Partnership Superannuation Plan. Member Booklet

Transcription

1 Partnership Superannuation Plan Member Booklet Issued 31 January 2013

2 Contents Welcome to Partnership Superannuation 1 Product Summary 2 Contributions 4 Managing your account 7 Accessing your benefits 10 How we invest your money 12 Risks of super 12 Partnership investment menu 19 Insurance 26 Fees and other costs 37 Additional explanation of fees and other costs 39 Taxation information 42 Keeping in touch 43 What happens when you leave your employer? 44 Other things you need to know 46 How to contact us back cover Suncorp Portfolio Services Limited (Trustee) (ABN , AFSL , RSE Licence No L ), Suncorp Life & Superannuation Limited (Insurer) (SLSL) (ABN , AFSL ) and Suncorp-Metway Limited (SML) (ABN , AFSL ), are related bodies corporate of Suncorp Group Limited (Suncorp Group) (ABN ). The information contained in the PDS, this Member Booklet, and any other material incorporated by reference, is of a general nature only and doesn t constitute financial advice. It has been prepared without taking into account your particular objectives, financial situation or needs. Before deciding to open an account or continuing to hold an interest, you should consider how the information contained in the PDS, this Member Booklet, and any other material incorporated by reference, relates to your own situation. We recommend that you speak to an adviser who will be able to help you with your investment and insurance decisions. Various products and services are provided by different entities of the Suncorp Group. The different entities of the Suncorp Group are not responsible for, or liable in respect of, products or services provided by other entities of the Suncorp Group. The obligations of the Trustee and the Insurer aren t guaranteed by any other company within the Suncorp Group. Except as otherwise stated, the Suncorp Group and its subsidiaries and related bodies corporate don t guarantee the repayment of capital invested in or the investment performance of this product. This product is not a bank deposit or other liability and is subject to investment risk including possible delays in repayment and loss of the interest and principal invested. The Product Disclosure Statement (PDS), the Member Booklet, and any other material incorporated by reference, were prepared on 30 January The Trustee is the issuer of the PDS, the Member Booklet, and any other material incorporated by reference, and takes responsibility for its contents. Investment option information is provided by the investment managers which includes their objectives, strategies, asset allocations, fees and buy/sell spreads. The investment managers have consented to the publication of this information in the PDS and the Member Booklet and haven t withdrawn their consent at the time of its preparation. They take no responsibility for any other information in the PDS, the Member Booklet and any other material incorporated by reference. Partnership Superannuation Plan (Partnership) (SPIN CTE0078AU) is part of the Connelly Temple Public Superannuation division of the Suncorp Master Trust (Fund) (ABN , RSE Fund Registration No. R ). Applications can only be accepted from persons receiving the PDS (including electronically) within Australia. If you print an electronic copy, please ensure you print all pages of the PDS, the Member Booklet, and any other material incorporated by reference. If you would like a printed version, free of charge, just call us on or us at super@asteronlife.com.au Administration services are provided by Suncorp Portfolio Services Limited, a wholly owned subsidiary of the Suncorp Group. We reserve the right to refuse or reject an application for membership or insurance. Insurance cover offered through Partnership is provided by the Insurer in a policy issued to us. This policy is a non-participating policy. Throughout the PDS, the Member Booklet, and any other material incorporated by reference, unless otherwise specified, references to: we, us, our and Trustee mean Suncorp Portfolio Services Limited adviser means a qualified financial adviser Insurer and Suncorp Life and SLSL mean Suncorp Life & Superannuation Limited bank account means an Australian bank, building society or credit union account business day means a Sydney business day other than a Saturday, Sunday or public holiday in Sydney licensee means an organisation that has obtained an Australian Financial Services Licence (AFSL) for the provision of financial services Partnership means Partnership Superannuation Plan plan means your employer superannuation plan within Partnership employer means your employer plan s adviser means the qualified financial adviser for your employer superannuation plan you and member means a member of Partnership (an employee).

