You will be charged fees for investing in the Scheme. Fees are deducted from your investment and will reduce your returns.
If Generate invests in underlying funds, those funds may also charge fees.
Here are the details on the fees above:
The management fee
We perform management services for the Scheme. The fee for these services is based on the gross asset value of the fund
and is the same no matter which fund or funds you invest in. The fee is calculated daily and paid to us each month. It
reduces each fund’s unit price. Currently the fee is 1% each year.
Other administration charges
(i) Supervisor fees
The supervisor charges a fee for its supervisor and custodial services. The amount of the fee is currently up to 0.07% per
annum each year of the gross asset value of the Scheme. The fee is the same no matter which fund or funds you invest in.
The supervisor’s fee is calculated daily and paid to the supervisor each month. The supervisor may also be paid additional fees
for non-routine matters, as the supervisor and the manager may agree from time to time. Such fees reduce each fund’s unit price.
(ii) Operating and administration expenses
Operating and administration expenses (such as auditing and legal expenses, postage, and other expenses) will be incurred to
operate the Scheme.
It is expected that the maximum expense for members in each fund will be 0.2% of the assets of the fund per annum
(excluding transaction costs e.g. brokerage and buy-sell spreads). To the extent that actual expenses exceed the target, we may
choose not to recover such expenses. Bank charges, currency conversion fees and, where applicable, tax will be deducted
from amounts transferred from foreign superannuation schemes before they are converted into units.
Underlying fund fees
The Growth Fund and the Focused Growth Fund invest into underlying funds.
Most of the managers of these funds will charge fees for investing the Scheme’s money and may change the fees they charge
from time to time. These fees will affect the value of these funds’ investments, and will be reflected in the Growth Fund’s and the
Focused Growth Fund’s unit price. The underlying funds’ fees will differ depending on the products into which we decide to invest.
There are two types of fees charged by underlying managers:
(i) Base fees
The underlying funds’ base fees provided in the summary of regular charges reflect the total estimated charges for management
fees from the underlying funds.
(ii) Performance fees
The underlying funds’ performance fees provided in the summary of regular charges reflect the total estimated charges for
performance fees from the underlying funds.
We have delegated the performance of certain administration management functions for the Scheme (including registry) to
MMC Limited (MMC). We and MMC are reimbursed from the Scheme’s assets for the day-to-day administration of members’
balances and for maintaining the member register for the Scheme. Currently the fee is $36 per member per year paid
monthly in arrears ($3 per member per month). This is a Scheme fee and not a per fund fee, therefore you will pay the
same fee no matter how many funds you are invested into.
‘Stepping Stones’ and ‘Stepping Stones Growth’
If you choose either the ‘Stepping Stones’ or ‘Stepping Stones Growth’ investment option you will pay the fees applicable to
the funds you are automatically invested into. There are no additional fees for being invested in either of the Stepping Stones
Example of how fees apply to an investor
Hannah invests $10,000 in the Growth Fund. She is not charged an establishment fee or a contribution fee.
This means the starting value of her investment is $10,000. She is charged management fees, which work out to about $147 (1.47%
of $10,000). These fees might be more or less if her account balance has increased or decreased over the year.
Over the next year, Hannah pays other charges of $36.
Estimated total fees for the first year
Fund charges: $147
Other charges: $36
See the latest fund update for an example of the actual returns and fees investors were charged over the past year.
This example applies only to the Growth Fund. If you are considering investing in other funds or investment options in the
Scheme, this example may not be representative of the actual fees you may be charged.
The fees can be changed
We may agree with the Supervisor to vary the fees from time to time. Fees not currently charged, may also be introduced at any
time as permitted by the trust deed. However, any changes in fees will be subject to the ‘reasonable fees’ restrictions outlined
in the KiwiSaver Act.
We must publish a fund update for each fund showing the fees actually charged during the most recent year. Fund updates,
including past updates, are available at generatekiwisaver.co.nz/fund-updates.