TRUSTEE REPORT HOLDEN EMPLOYEES SUPERANNUATION FUND

Transcription

1 TRUSTEE REPORT 2015 HOLDEN EMPLOYEES SUPERANNUATION FUND

2 Contents From the Trustee 1 Advice services for members 2 Member Guides 2 Your Fund website Super Update 4 How your Fund works 6 How your super is invested 7 Investment: Defined Benefit Section 8 Investment: Accumulation Section and Retained Benefit Section 11 Who manages your Fund? 17 Fees and other costs 18 Financial summary 19 Additional information 20 What to do when you leave your employer 21 Who to contact 22 Issued by Holden Employees Superannuation Fund Pty Ltd, ABN , as Trustee of the Holden Employees Superannuation Fund, ABN November 2015 FROM THE TRUSTEE On behalf of the Trustee Board for the Holden Employees Superannuation Fund ( Fund ), I present the Trustee Report for the year ending 30 June Key highlights of this year are as follows: 1. For the third year in a row, the Fund achieved strong investment returns, as highlighted by the box on the right hand side of this page; 2. The Fund Actuary conducted the Actuarial Review, as required every 3 years, to provide information on the funding and financial status of the Fund. The latest Actuarial Review was conducted as at 30 June 2014 and concluded that the Fund was in satisfactory financial position; 3. There were two changes on the Trustee Board: Alex Menta replaced Chris Collison as a Director appointed by GM Holden Ltd ( Holden ) and Scott Gibbins replaced Chris Juresko, as a Director appointed by the FVIU; and 4. An important project during the year was the production of a Member Guide for Salaried Payroll members and another for Plant Payroll members. These Guides are comprehensive, describing your contributions and benefits under the Defined Benefit Section, your Accounts under the Accumulation Section and the services available to you as a Fund member. The Trustee recommends that you read the Member Guide applicable to you. They are available on the Fund website. Given the Fund s strong financial position, since 1 January 2013 Holden had not been contributing to the Fund s Defined Benefit Section. However, the Fund Actuary recommended that Holden recommence contributing from 1 January Effective from that date, the rate of contribution by Holden to this Section was 13.7% of all members base salaries/wages and from 1 July 2015 the rate is 13.3%. I note at all times, Holden has been making its Supplementary Contributions and remitting all member contributions including those being paid under salary sacrifice arrangements with the employee. Holden is continuing to support the Fund and the Trustee is continuing to manage the Fund in the best interests of members. Fund investment returns for the year ending 30 June 2015 Investment return of 5.40% p.a. for the Defined Benefit Section Returns for the investment options under the Accumulation and Retained Benefit Sections: > 11.3% p.a. for the Growth Option > 10.1% p.a. for the Balanced Option > 8.3% p.a. for the Cautious Option > 6.2% p.a. for the Conservative Option > 2.3% p.a. for the Cash Option Please be aware that past performance is not an indicator of future performance. Fund statistics as at 30 June 2015 Net assets of $713.4 million 4,711 members (including 2,653 members in the Retained Benefit Section and 19 pensioners) Benefits totalling $30.0 million paid to retiring and totally and permanently disabled members $0.6 million paid to families of members who died $42.6 million paid to other members who left the Fund Kristen Hooke Chair 1

3 ADVICE SERVICES FOR MEMBERS Managing personal finances is a complicated task that s only getting harder and when you are in a Defined Benefit fund it can become even more complicated. You are bombarded with tax and investment information and many of us struggle to navigate our way through it. If you require any personal advice about superannuation, it is recommended that you consult a licenced financial adviser. The Trustee provides members of the Fund access to quality advice in the following ways: Fund Information and General Advice Face to face Super Advice Face to face Strategic Financial Advice MEMBER GUIDES Comprehensive Member Guides are now available on the Fund website. These guides provide details of: your contributions and benefits your accounts (as applicable) the Government s preservation and tax requirements applying to superannuation the services available to you as a Fund member, and what happens when you leave your employer. MEMBER GUIDE PLANT PAYROLL Simply call the Holden Super Helpline on Freecall Member Guide Plant Payroll Important Notes: 1. Helpline staff are not representatives of the Trustee. Any general financial product advice provided by the Helpline staff is provided by Mercer Financial Advice (Australia) Pty Ltd, AFSL No employees of GM Holden Ltd are authorised to provide general financial product advice to Fund members. 3. None of the Trustee, its Directors, the Fund Secretary or the Fund Administrator are able to give any personal financial product advice relating to your own circumstances. MEMBER GUIDE SALARIED PAYROLL Member Guide Salaried Payroll HOLDEN EMPLOYEES SUPERANNUATION FUND HOLDEN EMPLOYEES SUPERANNUATION FUND 2

