ANNUAL REPORT

Transcription

1 ANNUAL REPORT

2 [ 2 ] ANNUAL REPORT Contents 3. Welcome message 6. Governance 7. We re at your service 20. Market Update 22. Returns 27. Service providers 28. Other investment information 31. Financials 36. Other important information 39. Contact

3 intrust.com.au [ 3 ] Welcome to the Intrust Super Annual Report for the 2016/17 financial year. It has been an incredibly successful financial year at Intrust Super. Intrust Super s Balanced option returned a very impressive This figure represents the fourth year out of five that the Fund has delivered double digit returns, and the eighth consecutive year of positive returns since the global financial crisis. The Pension Balanced option also returned an incredibly strong 13.85, placing it second in the SuperRatings Pension Fund Crediting Rate SRP50 Survey². Both achievements were well above the median of for Balanced¹ and for Pension Balanced². We are very proud that the Fund continued to be recognised in 2016/17 for outstanding performance by independent experts. In 2017, Intrust Super won Money magazine s Best Value Insurance in Super for the fifth consecutive year. SelectingSuper, an independent research house, awarded our Select Super insurance product Personal Insurance Offering of the Year for We were also a finalist for SelectingSuper s Fund of the Year. And, for the 11th straight year, Intrust Super was awarded a Platinum rating by independent industry expert, SuperRatings, and was also a finalist for SuperRatings MySuper of the year for the second year in a row. Customer service has always been one of our top priorities, and we strive to serve our members in as many ways as we can. This financial year, we implemented new digital welcome cards to help our members engage with their superannuation accounts. Digital innovations are shaping the future of the superannuation industry, and we are continuing to work on more developments in this area to improve outcomes for both our members and employers. A message from the Chairperson and Chief Executive Officer 1 July 2017 also brought some of the biggest legislative changes to super we ve seen in a long time. Many of these changes affected our contributory members and Pension members. The entire Intrust Super team worked hard to ensure our members understood the legislation, and to minimise the impact these changes could have on our members retirement plans. Finally, there were some significant changes to the Intrust Super Board. December 2016 marked the departure of our long-serving Chair, Sandy McDonald. Sandy worked tirelessly for the Fund for almost 20 years and was instrumental to the growth and success of the Fund. We truly appreciate the many years of leadership and support he provided, and wish him all the best for the future. In his place, Gary Bullock was appointed as Chair of the Board, with Jim Stewart as Deputy Chair. The Fund also welcomed Dr Michael Wilson to the Board. Dr Wilson brings extensive experience in both law and business, and has become a very valuable member of the Board. We thank you for reading Intrust Super s Annual Report for the 2016/17 financial year and welcome your questions and feedback. Please see our contact details on the back cover if you would like to get in touch. ¹SuperRatings Fund Crediting Rate Survey SR50 Balanced [60-76] Index June ² SuperRatings Pension Fund Crediting Rate Survey SRP50 Balanced [60-76] Index June Brendan O Farrell CEO Gary Bullock Chair

4 [ 4 ] ANNUAL REPORT Intrust Super as at 30 June ,000 MEMBERS* 18,000+ EMPLOYERS $2.3b TOTAL FUM *Almost

5 [ 5 ] intrust.com.au Our growth in 2016/17 16,399 NEW MEMBERS 6,362 NEW EMPLOYERS BALANCED OPTION RETURN

6 [ 6 ] ANNUAL REPORT Governance Intrust Super Trustee The Trustee is the entity responsible for managing the Fund. It collects and invests contributions, maintains records, reports to members and employers, pays benefits and is responsible for all other activities required to operate the Fund effectively. The Trustee of Intrust Super [Registrable Superannuation Entity Registration No. R ] is the company IS Industry Fund Pty Ltd [ABN , Australian Financial Services Licence No: , Registrable Superannuation Entity Licence No. L ], MySuper Unique Identifier: Board of Directors The primary responsibility of the Intrust Super Board is to ensure the Fund is operating in the best interests of members. Intrust Super was established in 1988 as a joint initiative of the Queensland Hotels Association [QHA] and United Voice Queensland State Branch. Members and employers are equally represented on the Intrust Super Trustee Board of Directors, with three appointed by QHA and three appointed by United Voice. Meeting at least quarterly, the Board delegates specific tasks to its Committees to complete its obligations as defined by law and according to their formal charters. The composition of the Board and various Committees as at 30 June 2017 is outlined below: Intrust Super Board of Directors Gary Bullock [C] [M] Jim Stewart [DC] [E] Investment [C] Audit, Risk Management and Compliance Committee Remuneration Justin O Connor [E] [C] [C] Fiona Scalon [M] Troy Burton [M] Michael Wilson [E] Administration, Contracts and Claims [C] Marketing [C] [C] Chair, [DC] Deputy Chair, [E] Employer Representative Director, [M] Member Representative Director Board changes There were two changes to the Board of Directors this year: Mr Sandy McDonald resigned, effective 31 December Mr Gary Bullock was appointed Chair of the Board, effective 1 January Mr Jim Stewart was appointed Deputy Chair of the Board on 9 March Dr Michael Wilson commenced on 20 January 2017.

