to your account and for any lost investment earnings you should have received at the time the fee was incorrectly deducted.
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When will I receive my refund?
If you have an existing TTR Income account you receive the refund annually, shortly after the end of each financial year for the value for that previous financial year. You receive a separate letter from us explaining this error and confirming your refund details. Refunds for the FY19/20 year have already been paid. Additional refunds will be deposited into your AustralianSuper account and you’ll notice this in your transaction summary as an interest adjustment in the member portal, app and your annual benefit statement.
If you close your account during the year you will receive the refund after the account closure as we process these refunds on a quarterly basis. This means if you close your account, you will receive a standard exit statement. And we will send you a separate letter confirming your refund amount and (in most cases) it would have already been deposited into your new account. So, it could take at least 12 weeks before you receive your refund.
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Does this error impact my annual statement?
All transactions in your FY20/21 annual statement were correct, but the closing balance on your annual statement is less than it should have been – because these additional fees weren’t refunded to your account before the end of the financial year.
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What happens next? / Why is my account still being charged this fee?
TTR Income accounts share the same crediting rates as superannuation (accumulation) accounts, which includes the additional administration fee - we’re working on a solution and in the meantime, we will continue to reimburse your account on an ongoing basis.
If you have an existing TTR Income account you will receive the refund annually, shortly after the end of each financial year for the value for that previous financial year. If you close your account during the year you will receive the refund after the account closure as we process these refunds on a quarterly basis.
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What happens if I close my TTR account or exit the fund – will you refund me?
We process refunds for all closed accounts on a quarterly basis. This means if you close your account, you will receive a standard exit statement. And we will send you a separate letter confirming your refund amount and (in most cases) it would have already been deposited into your new account. So, it could take at least 12 weeks before you receive your refund.
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What happens if I switch investment options during the year?
If you make investment changes to your TTR Income account – we will action your investment switch as usual and follow the standard process. This means the additional administration fee, up to 0.04%, will continue to be charged to your account and will be reimbursed if you close your TTR Income account or at the end of the financial year if your account remains active.
Information for closed TTR Income accounts
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What happens if I close my TTR Income account or exit the fund?
If you close your TTR Income account, you will receive a standard exit statement – we will then send you a separate letter confirming your refund. Your refund will be deposited into your new account with AustralianSuper or your new fund, but these refunds are processed on a quarterly basis, so it could take up to 12 weeks.
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If I close my account, when will I receive my refund?
We’re working through all the operational requirements required for a solution to this error. In the meantime, we will be processing refunds for all closed accounts on a quarterly basis. After you receive your exit statement, it could take up to 12 weeks before you receive a letter from us, confirming your refund.
Information for Choice Income accounts
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Why is there an investment earning refund in my Choice Income account?
If you had an active TTR Income account from 1 July 2020, you should have received a letter recently advising you about an error with the fees charged on that account.
As a result of the error, you’re entitled to a refund, and because your TTR Income account is now closed, we’ve deposited this into your Choice Income account.
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What is the error?
From 1 July 2020 the crediting rates applied to your TTR Income account included an additional administration fee of up to 0.04% of your account balance, which was incorrect – this fee only applies to superannuation (accumulation) accounts.