AMP Superannuation Savings Trust

Transcription

1 AMP Superannuation Savings Trust Annual report for the year ended 30 June 2011 SignatureSuper SignatureSuper Personal SignatureSuper Personal Allocated Pension CustomSuper SuperLeader AMP Flexible Super Flexible Lifetime - Super Flexible Lifetime - Allocated Pension Flexible Lifetime - Term Pension AMP Flexible Income Plan AMP Multifund Flexible Income Plan - Allocated Pension Investment Linked Personal Superannuation Plan Investment Linked Personal Superannuation Bond Super Rollover Plan Portfolio Plan MultiFund Super Bond AMPAK Investment Account Personal Superannuation Bond Whole of Life Endowment Flexible Lifetime - Protection (Superannuation) Term Life Insurance Superannuation Yearly Renewable Term Guaranteed Super Pension AMP Retirement Savings Account For information on significant changes that may impact your plan, please refer to the 2011 Product Update which is sent between July and September. This is also available online at This annual report applies to all members of the AMP Superannuation Savings Trust. A supplementary annual report - which forms part of this annual report - has been prepared for members of some employer plans. If a supplementary annual report applies to your plan, it will be sent to you with your Product Update. Issued by AMP Superannuation Limited ABN , AFSL No , the trustee of the AMP Superannuation Savings Trust ABN Registered trade mark of AMP Life Limited.

2 In this annual report unless specified otherwise: AMP Bank means AMP Bank Limited (ABN , AFSL No ) AMP Capital Investors means AMP Capital Investors Limited (ABN , AFSL No ) AMP Life means AMP Life Limited (ABN , AFSL No ) we, us, our and the trustee mean AMP Superannuation Limited you, your refers to the member of the plan or holder of the account Fund means the AMP Superannuation Savings Trust plan refers to your plan or your account in the Fund RSA refers to the AMP Retirement Savings Account. This annual report is issued by AMP Superannuation Limited which is ultimately owned by AMP Limited. No other company in the AMP Group nor any of the investment managers of the investment options: is responsible for any statements or representations made in this annual report, or guarantees the performance of the trustee s obligations to members nor assumes any liability to members in connection with the Fund. None of the trustee, any other company in the AMP Group or any of the investment managers of the investment options guarantees the performance of the Fund or the investment options or any particular rate of return. The repayment of capital is not guaranteed, unless expressly stated. This annual report does not take into account your financial situation, objectives or needs. Therefore, it is important you consider the appropriateness of this information having regard to these matters before making any investment decision based on the information contained in this annual report. Some of the information in this document is based on an interpretation of law as at 20 September We recommend that any person seeking to rely on this information obtains independent advice. If any dispute arises about your benefits or any other aspect of your plan, the trust deed and the policy document, if relevant, will generally prevail. The Market Overview section is provided by AMP Capital Investors. While care has been taken in the preparation of this section, AMP Capital Investors makes no representation or warranty as to the accuracy or completeness of any statement in it, including without limitation, any forecasts. Past performance is not a reliable indicator of future performance. The section headed Policy Committee on page 5 in this annual report should be read together with the policy committee information in your member statement (if applicable). Changes to personal details Please let us know of any changes or corrections to your personal details - for example, your name or address. You can do this by advising your financial planner or calling us (contact details are on the back cover). Providing your Tax File Number (TFN) If you haven t given us your Tax File Number, you may be paying unnecessary tax on your super. The Member details section of your latest statement will show if you have supplied your TFN. If you haven t given us your TFN, you can simply let us know by: Online: Call us: Information within this annual report covers a number of different products held within the Fund. Those products are listed below. Please refer to your annual statement if you are unsure as to which product you hold. If you have any queries regarding this please contact us (contact details are on the back cover). SignatureSuper SignatureSuper Personal SignatureSuper Personal Allocated Pension CustomSuper SuperLeader AMP Flexible Super Flexible Lifetime - Super Flexible Lifetime - Allocated Pension Flexible Lifetime - Term Pension AMP Retirement Savings Account AMP Flexible Income Plan AMP Multifund Flexible Income Plan - Allocated Pension Investment Linked Personal Superannuation Plan Investment Linked Personal Superannuation Bond Super Rollover Plan Portfolio Plan MultiFund Super Bond AMPAK Investment Account Personal Superannuation Bond Whole of Life Endowment Flexible Lifetime - Protection (Superannuation) Term Life Insurance Superannuation Yearly Renewable Term Guaranteed Super Pension

3 CONTENTS Who s who in the management of your plan 2 Fund management and financial condition 3 Other information 4 Trustee s investment objectives and strategy 6 The year in review 7 Investment option aims and strategies as at 30 June Additional investment option information 28 Contact us Back cover

