Significant Event Notice Successor Fund Transfer: Important Information for Qualifying Recognised Overseas Pension Scheme Members

Transcription

1 11 March 2016 Dear Member, Significant Event Notice Successor Fund Transfer: Important Information for Qualifying Recognised Overseas Pension Scheme Members Member No: Tax File Number (TFN) Status: TFN supplied After an extensive review of options to deliver better value to members, we as the Trustee of EquitySuper are writing to advise that an in-principle decision has been made to transfer members in EquitySuper to another regulated superannuation fund - The Executive Superannuation Fund (TESF) ABN It is intended that this will occur by way of a Successor Fund Transfer (SFT), with effect from 1 April An SFT involves the transfer of members and their benefits from one fund to another fund the successor fund. In order to transfer members on this basis, the Trustee must be satisfied that members rights in the successor fund in respect of the transferred benefits will be equivalent to the rights members have in the transferring fund immediately prior to the transfer. The Trustee is satisfied that TESF will qualify as a successor fund and has made an in-principle decision to transfer members to TESF on that basis. The in-principle decision is subject to completion of the necessary legal documentation and the receipt of final legal advice. In the unlikely event that the transfer does not proceed you will receive a further notice. This Significant Event Notice summarises the impact of the SFT on your benefits in EquitySuper. The enclosed EquitySuper Transfer - Important Information About the SFT outlines further information about the SFT, including the transfer process and steps you should or may wish to take, and explains in more detail any material impacts relevant to your benefits (where applicable). At the end of this Significant Event Notice, there is also a separate notice from TESF s trustee in relation to future communications from TESF. Implications for you as a Qualifying Recognised Overseas Pension scheme member There are potential implications for you arising from your transfer of a benefit (referred to a relevant transfer sum or asset ) that was transferred from a UK Pension. At the time of the transfer, Equity Super was registered as a Qualifying Recognised Overseas Pension Scheme (QROPS). In April 2015, UK Pension laws changed and as a result EquitySuper and other Australian public offer superannuation funds no longer qualify as QROPSs. Importantly, TESF is not a QROPS. If the relevant transfer sum is transferred to a new superannuation fund in Australia, that is not a QROPS you may incur an unauthorised payments charge of up to 40% of the relevant transfer sum and a surcharge of 15%, depending on your circumstances. 1

2 EquitySuper will be successor fund transferred to TESF on 1 April If we have not received a transfer or rollover request by 5.00pm on 23 March 2016, then your full superannuation balance will be transferred to TESF. We will, however, endeavour to accommodate any QROPS members wishing to make alternative arrangements that fall within the freeze period. You may wish to arrange to transfer or rollover the balance of the relevant transfer sum to a fund that is a UK registered pension scheme or QROPS. We strongly advise you to seek personal financial advice from a Qualified Financial Adviser experienced in UK Pension Tax law. What was the change in UK Pension Law? The change in the UK Pension law meant that any fund which allows benefit payments to members under the age of 55 (except for ill health) would be non-complying for QROPS purposes. As Australian Law may pay members under the age of 55 for other reasons, for example hardship or payments as instructed by the ATO in relation to contribution caps, this change has the effect of disqualifying Australian public offer superannuation funds such as EquitySuper and TESF. Nevertheless, there may be some Australian superannuation funds (generally non-public offer funds) which may qualify as QROPS if the rules of that fund prevent members from accessing benefit payments under the age of 55. For example, a self-managed superannuation fund may be able to qualify. Changes as a consequence of the transfer In preparation for the SFT, there will be a suspension of the processing of transactions in EquitySuper. From 5pm on 23 March 2016, transactions on your account in EquitySuper (e.g. contributions, rollovers in or transfers out, investment switches, benefit payments and insurance changes) will not be able to be made in EquitySuper but may be processed at a later date by TESF (depending on the nature of the transaction). The processing of transactions in TESF will also be limited for a period. Please refer to the important information about this in the enclosure. Investment options in TESF TESF has different investments options. From 1 April 2016, your account balance in TESF will be invested in the investment option(s) that most closely correspond (in terms of objective, strategy and risk) to the investment option(s) applicable to your account balance in EquitySuper on the date of the transfer. This does not mean that the corresponding investment option in TESF will be identical to the investment options applicable to your account in EquitySuper. The investment objective, risk profile and indirect cost ratio (ICR) of the corresponding investment option may be different. The ICR may be higher. Refer to the enclosure for further details of the ICR applicable to your account in TESF. Assuming you do not alter the investment options applicable to your account in EquitySuper as at the date of this notice, the investment options applicable to your account in TESF on 1 April 2016 will be as follows: EquitySuper «Investment_1_From» «Investment_2_From» «Investment_3_From» «Investment_4_From» «Investment_5_From» «Investment_6_From» The Executive Superannuation Fund «Investment_1_To» «Investment_2_To» «Investment_3_To» «Investment_4_To» «Investment_5_To» «Investment_6_To» Please note: The investment strategy for the Balanced option is also the investment strategy for TESF s MySuper product, MySuper MyLife. If you were not invested in EquitySuper s MySuper product as at the date of transfer to TESF and your account balance is invested in TESF s Balanced option, you will not be a MySuper member in TESF. 2