3 Welcome to Partnership Superannuation Welcome to Partnership Superannuation Partnership Superannuation Plan (Partnership) is part of the Suncorp Master Trust. Your employer has chosen Partnership as your superannuation fund to help you invest and save for your retirement. We d like to welcome you to Partnership and invite you to get to know your super account. After all, your super s going to play a big role in your family s financial security, and even small decisions now could make a big difference later. What you can expect from us We take the responsibility for your investment very seriously. That s why we ll do all we can to support you and help you make the most of your super account. How will we do this? We ll keep things simple. If you re unsure about where your super should be invested, we ll help you with information about how to match your attitude to risk with your investment choice. Additional information This Member Booklet forms part of the Partnership Superannuation Plan Product Disclosure Statement (PDS), issued 31 January You should read the PDS, this Member Booklet and any other material incorporated by reference before making any investment or insurance decisions. You can get a copy of the PDS, this Member Booklet and any other material incorporated by reference from our website. Or if you would like a printed version, free of charge, just call us on We ll be happy to help. Changes to the PDS and Member Booklet The information in the PDS, and any other material incorporated by reference, such as this Member Booklet and its underlying Trust Deed, may change. Where the change isn t materially adverse, we may update the information on our website at asteronlife.com.au We ll give you a printed version of the updated information, free of charge, on request. We ll help you protect what s important with insurance within your super. We ll make it easy for you to manage your account, by giving you a range of contact options from online, telephone, fax or post. With Asteron Life, you re on the way to a better future for you and your family. Asteron Life 1

4 Product Summary The following section sets out key features of Partnership. Take a few moments to get to know your account. The choice is yours Where you invest your superannuation is your choice. Super Choice is legislation that allows you (if you re eligible) to choose where you want your compulsory employer contributions paid. If your compulsory employer contributions are currently being paid into another account and you d like them to be paid into your Partnership account, fill in a Standard Choice Form, available from our website. Your super account at a glance Features Refer to page Investment minimums Initial investment No minimum Ongoing account balance No minimum Regular contribution plan No minimum Investment choice Diversified investment options Single sector investment options Maximum number of investment options Unlimited 12 Default investment option Growth option 12 General features Investment switching Super consolidation service Lost super service You have the flexibility to switch between investment options at any time Consolidating your super accounts could reduce the amount of fees you pay and the amount of paperwork you receive We can help you transfer all your super balances into the one account, or, if you d prefer to do it yourself, we also have an online super rollover wizard We can help you find your missing super benefits by conducting searches on the Australian Taxation Office (ATO) databases on your behalf Binding or non-binding death benefit nomination You can have a binding or non-binding death benefit nomination 8 Contribution methods Insurance options Making contributions to your Partnership account is easy, and you can choose from the following methods: cheque transfer from another super fund Partnership gives members the option of having the following types of insurance: Death only or Death & Total and Permanent Disability (TPD) Income Protection (IP) Asteron Life

5 Features General features continued Online access communications Fees and costs Log on to WealthSolutions at asteronlife.com.au to access your super account at any time By providing us with your address, you can choose to receive many of the more important communications, such as annual statements, transaction confirmations and confirmations of changes to your account details via . If your employer gives us your address, we ll use this to communicate with you whenever possible Refer to page 43 Establishment fee Nil Contribution fee 1 Up to 4.1% of contributions and transfers 37 Withdrawal fee Nil 37 Termination fee Nil Administration fee % pa of your account balance. A discount applies for balances over $50, Expense recovery allowance 0.2% pa of your account balance 37 Investment fee Depends on the investment option you select. The investment fee ranges from 0.34% pa to 0.80% pa 37 Performance fees Depends on the investment option(s) you select and range from 0% to 25% 37 Member fee 3 $62.10 per year 37 Investment switching fee 4 Nil 38 Adviser Service fee Up to 1% pa of your account balance deducted monthly 38 Superannuation splitting fee (for family law purposes) $50 38 Family law enquiry fee $50. Where cases are complex we may charge a higher fee 38 Tax refund fee $ This fee includes an amount paid to your plan s adviser. See Fees and other costs on page Up to 0.4% may be paid to your plan s adviser (excl GST). 3 This fee increases on 1 January each year in line with the Consumer Price Index. 4 We don t currently charge an Investment switching fee although the Trustee reserves the right to charge a fee of $47.75 per investment switch. The fees outlined in this PDS are shown gross of income tax. If the Trustee is able to claim a tax benefit in relation to these fees, it may pass this benefit on to you. Continued flexibility, even when you leave your employer If you leave your employer, you can still keep your super account in Partnership. We ll also provide you with the information you need so that your new employer can contribute to your Partnership account on your behalf. For more information, see What happens when you leave your employer? Asteron Life 3