4 Who s who in the management of your plan The trustee All the products listed in the inside cover are part of the AMP Superannuation Savings Trust (Fund). The Fund is registered with the Australian Prudential Regulation Authority (APRA). AMP Superannuation Limited (ASL) is the trustee of the Fund and is a wholly owned subsidiary of AMP Life Limited. The trustee has been granted a licence by APRA to act as trustee of the Fund. The trustee: is responsible for all aspects of the operation of the Fund, is responsible for ensuring that the Fund is properly administered in accordance with the trust deed and policy documents, and ensures that the Fund complies with relevant legislation, that all members benefits are calculated correctly, and that members are kept informed of the operations of the Fund. The trustee may amend the trust deed of the Fund following changes to the law or to introduce new features. The trustee can only amend the trust deed of the Fund with the consent of AMP Life. Should you require a copy of the trust deed of the Fund please contact us. AMP Bank The AMP Super Cash, AMP Term Deposit and some Super Easy investment options (which are available under some plans) invest in banking products issued by AMP Bank Limited, trading as AMP Bank. AMP Bank is a direct banking business that manufactures, distributes and services lending products to retail customers and deposit accounts to both retail and wholesale customers. AMP Bank is a subsidiary of AMP Limited, and therefore is a company related to us. AMP Capital Investors and AMP Bank AMP Capital Investors and AMP Bank have only been involved in preparing sections that apply to them. The Auditor The trustee has appointed Ernst & Young as auditor of the Fund. The trustee has indemnity insurance. The relationship between the trustee and other service providers From time to time, the trustee may engage companies in and outside the AMP Group to provide services in relation to the Fund. The trustee may change these service providers at any time without notifying you. Companies in the AMP group are related to us. AMP Life All contributions we receive and all of the Fund s assets are invested in life policies issued to the trustee by AMP Life backed by Statutory Funds (No. 1 and No. 2 Funds). Some SignatureSuper Employer plans have life policies issued by other registered insurers. AMP Life invests contributions received with AMP Capital Investors, AMP Bank or managed investment schemes outside the AMP Group. AMP Capital Investors AMP Capital Investors is: the investment manager appointed by AMP Life under an investment management agreement with AMP Life, and the responsible entity for many managed investment schemes that AMP Life invests in. Under these managed investment schemes, AMP Capital Investors either or both: acts as the investment manager, or appoints company(ies) outside the AMP Group to be the investment manager(s). AMP Capital Investors is a subsidiary of AMP Limited, and therefore, is a company related to us. 2

5 Fund management and financial condition Detailed financial information is not included in this annual report as the benefits paid to members are wholly determined by reference to life policies. The value of total Fund assets for the AMP Superannuation Savings Trust at 30 June 2010 was $43,211,721,000 (audited). The value of total Fund assets for the AMP Personal Superannuation Fund at 30 June 2010 was $3,309,866,000 (audited). The value of total Fund assets for the AMP Self Employed Persons Superannuation Fund at 30 June 2010 was $941,399,000 (audited). The value of total Fund assets for the AMP Personal Employer Sponsored Superannuation Fund at 30 June 2010 was $11,131,000 (audited). On 29 June 2011, the members and assets of the AMP Personal Superannuation Fund, AMP Self Employed Persons Superannuation Fund and AMP Personal Employer Sponsored Superannuation Fund were transferred into the Fund. We expect the audited accounts and auditor s report for the Fund for the financial year ending 30 June 2011 to be available after 1 November You can obtain a copy of these documents after this date by calling us (contact details are on the back cover). The assets of the Fund (except for reserves and certain amounts, such as provisions for tax, which are set aside to meet the expenses) are fully allocated to the plans of members and participating employers. Superannuation Savings Trust CLOSING BALANCE AS AT 30 JUNE 2008 CLOSING BALANCE AS AT 30 JUNE 2009 CLOSING BALANCE AS AT 30 JUNE 2010 CLOSING BALANCE AS AT 30 JUNE 2011 $18,190,000 $18,558,000 $18,949,000 $15,699,000 The Reserves that were held for the former AMP Personal Superannuation Fund and the former AMP Self Employed Persons Superannuation Fund were transferred and continue in the SST on the same terms and conditions. The table below reflects these holdings: FUND AMP Personal Superannuation Fund AMP Self Employed Persons Superannuation Fund CLOSING BALANCE AS AT 30 JUNE 2008 CLOSING BALANCE AS AT 30 JUNE 2009 CLOSING BALANCE AS AT 30 JUNE 2010 CLOSING BALANCE AS AT 30 JUNE 2011 $69,000 $44,000 $38,000 $32,000 $810,000 $832,000 $858,000 $869,000 Our liability to pay benefits to members (except defined benefit members) is always equal to (or less than), the assets allocated to their plans. At the date of preparation of this report (20 September 2011), we do not have any information that leads us to believe there has been any material change in the financial position of the Fund over the reporting period for the financial year ended 30 June Reserves A small number of employer plans also have a Policy Committee Expense Reserve. If this applies to your plan, information about the reserve will be set out in a supplementary annual report which accompanies your Annual Update. General Purpose Reserve A reserve was established in the Fund as a result of the demutualisation of the AMP Society. The reserve, known as the General Purpose Reserve, may be used by the trustee for various expenses incurred in the administration, operation or management of the Fund. The General Purpose Reserve is invested in life policies owned by the trustee and issued by AMP Life. The table below indicates the approximate closing balances of the reserve for the financial years ending 30 June 2008, 2009, 2010 and

