Insurance-only division of the Macquarie Superannuation Plan

Transcription

1 Insurance-only division of the Macquarie Superannuation Plan Annual report to members year ended 30 June 2012 Macquarie Superannuation Macquarie Investment Management Limited ABN AFSL RSEL L

2 Contents 01 Welcome 02 Overview of the insurance-only division of the Macquarie Superannuation Plan 03 Important information 08 Financial statements of the Fund The insurance-only division forms part of a superannuation fund known as the Macquarie Superannuation Plan RSE R (the Fund). The trustee for the superannuation fund is Macquarie Investment Management Limited ABN AFSL RSEL L (MIML, Macquarie, the Trustee, we, us). The Fund is a complying superannuation fund under the Superannuation Industry (Supervision) Act 1993 and Regulations. You are entitled to have access to the Fund s trust deed, notice of compliance, APRA returns, auditor s reports, annual reports and financial statements. The Trustee is covered by the professional indemnity insurance taken out by the Macquarie Group Limited ABN The fund reporting is provided on an aggregated basis for all divisions of the Fund. In the insurance-only division of the Fund, the Trustee holds life insurance policies with Macquarie Life Limited ABN AFSL (Macquarie Life / MLL) for the benefit of the insured members. MIML has appointed Bond Street Custodians Limited (BSCL) ABN AFSL to hold the fund s investments in custody. Some of the assets of the Fund are held under policies issued by MLL. BSCL, MLL and MIML are wholly owned subsidiaries of Macquarie Bank Limited ABN MIML and MLL are not an authorised deposit-taking institutions for the purposes of the Banking Act (Cth) 1959, and their obligations do not represent deposits or other liabilities of Macquarie Bank Limited. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIML or MLL. The information contained in this annual report is dated 12 December 2012 and is general information only. We have not taken into account your objectives, financial situation or needs. You should consider the appropriateness of this information, taking into account your objectives, financial situation and needs and the applicable PDS available from us or your adviser, before acting on any of the information in this annual report.

3 Welcome 12 December 2012 Dear Member, Welcome to the annual report for the insurance-only division of the Macquarie Superannuation Plan for the financial year ended 30 June The 2012 financial year saw a continuation of the challenging conditions confronting the global economy and financial markets, with increasing concerns about the Euro region sovereign debt crisis and the deterioration in the global growth outlook. Fears of another global economic recession were fuelled by the US economy s slower than expected recovery and ongoing signs of the Chinese economy s loss of momentum. Against this background, the Australian economy remained resilient as income growth continued to be supported by favourable commodity prices and further growth in business investment, particularly in the key resources sector. Nevertheless, levels of household and business confidence declined during the 2012 financial year as concerns about unstable offshore economic and financial developments dominated the domestic mindset. The tendency of Australian households to continue to build their savings was also a key feature of the domestic economy, reflecting the importance being placed on protecting one s financial position. Your Macquarie Life insurance cover, held through the insurance-only division of the Macquarie Superannuation Plan, also helps to protect your financial position should you experience a change in your health or your ability to work due to illness or injury. If you have any questions about this annual report or about the insurance-only division of the Macquarie Superannuation Plan in general, please contact your adviser. Yours sincerely, Tony Graham Executive Director Macquarie Investment Management Limited 1

4 Overview of the insurance-only division of the Macquarie Superannuation Plan The insurance-only division of the Macquarie Superannuation Plan provides a mechanism to allow you to hold your insurance cover within superannuation, without the need to maintain an account balance. Your contributions into the insurance-only division are paid by the Trustee of the Macquarie Superannuation Plan (the Fund) to Macquarie Life Limited to meet the premium (and policy fee if applicable) for your insurance cover. The contributions you pay exactly equal the insurance premium (and policy fee). The Fund is a resident regulated superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 and a complying superannuation fund, able to accept employer superannuation guarantee contributions. The rights and obligations of members of the Fund are set out by way of a trust deed and the trustee of the fund is Macquarie Investment Management Limited (MIML). MIML applies no management fees or costs to members or their benefits. The only amounts paid by members are contributions to meet the premium (and policy fee) for their insurance cover. 2