4 YOUR FUND WEBSITE AT The Fund website is a great resource offering a wealth of information on the Fund. The website is divided into two parts a public area and a secure member area. The homepage provides access to: information about the Fund s Investments an article library a range of planning tools Fund documents Member Guides and a range of Fund forms. Via the homepage, you can also sign-in and access up-to-date information on your personal contributions and benefits. How to sign in To access your personal account, you ll need your Member Number (find this on your last Benefit Statement) and your PIN (a PIN was issued to each member in early April 2008). If you have forgotten your PIN, please call the Fund Helpline on for assistance. If you ve provided an address to the Fund previously, you can reset your PIN by following the prompts to Reset your PIN from the Sign-in section on the homepage. Once in the secure member area you can: find out how much super you currently have review and make changes to your Member Investment Choice options view daily unit prices for the Member Investment Choice options update your telephone numbers and address (and if you are a Retained Benefit Section member you can update your home address) view or download your latest Benefit Statement, as well as those going back to 2007 view your current beneficiaries for the payment of your death benefits in the Fund, and update them if required (not applicable if you are a Retained Benefit Section member) view your contribution details, and see how you re tracking against the Government contribution caps that apply view your correspondence with the Fund, for example a completed Fund form, a financial advisor authority, a roll in to the Fund, PIN reset requests, inquiries you have made to the Fund Helpline. Mobile Fund website There is a mobile version of the Fund website making it easier for you to view your important account information on the go. To access the mobile website you need an iphone, Android, Windows, Blackberry or non-tablet device and simply enter into your browser. You then need your Member Number and PIN to access your personal information. Also, if you have any questions, you can call the Fund Helpline at the touch of a button. 3

5 2015 SUPER UPDATE Super in Review Superannuation changes which could affect you Several pieces of legislation came into effect during the financial year. A few additional changes to super which will have a noticeable impact on members follow Federal Budget announcements Changes to terminal illness payments The Government announced in the 2015 Federal Budget that on 1 July 2015 the certification period for terminal medical conditions would change from 12 to 24 months. These changes refer to your super account balance but do not automatically translate to the terminal illness provisions of the Fund s insurance policy. Therefore, there may be circumstances where a member may be able to access their super account balance but not the associated insurance benefit for terminal illness at the same time. For members of the Retained Benefit Section, this means if you meet the criteria for a terminal medical condition you can access your super account balance up to a year earlier than before. Changes to the Age Pension The 2015 Federal Budget also proposed changes to the Age Pension. The Government has made it easier for people with fewer assets to get the Age Pension, but the asset-rich will find it harder to qualify or receive a reduced payment. However, the Government has guaranteed that all existing pensioners affected by these changes will remain eligible for the Commonwealth Health Seniors Card or Health Care Card. The changes below are not due to take effect until 1 January 2017 and will require legislation. Increase the amount of assets pensioners can have before their pension starts to be reduced (e.g. from $202,000 now to $250,000 in 2017 for single homeowners and from $286,500 now to $375,000 in 2017 for homeowner couples); and Double the taper rate (i.e. an increase from $1.50 to $3.00 in the rate at which the fortnightly age pension is reduced for each $1,000 of assessable assets in excess of the free level), so that part-pensions reduce more quickly as assets increase and cut out entirely at significantly lower levels than currently (e.g. the assessable assets cut-off level for a part pension will reduce from $775,500 now to $547,000 in 2017 for single homeowners and from $1,151,500 now to $823,000 in 2017 for homeowner couples). The Government said that the changes would result in pension increases for around 170,000 pensioners, with 50,000 of these becoming eligible for the full pension. However around 91,000 current part pensioners with assets above the new cut-off levels would cease to be eligible for any pension and a further 235,000 current part pensioners would see reductions due to the higher taper rate. The Government also confirmed that it will not proceed with last year s Budget proposal to restrict the pension indexation rate to CPI increases. Finding your lost and unclaimed super to become easier The ATO has confirmed that measures announced in the Federal Budget to cut red tape and make it easier for individuals to be reunited with their lost and unclaimed superannuation are being developed. A collaboration between Treasury, the ATO and superannuation industry stakeholders is expected to see most elements implemented on 1 July The following became legislation in : Superannuation Guarantee From 1 July 2014, the minimum employer superannuation contribution (Superannuation Guarantee) increased from 9.25% to 9.5% of Ordinary Time Earnings. The legislated rates that will apply for the 2015/16 to the 2025/26 income years are: Income Year SG Rate % 2015/ / / / / / / / / / /26 and onwards 12 Deeming of superannuation income streams From 1 January 2015, account-based superannuation income streams became subject to the normal deeming rules for social security pension income tests, subject to grandfathering of the current rules for qualifying persons in receipt of a Social Security pension at 31 December Eligibility for grandfathering ceases if the Social Security pension a person was receiving at 31 December 2014 ceases, with the person subject to the deeming rules after that time. 4

