HOSTPLUS Member Guide

The Fees and other costs at a glance table is an outline of fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the fund assets as a whole. You should read all the information about fees and costs because it is important to understand their impact on your investment.

Type of fee or cost	Amount	How and when it is paid
Fees when your money moves in or out of fund
Establishment fee – the fee to open your investment.	Nil	Not applicable
Contribution fee – the fee on each amount contributed to your investment, either by you or your employer.	Nil	Not applicable
Withdrawal fee – the fee on each amount you take out of your investment.	Nil	Not applicable
Termination fee – the fee to close your investment.	Nil	Not applicable
Management costs* - The fees and costs for managing your investment
Fees deducted from your account Member fee.	$78.00 p.a. ($1.50 per week) +	The member fee dollar cost is calculated weekly after tax, and deducted from your account half-yearly.
Expenses indirectly deducted Indirect cost ratio (ICR) or investment expenses and performance fees – the annual percentage fees for managing your investment. The amount you pay for a specific investment option is shown in the Investment expenses within this section.	The ICR varies according to your chosen investment option(s) and ranges from 0.00% to 1.11% p.a.	The annual percentage expense is deducted from investment returns before the after-tax net fund earning rate is declared each week.
Service fees†
Investment switching fees – the fee for changing investment options.	Nil	Not applicable.

* See ‘Additional explanation of fees and costs’ for a breakdown on the management costs.

† See ‘Additional explanation of fees and costs’ for information on all other fees which may be payable.

The table below gives an example of how fees and costs for the HOSTPLUS Balanced option can affect your superannuation investment over a one-year period. You can use this table to compare this product with other superannuation products.

Example: HOSTPLUS Balanced option
Balance of $50,000 with total contributions of $5,000 during the year
Contribution fees	Nil.	For every $5,000 you put in, you’ll be charged $0.
Plus Management costs	0.64% p.a. + $78 member fee p.a. ($1.50 per week).	And, for every $50,000 you have in the fund, you will be charged $320 each year plus $78 in administration fees regardless of your balance.
Equals cost of fund		If you put in $5,000 during a year and your balance was $50,000, then for that year you will be charged fees of: $398* What it costs you will depend on the investment option you choose and the fees you negotiate with your fund or financial adviser.#

*Additional fees may apply.

^#The wording used in this section is prescribed by law. Please note our fees are not negotiable. The figures are current as at 30 June 2011 and may be subject to change.

Most superannuation funds pay fees to investment managers to invest and manage their assets. Investment expenses are deducted from investment returns before returns are applied to your account. All returns declared are net of these expenses.

The table below shows the investment expenses paid for the financial year ended 30 June 2011, based on the funds under management in each investment option. The costs for each of the investment options are in addition to the $1.50 per week member fee ($78 per year).

Investment option	Investment Management costs	Performance Fees*	Total Investment Management costs before applicable tax deduction	Total Investment Management costs after applicable tax deduction**
Pre-mixed options
Capital Stable	0.42%	0.04%	0.46%	0.39%
Conservative Balanced	0.51%	0.05%	0.56%	0.48%
Indexed Balanced1	0.03%	0.00%	0.03%	0.03%
Balanced (default)	0.66%	0.09%	0.75%	0.64%
Shares Plus	0.64%	0.05%	0.69%	0.59%
Sector investment options
Cash	0.05%	0.00%	0.05%	0.04%
Diversified Fixed Interest	0.33%	0.00%	0.33%	0.28%
Property	0.68%	0.00%	0.68%	0.58%
Australian Shares	0.43%	0.09%	0.52%	0.44%
International Shares	0.61%	-0.08%	0.53%	0.45%
Individual manager options
Macquarie Investment Management – Australian Fixed Interest	0.00%	0.00%	0.00%	0.00%
BlackRock Asset Management –  International Fixed Interest2	0.12%	0.00%	0.12%	0.10%
Bridgewater Associates – Diversified Fixed Interest3	0.74%	0.00%	0.74%	0.63%
Industry Super Property Trust – Property	0.29%	0.00%	0.29%	0.25%
Lend Lease managed APPF (Retail, Commercial & Industrial) – Property	0.63%	0.00%	0.63%	0.54%
Balanced Equity Management – Australian Shares	0.16%	0.00%	0.16%	0.14%
Macquarie Investment Management – Australian Shares	0.19%	0.00%	0.19%	0.16%
Paradice Investment Management (Small Cap) – Australian Shares	0.75%	0.55%	1.30%	1.11%
Perpetual Investment Management – Australian Shares4	0.38%	0.00%	0.38%	0.32%
AllianceBernstein – International Shares3	0.56%	0.00%	0.56%	0.48%
IronBridge Capital Management  –  International Shares2	0.48%	0.00%	0.48%	0.41%
Marvin & Palmer Associates – International Shares4	0.60%	0.00%	0.60%	0.51%
Neuberger Berman – International Shares5	0.80%	0.00%	0.80%	0.68%