7 intrust.com.au [ 7 ] Highlights for the 2016/17 financial year Throughout 2016/17, delivering exceptional customer service has remained Intrust Super s biggest priority. All our innovations, achievements and project developments for the year were created with our members and employers in mind. We strive to do everything we can to support our members: Customer service Financial advice Managing super reforms Digital developments Industry sponsorships We re at your service We were recognised for our hard work for members by many independent research companies in 2016/17: 2016 RAINMAKER EXCELLENCE AWARDS

8 [ 8 ] ANNUAL REPORT We re here to help Intrust Super members are assigned a personal account manager from our Member Relationships Team to assist with their superannuation account. This financial year, the team assisted members with legislation changes, finding their lost super accounts, making extra contributions and many other superannuation queries. Having access to a personal account manager means our members don t have to wait in a call centre queue they can contact their personal account manager directly. Our Client Service Managers have also been working hard to visit our members face to face. This year, the team continued to visit businesses, present seminars and meet members for oneon-one meetings. In addition, the team were always available to help employers with superannuation administration and queries. Throughout the year, the Intrust Super Client Service Managers made over 2,300 site visits and more than 100 orientations and presentations for both employers and members. This financial year we also sent over 390,000 s to members, so they could access important information at a time that suited them. We wanted to ensure our members stayed engaged with their accounts, kept track of their super and kept up to date with legislative changes to super. Customer service

9 intrust.com.au [ 9 ] 2016/17 in numbers 2,304 SITE VISITS 390,607 S SENT 106 ORIENTATIONS/PRESENTATIONS

10 [ 10 ] ANNUAL REPORT We re here to advise The Fund offers financial advice through our financial planning arm, Intrust360. In 2016/17, some big legislative changes were made to superannuation, and many members took advantage of our financial advice service to navigate these changes. These legislative changes to superannuation came into effect from 1 July 2017, and some of the new rules required clients to amend their retirement planning strategies. In particular, the tax exemption on investment earnings in Transition to Retirement [TTR] pensions was removed. This change affected 32 of members in our Super Stream pension. The Intrust360 financial advisers contacted members to ensure those using TTR strategies were aware of the changes. The team completed reviews for their TTR clients and adjusted strategies, where necessary, in preparation for the new rules. In addition, on 1 January 2017, new thresholds were introduced to the Centrelink Age Pension assets test. This change reduced Pension incomes for many Intrust360 clients. Thanks to the work of Intrust360, clients affected by the Age Pension changes were able to prepare their finances adequately. Financial advice Intrust360 also produces a quarterly magazine to help educate clients and Intrust Super members about changes in the financial world. This financial year, the 1 July super reforms, Pension changes and the 2017 Federal Budget were some of major stories covered in the 360 Magazine to help keep our members up to date and informed. Intrust360 strives to deliver the best customer service to clients. The majority of Intrust360 clients are receiving continuing advice from our financial advisers. This form of repeat business is a testament to the fantastic work the team puts in for our clients.

11 intrust.com.au [ 11 ] 58 OF MEMBERS WHO RECEIVED ADVICE WERE CONTINUING CLIENTS 402 STATEMENTS OF ADVICE WERE DELIVERED 32 OF MEMBERS IN SUPER STREAM WERE AFFECTED BY THE 1 JULY TAXATION CHANGES

12 [ 12 ] ANNUAL REPORT We re here to help you manage industry changes Managing super reforms This financial year, many super reforms were introduced. These new rules affected both our contributory members and Pension members. Through s, phone calls, presentations, social media and website updates, the entire team worked to make sure our members were aware of the changes. Some of the major changes included: From 31 December 2016: The lost super threshold was increased to $6,000. Any superannuation account that is determined lost [for instance, if it has not been receiving regular superannuation contributions and falls below the lost account threshold] is transferred to the ATO. Previously, the lost account threshold was $4,000. From 1 July 2017: A reduction in the contribution caps. This will impact different people in different ways. Before-tax contributions are now capped at $25,000 per year, regardless of age. An individual aged over 49, who previously contributed at or close to last year s $35,000 concessional contribution cap, would need to revise their contributions strategy downwards to stay inside the new $25,000 cap on before-tax contributions. An individual aged below 49, who previously contributed at or close to last year s $30,000 concessional contribution cap, would also need to revise their contributions strategy downwards to stay inside the new $25,000 cap on before-tax contributions. After-tax contributions are now capped at $100,000. So, individuals who previously made after-tax contributions equal to or close to the previous $180,000 cap will also need to revise their contributions strategy. The introduction of a transfer balance cap of $1.6 million. If an individual s pension balance is above $1.6 million, they will need to transfer the excess to an accumulation account or withdraw it from super. An increase to the spouse contribution threshold. If an individual s partner earns less than $40,000 a tax offset of up to $540 may apply to the contribution. Previously, this tax offset was only available to those whose partners earned less than $13,800. The introduction of tax deductions on voluntary super contributions. Previously, contributions that were salary sacrificed were deducted from pre-tax income, and were subject to the 15 super contributions tax. Other voluntary contributions came out of after-tax income, and were not subject to the 15 super contributions tax. This change will mean that individuals who make voluntary contributions from after-tax income will be able to claim a tax deduction, which for some people may result in a similar effective financial outcome to salary sacrifice. The introduction of a tax of up to 15 on investment earnings in Transition to Retirement [TTR] accounts. Individuals who employ a TTR strategy should reassess their situation, to consider whether it would be possible, and desirable, to transfer to an account-based-pension.

13 68, MEMBERS LIKELY TO BE AFFECTED BY THE BUDGET CHANGES WERE NOTIFIED VIA OF MEMBERS WHOSE PREVIOUS CONTRIBUTION LEVELS WOULD HAVE BREACHED THE NEW CONTRIBUTIONS CAPS WERE CONTACTED PERSONALLY ABOUT THE NEW CAPS. OF 2016/17 NEWS ARTICLES READ RELATED TO BUDGET CHANGES.

14 [ 14 ] ANNUAL REPORT We re here to make things easier Digital developments It s important to keep making account interaction simple for our members, as this will help to increase our member s engagement with super. If members cannot easily access and update their account, details such as employer contributions, insurance coverage, investment growth and multiple super accounts are likely to go unnoticed. Being engaged with superannuation is so important. This is especially true for young people, who are perfectly positioned to take advantage of compound interest. Each year, we innovate to make super easier for our members and increase their level of engagement. Online account access, online forms and messaging are all methods we use to help members interact with their accounts on their own time, whenever it suits them. Many of our forms are available online, so updating personal details and finding lost super accounts is an easier process for members. They can also use MemberAccess to log in to their accounts online, to check their details and transactions while they re on the go. This year, we introduced digital contact cards for our new members. The digital cards upload directly to members phones without the need to download third party apps or wallets. Members can access their accounts online and update their details whenever it suits them, simply by opening the card on their phone. They can also contact their Account Manager directly if they require assistance. Most importantly, the cards simplify the process of taking an Intrust Super account from job to job, so our members can continue to keep all their super together while their retirement savings grow. Members can now also receive correspondence electronically regarding updates to their account, which they can easily check online. In addition, members can start a pension account directly online [if they are eligible]. It s important to our members that engaging with super is easy. It s our job to make sure we do everything we can to ensure that is possible.