6 Changes to concessional contributions limits for The concessional (before tax) contribution limit for is $35,000 for workers age 50 or over at 30 June Concessional contributions include employer and salary sacrifice contributions. The cap increased to $30,000 for younger workers. The higher limit of $35,000 for older workers is fixed and is not indexed (i.e. not automatically increased periodically). For younger workers, indexation of the $30,000 a year concessional limit resumed from 1 July Changes to non-concessional contributions limits for The non-concessional (post tax) contribution limit for is $180,000. However a member under age 65 can (unless they have already done so in the prior two years) generally bring forward two years of non-concessional contributions and make non-concessional contributions of up to $540,000 in This bring-forward provision will automatically be triggered if non-concessional contributions of more than $180,000 are made in and excess non-concessional contributions will only arise if total non-concessional contributions for and the next two years exceed $540,000. income earners face additional contributions tax The Government s additional contributions tax of 15% on some or all concessional contributions for members whose income plus non-excessive concessional contributions exceed $300,000 has been legislated. The tax is payable on the lesser of your non-excessive concessional contributions and the amount by which your income and non-excessive concessional contributions exceed $300,000. The tax applies retrospectively from 1 July 2012 and operates in a similar way to excess contributions tax. The member will be responsible for paying the additional tax and can generally request to have this paid from their super account. Special rules for defined benefit members For only, the defined benefit notional taxed contributions that apply for excess contributions tax purposes (capped if the member is eligible) also apply for this new tax. Notional contributions for and later years will be as determined under the existing arrangements for excess concessional contributions but without any grandfathering caps being applied. Any additional tax liability relating to defined benefit notional contributions may be deferred until a benefit is paid. Temporary residents can apply for a refund of this additional tax when they have left Australia. Temporary Budget Repair Levy impact on superannuation A three year temporary levy (the Temporary Budget Repair Levy) was introduced on high income individuals from 1 July 2014 until 30 June The Temporary Budget Repair Levy will apply at a rate of two percent on individuals annual taxable income in excess of $180,000. Taxes related to the maximum marginal tax rate will also be impacted. The Fringe Benefits Tax rate increased from 47% to 49% for two years from 1 April A number of other superannuation related tax rates, based on the top marginal tax rate plus the Medicare Levy, also increased by 2.5% from 1 July 2014 (including the excess non-concessional contributions tax rate and the tax rates on employer contributions and benefits where a member has not provided their TFN) and the tax rate on Departing Australia Superannuation Payments will increase by 3%. The changes to these tax rates apply across the board, not just to high income earners. Departing Australia Superannuation Payment (DASP) The tax rate payable on superannuation benefits paid to temporary residents following their departure from Australia has increased. The rate generally increased from 35% to 38% for the period 1 July 2014 to 30 June After taking into account the standard 15% contribution tax on employer and salary sacrifice contributions, this will result in an effective tax rate on superannuation of over 47% for all temporary residents, irrespective of income. 5