6 Contributions Get off to a super start Your super is your key to a life of financial independence. But it s easy to forget about your super you probably don t see the money going in, and for most people there s no way of getting it out. Until you retire that is. The fact is that your super is likely to be the second largest asset you build in your lifetime, after the family home. Partnership can help you reach your financial goals and achieve the retirement lifestyle you want. By taking advantage of the tax-effective nature of the superannuation environment and investing regularly in Partnership now, you can make saving for your retirement easier. How much is your employer contributing for you? Did you know that unless you are an exempt employee, your employer must make superannuation guarantee (SG) contributions to your account on a quarterly basis? This is the minimum amount your employer must contribute on your behalf (unless you have a specific agreement in place with your employer to contribute more). The SG contribution amount is currently equal to 9% of most employees salary. This will gradually increase from 9% to 12% between 1 July 2013 and 1 July To find out how much is being contributed to your super account on your behalf, check your payslip. Super strategies to boost your savings for your retirement The current level of SG contributions to your super account by your employer is a great start, but the truth is it probably won t be enough to provide you with the lifestyle you want in retirement. To help you boost your savings for retirement, the Government has put in place a number of initiatives to encourage you to save more for your retirement. The following snapshots give you a flavour of these super boosting strategies. For more information on how these strategies can work for you, speak to your adviser or call us. Salary sacrifice Putting a portion of your pre-tax salary into your super is one of the most powerful and tax-efficient ways to boost your Partnership account. Rather than paying income tax which can be up to 46.5%, you ll generally only pay 15% tax on these contributions. And because these contributions aren t considered salary for tax purposes, salary sacrificing can potentially reduce your overall taxable income. Government co-contributions If you are eligible to receive the co-contribution, earn less than $31,920 pa (in the 2012/13 financial year) and you make a $1,000 after-tax contribution, the Government has proposed that it will contribute the maximum $500 to your retirement savings. The Government s co-contribution amount decreases for those on higher incomes, but you can still benefit from the co-contribution scheme if you earn less than $46,920 a year (proposed for the 2012/13 financial year). Low income super contribution From 1 July 2012, the Government will pay a new super contribution to low income earners. Individuals with adjusted taxable income less than $37,000 pa will receive a Government contribution of up to $500 paid automatically to their super fund. The amount paid by the Government will be calculated based on concessional contributions (including SG contributions) made from 1 July 2012 and will be paid after lodgement of the individual s tax return for the year in which the concessional contributions were made. The amount payable will be 15% of before-tax contributions and capped at a maximum of $500. For example, an employee earning $30,000 pa will have a SG (ie. concessional contribution) of $2,700 1 annually. Therefore, the Government contribution will be $ Note: This example assumes a 9% SG paid in the 2012/13 financial year. 1 SG of $2,700 calculation: $30,000 x 0.09 = $2,700 2 Government contribution of $405 calculation: $2,700 x 0.15 = $405 Spouse contributions Having your spouse contribute to your super is a great way to work towards your retirement goals. By making a contribution on your behalf, your spouse may be entitled to a tax offset of up to $540 which can be claimed through their personal tax return. The offset is equal to 18% of a maximum contribution of $3,000 pa (that is, $540). 4 Asteron Life

7 Contribution splitting You can direct up to 85% of any concessional contributions made in the previous financial year, from your account to your spouse s account. Your spouse must be under age 65, but if they are between preservation age (currently age 55) and age 60, they must not be retired. Self-employed? As a self-employed person, you can t rely on SG contributions to help you save for your retirement. The good news is if you re self-employed or substantially self-employed, you may be able to claim a tax deduction for personal contributions if you re under age 75. All the more reason to contribute extra to your super! You can claim a tax deduction on all contributions you make. To be eligible for this deduction, less than 10% of your assessable income, plus reportable fringe benefits and reportable employer super contributions may come from an employer. If you ve made personal contributions into your account and haven t subsequently withdrawn them, we ll send you a notice at the end of the financial year. This is known as a 'section notice of intent to claim a tax deduction'. If you wish to claim a tax deduction, simply complete the notice and send it back to us. We ll take care of the rest and will let you know what information you ll need to claim a tax deduction. Who can contribute? Personal circumstances, such as your age and employment status, determine who can open an account and contribute to super. You can only open a Partnership account if you re: an eligible employee of an existing Partnership corporate super plan and receiving SG or certain Award employer contributions at any age. You can make contributions into your Partnership account if you re: under age 65 or age 65 to 74 and have worked at least 40 hours in a consecutive 30-day period within the current financial year. What types of contributions are accepted? Contributions made to your super account fit into one of two categories, known as: Concessional contributions or Non-concessional contributions. Both of these contribution categories are subject to caps on the amount you may contribute in a financial year (from 1 July to 30 June). The table below shows what category each type of contribution made into your super account falls into and the contributions caps for the 2012/13 and 2013/14 financial years: Types accepted Contributions caps for the 2012/13 and 2013/14 financial years What happens if your contributions exceed the caps? Concessional contributions Compulsory employer (SG and Award) Personal (deductible) Salary sacrifice Voluntary employer Nonconcessional contributions Spouse Personal (after-tax) $25,000 (indexed)* $150,000^ or $450,000 over three years Depending on the circumstances, you may pay additional tax or the contributions may be rejected. * The $25,000 concessional contributions cap is reviewed annually for indexation to average weekly ordinary time earnings (AWOTE) but will only increase in $5,000 increments. However, currently the Government has paused the indexation which will resume for the 2014/15 year. ^ The Government has announced changes that, if passed by parliament, will increase the concessional contributions cap from 1 July 2014 to $50,000 for individuals who have total super balances below $500,000 and are aged 50 years or older. The non-concessional contributions cap is three times the concessional contributions cap, which means it will increase whenever the concessional contributions cap increases. For the 2012/13 and 2013/14 financial years the limit is $150,000. However, a person under age 65 is able to bring forward the limit over three years to allow an amount up to $450,000 to be contributed in a single financial year. This $450,000 limit will not increase if the concessional contributions cap increases during the three year period. Asteron Life 5