6 Other information Transfers to the AMP Eligible Rollover Fund If your account is closed and we cannot locate you we may transfer your partial benefit (a compensation payment) to the AMP Eligible Rollover Fund (ERF). Being transferred to the ERF has the following effect: You will become a member of the ERF and be subject to its governing rules. Your benefits will be invested in a capital guaranteed participating life insurance policy issued to AMP Superannuation Limited by AMP Life. Your returns (by way of a crediting rate) are credited annually to your ERF account based on your daily ERF account balance and are guaranteed by AMP Life to never be negative. Crediting rates are determined after deducting fund expenses from the net investment returns allocated to the member. For the latest ERF crediting rates visit or call us on No insurance cover is available in ERF. Similarly, if your account is closed and we need to make a compensation payment to you, we may establish an ERF for you. The Product Disclosure Statement (PDS) for the AMP Eligible Rollover Fund is issued by AMP Superannuation Limited. You can obtain a copy of the PDS by asking your financial planner, visiting or by calling You are advised to consider the PDS and to consult a financial planner to determine how appropriate an investment in either of these products is to your objectives, financial situation and needs. Contact details for the ERF are as follows: AMP Eligible Rollover Fund AMP Life Limited - ERF Locked Bag 5400 PARRAMATTA NSW 1741 Phone: Fax: Searching for lost super Super Search is our web-based facility that allows you to connect to the Australian Tax Office s (ATO) Lost Member Register to check online whether you have lost super with AMP or another super fund. You will need your Tax File Number to use Super Search. Simply go to Our customer service staff are available to answer your enquiries and complaints. We will try to resolve your enquiry or complaint as quickly as possible. To help us do this, please give us as much information about your enquiry or complaint as possible. We have established procedures to deal with any complaints. If you make a complaint, we will: acknowledge its receipt and ensure an appropriate person considers the complaint, and respond to you as soon as we can. If your complaint cannot be resolved at first contact, then we will keep you informed of the progress and aim to give you a response to your complaint within 10 working days. If the complaint is not resolved by that time, then we will keep you advised at regular intervals of the status of your complaint. If we cannot resolve your complaint to your satisfaction within 90 days, then you may have the right to lodge a complaint with the Superannuation Complaints Tribunal (SCT), contact details listed below: Superannuation Complaints Tribunal Website sct.gov.au Phone: Write to: Locked Bag 3060 MELBOURNE VIC 3001 Time limits on making complaints to the SCT Time limits do apply for certain types of complaints. If in doubt, you should contact the SCT as soon as possible and the SCT will let you know if it can deal with your complaint. How you can stay informed You can stay informed about your superannuation by calling us (contact details are on the back cover) or by visiting our website. Account balance and investment information: and follow the prompts to My Portfolio Investment option performance, unit prices, crediting rates and reports: Market updates: Forms: Alternatively, if you don t have internet access you can ask the ATO to conduct a search on your behalf by contacting them on If you find lost super and would like to consolidate it to your account simply complete a Transfer of Superannuation Benefit form available from our website or by phoning us (contact details are on the back cover). Enquiries and complaints process If you need any additional information about the operation or management of your plan, or if you have a concern or complaint, then contact your financial planner or call us (contact details are on the back cover). 4

7 The following is not applicable for pension members: Policy committee (Members of employer plans in SignatureSuper, CustomSuper, SuperLeader, AMP Flexible Super, Flexible Lifetime - Super and AMP Retirement Savings Account only). An employer sponsored plan may have a policy committee. The role of the policy committee is to help a member or employer of the plan enquire about the investment strategy, performance and operation of the Fund. The policy committee may also assist the trustee to obtain the views of members on these issues and in dealing with any enquiry or complaint. We are required to take all reasonable steps to set up a policy committee where: an employer has 50 or more employee members, or an employer has at least 5 but less than 50 employee members and the trustee has received a written request to do so on behalf of at least 5 of those employee members. There must be equal numbers of employer and member representatives on the policy committee. Employer representatives are appointed or removed by the employer. Employer representatives can also be removed as a result of specific events under superannuation law. Member representatives are generally elected and removed by members except when they are removed as a result of specific events under superannuation law (for example, when a member representative resigns from their appointment as a member representative). Details of the policy committee arrangements (if any) for your plan are shown on your Annual Member Statement. For more details of the policy committee arrangements (if any) for the plan, including obtaining a free copy of our Guide How to Set Up a Policy Committee, please contact us (contact details are on the back cover). Members and employers of the plan can also download a copy of the Guide How to Set Up a Policy Committee at any time by visiting Superannuation Surcharge The trustee will deduct any surcharge payable for any liabilities for the financial years 1997 to 2005 from your account. Superannuation surcharge does not apply to contributions made on or after 1 July Temporary Residents* Super funds are, under certain circumstances, required to transfer a temporary resident s super to the ATO following their departure from Australia. Such a transfer would only occur when at least 6 months have passed since your temporary resident s visa had ceased to be in effect, you had left Australia and not taken your benefit. You can subsequently access your benefit from the ATO. The ATO can be contacted on There are now limited conditions of release available to a member who is or was a temporary resident. Accounts in respect of all temporary resident members (irrespective of whether or not they have left Australia) will only be able to be released under the following conditions: Death. Terminal medical condition. Permanent incapacity. Departing Australia and who apply in writing for the release of their benefits. Trustee payments to the ATO under the Superannuation (Unclaimed Money and Lost Members) Act Temporary incapacity, and/or Release Authorities under the Income Tax Assessment Act Note: Where a member is or was a temporary resident, they will not be able to access their benefit: On retirement. On attaining age 65. AMP is not required to issue exit statements to accounts transferred to the ATO. However if you need further information that will assist your claim to the ATO, please contact us. *If you are a New Zealand citizen or you become an Australian citizen or permanent resident, these changes will not apply to you. Checking your employer contributions For most employees, your employer has to contribute to superannuation for you under the Superannuation Guarantee rules, or your industrial award or workplace agreement. We consider members are in the best position to verify the amount and frequency of contributions that should be made to their super as we do not know what other super funds your employer may contribute to. You can check the amount and frequency of contributions made to your account by referring to your annual Member Statement or through AMP s online My Portfolio service at Your Tax File Number (TFN) We are unable to accept your personal after-tax contributions (including spouse contributions) if we do not have a record of your TFN. Also, no-tfn tax of 31.5% will apply to Concessional Contributions if we do not have your TFN. No-TFN tax is calculated and deducted at the earlier of 30 June each year and when you leave your plan. No-TFN tax may be refunded if you provide us with your TFN within 4 financial years from when the contribution is made. 5