7 HOW YOUR FUND WORKS The Fund has three sections: Defined Benefit Section Accumulation Section, and Retained Benefit Section. Defined Benefit Section You make Basic Contributions to this Section on either an after-tax or salary sacrifice basis. Your employer pays the balance of the cost of providing the benefits. The Fund Actuary monitors the Fund s financial position and recommends the contribution rate that the employer must make. Government regulations require that an Actuarial Review of the Fund takes place every three years. The purpose of this review is to provide information to the Trustee on the funding and financial status of the Fund. The last completed Actuarial Review covered the three year period ending 30 June 2014 and showed the Fund was in a satisfactory financial position. Pages 8-10 of this report provides investment and performance details. Your retirement, death and total and permanent disablement benefits are provided in the form of defined benefits. You can take your retirement benefit as a lump sum or a pension. Full information on all your benefits in this Section is covered in the Member Guides for Salaried Payroll and Plant Payroll available on the Fund website. Accumulation Section Under this Section you may have up to three separate accounts which are established in your name. These accounts hold: the Supplementary Contributions paid by your employer, any Voluntary Additional Contributions you have chosen to make to the Fund, and any amounts you have chosen to rollover into the Fund. Each account is made up of the accumulation of these contributions (after deducting any tax payable on employer contributions) with investment earnings (which may be positive or negative). You have a choice of investment options in which to invest your account balances and you can change your investment options. Details can be found in the Member Investment Choice Guide available on the Fund website. Pages of this report provide investment and performance details as at 30 June Full information on this Section is covered in the Member Guides for Salaried Payroll and Plant Payroll available on the Fund website. Retained Benefit Section Any member who leaves GM Holden Ltd, and has a superannuation account balance of more than $1,000 can leave all or part of their benefit in the Fund. Members of this Section: have access to the Fund s investment options, can roll-in amounts from other funds, can make lump sum personal contributions, and can make withdrawals of non-preserved amounts. There are no entry fees to the Retained Benefit Section. An administration fee is deducted from your account. The fee is: $1.44 per week for year ended 30 June 2015, and $1.46 per week from 1 July This fee is indexed each 1 July to the increase in Average Weekly Ordinary Time Earnings index. Full information on this Section is covered in the Member Guide available on the Fund website. 6

8 HOW YOUR SUPER IS INVESTED Your Fund has guidelines for investing The Trustee has an Investment Government Framework that sets investment strategy and objectives covering how and where the Fund s assets will be invested as well as other investment related matters. The Trustee regularly monitors the Fund s performance against its objectives and strategy, and changes are made where necessary. In consultation with the Fund s Investment Adviser, the Trustee reviewed the Fund s investment return objective and strategy for the Fund s Defined Benefit Section. The September 2014 Newsletter to members provides information on adopting a more conservative investment objective and strategy for the Fund s Defined Benefit Section. The Trustee does not directly use derivative instruments. Derivatives are not an asset class; they are financial contracts in which parties agree to arrangements for buying or selling an asset at a set price at some specified time in the future. Examples are share options or futures. The underlying investment managers may use derivatives in managing their part of the pooled investment vehicles in which the Trustee invests. The use of derivatives is monitored by the Investment Manager. Decisions to invest in or realise investments are based on key financial and managerial criteria. The Trustee does not separately consider social, environmental or ethical factors or labour standards to make these decisions. This and the following pages outline the investment objectives, strategies and performance for each section of the Fund, apart from the Pension section. The assets supporting the Fund s pensions are in a tax-exempt investment. Investment to risk objective The Trustee has established a risk objective for the Defined Benefit Section and for each Member Investment Choice option. These Short-term are risk two measures for the risk objects: to to to to to to to -term risk -term risk Long-term risk Long-term risk to to to to is the risk that a member s superannuation savings will be reduced by the annual volatility of investment markets. For this risk, the standard risk measure developed by the Association of Superannuation Funds of Australia Limited and the Financial Services Council is used. This measure has seven labels from to based on the expected number of negative annual returns over a 20 year period (refer to the table below). Long-term risk is the risk that a member s superannuation savings will not significantly outperform inflation over a member s superannuation accumulation lifetime. This risk has the same labels as applying to the short-term risk but is based on analysis specific to the definition of long-term risk. Table: Standard Risk Measure Risk Label Estimated number of negative annual returns over any 20 year period Less than to less than 1 to 1 to less than 2 2 to less than 3 to 3 to less than 4 4 to less than 6 6 or Greater 7

