One of the country's largest industry funds has announced a new fee for retirees.
First State Super customers will face changes to the Retirement Income Stream (RIS) and Transition to Retirement Income Stream (TRIS) fee structure on 1 April 2020.
In an update to members, the super fund announced it will be reducing its administration fee from 0.40% to 0.20% per annum with the $52 per year administration fee remaining and not included in the fee cap.
In addition to dropping the administration fee, the fund will introduce a new "management fee" that will replace the existing trustee fee for the RIS.
"This fee will apply to the pre-mixed investment options and single sector investment options (excluding cash)," the fund said.
"This fee is payable for expenses related to the development of enhanced retirement offerings, retirement specific portfolio management strategies and expenses incurred by the trustee (e.g. fund governance)."
Speaking to Financial Standard a First State Super spokesperson said: "At First State Super our priority is to provide our members with the best possible products and services at the lowest possible cost. We recently reduced the fees for members invested in our retirement products."
"Depending on the member's investment option or account balance the reduction was from 6 bp to 36 bp. At the same time we restructured the fees for these members to ensure they more closely aligned to the services we are providing. This restructure has resulted in a reduction of fees but also more transparency in what the fees are."
The new fee will be 0.15% for pre-mixed options, 0.06% for single-sector options and nil for cash options.
"All other fee and cost components of the investment fee for RIS and TRIS remain the same and will change each year depending on a number of variables, such as the performance of the underlying investments and transaction costs incurred," the release said.
"To improve how we disclose fees, Investment management costs will now be referred to as Investment-related costs. Importantly, there are no changes to how we calculate these costs."
The move comes after AustralianSuper announced it is introducing a new fee last month called the 'Administration fee - Protecting your Super' which will see members pay up to 0.04% of their balance to offset the impact of the recent Protect Your Super reforms.