As the investment management costs attract a tax deduction, the total investment management costs after applicable tax deduction is the amount incurred by members. These costs are deducted before the net earnings for each investment option are declared and applied to members’ accounts.

The expenses that will be payable for the 2011 –12 financial year will be calculated as at 30 June 2012.

PricewaterhouseCoopers have performed independent procedures over the calculation of the above investment costs and confirmed that they were calculated in accordance with the trustee’s policy.

*The performance based cost component comprises actual fees paid and estimates of fees to be paid for the financial year ending 30 June 2011.

**The total management cost after the applicable tax deduction includes the investment management costs and performance fees.

1 This is a new investment option available from 1 December 2010. The figure shown is an approximation of expenses had this investment option existed for a full financial year.

2 This is a new investment option available from 1 June 2011. The figure shown is an approximation of expenses had this investment option existed for a full financial year.

3 This investment option was closed on 1 December 2010.

4 This investment option was closed on 31 October 2011.

5 This is a new investment option available from 31 October 2011. The figure shown is an approximation of expenses had this investment option existed for a full financial year.

Investment expenses for each investment option

Where applicable, all fees and costs disclosed include GST less any input tax credits and/or stamp duty.

Management and transactional and operational costs cover the cost of investing the fund’s assets and include base and performance fees, asset consulting, bank fees and custodian costs. More specifically they include any expenses deducted indirectly.

Management costs, also known as indirect cost ratio (ICR) are deducted from investment returns before the earning rates are declared. The management costs or ICR can be broken down into the following two components and are an additional cost to members.

1. Investment expenses

The ICR for each investment option is outlined in Investment expenses. The amount paid annually for each investment option was calculated as at 30 June 2011 and takes into account the expenses that have accrued and/or been paid, as well as certain underlying expenses charged indirectly to the investment. These investment expenses may change. Annual revisions to the ICR for an investment option will be made available at hostplus.com.au

2. Performance fees

In certain circumstances performance fees are payable to investment managers if they outperform required performance targets. These performance fees are detailed below and will vary between investment managers. The performance fees form part of the Management Costs shown in Investment expenses. The performance fees (if any) will be passed on to members by reductions in the price of the investment option.

The dollar figure in bold is the approximate performance fee paid or expected to be paid for the financial year ending 30 June 2011.

For Acadian Wholesale Australian Equity Long Short Fund the performance fee is calculated as 15% of the gross return (before management fees) above the S&P/ASX 300 Accumulation Index. If the total performance of the Fund in any month is negative, a negative performance fee accrual will result in the Fund. Future months’ performance fees will be calculated after first making up for any negative performance fee accrual carried forward.

For AMP Select Property Portfolio I the performance fee is an amount equal to 20% of the remaining proceeds after unit holders have received grossed up proceeds equal to the paid up capital together with a return of 10% per annum.

For AMP Select Property Portfolio II and III the performance fee is an amount equal to 30% of the remaining proceeds after unit holders have received grossed up proceeds equal to the paid up capital together with a return of 12% per annum.

For Aurora Offshore Fund II a performance fee is calculated at 20% of any new appreciation above the high water mark and a quarterly hurdle rate of 1.25%. New appreciation is defined as realised and unrealised gains and interest income reduced by expenses. A fee cap of 4%, covering management and performance fees, applies. $4,269,000

For Australian Prime Property Fund Retail the performance fee is calculated at 15% of rolling annual total return less 9% applied to gross assets calculated and paid six monthly and capped at 0.2% in each six month period.