3 If you are invested in more than one investment option in EquitySuper, the weighting for each investment option will be replicated in the allocation of your account balance upon transfer to TESF. However, these weightings may change over time as a result of the performance of your investments in TESF. For the transfer from EquitySuper to TESF, your investment in the EquitySuper investment option(s) shown above will be valued at the sell unit price. A sell spread will apply ranging from 0% to 0.3% depending on the investment option. Please refer to the current Investment Guide relevant to your account in EquitySuper or contact us for details. Fees in TESF TESF has different fees and costs. From 1 April 2016, some of the fees and costs applicable to your account in TESF will be different to the fees and costs applicable to your account in EquitySuper. In particular, the administration fees and indirect cost ratios applicable to your account will be different as follows: EquitySuper Administration fee A percentage-based fee (calculated on a sliding scale ranging from 1.80% to 0.16% of assets) deducted from your account balance. Indirect cost ratio From 0.43% up to 1.25% per annum, depending on the investment option (estimated). The Executive Superannuation Fund Administration fee $ per annum, deducted from your account. Indirect cost ratio 0.77% up to 1.13% per annum, depending on the investment option (estimated). Refer to the Investment tables in the enclosure for information about the indirect cost ratio applicable to each of TESF s investment options. Other fees and costs may apply in EquitySuper and TESF, such as: Buy/sell spreads: Buy/sell spreads may apply when money moves in/out of investment options in EquitySuper. There are no buy/sell spreads applicable to investments into, redemptions from or switches of investment options in TESF, however costs associated with the buying and selling of underlying investments in the TESF may be included in the Indirect cost ratio of the TESF s investment options. Exit fees: Both EquitySuper and TESF charge an exit fee, in relation to any withdrawal from an account balance, however the exit fee in TESF is lower ($30.75 per withdrawal). You will not be charged an exit fee in respect of the transfer of your account from EquitySuper to TESF. Advice fees: Should you consult a financial adviser, advice fees for personal financial advice relating to your account in TESF may be deducted from your TESF account in the same manner as may currently occur in relation to an account in EquitySuper, if you provide your consent to TESF. Any consent or authority provided to EquitySuper for the deduction of advice fees from your EquitySuper account will not apply in TESF. Activity fees: Both EquitySuper and TESF charge fees in relation to family law information requests and family law splitting requests (pursuant to a court order or binding superannuation agreement following a relationship breakdown). However, family law related 3

4 activity fees are generally lower in TESF. Contribution splitting fees also apply in TESF. For further information, contact TESF on (02) (from 1 April 2016). For further information about the fees and costs applicable to your account in EquitySuper, please refer to the Product Disclosure Statement (PDS) and any significant event notices you have previously received from us. For further information about the fees and costs applicable in TESF, refer to the enclosure. For members who have not supplied their tax file number to EquitySuper If No TFN supplied appears in your contact details above, this means you haven t provided your tax file number to us. You should do so before 23 March 2016 as there may be tax consequences for you. Please refer to the important information about this in the enclosure. Binding nominations and other authorities Any valid binding death benefit nomination you have given to EquitySuper will be of no effect from 1 April Other authorities (e.g. Power of attorney, authority to deduct personal advice fees) will also cease to be effective in TESF. Please refer to the important information about this in the enclosure. More information Refer to the enclosed information for more detail on TESF and how your membership may change after the transfer into TESF. A Product Disclosure Statement (PDS) containing further information about TESF relevant to your account will also be made available on the TESF website or on request, after transfer. Note that this website will not be accessible until 1 April In late April/early May 2016 the trustee of TESF will send you a Welcome Pack outlining your membership in TESF. The trustee of TESF is also required to give, or make available to you, a PDS applicable to your membership in TESF. The trustee of TESF may use electronic means to give you the PDS and other documents relating to your membership. Please refer to the TESF Notice below for important information about how communications may be delivered to you. Issued by Equity Trustees Superannuation Limited ABN , AFSL as Trustee of EquitySuper ABN

5 TESF Notice Member communications in TESF This notice is issued by Equity Trustees Limited ABN , AFSL as trustee of the Executive Superannuation Fund, (and distributed on our behalf by Equity Trustees Superannuation Limited). The Trustee may provide or make available to you electronically (for example, via TESF s website), the following information or information of the following type: Product Disclosure Statements Financial Services Guides Periodic statements (excluding exit statements) Annual reports Disclosures regarding material changes and significant events Statements of Advice Additional product information (requested from us) unless you specifically elect not to receive these communications or types of communications by the electronic means. If you do not want to receive communications from TESF electronically (e.g. you would prefer to have the hard copy posted to you), you can contact the TESF s Fund Administrator at: KPMG Superannuation Services Pty Limited PO Box 67, Australia Square, NSW 1215 Please note this must be a signed document including your request, full name, date of birth, address and member number. 5

