Understanding TWUSUPER’s crediting rates
On 1 July 2009 TWUSUPER moved from year-to-date interim crediting rates (updated monthly) to monthly crediting rates updated weekly.
Frequently Asked Questions
What are crediting rates and how do they work?
How and when are crediting rates used?
How are monthly crediting rates calculated?
How are interim crediting rates calculated?
What happens if I change my investment option(s)?
How earnings are credited to a member's account examples
At the end of each financial year, investment earnings are applied to your super account.
Investment earnings are also applied during the year if you:
- switch investment options
- make a withdrawal from your super account or transfer to another super fund
- transfer all or part of your super to another division of the Fund.
TWUSUPER uses investment earnings to determine crediting rates. Crediting rates are based on the investment earnings for each investment option (adjusted for estimated tax, investment management fees and other costs).
Crediting rates can be positive or negative depending on investment performance.
Crediting rates are declared monthly for each investment option. Interim crediting rates are updated on a weekly basis. The Trustee reserves the right to declare crediting rates more or less often.
How earnings are credited to a member's account examples
Click here to view the current crediting rates.
Crediting rates are used to calculate investment earnings which are applied to your super account annually at the end of a financial year and at the time you:
- switch investment options
- make a withdrawal from your super account or transfer to another super fund
- transfer any of your super to another division of the Fund.
At the end of a financial year
At the end of each financial year, investment earnings are applied to your super account.
Investment earnings for the full financial year will be applied to your account if you have been a member for the entire year and you have not:
- switched investment options during the year
or
- withdrawn or transferred any amount from your super during the year.
During a financial year
If you have switched investment options during a financial year, investment earnings for your original investment option are applied to your account before the date you switched investment options. Investment earnings for your new investment option are applied to your account for the time you remain invested in that investment option during the financial year.
If you have made a withdrawal or transferred any amount from your super account during a financial year, investment earnings were applied to your account when you made the withdrawal or transfer. For any amount remaining in your super account for the rest of the financial year, investment earnings are applied to your account from the date of the last withdrawal or transfer to 30 June.
If you joined the Fund part way through a financial year, investment earnings will be calculated and applied for the period your money was invested in the Fund up to 30 June.
The investment earnings that are applied to your account are calculated on a daily pro-rata basis by applying the monthly crediting rates for the investment option(s) your money was invested in to the daily account balance.
How earnings are credited to a member's account examples
Click here to view the current crediting rates.
Investment switches, withdrawals and transfers
When you switch investment options, make a withdrawal or transfer any of your super to another division of the Fund during the year the crediting rate(s) applicable at the time the transaction is processed is used to calculate investment earnings based on the amount switched, withdrawn or transferred.
If you switch investment options before the final crediting rate for June is declared (usually August), investment earnings will be applied to your super account at the time of the switch, as set out above. In addition, when the final crediting rate for June is declared, investment earnings will be recalculated and applied to your super account if the final June crediting rate is different to the interim June crediting rate. The investment earnings applied may be positive or negative.
All investment option switches, withdrawals and transfers are processed using the crediting rates for the relevant investment option(s) since the previous 1 July or the last investment option switch, withdrawal or transfer, whichever is later.
Investment earnings to be applied to your switch, withdrawal or transfer are calculated on a daily pro-rata basis by applying the relevant monthly crediting rates for the investment option(s) your money was invested in, up to the day your switch, withdrawal or transfer is processed.
How earnings are credited to a member's account examples
Click here to view the current crediting rates.
Crediting rate adjustments
Where an actual error has been made in respect of the member the amount will be adjusted to reflect the actual rate, provided that the adjustment is considered to be material. An amount is generally considered to be material if the adjustment is at least 0.3% of the member's account balance. The Trustee may apply a lower threshold at its discretion. In the case of exited members, the Trustee may apply a fixed dollar minimum before it pays compensation. The fixed dollar minimum is currently $20.
Monthly crediting rates are declared for each investment option. These crediting rates are based on the investment earnings for each month, taking into account estimates for tax, investment management fees and other fees.
The crediting rates for the month of June are generally reviewed to take account of any difference between estimates for taxes and fees and actual tax and fees incurred by the Fund during the year, once those taxes and fees are known. This is to ensure that the Fund’s net assets cover members’ total account balances at the end of the financial year (30 June). The June crediting rates are usually declared in August each year.
The Trustee reserves the right to change any monthly crediting rate. Monthly crediting rates may be positive or negative because they depend on the performance of investments held in each investment option.
Click here to view the current crediting rates.
Interim crediting rates are based on estimated investment earnings for the period since the last monthly crediting rates, taking into account estimates for tax and fees.
For the Balanced and Equity Plus options, the estimated investment earnings are calculated using the benchmark asset allocation for each investment option and movements in market indices (eg Australian and overseas share markets) from the beginning of the month.
For the Cash Plus option (which is invested in a single product) actual investment earnings are available and updated on a weekly basis.
For any investment option, for periods where market indices are not available (such as when setting an interim rate in advance for the first week of a new month), a cash rate (for instance, the Australian Financial Markets Authority rate) may be used in the calculations.
When the monthly (final) crediting rates are declared for each option, they replace the monthly interim crediting rates.
Interim crediting rates may be positive or negative because they depend on the performance of investments held in each investment option.
Click here to view the current crediting rates.
You can change your investment options in two ways:
If we receive your completed form by 5pm on Friday, or you complete your switch online before midnight on Friday, your investment choice will normally be effective on the following Wednesday. We will send you a letter confirming your switch.
You can switch investment options up to once a week. If you try to make more than one switch in the same week, only the last switch request received before that week’s deadline will apply.
When you switch investment options, investment earnings will be credited or debited to your account using the relevant monthly crediting rate(s) on the effective date of the switch.
Crediting rates can be positive or negative depending on investment performance.
How earnings are credited to a member's account examples
Click here to view the current crediting rates.