For Babson Capital - Alternatives the performance fee is calculated at 20% of the portfolio’s over performance where the portfolio exceeds its benchmark return of 8% per annum plus base fees. $980,000

For BT Australian Long / Short Fund the performance fee is 15% of the amount (if any) by which the Fund’s investment performance (before fees) exceeds the S&P/ASX 200 Accumulation Index. It is only payable when any applicable performance deficit has been recouped, such that any performance deficit will need to be offset by future positive performance fees before any performance fee becomes payable. This means the performance deficit must be recovered in dollar terms before any performance fee can be accrued. If a performance fee is payable, it is payable annually as at 30 June. The Performance fee is payable in relation to the performance of the Fund as a whole during each year and does not necessarily reflect the performance of any individual unitholder’s investment.

For Campus Living Villages Fund the manager is entitled to 20% of returns above the 8% hurdle with a limit on total fees (base and performance) of 1.5% of net asset value. $779,000

For CFS Infrastructure Fund (Anglian Water Group Sector) the performance fee is calculated at a rate of 20% of any over performance to the Consumer Price Index plus 7%. $123,000

For Colonial First State Property Opportunistic Partnership the performance fee is calculated at a rate of 33.3% of any over performance to the pre-tax hurdle rate of 12.5% internal rate of return. $64,000

For Crown European Buyout Opportunities II Plc (CEB II) a performance fee is accrued based on a percentage of the gain in CEB II’s value over the year, but only if it exceeds net contributed capital plus a hurdle of 8% compounded rate of return. The performance fee also depends on the type of investment on which the gain has arisen and will only be payable when the contributed capital and the hurdle have been distributed back to the investors. Gains on primary and secondary investments attract performance fees of 5% and 10% respectively. Thereafter, any amount remaining after payment of the amounts outlined above shall be split in the following ratio: 95% (in the case of primary investments) and 90% (in the case of secondary investments) to shareholders and 5% (in the case of primary partnership investments) and 10% (in the case of secondary partnership investments) to the investment manager of CEB II.

For Crown Europe Middle Market II Plc (CEM II) a performance fee is accrued based on a percentage of the gain in CEM II’s value over the year, but only if it exceeds net contributed capital plus a hurdle of 8% compounded rate of return. The performance fee also depends on the type of investment on which the gain has arisen and will only be payable when the contributed capital and the hurdle have been distributed back to the investors. Gains on primary and secondary investments attract performance fees of 5% and 10% respectively. Thereafter, any amount remaining after payment of the amounts outlined above shall be split in the following ratio: 95% (in the case of primary investments) and 90% (in the case of secondary investments) to shareholders and 5% (in the case of primary partnership investments) and 10% (in the case of secondary partnership investments) to the investment manager of CEM II. $97,000

For Esemplia Emerging Markets – International Shares (Emerging Markets) portfolio the performance fee is calculated at 20% of any outperformance of the portfolio relative to a hurdle of 4% over the MSCI Emerging Markets Net (AUD) Index over a rolling three year period, which shall not exceed an amount equal to 1.2% (exclusive of base fee) of the average value of the assets of the portfolio during that year. $220,000

For GMO Multi Strategy Trust the performance fee is calculated at a rate of 20% of any performance in excess of the UBS Australia Bank Bill Index plus the base fee of 1%. Any negative underperformance is carried forward so that there is nothing payable until the previous underperformance has been extinguished.

For Goldman Sachs Hedged Global Flex Fund the performance fee is calculated as 20% (excluding GST) of excess return above the MSCI World Index (ex Australia) in AUD.

For Goodman Australia Industrial Fund the performance fee is calculated at a rate of 15% of any over performance to the 10-year Australian Government bond yield plus 3.5%.

For Greencape Capital Pty Ltd – Australian Shares portfolio the performance fee is calculated at a rate of 15% of any over performance above the S&P/ASX 200 Accumulation Index plus 3%. $366,000

For IFM Australian Private Equity Fund IV, a performance fee will be payable on co-investments. This will be 10% of the surplus after the return to the fund of the invested capital and expenses of the co-investments and the receipt of 8% per annum return by the fund on co-investment.