6 EquitySuper Transfer Important information about the Successor Fund Transfer Why is EquitySuper Transferring to The Executive Superannuation Fund? The Federal Government s Stronger Super reforms in recent years have resulted in increased governance, risk management and reporting obligations for superannuation funds. Following consideration of a number of options to manage these responsibilities while still delivering value to members, we as the Trustee have made the in-principle decision to transfer members in EquitySuper to The Executive Superannuation Fund (TESF) via a Successor Fund Transfer (SFT). An SFT involves the transfer of members and their benefits from one fund to another fund the successor fund without the consent of members. In order to transfer members on this basis, the Trustee must be satisfied that members rights in the successor fund in respect of the transferred benefits will be equivalent to the rights members have in the transferring fund immediately prior to the transfer. The Trustee is satisfied that TESF will qualify as a successor fund and has made an in-principle decision to transfer members to TESF on that basis. This decision is subject to completion of the necessary legal documentation and the receipt of final legal advice. In the unlikely event that the transfer does not proceed, you will receive a further notice. Bigger and Stronger The outcome of the SFT will be a larger, superior fund with more members and assets. This larger, combined fund will provide the trustee of TESF with additional purchasing power to negotiate lower costs with its service providers over the long term. Such savings may then be passed on to you through enhanced services and benefits and/or lower fees. Who is TESF? TESF is a superannuation master trust, designed to provide financial security for its members and their retirement savings. TESF caters to different types of members and products including accumulation accounts for employer-sponsored members and personal members as well as pension accounts for retirees. TESF offers a wide range of investment options in which members can choose to invest their superannuation assets. TESF has a MySuper product, called MySuper MyLife. EquitySuper 31,000 + members Over $1bn in assets Combined fund bigger and stronger over 44,000 members almost $2bn in assets! TESF 13,000 + members Over $818m in assets Figures as at February P1 of 16

7 When Will the Transfer Occur? The intended transfer date is 1 April Subject to the satisfaction of all legal requirements, your account balance in EquitySuper will be transferred to TESF with effect from 1 April This means that from 1 April 2016, you cease to be a member of EquitySuper and will be a member of TESF. We issue this Significant Event Notice (SEN) Your account transfers to TESF You receive an exit statement from EquitySuper Early March March March April April 2016 Mid/late April 2016 Late April / early May 2016 Last day for you to transact on your EquitySuper account, e.g. switch investment options in EquitySuper & supply your TFN Suspension of processing for transactions from 5pm, 23 March to 31 March 2016 with no online access. Limited processing period for transactions. Online access will continue to be unavailable from 1 April to 22 April You receive a Welcome Pack from TESF What You Should or May Need to Do Due to the suspension on processing for transactions in EquitySuper prior to the transfer of members to TESF, members in EquitySuper wanting to transact on their account should ensure they do so before 5pm, 23 March For legal reasons some members will need to complete new forms to ensure that current arrangements they have in place in EquitySuper, such as binding beneficiary nominations and third party authorities (e.g. Power of Attorney, authority to deduct personal advice fees for payment to a financial adviser), apply in TESF. Listed below are a number of actions that may be relevant to your account in EquitySuper: Action You want to switch your investment options in EquitySuper before the suspension of transactions You plan to transfer or withdraw a portion or all of your benefit in EquitySuper before the suspension of transactions You intend to provide your Tax file number ( TFN ) to facilitate the refund to your account of additional (non-tfn related) tax before the suspension of transactions You currently make personal after tax contributions to EquitySuper via BPAY or direct debit You currently have a binding death benefit beneficiary nomination in place in relation to your account in EquitySuper Page reference Page 13 Page 14 Page 12 Page 13 Page 12 You currently have a third party or personal advice fee authority in place in EquitySuper Page 13 You chose EquitySuper for your employer s contributions via a choice of fund arrangement or are a personal member of EquitySuper (that is, you have applied for membership of EquitySuper) Page 13 P2 of 16