8 If the non-concessional contributions cap is exceeded, depending on the circumstances, the contributions will either be rejected or taxed at 46.5% on the excess amount. An excess contributions tax assessment will be sent to you by the ATO. This excess tax must be deducted from your super fund. From 1 July 2011, individuals who breach the concessional contributions cap by up to $10,000 can request the excess contributions be withdrawn from their super fund and refunded to them. Those excess concessional contributions will be included in the individual s assessable income and taxed at their marginal tax rate. This measure will only apply for first time breaches of the concessional cap and apply for excess contributions made in the 2011/12 financial year onwards. Contribution methods It s easy to contribute to your super account, with a range of flexible methods. Direct debit You, your spouse and your employer can conveniently contribute to your Partnership account on a regular basis by setting up a direct debit facility. There s no minimum for direct debit contributions. Deductions from the nominated bank account are made on or around the 1 st of the relevant month. You can change or cancel this arrangement at any time and we must receive your request on or before the 20 th of the month for it to be effective for the next scheduled direct debit. Cheque Please make cheques payable to Suncorp Portfolio Services Limited <your account name> and send it with an Additional Investment form to us at: Customer Service Centre GPO Box 1576 Sydney NSW Asteron Life

9 Managing your account It s easy to manage your Partnership account via the following transaction options The table below answers some questions you may have and helps you identify the choice of options available for each transaction. All forms are available from our website at asteronlife.com.au How do you? What form do you need to use? Transaction options Apply for insurance cover Insurance application form Change your investment options Set up or change a regular contribution plan Investment change form Direct Debit Request form Change your address Change of details form Change your name Change of details form Change your bank account details Transfer money from another super fund Direct Debit Request form Transfer Authority form Make a withdrawal Withdrawal form Nominate or change your death beneficiary Death benefit nomination form Provide your TFN Change of details form Appoint an authorised representative Authorised representative form Cancel a request No form Put your request in writing By mail Customer Service Centre GPO Box 1576 SYDNEY NSW 2000 By phone By fax Original signature required We must receive an original ink signature Asteron Life 7

10 Our service standards We re committed to delivering consistent, superior service. Our service standards apply from when we receive your complete instructions. If we receive a complete investment transaction request from you by 12pm (Sydney time) on a business day, you ll receive the unit price effective for the investment option for that day. If we receive a completed investment transaction request after 12pm on a business day, we ll process the request using the investment option unit prices for the following business day. The 12pm cut-off applies to all contributions, switches and withdrawal requests. Generally, we aim to process requests within five business days. We process switches on the third business day following receipt of a complete Investment change form. We apply the unit price of the day we complete the switch. We strive to consistently meet our service standards, however the unit price used to process your transactions may differ from the effective unit price for that day or processing your transactions may be delayed in some circumstances including: incomplete or incorrect information from you a delay in confirmation or payment from an external investment manager carrying out the transaction may materially impact other members us receiving a direction from a lawful authority to suspend or amend the transaction the investment manager suspending redemptions from your underlying investment the proximity to the end of the financial year and any other delays in redeeming assets. 30 days notice should be provided to us if you wish to withdraw more than $250,000. We may from time to time review our service standards. Please also refer to Unit pricing delays on page 16. Terms and conditions for accepting faxes We ll accept faxed instructions on our relevant forms. Before using this option, there are a few things you need to know, like: we re not responsible to you for any loss resulting from any fraudulently completed request we re not responsible to you for any loss suffered by you because we process a fax that has been corrupted during transmission we won t compensate you for any losses arising from the use of this facility and we ll be released and indemnified by you against any liabilities as a result of acting on any faxed communication received in relation to your account. Nominating your beneficiaries Have certainty over who will receive your death benefits by nominating a dependant. Who is a dependant? You can only nominate your estate or your dependants to receive your death benefits. A dependant under super law includes: spouse (legal, de facto, same-sex) child (any age) person in an interdependency relationship with you and financial dependant. Choice of binding or non-binding death benefit nomination Partnership offers you the choice of either a binding or a non-binding death benefit nomination. Binding death benefit nomination A binding death benefit nomination allows you to nominate your dependants and/or your estate to receive part or all of your death benefit (including any insurance benefit). We must pay the benefit to your beneficiaries when you die (provided your nomination is valid at the time). 8 Asteron Life