15 intrust.com.au [ 15 ] Over 84 OF NEW MEMBERS RECEIVED DIGITAL CONTACT CARDS AFTER THEIR IMPLEMENTATION 77 INCREASE IN UNIQUE WEBSITE VISITS 29 INCREASE IN MEMBER CONTRIBUTIONS

16 [ 16 ] ANNUAL REPORT We re here to support your community Sponsoring major competitions, industry exhibitions and award ceremonies has allowed us to better support and understand the industries our members work in. By fostering familiarity with these industries, and tailoring our products and services to their specific needs, we can encourage membership growth. By increasing our membership, we can increase the stability and strength of the Fund. Below are the major sponsorships we believe will strategically grow the Fund and help build better outcomes for members. We were proud to continue our support of grassroots football across Australia this financial year. Not only do our sponsorships support the local community, they also help our Fund grow. They help us forge strong relationships with clubs and other organisations, thus expanding our sources of new membership. These sporting sponsorships are a cost-effective form of advertising and enable us to reach a larger audience and increase brand awareness: Intrust Super Cup Naming-rights sponsors to the Queensland Rugby League competition 2017 Queensland Rugby League Admin conference Sponsors Intrust Super Premiership Naming-rights sponsors to the NSW Rugby League competition Intrust Super Shute Shield Naming-rights sponsors to the NSW Rugby Union competition This year we also sponsored events and supported conferences showcasing industry innovations and developments. These events and conferences gave us access and exposure to pub, hotel and restaurant networks and key decision makers in these industries: 2017 Australian Hotel Industry Conference and Exhibition Platinum sponsors 2017 Pub Leaders Platinum sponsors 2016 Restaurant Leaders Silver sponsors 2017 Queensland Hotels Association Women in Hotels lunch Sponsors Industry sponsorships We also helped recognise the achievements of hospitality professionals at awards nights, familiarising our brand with hospitality business owners and their staff: 2016 Queensland Hotels Association Awards Sponsors 2016 Hotel Management Awards Sponsors

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18 [ 18 ] ANNUAL REPORT We re here to help your super grow Investment performance Despite an uncertain political and economic outlook, 2016/17 was a very successful year for investment returns. The Fund s Balanced investment option placed in the top 10 SuperRatings Fund Crediting Rate SR50 Survey, well outperforming median returns¹. For the 12 months to 30 June 2017, our Balanced investment option provided a return of 12.15, compared to the SR50 median Balanced fund return of 10.53¹. The result is the eighth consecutive year Intrust Super has delivered positive returns for members, and the fourth financial year out of five with double-digit returns. The Balanced option for pension income accounts also performed impressively in the 12 months to 30 June, placing second in the SuperRatings SRP50 Pension Fund Crediting Rate Survey². The option returned against the median return of 11.23² a fantastic result for our pension members. ¹SuperRatings Fund Crediting Rate Survey SR50 Balanced [60-76] Index June ² SuperRatings Pension Fund Crediting Rate Survey SRP50 Balanced [60-76] Index June In super, it s important to focus on longer term returns. Over a five-year annualised average, the Balanced option has returned an impressive and the Pension Balanced option an average of over the last five years. These results have surpassed the objectives of both options /17 balanced return 2016/17 Pension balanced return Five-year balanced return

19 intrust.com.au [ 19 ] How Intrust Super compares These charts compare Intrust Super s MySuper option [Balanced option in Executive Super and Select Super] compared to the median balanced option returns of the SuperRatings Balanced SR50 [60-76] option type Intrust Super Median Intrust Super Median year 3 years 5 years 7 years 10 years / / / / /17 Source: SuperRatings Fund Crediting Rate Survey SR50 Balanced [60-76] Index June Past performance is not an indication of future performance. Source: SuperRatings Fund Crediting Rate Survey SR50 Balanced [60-76] Index June Past performance is not an indication of future performance.

20 [ 20 ] ANNUAL REPORT Market update 2016/17 financial year in review Source JANA, FactSet, S&P, MSCI, Mercer, UBS, Barclays Asset Class Aust Equities Aust Equities Int'l Equities Int'l Equities Int'l Equities Unlisted Property Listed Property Int'l Fixed Int Aust Fixed Int Cash Currency Benchmark Index S&P/ASX 300 Accumulation S&P/ASX Small Ordinaries Accumulation MSCI World ex Aus [$A] MSCI World ex Aus [hdgd $A] MSCI Emerging Markets [unhedged $A] Mercer Unlisted Property Trust [pre tax] S&P/ASX 300 Listed Property GICS Bloomberg Barclays Global Aggregate Bond [hdgd] Bloomberg Composite Bond [0+ yrs] Bloomberg Bank Bill Index [90 day] Australian Dollar vs US Dollar Market Returns to 30-June-2017 Mth Qtr FYTD 1 Yr 3 Yrs pa 5 Yrs pa 7 Yrs pa 10 Yrs pa Aust Equities Aust Small Caps Int'l Equities [U/H] Int'l Equities [H] Emerging Mkts Unlisted Property AREITS Global Bonds Aust Bonds Cash AUD vs USD The 2016/17 financial year is now complete and, for the most part, investments, financial markets and economies are surprisingly stable, considering the volatility of the previous year. The financial year started with the fallout from Brexit and an Australian election, followed by the vote for the US President and a raft of elections in Europe. In Britain, Theresa May attempted to extend her Government s majority by calling an early election, to ensure stable leadership during the upcoming Brexit negotiations. Instead, the result delivered a hung parliament.