8 Suspended and Limited Processing Periods for Transactions To facilitate the transfer of members to TESF, there will be a suspension of the processing of transactions in EquitySuper from 5pm, 23 March to 31 March 2016 and a limited processing period from 1 April to 22 April. Suspension of processing of transactions: 5pm, 23 March 31 March 2016 During this period, there will be no processing of: Contributions received from you, or on your behalf, by EquitySuper Rollovers into your account in EquitySuper Transfers out of your account in EquitySuper Investment switches relating to your account in EquitySuper Full or partial benefit payments from your account in EquitySuper Insurance changes requested by you relating to your account in EquitySuper If You Have a Complaint, Insurance Claim, Benefit Payment or Family Law Matter in Progress in EquitySuper Should you have an urgent benefit claim such as financial hardship or TPD in EquitySuper during the suspension on processing, please contact EquitySuper on (before 1 April) or TESF on (02) (on or after 1 April) to check the progress of your claim. We will endeavour to finalise such matters prior to the transfer taking effect. However, where this is not possible, outstanding matters will be handled by the trustee of TESF, after the limited processing period ends. In relation to insurance claims in progress in EquitySuper, while such claims will continue to be assessed by the relevant Insurer, the trustee of TESF will become responsible for finalising the claims, and paying any insured benefits accepted by the Insurer. If you wish to have a transaction processed before the processing of transactions is suspended, the transaction request (duly completed) must be received by EquitySuper by 5pm on 23 March If transaction requests are made to EquitySuper after 5pm, 23 March 2016 they will be accepted but not processed in EquitySuper. Instead the requests will be forwarded to TESF for actioning by TESF after the end of the limited processing period outlined in the next column. Limited processing period for transactions: 1 April 22 April 2016 During this period, there will be no processing of: Transfers out of your account in TESF Investment switches relating to your account in TESF Full or partial benefit payments from your account in TESF Rollover requests Insurance changes requested by you relating to your account in TESF However contributions received from you, or on your behalf, by TESF into TESF will be processed by TESF from 1 April You will not be able to access your account in EquitySuper or TESF online during either of these periods. P3 of 16

9 Your Membership in TESF if You Have an Account in EquitySuper That is Transferred to TESF on 1 April 2016 Investment options in TESF To help you understand the investment option(s) applicable to your account balance in TESF from 1 April 2016 as set out in the attached Significant Event Notice refer to the table below and across the page. The tables contain a summary of the key characteristics of TESF investment options. In TESF, daily switching between investment options is available via online access, from 23 April For more information on online access, refer to the Additional information section of this notice on page 15. Please note that the trustee of TESF may vary, add or remove available investment options. Aggressive Growth Balanced or MySuper MyLife* Moderate Conservative Strategic Asset Allocation (SAA)** Australian International 47% Australian 43% International 38% Australian 35% International 34% Australian 22% International 21% Australian 19% International 11.5% 10.5% Property 0% Property 2.5% Property 2% Property 2.5% Property 2% Infrastructure 0% Infrastructure 2.5% Infrastructure 2% Infrastructure 2.5% Infrastructure 2% Alternatives 10% Alternatives 7% Alternatives 10% Alternatives 5% Alternatives 4% Australian Fixed Interest 0% Australian Fixed Interest 9.5% Australian Fixed Interest 16% Australian Fixed Interest 28% Australian Fixed Interest 32.5% International Fixed Interest 0% International Fixed Interest 3.5% International Fixed Interest 10% International Fixed Interest 16% International Fixed Interest 22.5% Cash 0% Cash 2% Cash 4% Cash 6% Cash 15% Performance objective CPI + 5% p.a. over rolling 10 year periods CPI + 4.5% p.a. over rolling 8 year periods CPI + 3.5% p.a. over rolling 7 year periods CPI + 3% p.a. over rolling 5 year periods CPI + 2% p.a. over rolling 3 year periods Risk level*** Level 6 Level 6 Level 5 Level 5 Level 3 High High Medium to High Medium to High Low to Medium Indirect Cost Ratio (ICR)**** 1.13% 1.09% 1.08% 1.02% 0.98% P4 of 16

10 Cash Diversified Fixed interest Listed Property Australian Shares International Shares SAA* Cash 100% Diversified fixed interest 100% Property 100% Australian 100% International 100% Performance objective CPI over rolling 1 year periods CPI + 2% p.a. over rolling 3 year periods CPI + 2.5% p.a. over rolling 5 year periods CPI + 5% p.a. over rolling 10 year periods CPI + 5% p.a. over rolling 10 year periods Risk level*** Level 1 Level 2 Level 6 Level 6 Level 6 Very Low Low High High High ICR**** 0.77% 0.98% 1.02% 1.10% 1.08% * The investment strategy for the Balanced investment option is also the investment strategy for TESF s MySuper product, MySuper MyLife. Not all members invested in the Balanced option as a result of the SFT will be in TESF s MySuper product. ** Actual asset allocations may vary from time to time. *** The risk level is based on a standard risk measure developed by the superannuation industry, summarised below. **** ICRs are estimates only, and may vary from year to year. Other fees and costs apply to an investment in TESF, as outlined in the Fees in TESF section of this enclosure. Risk band Risk label Estimated number of negative annual returns over any 20 year period 1 Very low Less than Low 0.5 to less than 1 3 Low to Medium 1 to less than 2 4 Medium 2 to less than 3 5 Medium to High 3 to less than 4 6 High 4 to less than 6 7 Very high 6 or greater P5 of 16