11 For your nomination to be valid: each beneficiary must be a dependant and/or your legal representative at the time of your death if there is more than one beneficiary, the apportionment of your benefit must be clear and add up to 100% and the nomination must be made, confirmed or amended every three years two adult witnesses who aren t beneficiaries must witness and sign the nomination. Where a dependant you have nominated as a beneficiary dies before you and your binding nomination is still valid, on your death, the Trustee will divide that dependant s share equally among your surviving nominated dependants. Where there are no remaining dependants, your binding nomination is invalid or you do not make a binding nomination, the Trustee can use its discretion and will generally pay the death benefit to your dependants and/or to your estate. Non-binding death benefit nomination If you make a non-binding death benefit nomination, the Trustee will consider your nomination and use its discretion to pay any death benefit, generally to your dependants and/or your estate. Unlike a binding nomination, a non-binding nomination does not have to be renewed every 3 years. We recommend you review your nomination whenever you experience a change in circumstances such as marriage, divorce, birth of a child or when a beneficiary ceases to be a dependant. Asteron Life 9

12 Accessing your benefits When can you withdraw from your Partnership account? Super is a long-term investment designed to help you save for your retirement and government legislation defines when you can access your super benefits. While you can only access your super benefits before your preservation age under certain circumstances, you can transfer to another complying super fund at any time. What can you access? Preserved benefits Restricted non-preserved benefits Unrestricted non-preserved benefits These benefits can only be accessed once you have satisfied a condition of release. These benefits can be accessed under the same conditions of release as your preserved benefits, but can also be paid to you when you leave the employer who made the contributions for you. Generally, restricted non-preserved benefits arise from personal contributions made to an employer fund from 1 July 1983 up to 30 June 1999, and for which you couldn t claim a tax deduction. These benefits are fully accessible at any time. When have you met a condition of release? You ll be able to access your preserved benefits if you satisfy one of the following conditions of release. Condition of release Permanent retirement from the workforce (after reaching your preservation age) Leaving your employer after turning age 60 Reaching age 65 Permanent incapacity What you can access All All All All Severe financial hardship You may be limited to one lump sum payment between $1,000 and $10,000 within a 12-month period depending on your circumstances. Compassionate grounds Temporary residents departing Australia Termination of your employment with the employer who contributed for you Lost member who is found and have less than $200 in your account Reaching preservation age and using your benefits to start a non-commutable pension (transition to retirement) Terminal illness Temporary incapacity Death You ll need to make an application to the Department of Human Services (DHS) to have your benefits released. The amount you receive is determined by DHS. All You can access all your restricted non-preserved benefits. You can access your preserved benefits if the amount is less than $200. All You ll need to commence a non-commutable income stream that is limited to a maximum pension payment of 10% of the account balance. All You can access an amount as long as it doesn t exceed your income level before becoming temporarily incapacitated. You can only receive payments as a non-commutable income stream. All 10 Asteron Life

13 Your preservation age Your preservation age is based on when you were born and determines when you can access some of your benefits. Once you have reached age 60 and retired, your money can be taken out of your super tax free as a pension or a lump sum. Date of birth Preservation age Before 1 July July June July June July June July June After 30 June Asteron Life 11