21 intrust.com.au [ 21 ] But despite all these changes around the world, returns on shares and residential properties lifted, while interest rates are lower and the Aussie dollar is little changed from a year ago. In fact, the Aussie dollar has tracked a range of US6.25 cents its least volatile year in 27 years. The share market has also had the least volatile year in 16 years. As a result, Australia s economy expanded moderately over the year. A sharp increase in commodity prices contributed to domestic recovery, boosting Australia s monthly trade surplus to a record high in December To support this economic recovery, the Reserve Bank of Australia [RBA] held interest rates at 1.5 for the rest of the year, after a 0.25 cut in August. Global economic growth continued to improve over the financial year. The US economy remained resilient, while economic conditions varied across the European Union [EU]. In the UK, markets adjusted to expectations of a UK independent of the EU. While it will take years for the full impact to be known, the immediate result was a lower exchange rate for the British pound. The UK also experienced rapidly rising inflation and a deterioration in some economic indicators throughout the year. On a positive note, the Japanese equity market was one of the best performing developed markets, rising 30.2 over the year. This was largely driven by a sharp depreciation of the Japanese Yen against the USD, which strongly increased the competitiveness of Japanese exporting companies. Global equities Global equities, as represented by the MSCI World ex-australia Index, rose 21.2 on a hedged basis [in AUD]. Unhedged returns were lower [15.4] due to a rise in the Australian dollar over the year. Emerging markets outperformed developed markets, with the MSCI Emerging Markets Index rising 20.5 [unhedged] for the year. Outlook for the coming year A diversified strategy across asset classes provided a strong performance in 2016/17. With the cash rate at record lows and home prices likely to continue growing, the Aussie dollar is expected to remain in the mid- 70s against the US dollar. The issues to watch this coming year will be oil prices, Australian home prices, wages and jobs, and geopolitics especially the decisions made by US President Donald Trump. If you would like any assistance with your investment options, please don t hesitate to contact Intrust Super s financial planning arm Intrust360 on Australian equities The S&P/ASX300 Index performed strongly for most of the year, buoyed by positive investor expectations that a Trump presidency would be supportive of commodities markets. However, market returns weakened towards the end of the year, largely due to the banking sector. The 2017 Federal Budget released in May included a proposal to impose a new levy on major banks, which impacted returns. This was compounded by the widespread credit rating downgrade of Australian banks and other financial institutions by major global credit rating agencies. Additionally, there were pronounced differences in industry sector performance over the year. The materials sector rose 24.5 thanks to a sharp recovery in commodity prices. In contrast, the telecommunications services sector performed very poorly [-21.2], primarily driven by stock specific issues. Property In the property sector, Australian Real Estate Investment Trusts [AREITs] fell 5.6 over the year. Australian unlisted property outperformed their listed counterparts to generate a strong 12.0 return over the financial year. Fixed Interest After several years of strong returns, fixed interest markets were muted over the financial year. Global inflation linked bonds [3.0, hedged into AUD] provided the best returns within the Fixed Interest asset class, while global government bonds [0.5, hedged into AUD] and Australian government bonds [0.2] performed poorly as global yields rose over the financial year.

22 [ 22 ] ANNUAL REPORT Investment returns Core Super Core Super is a simple, flexible and low-cost super product that offers a range of benefits to our members. With eight investment options that suit most of our members needs, Core Super also offers the opportunity for strong long-term performance, as well as cost-effective insurance options for casual, part-time and full-time workers. Executive Super Executive Super caters for members who prefer to have a hands-on approach to their superannuation. With ten investment options and additional insurance cover available, Executive Super can provide members with more flexibility. Select Super With the same investment options as our Executive Super product, Select Super has been designed for those who want to benefit from being a member of Intrust Super, but who may be self-employed, not working or otherwise not able to receive employer contributions into the fund. Stable Conservative* MySuper / Balanced Growth Combined Shares* Cash Bonds [fixed interest] Property Australian Shares International Shares FYTD Rolling 1 year Rolling 3 years Rolling 5 years Rolling 7 years Rolling 10 years As investment markets move up and down over time, it is important to remember that past performance is not an indication of future returns. Please note that the investment returns shown above have been rounded. This means there may be minor discrepancies when adding to achieve the compound return. *The Conservative and Combined Shares investment options are available in Executive Super and Select Super only. As at 30 June 2017

23 intrust.com.au [ 23 ] Super Stream Super Stream is our competitive pension product, designed to provide members with a regular income stream when they retire or are transitioning to retirement. As well as flexible payment options, Super Stream members have ten investment options to choose from, and access to our team of dedicated Super Stream specialists. Stable Conservative* MySuper / Balanced Growth Combined Shares* Cash Bonds [fixed interest] Property Australian Shares International Shares FYTD Rolling 1 year Rolling 3 years Rolling 5 years Rolling 7 years Rolling 10 years As investment markets move up and down over time, it is important to remember that past performance is not an indication of future returns. Please note that the investment returns shown above have been rounded. This means there may be minor discrepancies when adding to achieve the compound return. As at 30 June 2017