8 Trustee s investment objectives and strategy The investment objective is to offer a range of investment choices to suit various members risk return profiles depending on your account or plan. These include: Employer sponsored plans (including default investment options). Individual personal plans. Investment-linked benefits with access to a range of investment choices to suit various members risk return profiles and may include diversified and single sector investment options. Investment-linked benefits with no investment choice. Insurance cover within a superannuation fund but no investment-linked benefits. Insurance and investment benefits within a whole of life or endowment insurance policy, or A retirement income stream investing mostly in fixed interest and fully guaranteed by AMP Life. Detailed investment strategies are implemented either through holding group superannuation policies issued by AMP Life (Policies) that provide access to a range of investment options or through holding life policies issued by AMP Life that provide one of the above benefits or insurance cover for each member. See pages 10 to 29 for the aim and strategy of each investment option. In Retirement Savings Account (RSA) where balances are over $2,500, the investment objective is to provide returns over the longer term exceeding those from cash with security of capital. For all account balances, returns are guaranteed by AMP Life not to be negative. The investment strategy for RSA is to invest in a group superannuation policy (RSA Policy) that invests in a portfolio that is secure and has limited exposure to equities. The trustee also monitors the investment performance of all investment options to ensure that the investment objectives for those investment options are met. 6

9 The year in review This Market/Economic Overview is provided by AMP Capital Investors The Australian economy was mixed over the 2010/11 financial year. Real gross domestic product (GDP) came in weaker-than-expected at 0.2% for the September quarter of 2010 and declined by 0.9% in the March quarter of 2011, but climbed by a robust 1.2% in the June quarter. Towards the end of 2010 the National Australia Bank business surveys for both business conditions and business sentiment trended lower from their highs earlier in the year. Building approvals recorded a sharp decline but this reflected more weakness in flood-affected Queensland. The Reserve Bank of Australia (RBA) left interest rates on hold at 4.50% until its November 2010 meeting when it raised rates to 4.75%, stating that the balance of risks had shifted to the point where an early, modest tightening of monetary policy was prudent. Interest rates were left on hold thereafter with the central bank continuing to emphasise the need for higher interest rates at some point but recognising that activity remains subdued in some industry sectors. The US Federal Reserve (Fed) maintained the benchmark federal funds rate between 0.00% and 0.25% throughout the entire July 2010 to June 2011 period. Data released over the year continued to point towards a sedate recovery. Early in November, the Fed decided to pursue a second round of quantitative easing designed to promote a stronger pace of economic recovery. As part of the plan, the Fed purchased an additional US$600 billion of US Treasury bonds by June America s economic growth was revised upwards for the final quarter of 2010 but this recovery slowed in the first half of The Fed recognised a slower pace of recovery by downgrading 2011 growth forecast from approximately 3.2% to 2.8%. In Europe, the European Central Bank raised interest rates by 0.25% to 1.25% in April, the first increase since May The rate hike came despite the region s ongoing sovereign debt issues which continued to plague the peripheral nations throughout the period. The European Union and the International Monetary Fund agreed to bail out Ireland in November and Portugal in May with 85 billion and 78 billion rescue packages respectively. The details of a second 110 billion rescue package for Greece were also finalised in July 2011 after the Greek government introduced another round of austerity measures. The UK s coalition government announced dramatic fiscal tightening measures in October aimed at reducing its budget deficit from -11% of GDP to -2.1% by The Bank of England retained its very accommodative monetary policy settings leaving interest rates on hold at 0.5%. The Bank of Japan kept its key short-term interest rate at 0.1%. On 11 March the north eastern coast was devastated by a severe earthquake and tsunami. This was compounded by a nuclear power crisis and associated disruptions to power supply. Preliminary estimates suggested that the physical damage alone will be trillion, ie approximately 3% to 4% of nominal GDP. The Bank of Japan moved rapidly to provide additional liquidity support and expand its asset purchase program by 5 trillion. Yet the Japanese economy fell into recession once again, recording 2 consecutive quarters of declining activity. However, towards the end of the period, signs emerged that Japan s economic activity is starting to stabilise. China s economy slowed to a more sustainable pace of growth during the period. After the massive policy stimulus of 2008/early 2009, there was a surge in China s economy, with growth reaching 11.9% for the year to 31 March Authorities understandably responded with measures not to crunch growth, but to rebalance the economy as well as cool it down. This proved to be highly effective with growth stabilising to 9.6% by the end of The People s Bank of China raised interest rates 4 times throughout the period, reaching 6.31% in April, and increased banks required reserve ratio by 4.5% over the year. Shares The leading measure of global shares performance, the MSCI World (ex-australia) Accumulation Index, returned 22.28% in local currencies for the period, or 2.66% in unhedged Australian dollar (A$) terms. There were 2 distinct trends in international share markets over the year to 30 June The first half of the year saw solid gains in markets on the back of confidence that the sovereign debt issues in Europe were under control, improving economic data and the announcement of more monetary stimulus in the US, and continued strength in the Chinese economy. From the beginning of 2011, however, fears over the sustainability of the economic recovery resurfaced for a number of reasons: The floods in Australia and earthquake and tsunami in Japan; softening US economic data; worries about inflation and monetary tightening in China and emerging countries generally; political turmoil in the Middle East and the associated surge in the oil price; and renewed worries about sovereign debt issues in Europe, particularly in Greece. The Australian share market was just as mixed over the period. Australia s S&P/ASX 200 Accumulation Index returned 11.73% for the year to 30 June Australian shares finished the September quarter strongly as global markets were helped by talk of further US