Member investment fees reduced

legalsuper is pleased to announce a reduction in the investment fees paid by members.

Two more legal sector super funds merge into legalsuper

legalsuper is pleased to announce that The Victorian Bar Superannuation Fund and The Blake Dawson Partners’ Superannuation Fund have recently merged into legalsuper.

New Board appointments

Since our last newsletter, there have been two new appointments to the Board of Legal Super Pty Ltd.

Recent changes to superannuation

Two key changes to super were announced in the May 2009 Federal budget that took effect on 1 July 2009.

Latest member research findings

In March 2009 we issued our second quarterly survey of legalsuper members. To encourage broad participation, we offered survey respondents a chance to win one of three $100 book vouchers.

Fee capping – a new member benefit

To reward the economies of scale that high-balance members bring to legalsuper, legalsuper has now introduced an annual cap on the fees that we charge members with a balance of $350,000 and more.

Member investment fees reduced

legalsuper is pleased to announce a reduction in the investment fees paid by members. The fee reductions follow a number of changes in our investment manager line-up that have yielded investment fee savings.

The reductions are between 0.01% and 0.04% of your total balance per annum, depending on the investment option in which your balance is invested (excluding the Cash, Enhanced Cash, Conservative and SRI options where the fees stay the same). 

The table below shows the new investment fees, compared with the old investment fees.  

The investment fees paid by legalsuper members compare favourably with those levied by other super funds and in many cases are even lower than those paid by members of some considerably larger super funds. 

The investment fees paid on the applicable ‘default’ investment option by members of some other super funds are listed below (for legalsuper, the default option is the Moderate option, where most assets are invested):

- Hostplus: 0.73%

- AustralianSuper: 0.72%

- CareSuper: 0.70%

- Sunsuper: 0.70%

- HESTA: 0.67%

- MTAA Super: 0.66%

- Health Super: 0.65%

- legalsuper: 0.64%

This investment fee reduction comes on top of our recent announcement of a cap on administration fees for members with balances over $350,000 – and as explained in article 6 of this newsletter.

Two more legal sector super funds merge into legalsuper

New Board appointments

Since our last newsletter, there have been two new appointments to the Board of Legal Super Pty Ltd.

Hugh Macken, the immediate past President of the Law Society of New South Wales, has been appointed to the Board on the nomination of the Law Society of New South Wales. During his seven years on the Council of the Law Society of New South Wales, including a year as its President, Mr Macken chaired numerous committees and worked with other members to promote justice and law reform and tackle issues relevant to the legal profession. Mr Macken has worked in private legal practice for over 20 years, and is a partner at Sydney law firm, Beston Macken McManis.

Mr Macken replaces the outgoing Board member, Robert Laurie. Mr Laurie had been a Board member since the merger of LISS and the Law Industry Superannuation Trust ('LIST') (the former industry super fund for the legal profession in New South Wales, one of the two predecessor funds of legalsuper) in February 2005, and prior to that had been the Chairman of LIST. We would like to recognise and thank Mr Laurie for the very substantial contribution he made to legalsuper and its predecessor fund.

Pursuant to the recent merger of The Victorian Bar Superannuation Fund into legalsuper, Phil Kennon QC, the former Chairman of The Victorian Bar Superannuation Fund, has joined the Board of Legal Super Pty Ltd on the nomination of the Council of the Victoria Bar Inc. Mr Kennon QC has been a Trustee/Director of The Victorian Bar Superannuation Fund since 1992, and has extensive experience in superannuation and especially investment matters.

Recent changes to superannuation

Two key changes to super were announced in the May 2009 Federal Budget that took effect on 1 July 2009.

Firstly, concessional contribution caps have been halved. From 1 July 2009, the $100,000 cap for super fund members aged over-50 has been halved to $50,000; for those under 50, the cap has also been halved, from $50,000 to $25,000. Further, in three years' time (from 1 July 2012), the $50,000 cap for over-50s will be reduced again to $25,000, to match the under-50s cap.

This change further reduces the maximum amount that can be contributed into super as a concessional contribution* in any one financial year (for employees, it is very important to remember that the new $50,000 and $25,000 limits are inclusive of the 9% Superannuation Guarantee (SG) employer contributions).