24 [ 24 ] ANNUAL REPORT Investment options Balanced Investor profile: This investment option seeks high medium to long-term returns with a medium exposure to risk. It is likely to suit members seeking mid to long-term growth of their superannuation with medium risk. Investment objective: To outperform CPI + 3 p.a. over rolling 10-year periods. Investment strategy: A diversified option that invests across most asset classes, with a large proportion in Australian and international shares, bonds and property investments. Minimum investment timeframe: Medium to long term: if you choose this investment option, be prepared to stay invested in this option for at least 5 years. Risk band: 5 Medium to high: Estimated number of negative annual returns is 3 to 4 over any 20-year period.^ Growth Investor profile: This investment option seeks significant growth above inflation in the longer term with a high exposure to risk. It is likely to suit members seeking long-term growth of their superannuation with high risk. Investment objective: To outperform CPI p.a. over rolling 10-year periods. Investment strategy: Invests heavily in Australian and international shares, with a smaller investment in property and other investment opportunities. Minimum investment timeframe: Long term: if you choose this investment option, be prepared to stay invested in this option for at least 7 years. Risk band: 6 High: Estimated number of negative annual returns is 4 to 6 over any 20-year period.^ Combined shares Investor profile: This investment option seeks significant growth above inflation in the longer term with a high exposure to risk. It is likely to suit members seeking long-term growth of their superannuation with high risk. Investment objective: To outperform CPI + 4 p.a. over rolling 10-year periods. Investment strategy: Invests in Australian and international shares. Minimum investment timeframe: Long term: if you choose this investment option, be prepared to stay invested in this option for at least 8 years. Risk band: 6 High: Estimated number of negative annual returns is 4 to 6 over any 20-year period.^ LOW MEDIUM HIGH LOW MEDIUM HIGH LOW MEDIUM HIGH Strategic asset allocation Strategic asset allocation Strategic asset allocation Asset Allocation Benchmark Range Australian shares International shares Growth opportunities Property Bonds Cash Defensive opportunities Asset Allocation Benchmark Range Australian shares International shares Growth opportunities Property Bonds Cash Defensive opportunities Asset Allocation Benchmark Range Australian shares International shares Cash

25 intrust.com.au [ 25 ] Conservative Investor profile: This investment option seeks to achieve growth above inflation over the longer term with a medium level of risk. It is likely to suit members seeking long-term growth of their superannuation with medium risk. Investment objective: To outperform CPI + 2 p.a. over rolling 10-year periods. Investment strategy: A diversified option that invests across most asset classes, with a large proportion in Australian and international shares, bonds and cash. Minimum investment timeframe: Medium to long term: if you choose this investment option, be prepared to stay invested in this option for at least 4 years. Risk band: 3 Low to medium: Estimated number of negative annual returns is 1 to 2 over any 20-year period.^ Stable Investor profile: This investment option seeks reliable short-term returns with a certain level of security and potential for some growth. It is likely to suit members seeking short to medium-term growth of their superannuation with low risk. Investment objective: To outperform CPI p.a. over rolling 10-year periods. Investment strategy: A diversified option that invests mainly in defensive assets such as cash and bonds, with a smaller proportion spread across other asset classes. Minimum investment timeframe: Short to medium term: if you choose this investment option, be prepared to stay invested in this option for at least 3 years. Risk band: 2 Low: Estimated number of negative annual returns is 0.5 to 1 over any 20-year period.^ Australian shares Investor profile: This investment option seeks significant growth above inflation in the longer term with a high exposure to risk. It is likely to suit members seeking long-term growth of their superannuation with high risk. Investment objective: To outperform the S&P/ASX 300 Accumulation Index over rolling 3-year periods. The S&P/ ASX 300 Index includes the largest 300 companies listed on the Australian Securities Exchange. Investment strategy: Invests predominantly in Australian shares. Minimum investment timeframe: Long term: if you choose this investment option, be prepared to stay invested in this option for at least 8 years. Risk band: 6 High: Estimated number of negative annual returns is 4 to 6 over any 20-year period.^ International shares Investor profile: This investment option seeks significant growth above inflation in the longer term with a high exposure to risk. It is likely to suit members seeking long-term growth of their superannuation with high risk. Investment objective: To outperform the aggregate benchmark of 50 MSCI World Index ex-australia Unhedged and 50 MSCI World Index ex-australia Hedged over rolling three year periods. Investment strategy: Invests solely in international shares. Minimum investment timeframe: Long term: if you choose this investment option, be prepared to stay invested in this option for at least 8 years. Risk band: 6 High: Estimated number of negative annual returns is 4 to 6 over any 20-year period.^ LOW MEDIUM HIGH LOW MEDIUM HIGH LOW MEDIUM HIGH LOW MEDIUM HIGH Strategic asset allocation Strategic asset allocation Strategic asset allocation Strategic asset allocation Asset Allocation Benchmark Range Australian shares Asset Allocation Benchmark Range Australian shares Asset Allocation Benchmark Range Australian shares Asset Allocation Benchmark Range International shares International shares International shares International shares Cash Growth opportunities Growth opportunities Cash Property Property Bonds Bonds Cash Cash Defensive opportunities Defensive opportunities

26 [ 26 ] ANNUAL REPORT ^The Standard Risk Measure is based on industry guidance to allow members to compare investment options that are expected to deliver a similar number of negative annual returns over any 20-year period. The Standard Risk Measure is not a complete assessment of all forms of investment risk, for instance it does not detail what the size of a negative return could be or the potential for a positive return to be less than a member may require to meet their objectives. Further, it does not take into account the impact of administration fees and tax on the likelihood of a negative return. Members should still ensure they are comfortable with the risks and potential losses associated with their chosen investment option[s]. Property Investor profile: This investment option seeks growth above inflation over the medium-term with a medium exposure to risk. It is likely to suit members seeking mid to long-term growth of their superannuation with medium risk. Investment objective: To outperform the Mercer Unlisted Property Trust Index over rolling 4-year periods. Investment strategy: To provide investors with diversified exposure to a range of high-quality properties via unlisted property trusts. Minimum investment timeframe: Medium to long term: if you choose this investment option, be prepared to stay invested in this option for at least 5 years. Risk band: 5 Medium to high: Estimated number of negative annual returns is 3 to 4 over any 20-year period.^ Bonds [fixed interest] Investor profile: This investment option seeks reliable short-term returns with security, but low potential for growth. It is likely to suit members with a short investment timeframe. Investment objective: To outperform the aggregate benchmark of 50 Bloomberg AusBond Composite Bond Index and 50 Barclays Global Aggregate Bond Index [hedged to AUD] over rolling two year periods. Investment strategy: May use index or active bond fund managers which invest in Australian and international bond markets. Minimum investment timeframe: Medium to long term: if you choose this investment option, be prepared to stay invested in this option for at least 3 years. Risk band: 4 Medium: Estimated number of negative annual returns is 2 to 3 over any 20-year period.^ Cash Investor profile: This investment option seeks reliable short-term returns with maximum security, but low potential for growth. It is likely to suit members with a short investment timeframe. Investment objective: To match the Bloomberg AusBond 90 Day Bank Bill Index. It aims to do this by investing in deposits, money market and fixed income securities. Investment strategy: Invests solely in cash using major cash investment manager/s and/or allocation to term deposits. Minimum investment timeframe: Short to medium term: if you choose this investment option, be prepared to stay invested in this option for at least 1 year. Risk band: 1 Very Low: Estimated number of negative annual returns is less than 0.5 over any 20-year period.^ LOW MEDIUM HIGH LOW MEDIUM HIGH LOW MEDIUM HIGH Strategic asset allocation Asset Allocation Benchmark Range Property Cash Strategic asset allocation Asset Allocation Benchmark Range Bonds Cash Strategic asset allocation Asset Allocation Range Cash 100