quantitative easing. From the December quarter, however, Australian shares underperformed global shares on the back of the RBA s interest rate increases, the rising A$, renewed concerns over further Chinese policy tightening, and turmoil in the Middle East and North Africa and surging oil prices. There was some respite in the March quarter which saw Australian shares supported by solid economic data and renewed confidence regarding the global economic outlook. However this was short lived as shares were again impacted by global weakness from the March quarter. The headwinds of higher interest rates and an appreciating A$ caused a softening in economic data and analyst downgrades to company outlooks. Cash The RBA increased the cash rate once in November from 4.50% to 4.75%. Interest rates were left on hold thereafter with the central bank judging in March that a mildly restrictive stance of monetary policy was appropriate in Australia. During the 2010/11 financial year, 90-day bank bills rose opening at 4.92% and closing 5 basis points (bps) higher at 4.97%. Similarly, 180-day bank bill yields also increased, opening at 5.00% before rising 5 bps to close at 5.05%. 7

10 Property Listed property (both global and Australian) was steady over the year to 30 June Locally, the S&P/ASX 200 Property Accumulation Index returned 5.84%, while global listed property returned 32.50% (as per the UBS Global Real Estate Investors Index in hedged A$ terms). Listed property benefited at the beginning of the period as investor demand for riskier assets returned in response to generally strong economic data in Australia. The Australian Real Estate Investment Trust (A-REIT) sector was also positive in December, but continued to feel the effects of the large equity issuance in November, with ongoing funding pressures limiting the sector s gains. In the December quarter, the A-REIT sector significantly underperformed broader Australian equities, but regained ground in the first half of Commercial names proved strongest in March delivering 2.4% for the month. This was largely due to corporate activity, with ING Office Fund delivering a strong result of 3.4% following Investa s announcement that it had agreed terms with ING Management Limited to acquire the management of ING Office Fund. The Office sector performed well over the March quarter, with Charter Hall Office Fund outperforming the market in April, buoyed by corporate manoeuvring regarding the outcome of its US asset sale. The Industrial sector also produced high returns as Goodman Group continued to deliver on its stated strategies. The Retail sector continued to be affected by market sentiment regarding consumer spending, although low stock prices appear to be tempting investors back into the sector. Bonds Australian bond yields rallied in the year to 30 June The yields on both 3- and 10-year Australian bonds finished the year 37 bps and 15 bps higher respectively. The December quarter, saw bond yields rise steadily and the yield curve steepen on mixed Australian economic data. The rally continued into the first half of 2011, as positive risk sentiment declined driven by mixed domestic economic data and offshore events including the escalation of geopolitical conflict in the Middle East and the earthquake and tsunami in Japan. Towards the end of the period continuing concerns over Europe triggered a global bout of risk aversion and a flight to quality in the government bond market. How earnings are allocated to your account The value of your investment is reflected in your account. Unitised options The value of your investment in a unitised investment option is equal to the number of units held for you multiplied by the unit price at that time. Separate unit prices are calculated for each unitised investment option. Unit prices will generally rise and fall with movements in the value of the underlying assets. AMP Life generally calculates unit prices at least once each Sydney Business Day. Unit prices will always be calculated (except in extreme/unusual circumstances) at least weekly. AMP Life has processes in place to check the accuracy of unit prices. Unit pricing is a process comprising many inputs (for example, the valuation of assets). The unit price can sometimes be found to be incorrect because of errors made at some point in the process. To the extent that you may have transacted on this unit price, your account may require a correction. If this occurs, a tolerance of 0.30% of the unit price of the affected investment option has been set to determine if a correction needs to be made. If a unit pricing error is less than 0.30%, generally no correction will be made. However, if an error is equal to or greater than 0.30% and the error affects (or affected) the value of your transaction in an affected investment option, AMP Life will pay compensation directly into your account or, if you have closed your account, attempt to send you a compensation payment (for example by cheque) if the payment would be an amount above a dollar minimum agreed by the trustee. Payments under that dollar minimum amount would be contributed on an unallocated basis into the relevant Fund. The trustee, acting in your interests, and AMP Life may agree to make other adjustments, as appropriate. The tolerances and related processes described above generally reflect industry practice. Interest rate options Unlike unitised investment options, interest rate investment options do not have a unit price. They have an interest rate. Except for AMP Term Deposits: the interest rate can change at any time without notice, and the investment return based on the interest rate is calculated daily and credited to your account annually or when you withdraw from the investment option. For AMP Term Deposits, the Term Deposit will normally be accepted at the advertised crediting rate on the `day the Term Deposit starts. The interest will be credited to your account annually and/or at maturity. Allotment of earnings for Investment Account or AMPAK plans - crediting rates Returns are calculated from changes in crediting rates declared over the periods shown and any change to the adjustment index. Returns are after the deduction of Management Costs and superannuation fund earnings tax. Returns assume a sum of money is invested at the beginning of the period and neither drawn upon nor added to throughout that period. The actual rate of return of your plan will vary depending on individual plan features (such as fees) and the timing of withdrawals, alterations or contributions. Annual bonuses For benefits backed by a Whole of Life or Endowment policy, the explanation of how earnings are allocated is below. Allocation of earnings The distribution of profit (in the form of bonuses) is made in accordance with the Life Insurance Act Under the Life Insurance Act, AMP s actuary regularly assesses the strength of the AMP Statutory No. 1 Fund and advises how much policy owner profit it can prudently pay out, and how to share it fairly among different groups of policies. 8