11 Investment Returns The investment options relevant to your account in TESF are unitised (as is the case for investment options relevant to your account in EquitySuper). This means that investment returns within TESF will be passed on to your account via the calculation of unit prices (usually daily) for the investment option(s) relevant to your account. Unit prices can go up or down. This means investment returns may be positive or negative. Unlike EquitySuper s unit prices, TESF s unit prices do not include a buy/sell spread. Any costs associated with the buying and selling of underlying investments is reflected in the Indirect Cost Ratio for each of TESF s investment options. Fees in TESF The fees and costs that will be applicable to your account in TESF from 1 April 2016 are set out below. The Indirect Cost Ratio(s) (ICR) applicable to your account in TESF depend on how your account in TESF is invested. Refer to the investment tables on the previous pages for the applicable ICR, taking into account the information in the attached Significant Event Notice about how your account in TESF will be invested on 1 April Type of fee Amount How and when paid Investment fee Indirect investment fees apply and are included in the ICR Nil Not applicable Administration fee Indirect administration fees apply and are included in the ICR $ (per year) The $ fee is deducted from members accounts monthly in arrears or on a pro-rata basis upon exit from TESF Buy-sell spread Nil Not applicable Switching fee Nil Not applicable Exit fee $30.75 Deducted from a member s account for each withdrawal Advice fees Relating to all members investing in a particular MySuper product or investment option Other fees and costs 1 Nil Not applicable ICR % 1.13% of assets per annum Deducted from earnings before unit prices are calculated (usually) daily 1 Activity fees, advice fees for personal advice and insurance fees may also apply. 2 ICRs are estimates only, and may vary from year to year depending on underlying investment fees and costs. P6 of 16

12 Employer subsidy fees and costs If some or all of the fees and costs applicable to your EquitySuper account are paid on your behalf by your employer as an additional benefit to you (e.g. via additional employer contributions to your EquitySuper account), then this arrangement will continue to apply to your account in TESF, until such time as the arrangement ceases for whatever reason (e.g. you cease employment with the employer). For more information about your employer arrangements, contact EquitySuper before 1 April 2016 on or TESF after 1 April on (02) Insurance Cover in TESF Level and type of cover The following types of insurance cover will be available in TESF to eligible members of EquitySuper transferred to TESF on 1 April 2016: Cover calculation types Death only or Death and TPD cover can be calculated using one or more of the following methods: Unit based (i.e. Units of cover). Unit based cover will be the most common way of calculating Death only or Death and TPD cover in TESF Formula based Multiple of salary Fixed Each of these calculation types is described in further detail on the pages that follow. Death only Death and Total and Permanent Disablement (TPD) Salary Continuance (also referred to as Income Protection). Members of EquitySuper with Death only or Death and TPD insurance cover applicable to their account immediately prior to the transfer of their account to TESF will receive the same type of cover in TESF, subject to any special terms and conditions (e.g. restrictions) that were applicable to your cover in EquitySuper. However, for some members with Death only or Death and TPD cover, the amount of the cover applicable to their account in TESF may be different because the way in which cover is calculated in TESF is different. In no case will the amount of Death only or Death and TPD cover be lower as at the transfer date. In some cases, the amount of cover will be higher. If you have Death only or Death and TPD cover in EquitySuper, that will be calculated in a different way in TESF, the new calculation type and the resulting amount of cover is shown in the attached Significant Event Notice and explained in the pages that follow. Please note: Insurance cover in TESF (as is the case in EquitySuper) is subject to terms and conditions in the relevant insurance policy, including eligibility criteria. TESF s insurance arrangements (including insurance premiums) may change. P7 of 16

13 Units of cover Members with Death only or Death and TPD cover in TESF, based on Units of Cover, will have the amount of their insurance cover calculated according to the following table (with the amount of cover depending on their age multiplied by the number of units). Refer to Important notes across the page and the attached Significant Event Notice to ascertain if Unit based cover will be relevant to your membership of TESF. Age next birthday Cover per unit ($) Age next birthday Cover per unit ($) Age next birthday Cover per unit ($) 15 25, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , P8 of 16

