Performance fees

To help motivate investment managers to do their best for members, one of Sunsuper's initiatives over the past few years has been to put in place performance fees with an increasing number of our investment managers.

Our approach is to pay the investment managers a lower base fee, and pay a performance fee if it outperforms a set return objective. For example, a manager could be paid a performance fee for beating an objective like a market index by a specified margin. So, instead of paying an Australian shares investment manager a fixed asset-based fee of 0.4% of assets, we might pay a base fee of 0.2% of assets plus 20% of any return the manager gets in excess of a market index (e.g. for Australian shares a market index is the S&P/ASX 300 index). If they don't perform, they don't get their performance fee. That way, the fees reflect the performance you get. We think that gives you good value, and helps ensure your money will be working hard for you.