Performance‑based fees
29VD Performance‑based fees
This section applies if:
a regulated superannuation fund offers a MySuper product; and
the trustee, or the trustees, of the fund enter into an arrangement with an investment manager for the investment of an asset or assets of the fund attributed, in whole or in part, to the MySuper product; and
under the arrangement, a fee payable to the investment manager is determined, in whole or in part, by reference to the performance of the investments made by the investment manager on behalf of the trustee or trustees of the fund (a performance‑based fee).
The trustee, or the trustees, of the regulated superannuation fund must ensure that the arrangement complies with this section.
Base fee must be set or adjusted to give incentive to obtain performance‑based fee
If, under the arrangement, a fee is or fees are payable to the investment manager in addition to the performance‑based fee, the other fee or fees must be set or adjusted so that they are lower than they would be if the arrangement did not include the performance‑based fee.
Period to which performance‑based fee relates
The period over which entitlement to the performance‑based fee is determined under the arrangement must be appropriate to the kinds of investment to which the performance‑based fee relates.
Performance of investment must be measured against an appropriate benchmark
Under the arrangement, the performance of the investment must be measured by comparison with the performance of investments of a similar kind.
Performance‑based fee to be worked out on after‑costs, after‑tax basis
For the purposes of working out the performance‑based fee payable under the arrangement, the performance of the investment must be determined on an after‑costs and, where possible, an after‑tax basis.
Disincentives to underperformance
Under the arrangement, the performance‑based fee must be calculated in a way that includes disincentives for poorly performing investments.
Best interests of MySuper members
A trustee of a regulated superannuation fund does not breach this section to the extent that the asset or assets of the fund invested under the arrangement are attributed by the trustee or the trustees of the fund to a MySuper product if, despite the fact that the arrangement does not comply with one or more of the provisions of this section, the arrangement promotes the financial interests of the beneficiaries of the fund who hold the MySuper product.
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