14 How we invest your money Make the right investment choice. A few small decisions now could make a big difference to where you ll end up. Our investment menu Partnership makes it simple for you to choose an investment option that s right for you. We got together with our investment partner, Ibbotson, a worldwide leader in investing, to offer you a choice of six investment options, including four diversified investment options and two single sector investment options. Secure Conservative Growth High Growth Australian Shares International Shares. Partnership gives you the flexibility to switch between your investment options at any time. You can also have your current account balance invested differently from how your future contributions are invested, if you want. Default investment strategy If you don t make a choice, your super will be invested in the default investment option, the Growth option. The Growth option has a diversified investment mix, so you don t put all your eggs in one basket. Details of your investments are included in your welcome pack. This could be a perfectly reasonable investment option for you. But no single investment option suits everyone. And the risk you take is that the default investment option won t deliver what you want, or need, from your investments. Matching your investments to your risk profile, and to your long-term lifestyle goals, is a good start to achieving your retirement goals. There s sure to be an investment option, or a combination of investment options, to suit you. It s just a matter of finding out what they are and discussing with your adviser the investment strategy that s right for you. Check out the Partnership investment menu in this Member Booklet for details on each investment option. Risks of super Even though the government makes it partly compulsory, investing in super carries certain risks. One of the biggest is that you won t end up with enough money to meet your retirement needs. This could happen: when an investment decreases in value where money is invested conservatively in assets which provide more stable but lower long-term returns. General risks that could affect your Partnership account Some of the risks that could affect your investments in your Partnership account are shown below. We regularly monitor these risks for their impact on the investment menu as a whole, but it s a good idea for you and your adviser to consider what they might mean for you. Risk type Market risk Investment options risk Liquidity risk Credit risk What is it? This can arise due to changes in government or economic policy, interest rates and exchange rates, market sentiment, global events, technological change, environmental conditions or changes in legislation. All these things can adversely affect the financial markets in which your super may be invested. Investment managers and the strategies they adopt may change, which may not be in line with your expectations when you first invested. They may also fail to meet their stated investment objectives. It s also possible an investment option may be terminated. This arises where an investment can t be easily converted into cash or sold at fair value, at a time when you need it. This is where someone doesn t meet their obligations in, or relating to, an investment option. For example, it includes the risk that we or an underlying investment manager are unable to make payments. 12 Asteron Life

15 Risk type Inflation risk Currency risk Derivatives risk Gearing risk Changes in law What is it? If inflation exceeds an investment s return, it will reduce the investment s purchasing power. Inflation risk is more common in low-risk investments, such as cash, which generally fluctuate less, but potentially provide lower long-term returns. The value of international investments will change with the rise and fall of the Australian dollar. An investment manager can manage currency risk via a strategy referred to as currency hedging. Generally, if the Australian dollar s value rises, the value of unhedged investments (those not currency hedged) held in other countries will fall and vice versa. Derivatives are securities that derive their value from another security. Commonly known derivatives include futures and options. Investment managers may use derivatives to manage risks in a portfolio or to leverage a portfolio in the hope of generating additional returns. The risks of using derivatives include that they may be costly or difficult to reverse and their value may not move in line with that of the underlying security. Gearing involves borrowing money to invest in an asset. Geared investment options are internally geared, meaning the investment option borrows the money, rather than you. The cost of borrowing, including interest rates, and the level of gearing influence returns on a geared investment. Gearing magnifies both the gains and losses of an investment option. Super and tax legislation changes frequently. These changes could affect when you can access your benefits and how they ll be treated upon withdrawal. We ll tell you about any changes we think are likely to affect your investment. Generally, we do this through the annual report. How can you reduce risk? The most common way to reduce your risk is by diversification, or not putting all your eggs in the one basket. Partnership can help you diversify your investments: How we can help you diversify your super investment Across asset classes Within an asset class Our diversified investment options are invested across a range of investments, including Australian and international shares, Australian and international fixed interest, Australian and international property, cash and alternative assets. You can also create your own investment mix from our six investment options. You can invest in different markets, different industries or different investment styles, within the one asset class. Asteron Life 13

16 The relationship between risk and return As a general rule, investments with a higher level of risk will provide a higher potential return. By the same token, the smaller the risk an investment poses, the smaller the potential return it will provide. This is illustrated below: High Shares Property Fixed interest Return Cash Growth assets Income assets Low Risk High Balancing this relationship can be tricky. That s why it s important to speak to your adviser before making any investment decisions. Your adviser can recommend an investment option or a combination of investment options that suits your own risk tolerance level. Australian Prudential Regulation Authority (APRA) Standard Risk Measure The Standard Risk Measure (SRM) is a calculation we do to help make it easier for you to compare the riskiness of investment options. Technically it tells you how many negative annual returns an investment option can be expected to deliver over any 20 year period. The SRM is not a complete assessment of all forms of investment risk. For instance it doesn t detail what the size of a negative return could be or the potential for a positive return to be less than you may require to meet your objectives. Further, it doesn t take into account the impact of the fee, and tax on the likelihood of a negative return. You should still ensure you are comfortable with the risks and potential losses associated with your chosen investment option(s). A description of the SRMs are shown below: 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 You can find more information on the methodology we use to calculate the SRM in the Understanding Investment Risk flyer on our website. 14 Asteron Life