11 Bonuses are only paid to members who hold a participating policy. In determining bonus rates, the Actuary not only considers the recent investment performance, but also likely future investment return, estimated future rates of mortality, assumed rates of taxes, fees and other expenses. There are 2 types of bonuses. They are annual bonuses and terminal bonuses. Annual Bonuses Annual bonuses are allocated to plans each year as additions to the sum insured. As the rate of bonus is dependent on AMP s investment experience and our estimates of future experience including investment returns, annual bonuses may fluctuate from year to year. However, once declared they are guaranteed and payable in full when the sum insured becomes payable (ie usually on death or maturity). Terminal Bonuses Terminal Bonuses are currently paid in addition to annual bonuses on maturity, death or disability claims (where appropriate) on plans that have been in force for 5 years or more. Terminal bonuses are currently allotted as a percentage of attaching annual bonuses. They are a means of passing on a greater level of capital appreciation, usually from growth oriented assets, such as equities and property. While there is still some smoothing there is a greater recognition of underlying market values, and terminal bonus rates are more volatile than annual bonuses. Terminal bonuses are not guaranteed and may be increased or decreased based on movements in underlying markets relative to policy values. Derivatives Investment managers may use derivatives such as options, futures, swaps or forward exchange rate agreements. The use of derivatives by investment managers is in accordance with the guidelines of the investment strategy and objectives of the option and the relevant Derivative Risk Statement. Derivatives can be used for many purposes, including hedging to protect an asset against market fluctuations, reducing the transaction costs of achieving a desired market exposure, and maintaining benchmark asset allocations. Derivatives can also be used to implement the investment objective of the investment option. Securities Lending The trustee does not engage in securities lending. AMP Life may, as the holder of securities, lend those securities in return for a fee as part of its investment strategy. The aim of securities lending is to generate positive investment returns but this is not guaranteed as there are a number of risks involved in securities lending. These include the borrower failing to repay the securities lent. To manage the risks, AMP Life has certain processes in place including the requirement for the borrower to provide collateral not less than 100% of the value of the assets loaned. Since January 2009, AMP Life has not engaged in securities lending. We may update investment options and investment managers To ensure that the range of investment options we offer continues to suit the investment needs of our members, we regularly monitor our investment options and investment managers. The trustee has delegated selection and monitoring of investment managers and investment options to AMP Life. We may add, close or terminate investment options, add new investment managers or replace investment managers, as well as change the aim and strategy and asset range or benchmark of an investment option, at any time, without prior notice to you. If an investment option is terminated, we will switch your monies invested in that investment option to another investment option, which will generally be of a similar risk/return profile. We will notify you of any material change to the investment options or investment managers. 9