5 Important information Legislative updates During the 2011/12 financial year, the following superannuation-related measures were either enacted by Parliament or proposed by the Government: Concessional contributions cap In the 2012/13 Federal Budget the Government announced it would defer the start date of the higher concessional contributions cap for individuals aged 50 and over with total super balances below $500,000 from 1 July 2012 to 1 July At the time of writing this report, legislation enacting this change had not been tabled in Parliament. This deferral means that for 2012/13 and 2013/14 all individuals will be subject to a concessional contributions cap of $25,000. Government co-contribution The Government has proposed to reduce the matching rate for the co-contribution to 50 per cent, with a maximum co-contribution of $500 from 1 July 2012 where income is below $46,920. At the time of writing this report, legislation enacting this change had not been tabled in Parliament. If not legislated, the upper threshold will be $61,920, the matching rate will be 100 per cent and the maximum co-contribution will be $1,000. Low income super contribution From 1 July 2012 the Government will pay a new low income super contribution equal to 15 per cent of concessional contributions made by a person or their employer, where the person s adjusted taxable income is up to $37,000 per annum. The maximum low income super contribution is $500. Contributions tax for high income earners In the 2012/13 Federal Budget the Government announced the superannuation contributions tax will be increased to 30 per cent for high income earners from 1 July The additional 15 per cent tax will apply to concessional contributions that cause an individual s income (including the concessional contributions) to exceed $300,000. Concessional contributions that exceed the cap will not be subject to the additional 15 per cent tax excess contributions tax arrangements will apply. At the time of writing, legislation enacting this change had not been tabled in Parliament. 3

6 Refund of excess concessional contributions From 1 July 2011 excess concessional contributions of up to $10,000 will be refundable for first time breaches. The excess amounts will be taxable at personal marginal tax rates rather than 31.5 per cent plus the super fund rate of 15 per cent. Government reforms and reviews Stronger Super In late 2010 the Government announced its Stronger Super reforms designed to make the superannuation system stronger and more efficient. The Stronger Super reform agenda was detailed in last year s annual report. At the time of writing, legislation implementing some of the above measures had been enacted by Parliament, while other Stronger Super reforms have not yet been made law. The reforms are not expected to have a significant impact on member entitlements in the insurance-only division of the Macquarie Superannuation Plan. Future of Financial Advice (FOFA) In April 2010 the Government announced reforms to financial advice which have been designed to improve the trust and confidence of Australian retail investors in the financial planning sector. The Future of Financial Advice (FOFA) package was detailed in last year s annual report. At the time of writing, legislation implementing the majority of the FOFA reforms had been enacted by Parliament. The reforms are not expected to have a significant impact on member entitlements in the insurance-only division of the Macquarie Superannuation Plan. General information Trustee and fund management information During the 2011/12 financial year, the Fund held the following assets directly or indirectly with a value of greater than five per cent of the Fund s total assets: in all trusts for which Macquarie Investment Management Limited acts as responsible entity ($1.759 billion) in the Macquarie Wrap Solutions Cash Account ($1.372 billion) in Macquarie Life Limited ($0.560 billion) in Dimensional Funds Australia Limited ($1.245 billion) in Vanguard Investments Australia Limited ($0.543 billion) in Macquarie Term Deposits ($0.564 billion). 4

7 Insurance cover held within the Macquarie Superannuation Plan The premiums for certain types of insurance policies are tax deductible to the trustee of a superannuation fund depending on the extent to which they relate to the fund s liability to pay certain kinds of superannuation benefit as defined in tax law. The extent of alignment may be specified in the terms and condition of the policy by the insurer. With this in mind, Macquarie Life has endorsed the policy on your life owned by Macquarie Investment Management Limited with the new terms that apply to Life and TPD Insurance. The part of the premium payable for Life Insurance that relates to insured events which align with the tax law definitions of a superannuation death benefit or a superannuation benefit for a terminal medical condition is 100 per cent. Depending on the TPD definition which applies (as shown in the Certificate of Insurance), the part of the premium paid for TPD Insurance that relates to insured events which align with the tax law definition of disability superannuation benefit is: Definition Percentage Any occupation 100% Own occupation 67% Domestic duties 100% Modified TPD 100% Superannuation optimiser 100% Superannuation optimiser any occupation 100% Superannuation optimiser domestic duties 100% The specified percentages took effect on 1 July The percentages are subject to change. Macquarie Life will provide written notice to the Trustee of any changes. New percentages and the dates from which they apply will be incorporated into the policy terms. Refund of premiums The insurance-only division of the Macquarie Superannuation Plan has been established purely for the purpose of providing insurance cover inside the superannuation environment and is not an accumulation-based superannuation fund. Payments made towards insurance premiums are superannuation contributions which are subject to superannuation preservation rules and therefore are generally not refundable directly back to the member. In the case of insurance cover being cancelled and a premium refund being due (for example, part refund of an annual insurance premium), the refund will need to be paid to another complying superannuation fund (the other fund ) by way of a rollover, rather than as a direct payment back to the member. 5