27 intrust.com.au [ 27 ] Administrator: Australian Administration Services Auditor: BDO Audit [QLD] Pty Ltd Internal auditor: KPMG Custodian: JP Morgan Investor Services Insurer: Life & TPD Insurance: Hannover Life Re of Australasia Ltd Insurer: PayGuard [Income Protection]: Windsor Income Protection Pty Ltd Investment Adviser: JANA Investment Advisers Pty Ltd Legal Advisers: Corrs Chambers Westgarth Personal Financial Advice: IS Financial Planning Pty Ltd trading as Intrust360 a corporate authorised representative of Adviser Network Pty Ltd Investment manager changes Intrust Super made six investment manager changes in 2016/17: Removed: Integrity Investment Management Added: Charter Hall Investment Management Kayne Anderson Capital Advisors Hayfin Capital Management BT Investment Management Macquarie Investment Management Our investment adviser JANA Investment Advisers Pty Ltd [JANA] was established in 1987 as a specialist investment adviser to large institutional investors such as Intrust Super. JANA provides extensive research and recommendations on investment strategy and managers for the Fund. With JANA s assistance, the Trustee monitors and reviews the performance of each investment manager. Service providers

28 [ 28 ] ANNUAL REPORT Other investment information How investment returns are paid With Core Super MySuper, members can choose any combination of the eight investment options available. Executive Super, Select Super and Super Stream members can choose any combination of ten options. Investment switching is free and available weekly across all products. All products are unitised. This means that account balance and transaction details for all products are expressed as both units and dollars. All transactions are unit-based and units are priced each week according to market movements. Your account balance at any time is equal to the number of units you hold in each investment option multiplied by the investment option s current unit price. To view the latest unit prices log in to member access by visiting. Our approach to investing The long-term objective of all superannuation savings should be to maintain or enhance the purchasing power of members savings. While short-term volatility of returns is clearly important for the Fund, the real risk is whether the investments of the Fund will deliver long-term real returns sufficient to meet the retirement aspirations of members. Investments are selected purely for their ability to help achieve the relevant investment objective. Decisions about the selection, retention or realisation of the investments in the Fund are primarily based on economic factors. When selecting, retaining or realising the Intrust Super investments, we do not take into account labour standards or environmental, social or ethical considerations, although sometimes these matters do affect economic factors that in turn affect investments. Our policy towards the use of derivatives Intrust Super does not use derivatives directly. However, our underlying investment managers may invest in derivatives such as futures and options. Derivatives are used to protect the values of portfolios against major falls in market prices or to change a portfolio s exposure to markets more rapidly and efficiently than what could be achieved through the direct purchase or sale of physical assets. To assist in achieving the Fund s investment objectives, the chosen Investment Managers may use tactical asset allocation techniques, which could include investments in derivatives.

29 intrust.com.au [ 29 ] Some investment terms explained Annualised return [pa]: An investment return expressed in yearly terms, even though it does not apply directly to a single year. If the total return on an investment, over two years, was 21 for example, then the two-year annualised return would be 10. This is because a 10 annual return is required in two consecutive years, to generate a total return of 21. Compounding: Compounding refers to the reinvestment or assumed reinvestment of returns into an investment portfolio. As a result of this, returns in future years are generated on top of returns from this year or, as is commonly quipped interest is paid on interest. An investment of $100, made one year ago, would have grown by $10, to $110 today, if the return was 10. If none of that money was touched, and it was left to grow, the returns would be compounded next year. For instance, if next year the return was again 10, the portfolio would grow by $11, to $121 at the end of next year. The dollar return is higher because the return in the second year compounded the first year s return. Unlisted property: An investment in property [for example, office blocks, shopping centres, resorts, hotels] that is not made through a portfolio listed on the stock exchange [ASX]. Securities issued by unlisted companies and investment in unlisted property generally cannot be traded on the ASX but must be sold directly. Index managers: Index fund managers seek to hold a basket of assets that mimic the returns of a particular index, for instance the S&P/ ASX 300 Accumulation Index or the MSCI World ex-australia Index. Active managers: Active fund managers buy and sell securities in an attempt to produce returns that are greater than the general market [or index]. Managed investment: A professionally managed portfolio of assets.

30 [ 30 ] ANNUAL REPORT Investment manager allocations as at 30 June 2017 Intrust Super appoints a range of specialist investment managers, with a track record of providing solid and consistent returns, to invest on the Fund s behalf. Each manager is chosen based on their suitability in relation to the Fund s overall investment objectives and strategy. Their investment performance is regularly reviewed and changes are made where necessary. The managers in place at 30 June 2017 are shown in the following table: Australian Equities International Equities Growth Alternatives Defensive Alternatives Property Bonds [Fixed Interest] Cash Investment Managers Assets $ of total assets Cooper Investors 108,037, Paradice Investment Management 109,724, Greencape Capital 90,862, T Rowe Price 53,785, DNR Capital 95,550, BT Investment Management 77,204, Macquarie Investment Management 80,358, Neuberger Berman 66,507, T Rowe Price 116,377, Investec 118,430, Sands Capital 142,535, Causeway Capital Management 131,894, AMP Capital Investors 47,235, Hastings Funds Management 58,038, Industry Super Holdings / ME Bank 1,102, Gardior 2,738, ISF Investment Trust 36,998, Standard Life Investments 51,538, Schroder Investment Management Australia 29,158, Redpoint Investment Management 23,611, Vinva Investment Management 61,495, Apollo Global Management 63,240, QIC 35,566, Hayfin Capital Management 23,009, Bentham Asset Management 63,304, QIC 150,859, Direct Property 4,200, Charter Hall 51,591, La Salle Investment Management 74,037, ME Portfolio Management 476, AMP Capital Investors 42,148, Pimco Australia 161,441, ME Bank 5,161, Custodian Cash 11,548, Term Deposits 82,532, QIC 46,774, Total 2,319,083,