9 TRUSTEE REPORT 2015 INVESTMENT: DEFINED BENEFIT SECTION Investment return objective Up to August 2014, the long term investment objective was to earn a return (after fees and tax) exceeding the rate of inflation (as measured to to to to to 5 year periods. Following a review by the to to to by the Consumer Price Index (CPI) by at least 3.0% p.a. over rolling Trustee, the new objective is to earn a return (after fees and tax) exceeding the rate of inflation (as measured by the Consumer Price Index (CPI) by at least 2.0% p.a. over rolling 5 year periods. 20 Investment return for the yearended 30 June for the last 5 years Investment risk objective 15 to to 2012 to % % 5 0 up to August % to to to Long-term risk up to August 2014 to to to to to to to to to to Short-term risk Short-term risk 2015 from August 2014 The Annual Compound Return for the 5 year period to 30 June 2015 was 8.9% p.a. For the same period the CPI was 2.34% p.a. to For an explanation of the two risk measures please refer to page 7 of this report. 15.5% 12.1% to to to to to to to to to to Long-term risk from August 2014 to to to to to 8

10 Investment Strategy The actual asset allocation at 30 June 2015 is shown in the table below. Also shown is the Strategic Asset Allocation at 30 June The Strategic Asset Allocation is determined by the Trustee, in conjunction with the Fund s Investment Adviser, as the appropriate asset allocation mix to achieve the investment objective of the Defined Benefit Section. Asset class Actual asset allocation % Strategic asset allocation % at 30 June 2015 at 30 June 2015 Growth assets Australian Shares International Shares Unhedged International Shares $A Hedged International Property $A Hedged Global Listed Infrastructure $A Hedged* Total Defensive assets Australian Bonds Australian Enhanced Cash Total *Global Listed Infrastructure This investment aims to provide exposure to a diversified portfolio of predominantly global listed infrastructure securities on stock exchanges in developing and emerging markets (such as countries included in the S&P Global Infrastructure Index). 9

11 Investment Returns and Crediting Rates Whilst retirement, death and total and permanent disablement benefits are provided in the form of defined benefits, your resignation benefit is different as it is an accumulation style benefit and depends on the rate of interest credited to your Basic Contributions. The Fund s Crediting Rate Policy was changed with effect from 1 July Up to March 2012 when the Notional Crediting Rate reserve reached nil, the Crediting Rate was calculated using a smoothing approach but with a minimum rate of zero. For more information please refer to the newsletter on crediting rates issued in April From 1 April 2012 investment earnings are allocated to a member s Basic Account using a Crediting Rate equal to the actual investment return (after investment fees and tax) which may be positive or negative. From 1 July 2013, new superannuation legislation required the Trustee to establish an Operational Risk Reserve. To build up this Reserve, a levy of 0.1% p.a. has been deducted when determining the Crediting Interest Rate. This deduction will cease effective 31 October The table below shows the history of the investment returns and the Crediting Interest Rate over the 5 years to 30 June Year as at 30 June Investment Return % p.a. Crediting Interest Rate % p.a Annual Compound Rate for the 5 year period Past performance should not be taken as an indication of future performance. Investment returns can go up or down. 10