The reduction in contributions caps means that Australians will now need to save for their retirement over a longer period of time, rather than topping-up their super in their last few working years.

*Concessional super contributions include: Superannuation Guarantee (SG) employer contributions, salary sacrifice arrangements entered into by fund members and their employers, and personal tax-deductible contributions: or by any combination of the above types of contributions.

The second Budget super change affects the Government co-contribution scheme. Introduced in 2003, up to 30 June 2009 this scheme paid $1.50 into your super account for every $1 that you paid in from after-tax income, up to a maximum co-contribution of $1,500.

From 1 July, the scheme will now pay $1 for every $1 that you pay, up to a maximum co-contribution of $1,000.

To see how much you may be eligible to receive from the Government use legalsuper’s co-contribution calculator, click here.

Latest member research findings

In March 2009, we conducted our second quarterly survey of legalsuper members. To encourage broad participation, we offered survey respondents a chance to win one of three $100 book vouchers.

These surveys give us insights into what you think about legalsuper and our products and services. They also provide insights to help legalsuper seek super reform to the advantage of the legal profession.

We received 1,900 responses, a very high number, from across our membership, including barristers, solicitors, and legal firm management and support staff. Congratulations to the winners of the three $100 book vouchers, all of whom have been contacted and agreed to their name being included in this newsletter:

• T.Bolton
• K.McGuren
• A.Kiely

Key findings of survey

In terms of their personal short-term superannuation plans, 16% of the survey group said that they are intending to increase their contributions in the next six months – a positive finding, considering that many other super funds are reporting reductions in contributions because of the recent downturn in investment markets. Also, despite this market turmoil, only 7% of legalsuper members intend to change their investment option during the next six months.

Regarding the impact of the market downturn, only 16% of respondents believed the downturn will have a long-term impact on their super; however, at the same time, a high proportion of members (62%) had a moderate to high level of worry about current volatility. This would appear to suggest that members understandably have surface-level nervousness – but underlying that is a continuing confidence in the superannuation system.

On questions relating to knowledge about super, most respondents said they want to know more about super, with 90% saying they wanted to achieve a moderate to high level of understanding about super. However, only 8% of respondents said they had already given a lot of thought to their retirement and made preparations. Both these findings vindicate legalsuper’s ongoing investment in educational and communication initiatives to better inform members about super and prepare them for retirement.

Respondents expressed varied attitudes about their preferred future communication channels from legalsuper:

• 55% said that they would prefer to receive their Annual Reports in electronic format.
• 86% said the mid-year Contribution Statement sent in February 2009 was easy to understand, and 57% said the accompanying newsletter (Superbrief) was moderately or very interesting.
• Respondents offered a wide range of suggestions for superannuation topics that they would like legalsuper to focus on in future; the most popular concerned investment, including calls for articles that detail legalsuper's performance and the pros and cons of our various investment options.

Finally, more than 600 of the 1,900 respondents also provided feedback on a number of other matters, including their unsurprising disappointment with recent investment market performance and suggestions for future legalsuper products and services.

This feedback will be valuable in assisting legalsuper’s future planning. Thank you to all those members who contributed.

Fee capping – a new member benefit

To reward the economies of scale that high-balance members bring to legalsuper, legalsuper has now introduced an annual cap on the fees that we charge members with an account balance of $350,000 or more.

A cap on administration fees will be applied to members’ balances when legalsuper has finalised 2008/09 financial year member statements. Members who paid over the cap during the 2008/09 financial year will have money rebated back into their accounts.

The cap on administration fees is now an annual benefit and rewards the economic benefit that high-balance members bring to legalsuper. Administration fees are capped at $1,000 for members with balances of $350,000 and higher.

Previously, legalsuper’s administration fees of $1.30 per week plus 0.263% of account balance applied without any cap.

Please note: the new fee cap does not apply to investment fees, which continue to apply regardless of balance without capping.

A supplementary product disclosure statement with more information about the cap has been issued and is available from our website. Click here to view a copy.

I trust that you have found this edition of e-news informative. If you have any comments or questions, please email legalsuper at: feedback@legalsuper.com.au. Thank you for your continued support of legalsuper.