14 Important notes: Some members with Death only or Death and TPD cover that is Formula-based cover in EquitySuper will have their insurance cover in TESF calculated on the basis of Units of Cover (see the attached Significant Event Notice to ascertain if this will apply to your membership in TESF). As at the transfer date, if eligible, these members will receive a number of units in TESF (based on the value of $ Cover per unit in TESF s Units of Cover table) that will provide them with an amount of cover that is not less than the amount of cover calculated using the formula applicable in EquitySuper immediately prior to the transfer. In some cases, the amount of cover in TESF will be higher than the amount of cover in EquitySuper immediately before the transfer (subject to the at work requirement mentioned in the Significant Event Notice). The insurance cover amount in TESF will change as you get older (the insurance cover amount will no longer change due to changes in salary or years to retirement). Members with Death only or Death and TPD cover that is based on Units of Cover in EquitySuper will have their insurance cover in TESF calculated on the basis of the Units of Cover table shown above which may be different to the Units of Cover table applicable in EquitySuper. As at the transfer date, if eligible, these members will receive a number of units that will provide them with an amount of cover (based on the $ value per unit in TESF s Units of Cover table) that is not less than the amount of cover they had in EquitySuper immediately before the transfer. In some cases, the amount of cover will be higher than the amount of cover in EquitySuper immediately before the transfer (subject to the at work requirement mentioned in the Significant Event Notice). As in EquitySuper, the insurance cover amount in TESF will change as you get older. To find out the number of Units of Cover applicable to your TESF account (if unit based cover will apply to your membership of TESF), contact TESF on (02) after 1 April. The premium rates applicable to Units of Cover in TESF are different to the premium rates applicable to your account in EquitySuper and may result in higher premiums as at the transfer date, or a later date. Further information about insurance premiums is provided on this and the following pages. Formula-based cover Formula-based cover is calculated on the basis of a specified formula. In EquitySuper members with Formula-based cover have Death only or Death and TPD cover calculated as follows: A percentage (between 2.5% and 20% depending on the arrangement applicable to members in EquitySuper) of salary multiplied by years to retirement (YTR). In most cases, retirement is age 65. Example: 12.5% of $100,000 x 30 YTR = $375,000 As noted above, some members with Death only or Death and TPD cover that is Formula-based cover in EquitySuper will have their insurance cover in TESF calculated on the basis of Units of Cover, and will be subject to the premium rates applicable to TESF s Units of Cover. See the attached Significant Event Notice to ascertain if this will apply to your membership of TESF. In some cases, members with Death only or Death and TPD cover that is Formula-based cover in EquitySuper will have their insurance cover in TESF calculated in the same way (that is, using the same formula). See the attached Significant Event Notice to ascertain if this will apply to your membership of TESF. Multiple of Salary-based cover Multiple of Salary-based cover is calculated as a multiple of an applicable member s annual salary. In EquitySuper, the multiple (which can range from 1 to 7) applicable to members with Multiple of Salary-based cover varies depending on the arrangement put in place by a member s employer. There may be additional variables (e.g. less the member s account balance or reducing by 50% after attaining a particular age). Members with Death only or Death and TPD cover that is based on a Multiple of Salary in EquitySuper, will (if eligible on the transfer date) have Fixed cover in TESF which is equal to the amount of cover they had in EquitySuper (calculated in accordance with the applicable Multiple of Salary) immediately prior to the transfer (see the attached Significant Event Notice to ascertain if this will apply to your membership of TESF). This means that the amount of your insurance cover in TESF will no longer change as your salary changes. The premium rates (excluding the insurance administration fee) applicable to Fixed Cover in TESF are the same as those applicable to your account in EquitySuper. Premiums for Fixed Cover increase as you get older. Information about insurance premiums is provided over the page. P9 of 16

15 Fixed cover Fixed cover is a fixed dollar amount of cover, which does not vary with age or salary. Members with Death only or Death and TPD cover in EquitySuper that is Fixed cover will (if eligible on the transfer date) have an equivalent amount of Fixed cover in TESF, and will be subject to applicable premium rates. See the attached Significant Event Notice to ascertain if this will apply to your membership of TESF. Premiums in TESF The insurance premium rates depend on the type of cover you have in TESF, and whether there has been any change to the way in which cover was calculated for you in EquitySuper. In all cases, if the insurance cover you had in EquitySuper on the transfer date was subject to special premium loadings imposed by the Insurer, the special premium loadings will also apply in TESF. Units of cover premiums The rates are calculated weekly, per unit of Death only or Death and TPD cover held. Type of cover Death only $0.242 Death and TPD $0.495 Premium (per unit per week) Occupational Loading/Discount Factors The following Occupational Loading/Discount Factors apply to the unit-based premium rates in the above table (premium rates are multiplied by these rates). Occupation rating Death only Professional White Collar Light Blue Heavy Blue (Skilled) Heavy Blue (Unskilled) Death and TPD The insurance premium applicable to a White Collar member with 12 units of Death and TPD insurance cover would be calculated as follows: Number of units x premium per week x occupation rating x number of weeks p.a.= annual premium 12 units x $0.495 x 1.00 x 52 = $ per annum (including insurance fee) P10 of 16