12 Investment option aims and strategies as at 30 June 2011 SuperLeader SUPERLEADER INVESTMENT OPTIONS SuperLeader Secure SuperLeader Growth SuperLeader Responsible Investment Leaders Balanced SuperLeader High Growth To provide returns exceeding those obtained from cash over the longer term (5 years) with a low level of volatility. To provide a medium level of returns over the medium to longer term (5-7 years) primarily through a diversified portfolio of equities, property and bonds, with a moderate level of volatility. Over the longer term, returns should exceed those from the Secure portfolio. To provide moderate capital growth and some income over the medium to long-term (5-7 years) primarily through a diversified portfolio investing in managed funds of equities, property and fixed interest. Equities are managed using a socially responsible investment approach. To provide higher returns over the medium to long-term (6-9 years) through a diversified portfolio investing mostly in equities with some property, bonds and direct investment in other assets. SignatureSuper, SignatureSuper Personal, SignatureSuper Allocated Pension, CustomSuper, Flexible Lifetime - Super, AMP Flexible Super, Flexible Lifetime - Allocated Pension, Flexible Lifetime - Term Pension, AMP Flexible Income Plan, AMP Multifund Flexible Income Plan - Allocated Pension, Investment Linked Personal Superannuation Plan, Investment Linked Personal Superannuation Bond, Super Rollover Plan, Portfolio Plan and MultiFund Super Bond This section sets out all of the investment options available for the above products. Some of the investment options may be restricted, closed or not available under your plan. To find out the investments options which are available under your plan, go to and click on My portfolio. MULTI-SECTOR (DIVERSIFIED) INVESTMENT OPTIONS CONSERVATIVE Who are these options suitable for? Investors seeking stability of capital and who are prepared to accept lower returns to achieve this objective. Returns are primarily from income as well as some capital growth over the short to medium-term, achieved by investing mainly in defensive assets with some exposure to growth assets. A low level of volatility can be expected from time to time. AMP Conservative AMP Conservative Enhanced Index Also known as: Conservative Enhanced Index Super Easy Conservative Future Directions Conservative Responsible Investment Leaders Conservative To provide returns greater than those from cash over the short to medium-term through a diversified portfolio, with a core of cash and fixed interest and some exposure to shares and property. To provide returns primarily from income as well as some capital growth over the short to medium-term, by investing mainly in defensive assets with some exposure to growth assets. Exposure to individual asset classes will be attained through the use of index focussed fund managers. The investment option seeks to provide an index focussed solution to diversified investing. Through a process of diversified market analysis combined with selection of the most appropriate fund managers for each underlying asset class, the fund is designed to provide market tracking returns over the recommended investment time frame. To provide moderate returns over the medium-term through a diversified portfolio, with a bias towards defensive assets such as cash and fixed interest. This option aims to achieve a rate of return above inflation after costs over a 3 year period and to provide a total return, after costs and before tax, higher than the return from the relevant benchmark mix index of the underlying investments. This option also aims to exceed the Chant West Multi-Manager Survey (Conservative Growth) Median (competitor universe) on a pre-tax basis. To provide a stable return at a rate above inflation on a rolling 3 year basis, through a diversified portfolio, with a core of cash and fixed interest and some exposure to shares and property. Shares are managed using a Responsible Investment approach, an approach that focuses on investing in companies that contribute to a socially and environmentally sustainable world. On a rolling 3 year basis, this option aims to achieve a total return (after costs and before tax) higher than the return from the relevant performance benchmark index of the underlying investments. 10

13 MULTI-SECTOR (DIVERSIFIED) INVESTMENT OPTIONS (CONTINUED) CAUTIOUS Who are these options suitable for? Investors seeking stability of capital and who are prepared to accept modest returns to achieve this objective. Returns are primarily from income as well as some capital growth over the short to medium-term, achieved by investing mainly in defensive assets with some exposure to a diversified range of growth assets. A low level of volatility is expected from time to time. AMP Cautious Enhanced Index Also known as: Cautious Enhanced Index Super Easy Cautious MODERATELY CONSERVATIVE To provide returns primarily from income as well as some capital growth over the short to medium-term, by investing mainly in defensive assets with some exposure to a diversified range of growth assets. Exposure to individual asset classes will be attained through the use of index focussed fund managers. The investment option seeks to provide an index focussed solution to diversified investing. Through a process of diversified market analysis combined with selection of the most appropriate fund managers for each underlying asset class, the fund is designed to provide market tracking returns over the recommended investment time frame. Who are these options suitable for? Investors seeking to achieve moderate returns from a balance of income and capital growth over the medium to long-term by investing in a diversified mix of growth and defensive assets. Capital stability is still a priority however investors are willing to accept some risk and low levels of volatility to achieve these returns. AMP Moderate Growth AMP Moderately Conservative Enhanced Index Also known as: Moderately Conservative Enhanced Index Super Easy Moderately Conservative Future Directions Moderately Conservative BALANCED To provide returns greater than those from cash or fixed interest over the medium to long-term through a diversified portfolio of cash, fixed interest, shares and property. To provide moderate returns from a balance of income and capital growth over the medium to long-term, by investing in a diversified mix of growth and defensive assets. Exposure to individual asset classes will be attained through the use of index focussed fund managers. The investment option seeks to provide an index focussed solution to diversified investing. Through a process of diversified market analysis combined with selection of the most appropriate fund managers for each underlying asset class, the fund is designed to provide market tracking returns over the recommended investment time frame. To provide moderate returns over the medium-term through a diversified portfolio of assets such as fixed interest, shares, property and alternative assets. This option aims to achieve a rate of return above inflation after costs over a 3 to 5 year period and to provide a total return, after costs and before tax, higher than the return from the relevant benchmark mix index of the underlying investments. This option also aims to exceed the Chant West Multi-Manager Survey (Balanced Growth) Median (competitor universe) on a pre-tax basis. Who are these options suitable for? Investors seeking to achieve moderate to higher returns primarily from capital growth with some income over the long-term by investing across all asset types, with higher exposure to growth assets. Investors are willing to accept a medium level of volatility to achieve these returns. AMP Balanced Enhanced Index Also known as: Balanced Enhanced Index Super Easy Balanced AMP Balanced Growth Future Directions Balanced To provide moderate to higher returns primarily from capital growth with some income over the long-term by investing across all asset types, with higher exposure to growth assets. Exposure to individual asset classes will be attained through the use of index focussed fund managers. The investment option seeks to provide an index focussed solution to diversified investing. Through a process of diversified market analysis combined with selection of the most appropriate fund managers for each underlying asset class, the fund is designed to provide market tracking returns over the recommended investment time frame. To provide moderate to high returns over the medium to long-term through a portfolio diversified across all asset types, but with an emphasis on shares and property. To provide moderate to high returns over the long-term through a diversified portfolio, with a bias towards growth assets such as shares, property and alternative assets. This option aims to achieve a rate of return above inflation after costs over a 5 year period and to provide a total return, after costs and before tax, higher than the return from the relevant benchmark mix index of the underlying investments. This option also aims to exceed the Chant West Multi-Manager Survey (Growth) Median (competitor universe) on a pre-tax basis. 11