31 intrust.com.au [ 31 ] Statement of Financial Position as at 30 June ASSETS Cash and cash equivalents 14,389,432 43,341,080 Receivables 26,268,347 27,767,807 Investments Cash and short term deposits 89,103, ,559,526 Interest bearing securities 284,531, ,906,058 Australian equities 591,623, ,551,456 International equities 560,500, ,336,436 Opportunities 489,062, ,894,659 Property 278,066, ,261,149 Property, plant and equipment 865,670 1,050,598 Total assets 2,334,410,983 2,002,668,769 Financials Financial statements This summary has been prepared from the unaudited financial accounts for the Intrust Super 2016/17 financial year. The audited Financial Statements will be made available at intrust.com.au. LIABILITIES Payables [4,300,001] [3,316,138] Cash in transit [3,340,319] [975,892] Income tax payable [2,986,852] [9,994,641] Deferred tax liabilities [31,826,558] [19,468,550] Total liabilities excluding member benefits [42,453,730] [33,755,221] Net assets available for member benefits 2,291,957,253 1,968,913,548 MEMBER BENEFITS Allocated to members [2,273,740,596] [1,957,027,380] Unallocated to members [123,885] [674,307] Total member liabilities [2,273,864,481] [1,957,701,687] Net assets 18,092,772 11,211,861 EQUITY Other reserves [12,931,618] [6,181,422] Operational risk reserve [5,161,154] [5,030,439] Total equity [18,092,772] [11,211,861]

32 [ 32 ] ANNUAL REPORT Reserves Intrust Super maintains reserves to cover the operational costs of the Fund. The reserves are invested in a manner consistent with the Fund s investment strategy in the Balanced option and in a manner that allows the fund to discharge its liabilities as they fall due. The value of the reserve as at 30 June for the past three financial years is listed below: 30 June 2017 $18,092, June 2016 $11,211, June 2015 $12,612,245 Income Statement as at 30 June SUPERANNUATION ACTIVITIES Interest 2,765,343 2,547,997 Dividend revenue 22,859,952 21,023,527 Distributions from unit trusts 68,199,532 59,847,582 Changes in assets measured at fair value 185,006,851 [9,670,218] Other investment income 1,398,963 1,448,945 Other income 256, ,530 Total superannuation activities income 280,487,321 75,873,363 Investment expenses [8,355,339] [6,099,416] Operating expenses [15,304,314] [13,991,398] Anti-detriment expenses [345,646] [216,478] Total expenses [24,005,299] [20,307,292] Net result from superannuation activities 256,482,022 55,566,071 Profit from operating activities 256,482,022 55,566,071 Less: Net benefits allocated to members' accounts [232,106,592] [56,711,074] Profit/[loss] before income tax 24,375,430 [1,145,003] Income tax expense/[benefit] 17,494, ,381 Profit after income tax 6,880,911 [1,400,384]

33 intrust.com.au [ 33 ] Statement of Changes in Members Benefits as at 30 June Opening balance of member benefits 1,957,701,687 1,833,664,222 Contributions Employer 166,722, ,016,317 Member 20,195,636 15,189,849 Transfer from other superannuation plans 91,668,453 67,318,252 Government co-contributions 371, ,022 Income tax on contributions [21,181,524] [18,725,149] Net after tax contributions 257,776, ,215,291 Benefits to members/beneficiaries [163,330,658] [138,196,300] Insurance premiums charged to members' accounts [25,494,390] [20,675,125] Death and disability insurance benefits credited to members' accounts 15,105,100 12,982,525 Benefits allocated to members' accounts, comprising Net investment income 242,007,263 66,578,836 Administration fees [9,900,671] [9,867,762] Operational Risk Financial Requirement Reserve [ORFR] Included in the reserves is the ORFR which is a requirement in terms of the Prudential Standard SPS114. The purpose of this operational risk reserve is to provide funding for incidents where material losses may arise from operational risk relating to the Fund. The level of reserve is determined by the Board based on an assessment of the risks faced by the Fund. The Fund s ORFR of $5,161,154 was fully funded as of 30 June Closing balance of member benefits 2,273,864,481 1,957,701,687

34 [ 34 ] ANNUAL REPORT Have you viewed your Interactive Statement yet? Intrust Super s newly designed Annual Statements fully customised and hitting inboxes everywhere!

35 [ 35 ] intrust.com.au

36 [ 36 ] ANNUAL REPORT Other important information Keep your details up to date Your superannuation is likely to be a significant part of your future retirement nest egg. By staying in touch with you, we can help you keep track of your savings and ensure your account doesn t get transferred to the Australian Taxation Office as a Lost Account. Please help us help you by keeping the following personal details up to date: Your address. Intrust Super requires your current postal address in order to send regular communications about your account. If we are unable to contact you, and your account balance is under $6,000, in some circumstances, we may be required to transfer your account balance to the Australian Taxation Office. Your insurance. Intrust Super provides you with the option of holding life insurance, total and permanent disability insurance and income protection insurance within your account. Members receive a prescribed level of default insurance cover upon joining the Fund [even if you are casual] and there is the option to increase the levels of cover throughout your membership. Please review your personal insurance regularly to ensure that the levels of cover you have are appropriate for your needs. Please see the relevant Product Disclosure Statement for further information. Your beneficiaries. It is important to advise Intrust Super in writing of your preferred beneficiaries. Your beneficiary is the person[s] to whom the balance of your superannuation account, including any attached life insurance, would be paid in the event of your death. The Superannuation Industry [Supervision] Regulations 1994 [ SIS Regulations ] require that a fund can only pay a death benefit to either or both of: the member s legal personal representative [LPR] the person handling the estate of the deceased member, or one or more of the member s dependants A dependant is defined as including: the spouse of the member this can include a de facto or same-sex spouse; any child of the member; any person with whom the member had an interdependency relationship ; and any person who was wholly or partially financially dependent on the member. Please remember to review the beneficiaries listed on your superannuation fund whenever your personal circumstances change over the years. Your contributions. While the Trustee does have a follow-up process in place to contact employers who have not made contributions to the Fund by the due date, you should also check your pay slip and online super fund account details regularly to ensure that you are receiving the contributions you are entitled to. Your SG payments are due at least quarterly and potentially more often under certain industrial awards.

