Changes to fees, investments, and drawdown rates for your Income Stream account

November 21 2024

Significant event notice

ESSSuper acts in our members' best interests and is committed to optimising our members' superannuation outcomes.

Effective 1 July 2023, we are making some important changes to your ESSSuper Income Stream account(s) regarding:

  1. Ongoing administration fee reduction
  2. Administration fee rebate to members with an open Income Stream account at 31 May 2023
  3. Investment option name and classification changes
  4. Minimum drawdowns reverting back to pre-pandemic rates.

1. Ongoing administration fee reduction

Our new administration systems are more efficient, so we are reducing administration fees on Income Stream accounts. This is in line with our 'profit-to-member' ethos and will help to increase members' retirement benefits.

Administration fees and costs are made up of an account-keeping fee and an administration fee. From 1 July 2023, the account-keeping fee will remain as $52 per annum but the administration fee will reduce from 0.25% to 0.20% per annum.

Additionally, the administration fee cap will reduce from $2,120 to $750 per annum.

Fee type Before 1 July 2023 (per annum) From 1 July 2023 (per annum)
Account-keeping fee $52 $52
Administration fee 0.25% 0.20%
Cap on total administration fees and costs $2,120 $750

What this means for you

These reductions will come into effect automatically on 1 July 2023, meaning you don't need to take any action. The below are two examples for comparison.

Example 1

Sam has an Income Stream account balance of $100,000.

Currently, their total administration fees and costs are $302 (i.e. a $52 account-keeping fee and a $250 administration fee).

Due to the fee reduction from 1 July 2023, Sam's total administration fees and costs will be $252 (i.e. a $52 account-keeping fee and a $200 administration fee). That's a saving of $50 per annum.

Example 2

Li has $400,000 in her Income Stream account.

Currently, Li's total administration fees and costs are $1,052 (i.e. a $52 account-keeping fee and a $1,000 administration fee).

Due to the reduced cap from 1 July 2023, her total administration fees and costs will be $750 (i.e. a $52 account-keeping fee and a $698 administration fee). That's a saving of $302 per annum.

Important notes:

  • The examples above have been created to demonstrate the broad impact of changes to Income Stream administration fees and costs prior to and from 1 July 2023 on different account balances.
  • These examples are provided for illustrative purposes only and assume that each balance has been maintained in the fund for a full year. Fees and costs have been calculated in accordance with the administration fees and costs published in the Income Stream Product Disclosure Statement (PDS) issued 5 December 2022 and the new Income Stream PDS to be issued on 1 July 2023. These examples do not include all fees and costs. You should review the Income Stream PDS for more information about fees and costs.
  • These examples are not a promise or guarantee of the savings you may receive.

 

2. Administration fee rebate to members with an open Income Stream account at 31 May 2023

As we have gained efficiencies from our new administration system this financial year, we are able to rebate a portion of this year's administration fees for Income Stream accounts.

This rebate will be calculated as the equivalent of the scheduled administration fee reduction of 0.05% of your Income Stream account balance at 31 May 2023. It will be applied by adjusting the unit prices for Income Stream investment options on 31 May 2023.

What this means for you

This rebate will be applied to the Income Stream investment options' unit prices automatically on 31 May 2023, meaning you don't need to take any action.

3. Investment option name and classification changes

We are renaming six of our nine investment options for Income Stream accounts from 1 July 2023.

Additionally, from 1 July 2023 our investment options will be put into two classifications: diversified options and single asset class options.

We are making these changes to our investment options to make them easier to understand and the terminology more compatible with that used by other super funds.

Current investment option name Investment option name from 1 July 2023
Diversified options
High Growth Growth
Basic Growth Balanced Growth
Ethically Minded Ethical Diversified
Growth Balanced
Balanced Conservative
Conservative Capital Stable
Defensive Defensive
Single asset class options
Shares Only Shares Only
Cash Cash

What this means for you

These are changes to investment option names and classifications only. The underlying strategic asset allocations and target returns will not be impacted. They will come into effect automatically on 1 July 2023, meaning you don't need to take any action.

Investment options aren't available in ESSSuper's defined benefit super schemes, which are guaranteed by the Victorian State Government and are not impacted by investment performance.

4. Minimum drawdowns reverting back to pre-pandemic rates

On 1 July 2020, the Federal Government mandated a temporary 50% reduction to minimum drawdown rates as part of its response to the global COVID-19 pandemic. This reduction will end on 30 June 2023.

The minimum drawdown rates will return to the previous levels from 1 July 2023.

Age(s) Temporary minimum drawdown rates until 30 June 2023 Minimum drawdown rates from 1 July 2023
Under 65 2.0 4.0
65 to 74 2.5 5.0
75 to 79 3.0 6.0
80 to 84 3.5 7.0
85 to 89 4.5 9.0
90 to 94 5.5 11.0
95 or more 7.0 14.0

What this means for you

If you have currently chosen the minimum drawdown rate, your drawdown amounts after 1 July 2023 will be recalculated automatically and your pension payments will increase to the new rate, meaning you don't need to take any action.

If you have a nominated drawdown rate, you will only be affected if your nominated drawdown rate is below the new minimum. In this case, your pension payments will increase to the new minimum.

Members that have selected the maximum drawdown rate for their Working Income Stream will not be affected.

We're here to help

You can book an appointment with one of our expert Member Education Consultants for general advice about your ESSSuper account(s). If you're looking for personal advice relating to your financial situation or needs, our qualified Financial Advisers* can help. To request an appointment, please call us or use our online enquiry form.

A copy of this significant event notice will be available to download by logging into your Members Online inbox.

From 1 July 2023, the changes described in this document will be updated in the relevant Product Disclosure Statement (PDS) and associated guide(s), on our website, and in Members Online where applicable.

If you have any questions, please contact us on 1300 650 161 (Emergency Services members) or 1300 655 476 (State Super members) between 8:00am and 5:00pm Monday to Friday, or email us at info@esssuper.com.au

Warm regards

Duncan Winton
Group Executive, Strategy, Brand & Insights

 

* ESSSuper Financial Advisers are authorised representatives of Link Advice Pty Ltd (Link Advice). Link Advice holds a current Australian Financial Services Licence No. 258145 and is responsible for the financial services provided to you. ESSSuper has an arrangement with Link Advice Pty Ltd to provide financial advice to ESSSuper members. ESSSuper pays Link Advice a fee for this service. Neither the Board, nor the Victorian Government, guarantee or endorse any recommendations made by Link Advice, or are responsible for the advice and actions of Link Advice.

Emergency Services Superannuation Board (ABN 28 161 296 741) (ESSB), the Trustee of the Emergency Services Superannuation Scheme (ABN 85 894 637 037) (ESSSuper).

The information contained in this document is of a general nature only. It should not be considered as a substitute for reading ESSSuper's Product Disclosure Statement (PDS) that contains detailed information about ESSSuper products, services and features. Before making a decision about an ESSSuper product, you should consider the appropriateness of the product to your personal objectives, financial situation and needs. It may also be beneficial to seek professional advice from a licensed financial planner or adviser. An ESSSuper PDS is available at esssuper.com.au/pds or by calling 1300 650 161.

Investment returns are not guaranteed. All investments carry risks and past investment performance gives no indication of future performance. Benefits in ESSSuper's Accumulation Plan, Income Streams, and Beneficiary Account products are not guaranteed or underwritten by the Victorian Government or ESSSuper, and ESSSuper does not come under the jurisdiction of the Australian Financial Complaints Authority. ESSSuper comes under the jurisdiction of the Victorian Civil and Administrative Tribunal.