16 Fixed cover premiums in TESF Members on Fixed cover arrangements in TESF will be subject to insurance premiums in accordance with the premium rates table currently applicable to their account in EquitySuper. That is the premium rates (excluding the insurance administration fee) applicable to your cover in EquitySuper will be the same in TESF. However the insurance administration fee in TESF will be different, and in some cases may be higher. As is currently the case in EquitySuper, insurance premiums in TESF include an insurance administration fee. The insurance administration fee in TESF is 10% of the annual premium. While TESF s insurance administration will usually be lower than insurance administration fees (up to 35%) applicable in EquitySuper, in the case of some members the insurance administration fee will be higher, resulting in a higher insurance premium in TESF, going forward. The insurance administration fee is included in the amount of the insurance premium. For a copy of the EquitySuper premium rates table (including the applicable insurance administration fee) for members given Fixed cover in TESF (because the calculation of their cover is changing from a multiple of salary to Fixed cover on transfer to TESF, if eligible), contact us on As is currently the case under the insurance arrangements applicable in EquitySuper, the amount of your insurance cover in TESF (and the premiums you pay) may change depending on your personal circumstances (e.g. when your age changes). Additional Information about Premiums in TESF The insurance premiums in TESF include an insurance administration fee of 10% of the annual premium. This applies to premiums for all types of insurance cover available in TESF. If some or all of the insurance premiums applicable to your EquitySuper account are paid on your behalf by your employer as an additional benefit to you (e.g. via additional employer contributions to your EquitySuper account), then this arrangement will continue to apply to your account in TESF, until such time as the arrangement ceases for whatever reason (for example, you cease employment with the employer). For more information about your employer arrangements, contact EquitySuper before 1 April 2016 on or TESF after 1 April on (02) TESF s Service Providers Administrator The administrator of TESF is different to the administrator of EquitySuper. The administrator of TESF is KPMG Superannuation Services Pty Limited ( KPMG Super ). The KPMG Super team has extensive experience in the administration of corporate and public offer superannuation funds. Asset Consultant The asset consultant for EquitySuper, Mercer (Australia) Pty Ltd ( Mercer ), will be retained as the asset consultant in TESF. Insurer The main insurance provider for EquitySuper, TAL Life Limited (TAL), will be the provider of insurance cover to eligible members transferred from EquitySuper to TESF. Insurance premiums in TESF are subject to change if your circumstances change after the transfer date, for example, as a result of changes to your age, or if you voluntarily vary your level and type of insurance cover subject to approval (where required) by the Insurer. TESF s insurance premiums are guaranteed to 30 September 2016, and are subject to change thereafter. P11 of 16

17 Action Required by Some Members If you have a binding death benefit beneficiary nomination in place in relation to your account in EquitySuper If you have a valid binding beneficiary nomination in place with EquitySuper immediately prior to the transfer of your account to TESF, from 1 April 2016 it will no longer be effective. You will need to make a new binding death beneficiary nomination following the successor fund transfer if you would like the same nomination of beneficiaries to apply to your account in TESF. To do this please use TESF s Nomination of Beneficiaries form, which you can download at (from 1 April). To be valid and effective, your binding nomination must be witnessed by two individuals who are over the age of 18 (and not your nominated beneficiaries) and meet other requirements. Until a new binding beneficiary nomination form is received by TESF, your binding nomination in EquitySuper will be treated as a non-binding nomination in TESF. Therefore, it is important that you complete and return TESF s Nomination of Beneficiaries form (duly completed) as soon as possible after 1 April 2016, if you would like your TESF account to be dealt with in a particular way in the event of your death while a member of TESF. If you have a non-binding beneficiary nomination If you have made a non-binding nomination in EquitySuper, this nomination will continue to be taken into consideration in relation to the distribution of any death benefit from your account in TESF, however it is not binding on the trustee of TESF. If you would like make a new non-binding nomination in relation to your account in TESF, you will need to complete the Nomination of Beneficiaries form, which you can download from (from 1 April). If you intend to provide your Tax file number ( TFN ), to facilitate the refund to your account of additional (non-tfn related) tax before the suspension of transactions If we don t hold your TFN your account in EquitySuper may have incurred a significant amount of additional tax on concessional (pre-tax) contributions to your account in EquitySuper. To enable this tax to be returned to your account, you should ensure your TFN is recorded with EquitySuper prior to the transfer. You should advise us by 5pm on 23 March If you provide us with your TFN after this date, we cannot guarantee a refund of the additional tax to your account will be processed before 1 April Following the transfer of your account to TESF, it is no longer possible for any additional tax paid on concessional contributions to your EquitySuper account (within the last four financial years) to be refunded. If you are unsure of whether we have your TFN, check the front page of the attached Significant Event Notice. If your TFN is shown as Not supplied, this means we do not have your TFN. If you wish to avoid additional tax on contributions to any superannuation fund or wish to make personal contributions to a superannuation fund, you cannot do so without supplying your TFN to the fund. To provide your TFN: Contact us by telephone on Or complete and return our TFN Consent form which you can download from the Forms section at super/equitysuper/formsguides/tfn-consentform.pdf As a member of TESF, you will continue to have the option to nominate the individual/s (beneficiaries) to whom you intend for your benefits to be paid from TESF upon your death, as a lump sum. Like EquitySuper, TESF offers two types of beneficiary nominations binding and non-binding. Any nominations on or after 1 April 2016 must be made using TESF s forms. P12 of 16