17 You ll find an SRM for each of our investment options either in the PDS or later in this Member Booklet. The actual measure for each investment option can change at any time, for example because of market conditions. You should always check the most up-to-date information before you make a decision. You can find any updates in the Understanding Investment Risk flyer on our website. Understanding the asset classes Each investment option is invested into what are called underlying assets. These underlying assets have different characteristics and may be either income assets, growth assets or a combination of both. Income assets include such things as cash and fixed interest, which provide income returns in the form of interest Growth assets include property, shares and alternative assets, which provide investment returns comprising both capital growth (increase in value of the investment) and income. Asset class What is it? Cash generally refers to short-term liquid investments and may include bank deposit securities, such as term deposits. Cash Fixed interest generally refers to debt instruments issued by governments and companies. Investments may include bonds, debentures and other hybrid securities. Fixed interest Property Shares Alternative assets Property generally refers to direct or indirect property investments in Australian and international property via listed and unlisted real estate trusts (REITs), exchange traded funds (ETFs) and companies. Shares represent a part ownership in a company (ie. a share ). Returns from the ownership of shares combine both income received (dividends) and growth (capital gains) through the increase in the share price. The value of international shares may also be affected by fluctuations in the exchange rate. Alternative assets are investments that are not classified or may not be correlated to the traditional asset classes of cash, fixed interest, property or shares. Typically they may involve investments in asset classes (eg. gold, infrastructure or private equity) or investment strategies (eg. financial instruments such as exchange traded or Over The Counter (OTC) derivatives, or trading techniques) that aren t liquid and require specialised skills to manage. Asteron Life 15

18 Can you change your investment options? Because your financial needs may change, you have the flexibility to switch between investment options at any time. You need to fill out an Investment change form and send it to us. You may incur a buy/sell spread, which is charged by the investment manager, depending on the options you select. For more information, please see Buy/sell spreads in the Fees and other costs section of this Member Booklet. Unit prices For all Partnership investment options, your balance in that investment option is calculated by multiplying the number of units you hold by the investment option s exit price and moves up or down over time. Your unit balance represents a partial holding in an investment option. Buying units When you invest or switch into an investment option, units in your chosen investment option are allocated to you. The number of units allocated will depend on the investment option s entry price at the time and the amount you invest. Selling units When we sell units in an investment option, the amount you receive will depend on the exit price of the investment s units at the time and number of units sold. We can sell units from your investment options to pay for taxes, insurance premiums (if applicable) and certain fees or charges. We also sell units when you switch to another investment option, request a withdrawal or transfer to another super fund. Switching between investment options If you request a switch, we ll sell units from one investment option and use the proceeds to buy units in the other investment option. The buy/sell spread is applied to cover transaction costs associated with processing the switch. How are unit prices calculated? Unit prices are usually calculated daily and reflect the value of the underlying assets of the investment option. This takes into account income entitlements, investment fees, taxes and other expenses and liabilities. The underlying asset value is divided by the number of units on issue to arrive at the price per unit. Buy or sell spreads are then applied to this price per unit to calculate the entry and the exit prices, respectively. Like the values of the underlying investments, the price of units can move up and down. If you want information about daily unit prices, give us a call on Unit pricing delays We may suspend unit pricing where in our opinion: a significant event or incident occurs that has the potential to affect investment markets or an event occurs that has the potential to affect unit prices or an external investment manager closes the underlying investment to applications and withdrawals or the unit prices calculated have the potential to prejudice specific investors. Investment performance Investment performance lets you see how your investment is going. How is investment performance calculated? Your super balance can go up or down. Past performance is not an indicator of future performance. In accordance with industry standards, investment performance is generally calculated net of taxes and ongoing fees such as the administration fee, member fee, performance fee and investment fee. However, when calculating investment performance, we generally don t take into account contributions tax, contribution fees, exit fees and any discretionary ongoing fees such as insurance premiums and adviser service fees. If we calculate the investment performance for an investment option in a way different from that set out above, we ll explain this in the monthly Partnership investment performance report which is available from our website. You should be aware that the investment performance information for the investment options may differ from the performance of the underlying investment managers. This may be due to: holding some assets in cash or short-term securities, for liquidity purposes or provisions for tax and distribution of tax credits or the fees and charges that apply or 16 Asteron Life