8 When money is paid as a rollover to the other fund, contributions tax that would otherwise have been offset by a tax deduction that the Trustee is entitled to for insurance premiums, may become payable. In these cases, the amount of the tax payable will be deducted from the amount refunded and the balance transferred to the other fund. If the member does not provide details of the other fund to which they would like the rollover to be paid within 30 days, Macquarie Investment Management Limited may transfer the money to an Eligible Rollover Fund (ERF). The ERF chosen is called the Super Safeguard Eligible Rollover Fund. Super Safeguard Eligible Rollover Fund GPO Box 3426 Melbourne VIC 3001 Phone: Fax: supersafeguard@primary.com.au Website: supersafeguard.com.au Should your benefit be transferred to the Super Safeguard Eligible Rollover Fund: 6 your interest in the Fund, including your insurance cover, will cease you will become a member of the Super Safeguard Eligible Rollover Fund and will be subject to its governing rules your account will be invested according to the investment strategy of the Super Safeguard Eligible Rollover Fund the Super Safeguard Eligible Rollover Fund may charge fees to your account you may not be offered insurance cover. You should refer to the Product Disclosure Statement for the Super Safeguard Eligible Rollover Fund for more information. We reserve the right to change the chosen ERF without providing notice to you. Eligibility to contribute to superannuation As a member of the insurance-only division of the Macquarie Superannuation Plan, the premium (and policy fee if applicable) paid by the Trustee to Macquarie Life for your insurance cover is funded by the superannuation contributions you make into the Fund. In order to make contributions into the Fund, you must be eligible to make superannuation contributions or have them made on your behalf.

9 Generally, you are eligible to contribute to superannuation (or have contributions made on your behalf) if you are either: under age 65, or aged 65 to 74 and have worked at least 40 hours in a period of not more than 30 consecutive days in the financial year in which contributions are made (known as the work test ). Once you reach age 65, for superannuation contributions to be accepted, we need you to confirm you have satisfied the work test each financial year. If we do not receive confirmation from you, we will be unable to accept further contributions and will be required by law to return any contributions already received during that financial year. However, work test and age restrictions do not apply to mandated employer contributions. That is, contributions required to be made under superannuation guarantee legislation or certain industrial awards or agreements. If you become ineligible to contribute to superannuation but would like to continue your insurance cover, you may take up a non-superannuation policy for the same benefits and level of cover as you hold at the time. You must exercise this option before cover under the superannuation policy ends. Complaints If you have a complaint, please contact your adviser and discuss your enquiry or complaint with them. If you are not satisfied with the result, please contact us on Alternatively, please write to us at the below address. Macquarie Investment Management Limited GPO Box 5216 Brisbane QLD 4001 We will respond to your written enquiry or complaint as soon as possible and always within 45 days of receipt. If you are not satisfied with our response after 90 days, you may wish to refer the matter to the Superannuation Complaints Tribunal, an independent body set up by the Federal Government to review trustee decisions relating to individual members. You can contact the tribunal by telephoning

10 Financial statements* of the Fund Operating statement for the year ended 30 June $ $ 000 Investment revenue Changes in the net market value of (545,118) 247,825 investments Interest 44,262 30,536 Distributions from unit trusts 333, ,456 Dividends 86, ,408 Total investment revenue (81,218) 682,225 Contributions revenue Employer contributions 225, ,113 Members contributions 383, ,545 Transfers from other Funds 1,069, ,343 Total contributions revenue 1,678,797 1,367,001 Other Revenue Insurance proceeds 11,301 5,334 Total revenue 1,608,880 2,054,560 Expenses Insurance premiums 37,272 29,105 Operating expenses 112, ,402 Superannuation contributions 4 72 surcharge Total expenses 150, ,579 Benefits accrued as a result of 1,458,810 1,913,981 operations before income tax Income tax (benefit) (11,629) (3,153) Benefits accrued as a result of operations 1,470,439 1,917,134 * This annual report contains abridged financial information for the financial year ended 30 June 2012 for the Fund. The abridged financial statements relate to the entire Macquarie Superannuation Plan (the Fund), which includes Macquarie Wrap Super, Macquarie SuperOptions and the insurance-only division a risk only superannuation fund. The full financial information is available upon request by contacting your adviser, or us on

11 Statement of financial position as at 30 June $ $ 000 Assets Cash and cash equivalents 175,400 14,765 Investments 9,256,819 9,103,198 Receivables 65,580 78,879 Current tax asset 52,618 55,418 Deferred tax asset 56,950 52,519 Total assets 9,607,367 9,304,779 Liabilities Trade and other payables 10,019 10,485 Total liabilities 10,019 10,485 Net assets available to pay benefits 9,597,348 9,294,294 Represented by: Liability for accrued benefits Allocated to members' accounts 9,597,348 9,294,294 9

12 For more information Financial advisers Existing clients Your adviser is your main point of contact for your insurance cover, so if you have any questions about your cover, please talk to your financial adviser. Macquarie can be contacted at: GPO Box 5216 Brisbane QLD 4001 macquarielife.com.au Claims SUPER-INSUR 12/11