18 If you currently make personal after tax contributions to EquitySuper via BPAY or direct debit Contributions may continue to be made via BPAY into TESF. Call (02) after 1 April for the new BPAY biller code and reference number. Direct debit contributions will not be accepted by TESF. If you currently make personal contributions using this method you may want to consider BPAY, which works in a similar way. If you have questions about how to use BPAY, please call (02) after 1 April If you chose EquitySuper for your employer s contributions in a choice of fund arrangement or are a personal member of EquitySuper If EquitySuper is your chosen fund, your employer will be contributing any compulsory (Superannuation Guarantee) contributions for you to your EquitySuper account. On the transfer of your account to TESF, TESF will be treated as your chosen fund and your employer can contribute its contributions to your TESF account from 1 April However you will need to provide your employer with the Unique Superannuation Identifier (USI) for TESF. Any superannuation contributions made by your employer from 1 April 2016 using EquitySuper s USI will be rejected and refunded to your employer. If you currently have a third party or a personal advice fee authority in place in EquitySuper As at the transfer date, any third party authority you currently have in place in EquitySuper which permits another person to access information about, or provide instructions in relation to, your benefit in EquitySuper (such as those with Power of Attorney or an authority for EquitySuper to deduct personal advice fees from your EquitySuper account for payment to a financial adviser), will lapse. You will need to complete and submit a new authorisation to TESF on or after 1 April You can request the relevant form from TESF by calling (02) If you want to switch your investment options in EquitySuper before the suspension of transactions If you are thinking of switching your investment option in EquitySuper prior to the transfer, you must submit your request to EquitySuper by 5pm on 23 March To switch your investments, simply complete and return the Change of Investment Strategy form available at superannuation/super-plans/equitysuper-personalsuper-service Please note, investment switching will be unavailable in EquitySuper from 5pm, 23 March Also, investment switching will be unavailable in TESF from 1 April 22 April If a request to switch investments is received by EquitySuper after 5pm, 23 March 2016, it will be accepted but not processed in EquitySuper. Instead the requests will be forwarded to TESF for actioning by TESF after the end of the limited processing period outlined in this document. P13 of 16

19 If you plan to transfer or withdraw a portion or all of your benefit in EquitySuper before the suspension on transactions Before your benefits are transferred to TESF from EquitySuper, you can withdraw any unrestricted non-preserved benefits you have in EquitySuper or transfer your account balance to another superannuation product. To do this, your request must be received by EquitySuper by 5pm on 23 March Refer to your last member statement from EquitySuper for information about whether you have any unrestricted non-preserved amount, or contact us for details. You can only withdraw your benefits in EquitySuper if you meet a condition of release prescribed in Government legislation (e.g. you have reached age 65 or have permanently retired). When deciding whether to transfer your benefit to another superannuation fund, you should consider any fees and costs you may be charged for the transfer, whether you will lose any benefits (e.g. insurance cover) and any other implications of the transfer having regard to your personal circumstances. We cannot advise you about which other fund you should choose. Different funds have different features, fees and costs, investment options, insurance options and risks (details of which should be set out in the other fund s product disclosure statement). We suggest you obtain financial advice from a suitably qualified and licensed financial adviser, that takes into account your personal situation, if you require any assistance in choosing a fund. P14 of 16

20 Additional Information Product Disclosure Statement A Product Disclosure Statement (PDS) containing further information about TESF relevant to your account will be made available on the TESF website or on request, after transfer. Note that this website will not be accessible until 1 April Online access You will be able to access your TESF account at after you receive a user ID (provided to you in your Welcome Pack) and PIN number (sent in a separate letter for security purposes) from TESF. Access to financial planning Equity Trustees Superannuation Limited currently offers members of EquitySuper access to financial advice through its parent company, Equity Trustees Limited ( Equity Trustees ) ABN ; AFSL Financial advice fees apply. After the transfer to TESF, you will still be able to access these financial advice services as a member of TESF. Any financial advice services are provided by or on behalf of Equity Trustees in its capacity as a provider of financial services, and are not provided by the trustee of EquitySuper or TESF. Please call Equity Trustees on for further information, including its Financial Services Guide. Stay up to date with the transfer If you have any questions about the transfer, please call us on or super@eqtsuper.com up until the transfer date on 1 April. Your exit statement and TESF Welcome Pack An exit statement will be sent to you from EquitySuper by mid/late April This will confirm the benefit amount transferred to TESF and applicable transactions up to 31 March In late April/early May 2016, you will receive a Welcome Pack from TESF which will include a welcome statement providing details of your account balance in TESF, insurance cover (if applicable) and the investment options applicable to your TESF account balance. P15 of 16

21 Contact us Up to 31 March 2016 EquitySuper PO Box 398 North Sydney NSW 2059 From 1 April 2016 TESF (02) execsuper@kpmg.com.au PO Box 67 Australia Square NSW 1215 The Trustee is unable to provide members with personal financial advice and this notice is not, and should not be construed as, providing such advice. The Trustee recommends that you obtain financial advice from a suitably qualified and licensed financial adviser before you make any decision regarding the destination of your superannuation benefit or any other decision regarding your superannuation. P16 of 16