12 INVESTMENT: ACCUMULATION SECTION AND RETAINED BENEFIT SECTION Investment options There are five investment options available for investing your accounts: Growth, Balanced, Cautious, Conservative and Cash. Your accounts invested in units Your accounts buy you units in your chosen investment options. The price of units varies from day to day, depending on the value of the underlying assets. As contributions go into your accounts, you get more units in your chosen investment options. The total value of your accounts at any time is simply your total number of units in your chosen investment options multiplied by the relevant unit sell price. The impact of transaction and operational costs on the unit prices (i.e. expenses, commissions, brokerage and other fees which are incurred in buying or selling part or all of the underlying investments of each investment option) is passed on to members through what is commonly referred to as the buy/sell spread. The buy/sell spread is the difference between the (higher) price at which members can purchase units (the buy price) and the (lower) price at which members can sell units (the sell price). No part of the buy/sell spread is paid to the Trustee. For an example on how buy/sell spreads work in practice, please read the example on page 15 of the Member Investment Choice Guide, available on the Fund website. The buy/sell spread is different for each investment option and can change over time. The buy/sell spreads at 1 July 2015 were: Growth option: 0.50% of the amount invested. Balanced option: 0.46% of the amount invested. Cautious option: 0.42% of the amount invested. Conservative option: 0.36% of the amount invested. Cash option: Nil. The latest buy/sell spreads for all options are available on the Fund website. Changing your investment choice You can change your investment choice at any time. You can choose to invest your accounts in one or more investment options. You may also invest your current account balances one way and your future contributions a different way. To change your investment choice, you can either do this online or complete and return a Changing your investment choice form (which is available on the Fund website or by calling the Fund Helpline). Your change will be processed on the first business day after your form is received. Before making a decision to change your investment options you should read the Member Investment Choice Guide, also available on the Fund website. There are two costs which apply to changing investment options. There is the buy/sell spread and a processing fee of $30.00 which is debited to your account. Monitoring your investment You can view the performance of each investment option on the Fund website, which shows up-to-date unit prices for all investment options. The net earnings on your chosen investment options (which may be positive or negative) will be reflected via changes in the unit prices. Remember it is very important for most members that you take a longterm view of your investment rather than focusing on short-term results. Investment returns and risk objectives The charts and tables on the following pages show each investment option s objectives and strategy applicable at 30 June 2015, and returns over the past five years. The investment returns quoted reflect the change in unit prices over the year expressed as a percentage. The unit prices for each option reflect the value of the underlying investments after making provision for investment tax and investment management fees. From 1 July 2013, new superannuation legislation required the Trustee to establish an Operational Risk Reserve. To build up this Reserve, a levy of 0.1% p.a. is being deducted when determining unit prices for the investment options. This deduction will cease effective 31 October Past performance should not be taken as an indication of future performance. Remember, investment returns can go up or down. Investment objectives on these pages are not a financial forecast. 11

13 TRUSTEE REPORT 2015 HIGH GROWTH OPTION 25 Suitable for investors who: Investment return for the year ended 30 June for the last 5 years to to 11.3% 7.6% Growth Assets Australian Shares 32.7% International Shares 34.0% Infrastructure 4.2% Property 5.5% Other Alternatives 9.7% Commodities 0.4% 15.3% plan to invest for 6 years or more15 are willing to accept the possibility of negative returns over the 10 short to medium term. Where the assets were invested at 30 June % are seeking to build wealth over 20 the long term y w y w This option aims to earn a return (after investment fees and tax) of at least 4.0% p.a. above the Consumer Price Index (CPI) over rolling 5 year periods. For the 5 year period to 30 June 2015, this objective was met: the investment return was 10.3% p.a. and the CPI for the same period was 2.34% p.a. Approximately 90% growth assets and 10% defensive assets. Investment return objective to to Defensive Assets Fixed Interest 8.2% Cash 5.3% -2.9% The Annual Compound Return for the 5 year period to 30 June 2015 was 10.3% p.a. Investment risk objective For an explanation of the two risk measures please refer to page 7 of this report. Long-term risk to to to to to to to to to Mediu 12

14 TRUSTEE REPORT 2015 BALANCED OPTION Investment return objective This option aims to earn a return (after investment fees and tax) of at least 3.5% p.a. above the Consumer Price Index (CPI) over rolling 5 year periods. For the five year period to 30 June 2015, this objective was met: the investment return was 9.4% p.a. and the CPI for the same period was 2.34% p.a. Approximately 70% growth assets and 30% defensive assets. Suitable for investors who: to to y 0-5 y 10.1% 7.2% 5 Growth Assets Australian Shares 27.4% International Shares 27.7% Infrastructure 4.1% Property 4.5% Other Alternatives 6.6% 13.4% plan to invest for 5 years or more are willing to accept the possibility of 10 negative returns over the shorter term. Where the assets were invested at 30 June % are seeking to built wealth over the medium to long term Investment return for the year ended 30 June for the last 5 years to to to Defensive Assets Fixed Interest 20.5% Cash 9.2% to -0.2% The Annual Compound Return for the 5 year period to 30 June 2015 was 9.4% p.a. Investment risk objective For an explanation of the two risk measures please refer to page 7 of this report. Long-term risk to to to to to to to to to to to Mediu 13