37 intrust.com.au [ 37 ] Unclaimed benefits If we have to make a payment to you and are unable to do so because we cannot contact you or your beneficiaries to ask for payment instructions, we will pay the money to the Australian Tax Office. This money can be claimed at any time by contacting them on Keeping you in the loop To help you stay fully informed about your Intrust Super account and superannuation matters in general, we provide the following regular communications: An annual Member Statement. This Annual Report. Lunchroom seminars at various work places. Phone and support through our Contact Centre. Your very own Super Concierge who can contact you at a time that suits your schedule. Information at your fingertips at intrust.com.au. Trustee indemnity insurance To protect both the Trustee and our members benefits, the Trustee has taken out indemnity insurance. This protects the Trustee against any claims it cannot satisfy from Fund assets. Trust Deed amendments Enquiries Please direct all enquiries to the Intrust Super Contact Centre by phone, , in writing, or in person. The Fund s Contact Centre is open from 8am to 8pm [AEST]. Core Super, Executive Super and Select Super members: Phone Visit Level 15, 324 Queen Street Brisbane QLD 4001 Mail GPO Box 1416 Brisbane QLD 4001 Fax info@intrust.com.au Super Stream members: Phone Visit Level 15, 324 Queen Street Brisbane QLD 4001 Mail Locked Bag 5042 Parramatta NSW 2124 Fax info@intrust.com.a The Trust Deed is the document that sets out the rules associated with Intrust Super. The Trust Deed was recently reviewed and no updates were required. Additional information At any time you can ask for a copy of the Trust Deed [the Fund s rules], the latest audited accounts, a copy of the Fund s Life and PayGuard Insurance policies or the latest Member Guides [Product Disclosure Statements]. Contact us on or visit intrust.com.au if you would like any of these documents. A fee may be charged for providing this information.

38 [ 38 ] ANNUAL REPORT Other important information Complaints While Intrust Super strives to provide excellent member services, we acknowledge that the services we provide and the decisions we make may not always satisfy everyone. Should you be dissatisfied with the service you receive or any other aspect of Intrust Super, please contact us to discuss the matter. If this does not resolve your enquiry, please contact us, using the details listed left, to make a formal complaint. We will do our best to acknowledge all complaints in writing within one working day of receipt and aim to resolve all complaints within five working days of receipt. However, at times, the nature of the complaint may not make this possible. In these cases, the Trustee will resolve any complaints within a maximum of 90 days. If you are not satisfied with the way we handle your complaint or with its resolution, you may contact the Superannuation Complaints Tribunal. The Tribunal is an independent body set up by the Federal Government to assist members or beneficiaries to resolve certain superannuation complaints. The Tribunal may be able to help resolve your complaint but will only become involved after you have used the Intrust Super internal complaint handling process, as outlined above. If the Tribunal agrees to hear your complaint, it will firstly try to resolve the matter by assisting the parties to come to a mutual agreement. Should mutual agreement not be reached, the Tribunal can progress the matter to a formal hearing. To find out whether the Tribunal can handle your complaint and the type of information you need to provide, please contact it as follows: Superannuation Complaints Tribunal Mail Locked Mail Bag 3060 Melbourne VIC 3001 Phone Privacy Intrust Super collects your personal information to establish and administer your account. If you would like to access any personal information we hold about you, please contact us. A copy of the Fund s privacy policy is available on request or by visiting intrust.com.au.

39 [ 39 ] intrust.com.au Contact intrust.com.au The Clearing House functionality within EmployerAccess is provided by the Superannuation Clearing House [SCH] as an Authorised Representative of Pacific Custodians [ABN AFSL ]. Both the SCH and our administration provider, Australian Administration Services [AAS] [ABN ], are part of the Link Group of companies and therefore separate to IS Industry Fund Pty Ltd, the Trustee of Intrust Super. The Trustee is not responsible for the products or services, views or actions of these organisations. Employers should use their own judgment before taking up any product or service offered by a third party. The information contained in this document is of a general nature only, and does not take into account your individual situation, objectives and needs. You should consider the appropriateness of the general information having regard to your own situation before making any investment decision. A Product Disclosure Statement is available at or call us on for a copy. While Intrust Super has no reason to believe that this information will not provide an accurate view of the material covered, Intrust Super does not accept liability for any errors in the content of this information. This Annual Report together with your Member Statement and the Your Statement Explained Flyer form part of and make up your Annual Statement. This document was created on 00/09/2017. Issued by IS Industry Fund Pty Ltd MySuper Unique Identifier: ABN: AFSL No: RSE Licence No: L Intrust Super ABN SPIN: HPP0100AU RSE Registration No: R IS Financial Planning Pty Ltd ABN trading as Intrust360 is a wholly owned subsidiary of IS Industry Fund. Intrust360 is a corporate authorised representative of Adviser Network Pty Ltd ABN: AFSL: Corporate Authorised Representative Number: Visit Level 15, 324 Queen Street, Brisbane QLD 4000 Mail GPO Box 1416, Brisbane QLD 4001 Fax info@intrust.com.au CONNECT WITH US facebook.com/intrustsuperfund twitter.com/intrustsuper

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