For IFM International Private Equity Fund III, the performance fee will be 5% on the IFM Discretionary Portfolio exit proceeds in excess of the return to the fund of the drawn capital and expenses of all the IFM Discretionary Portfolio investments undertaken and the receipt of an 8% per annum return to the fund.

For L1 Capital – Australian Shares the performance fee is calculated as 15% of the net outperformance above the S&P/ASX 200 Accumulation Index. $298,000

For Lend Lease Asian Retail Investment Fund the investment manager is entitled to a performance fee when:

1. 20% of amount (if any) by which the Development Phase internal rate of return exceeds 12% up to and including 15%, and
2. 30% of the amount (if any) by which the Development Phase internal rate of return exceeds 15%.
3. 15% of the amount (if any) by which the Operational Phase total return, after fund expenses but before base fees and tax, exceeds the benchmark rate. This performance fee is capped at 0.25% per half year on gross asset value with any over/under performance carried forward.

For Lend Lease Communities Fund I the investment manager is entitled to a performance fee calculated at a rate of 40% on project completion where the investment return exceeds 12% per annum fund internal rate of return (being the realised returns on equity after base fee and fund expenses and before performance fee and tax).

For Lend Lease Real Estate Partners 3 the investment manager is entitled to a performance fee representing 20% of the excess return above a leveraged IRR of 13% per annum after establishment costs, base fees and expenses but before the performance fee and tax.

For Lend Lease V5 Trust the investment manager is entitled to a performance fee calculated at a rate of 20% where the investment return is between 12% and 17% per annum and a rate of 30% where the investment return is over 17% per annum. The investment return is calculated after establishment costs, base fees and expenses but before the performance fee and tax. Any performance fee will be payable to the investment manager on project completion.

For MGPA Asia Fund III the performance fee is calculated at 20% of all distributions after:

1. an amount equal to 100% of the Limited Partners’ capital contributions, and
2. an amount sufficient to provide Limited Partners’ with a simple return equal to 12% per annum has been distributed back to Limited Partners.

For Macquarie Global Infrastructure Fund III the performance fee is calculated at a rate of 20% when the portfolio earns more than 8% per annum.

For Macquarie Real Estate Equity Fund 3 and 5 the performance will be payable upon project completion and will be capped at 40% of the remaining proceeds after the payment of all project related debt facilities, all expenses and capital invested in the project, together with a pre-tax hurdle rate of 13% internal rate of return per annum. The performance fee is subject to claw back at the completion of the Fund in the event that investors do not receive an overall return on drawn investor capital of 13% per annum (pre-tax and net of fees) over the life of the Fund.

For Macquarie Real Estate Equity Fund 6 the performance will be payable upon project completion and will be capped at 30% of the remaining proceeds after the payment of all project related debt facilities, all expenses and capital invested in the project, together with a pre-tax hurdle rate of 10% internal rate of return per annum. The performance fee is subject to claw back at the completion of the Fund in the event that investors do not receive an overall return on drawn investor capital of 10% per annum (pre-tax and net of fees) over the life of the Fund.

For Orbis Investment Management – Australian Shares a performance fee of 20% is calculated on the outperformance of the mandate relative to the S&P/ ASX 300 Accumulation Index, subject to a high water mark. The amount of performance fees due and payable at the end of each financial year is limited to one third of that amount of the performance fee exceeding 1% of the mandate value at that date.

For Orbis Institutional Global Equity Fund a performance fee of 25% of outperformance against the FTSE World Total Return Index is accrued in a fee reserve. This reserve is invested in the underlying strategy and refundable at the same rate if superior performance is subsequently lost. The Manager’s draw on the fee reserve is capped. 