19 a lag between when the underlying investment managers report their performance and when the value of the underlying investment option is reflected in the unit prices. Who manages Partnership investment options? We ve got together with our investment partner, Ibbotson Associates Australia Limited (Ibbotson), a worldwide leader in investing, to offer you Partnership s six investment options. For more information, please see Information about the investment manager in this Member Booklet. About the investment options For some investment options, a PDS is issued by the underlying investment manager, free of charge. You can download copies from our website or ask us for a printed version. Before you select or change your investment selection to a new investment option, you should consider the relevant investment manager s PDS. In general, if there s a conflict between the terms and conditions shown in an investment manager s PDS and the Partnership PDS and this Member Booklet, you should refer to the Partnership PDS and this Member Booklet to understand the terms and conditions applying to your investment. If you d like to find out what the differences are in investing into an investment option through Partnership as opposed to investing directly with the underlying investment manager, please see Investing through Partnership and investing directly in this Member Booklet. Please note that we don t take labour standards, environmental, social and ethical considerations into account when selecting, retaining or terminating investment options. Multi-manager investment options A multi-manager approach to investing uses the skills of more than one investment manager. It s based on the view that no single investment manager consistently outperforms the market in all conditions. Over any given timeframe, it s difficult to predict which investment managers or which investment style will outperform the market and its peers. Some investment styles will perform well in one stage of the market cycle, while others may perform poorly in the same conditions. Partnership s multi-manager investment options blend a combination of quality investment management styles to create investment options aimed at reducing investment risk and the volatility of returns. Changes to investment options Partnership s investment menu may change, so it s important to check our website regularly in case your investment options have changed, including the fees and charges relating to the investment options. From time to time, investment options may also be closed, suspended or terminated by an external investment manager or by us. This may happen where: the investment option is no longer offered by the investment manager or the total amount of investor s money in the investment option has grown too large for the investment manager to continue with its current investment strategy or laws change so that some investment types become no longer permissible or we determine that it s in the best interests of members or the investment option may no longer be economically viable. If an investment option is closed, suspended or terminated, this may cause delays in processing withdrawals and transfer requests. Such a delay may be more than 30 days. The unit price used to process your transaction may therefore differ from the price applicable on the day you lodged your request. Where an investment option is closed, suspended or terminated, we ll write to you in advance (where possible) to tell you. You ll then be able to review your investment strategy with your adviser or call us. If we can t tell you in advance, we ll choose a replacement investment option in which to invest your money until you ve been able to review your investment strategy. Asteron Life 17

20 Investing through Partnership and investing directly When you invest with Partnership, we hold the investment on your behalf, instead of you holding it directly. There are differences in investing into an investment option through Partnership as opposed to investing directly with the underlying investment manager. These include: Timing of information Differing returns Differing fees Minimum and maximum transaction amounts Tax implications Receipt of reports The rights to attend and vote at unit holder meetings An investment manager s PDS may have a different preparation date from this PDS and may include investment information effective as at different dates. Investment returns based on unit prices as calculated for Partnership are likely to differ from any returns in an investment manager s PDS or reports. This could be due to differences in investment fees, costs, taxes, and the timing impact of differences in transactions for the investment options offered within Partnership relative to those for the investment manager s financial product. The fees incurred when investing through Partnership are likely to differ from the fees charged by the investment manager as a result of fees levied to administer Partnership. An investment manager s PDS may set out minimum and maximum investment amounts. These don t apply to you when investing through Partnership. Partnership is liable to pay tax for each investment option. The unit prices of investment options in Partnership will reflect any applicable tax liability. You won t receive reports directly from investment managers when you invest in Partnership. When you invest in Partnership, you won t hold any rights to attend and vote at meetings of unit holders of the underlying financial product. Before you make any investment decisions, you should consider the relevant investment manager s PDS. You can download copies from our website or you can ask us for a printed version, free of charge. The information in an investment manager s PDS may change from time to time. This means that when you make a contribution into an investment option, you may not have referred to the most recent PDS for that investment option. You may not therefore be aware of material changes or significant events that would be in the most recent PDS. However, you can download from our website information about material changes or significant events that affect a matter in the underlying PDS. We ll provide this information as soon as practicable after the change or event takes place. You should therefore check our website each time you make an additional contribution to see whether any matter in the PDS has been affected by a materially adverse change or significant event. Related companies We, Suncorp Custodian Services Pty Limited (ABN ), Optimum Pooled Superannuation Trust (PST) (SFN ), and Suncorp Life & Superannuation Limited (SLSL), are part of the Suncorp Group. We don t deal with our related companies more favourably than we would with any other independent service provider. The underlying assets of the Fund are invested in the Optimum PST which then invests into underlying investment options. 18 Asteron Life