14 MULTI-SECTOR (DIVERSIFIED) INVESTMENT OPTIONS (CONTINUED) BALANCED (CONTINUED) Macquarie Balanced Growth Portfolio Plan Responsible Investment Leaders Balanced MODERATELY AGGRESSIVE To outperform its structure benchmark over the medium-term (before fees), providing investors with broad asset class exposure by focusing on growth assets with some exposure to cash and fixed interest. The option aims to return a balanced level of growth and income. To provide moderate to higher returns over the medium to long-term through a portfolio diversified across all asset types, but with an emphasis on shares and property. To provide moderate to high returns on a rolling 5 year basis through a portfolio diversified across all asset types, but with an emphasis on shares and property. Shares are managed using a Responsible Investment approach, an approach that focuses on investing in companies that contribute to a socially and environmentally sustainable world. On a rolling 5 year basis, this option aims to achieve a total return (after costs and before tax) higher than the return from the relevant performance benchmark index of the underlying investments. Who are these options suitable for? Investors seeking to achieve moderate to high returns predominantly from capital growth by investing across all asset types, but with a substantially higher exposure to growth assets. Investors are prepared to accept higher volatility and medium risks to achieve these returns. AMP Growth Enhanced Index Also known as: Growth Enhanced Index Super Easy Growth AMP High Growth Future Directions Growth Responsible Investment Leaders Growth AGGRESSIVE To provide moderate to high returns predominantly from capital growth by investing across all asset types, but with a substantially higher exposure to growth assets. Exposure to individual asset classes will be attained through the use of index focussed fund managers. The investment option seeks to provide an index focussed solution to diversified investing. Through a process of diversified market analysis combined with selection of the most appropriate fund managers for each underlying asset class, the fund is designed to provide market tracking returns over the recommended investment time frame. To provide high returns over the medium to long-term through a diversified portfolio investing mostly in shares with some property, fixed interest and alternative assets. To provide high returns over the long-term through a diversified portfolio investing mostly in shares with some exposure to property, fixed interest and alternative assets. This option aims to achieve a rate of return above inflation after costs over a 5 to 7 year period and to provide a total return, after costs and before tax, higher than the return from the relevant benchmark mix index of the underlying investments. This option also aims to exceed the Chant West Multi-Manager Survey (Growth) Median (competitor universe) on a pre-tax basis. To provide high returns over the medium to long-term through a diversified portfolio focusing mainly on shares and property, with limited investment in fixed interest and alternative assets. Shares are managed using a Responsible Investment approach, an approach that focuses on investing in companies that contribute to a socially and environmentally sustainable world. On a rolling 5 year basis, this option aims to achieve a total return (after costs and before tax) higher than the return from the relevant performance benchmark index of the underlying investments. Who are these options suitable for? Investors seeking to achieve high returns from capital growth over the long-term by investing in growth assets. Capital stability is not a concern as investors are prepared to accept high volatility to pursue potentially greater long-term returns. Investment choices are diverse but carry with them a higher level of risk. AMP All Growth AMP High Growth Enhanced Index Also known as: High Growth Enhanced Index Super Easy High Growth To provide high returns over the long-term through a portfolio investing mostly in Australian and international shares. To provide high returns from capital growth over the long-term by investing in growth assets. Exposure to individual asset classes will be attained through the use of index focussed fund managers. The investment option seeks to provide an index focussed solution to diversified investing. Through a process of diversified market analysis combined with selection of the most appropriate fund managers for each underlying asset class, the fund is designed to provide market tracking returns over the recommended investment time frame. 12