WA Super News
Explanation of indirect cost ratios
WA Super's underlying costs are not actually increasing to the extent that the change in indirect cost ratios (ICRs) would indicate.
For accumulation accounts, costs are now disclosed without the tax benefit which previously reduced the reported cost. Previously the indirect external costs disclosed on pension accounts were gross of tax as no tax is paid in pension and the equivalent costs were disclosed net of the tax benefit received for accumulation.
The changes in ICRs included in the PDS reflect changes in the manner by which ICRs are calculated. This change brings the calculation of WA Super's ICRs into line with current AISC's guidelines. Investment managers have provided us with details of fees charged by the underlying investments held within our investments (funds of funds) and we have included the disclosure of as many ‘look through’ fees costs as we can identify, consistent with ASIC guidance and best practice.
Note: We are unsure whether all our competitors disclose on this basis, and some may elect not to do so.