For Paradice Investment Management – Australian Shares (Small Cap) the performance fee is calculated at a rate of 10% of any out performance of the S&P/ASX Small Ordinaries Accumulation Index, with a limit on total fees (base and performance) payable in one year of 3.25% of average market value. $1,000,000

For Paradice Investment Management – Australian Shares (Mid Cap) the performance fee is calculated at a rate of 15% of any out performance of the composite index, consisting of 70% S&P/ASX Mid-Cap 50 Accumulation Index and 30% S&P/ASX Small Ordinaries Accumulation Index, with a limit on total fees (base and performance) payable in one year of 2% of average market value. $862,000

For Paradice Investment Management – Australian Shares (Large Cap) the performance fee is calculated at a rate of 15% of any out performance of the S&P/ASX 200 Accumulation Index. with a limit on total fees (base and performance) payable in one year of 1.75% of average market value. $12,000

For Paradice Investment Management – International Shares (Small Cap) the performance fee is calculated at 15% of any out performance of the benchmark S&P BMI US$1bn-US$5bn Cap Range Index, with a limit on total fees (base and performance) payable in one year of 1.75% of average market value.

For Retirement Villages Group the performance fee is calculated at a rate of 20% of any over performance to the benchmark return of 11% per annum after bank fees.

For Stockland Residential Estates Equity Fund No. 1 the performance fee is calculated at a rate of 35% of Fund residual profit after investors receive a pre-tax internal rate of return (IRR) of 14% per annum on the Drawn Investor Capital net of fees (excluding performance fee) and expenses. A performance fee, if any, will be paid on wind-up of the Fund.

For Stone Tower Fund Management LLC – Alternatives the performance fee is calculated at 20% of the portfolio’s performance where the appreciation of the portfolio exceeds its benchmark return of 8% per annum, which is cumulative until 30 June 2012.

For Utilities Trust of Australia the performance fee is calculated at a rate of 10% of any over performance to the 10-year Australian Government bond yield plus 4%, and is only payable on disposal of an asset. $385,000

For Vinva Australian Equity Alpha Extension Fund the performance fee is calculated at 15% of any outperformance of the portfolio to the S&P/ASX 300 Accumulation Index, with a limit on total fees (base and performance) payable in one year of 1.1% of average market value. $20,000

For Wilshire Australian Private Markets No 1 Fund the performance fee is payable after:

1. all capital contributions have been returned to the unit holders
2. an internal rate of return of 15% per annum has been achieved on the contributed capital
3. up to 10% of cumulative distribution has been received by the manager.

Thereafter, the manager receives 10% of the net distribution. $36,000

For Wilshire Australian Private Markets PST Class J, K, L & M, no performance fee is charged by the PST manager however a fee may be charged by the underlying manager. The hurdle rate is 8% per annum, after which the manager is to receive 5% of the excess returns.

The above description of performance fees is current as at 30 June 2011. Any revisions to the performance fees will be made available at hostplus.com.au/memberguide/investments

The investment expenses in 6.4 Investment expenses include performance fees, and can be found at hostplus.com.au/memberguide/fees

Under family law, your spouse, a person considering entering into a superannuation agreement with you, or their authorised representative, can request information about your superannuation account balance. HOSTPLUS charges a $75 fee for supplying this requested information, which is paid by the person making the application at the time the request is made.

HOSTPLUS also charges a fee of $60 for splitting a superannuation interest upon receipt of a splitting agreement or court order, which is deducted from your account at the time the benefit is split.

Costs such as brokerage, settlement costs (including custody), stamp duty and clearing costs are classified as transactional and operational costs and are included in the cost base of each asset and are approximately 0.14% for the year ended 30 June 2011. This is an additional cost to members.

If you make a contribution by cheque or direct debit that is dishonoured, a handling fee of $15 will be deducted from your account.

All fee calculations are inclusive of GST, less any input tax credits and stamp duty (if applicable). The fund passes on any tax deduction in the form of higher returns on your investments. A tax deduction is not passed on by way of reduced fees or costs. For information about superannuation taxes, refer to Section 7: How super is taxed at hostplus.com.au/memberguide/tax

If you choose to engage the services of Industry Fund Financial Planning, set fees may apply. Find out more about Industry Fund Financial Planning at hostplus.com.au/advice

A $60 administration fee will be payable by the splitting member for each transaction which will be deducted from the member’s account.

The trustee of HOSTPLUS reserves the right to increase fees and other costs. If this occurs, we’ll advise you in writing at least 30 days prior to the increase.