15 TRUSTEE REPORT 2015 CAUTIOUS OPTION Investment return objective Approximately 50% growth assets and 50% defensive assets. Investment return for the year ended 30 June are seeking some capital growth over the20 medium term 13.3% Growth Assets Australian Shares 17.9% International Shares 19.0% Infrastructure 2.7% Property 3.9% Other Alternatives 7.9% Commodities 0.5% plan to invest for 4 years or more are15 willing to accept the possibility of negative returns over the shorter term. to 10 5 y y Where the assets were invested at 30 June Suitable for investors who: This option aims to earn a return (after investment fees and tax) of at least 3% p.a. above the Consumer Price Index (CPI) over rolling 5 year periods. 10.9% to to 0 8.3% to to 2013 to to to Defensive Assets Fixed Interest 34.6% Cash 13.5% t Mediu Note: There is no 5 year return for this option as it commenced in October The return for the period from 1 October 2011 to 30 June 2015 was 10.2% p.a. Investment risk objective For an explanation of the two risk measures please refer to page 7 of this report. Long-term risk to to to to to to to to t Mediu 14

16 TRUSTEE REPORT 2015 CONSERVATIVE OPTION Investment return objective This option aims to earn a return (after investment fees and tax) of at least 2.0% p.a. above the Consumer Price Index (CPI) over rolling 5 year periods. For the five year period to 30 June 2015, this objective was met: the investment return was 6.9% p.a. and the CPI for the same period was 2.34% p.a. Approximately 30% growth assets and 70% defensive assets. Suitable for investors who: 10 Investment return for the year ended 30 June for the last 5 years 9.0% are happy with slower growth 8 6.7% 6.2% 6 4.7% to 4 to to 2 0 Growth Assets Australian Shares 9.8% International Shares 8.9% Infrastructure 3.0% Property 3.2% Other Alternatives 9.2% 8.1% plan to invest for 3 years or more can accept only very little volatility in returns. Where the assets were invested at 30 June Defensive Assets to Fixed Interest 40.8% to Mediu Cash 25.1% 2015 The Annual Compound Return for the 5 year period to 30 June 2015 was 6.9% p.a. Investment risk objective For an explanation of the two risk measures please refer to page 7 of this report. Long-term risk to to to to y w to to to to Mediu to 15

17 TRUSTEE REPORT 2015 to CASH OPTION Investment return objective t Mediu to This option aims to earn a return (after investment fees and tax) above the Bloomberg UBS Bank Bill Index) Ausbond Bank Bill Index (formerly known as over rolling 1 year periods. This objective was not met: the investment return for the year ended 30 June 2015 was 2.3% and the Bloomberg Ausbond Bank Bill Index was 2.6%. 100% defensive assets. Suitable for investors who: are happy with slow growth Investment return for the year ended 30 June for the last 5 years plan to invest for the short term want to minimise the chance of any 5 volatility in returns. 4.7% 4.4% 4 Where the assets were invested at 30 June 2015 At 30 June 2015, the Cash Option was invested in the Cash Option managed by JANA Investment Advisers. This is invested in Australian Cash. 3.46% 3 2.6% 2.3% to 2 to t Mediu The Annual Compound Return for the 5 year period to 30 June 2015 was 3.5% p.a. Investment risk objective For an explanation of the two risk measures please refer to page 7 of this report. Long-term risk to to to to to to to 16

18 WHO MANAGES YOUR FUND? Your Fund is run by the Trustee company called Holden Employees Superannuation Fund Pty Ltd ABN The Trustee manages the Fund according to the Fund s Trust Deed and superannuation laws. Trustee insurance protection The Fund pays for insurance to protect the Trustee, its Directors and your Fund against claims against it. The Directors are not insured for liability arising from dishonest, wilful or reckless acts. Trustee Board As at 30 June 2015, the Directors of the Trustee Company were: Appointed by FVIU Heinz Joham Elizabeth, South Australia Scott Gibbins Port Melbourne, Victoria Alex Kyriakopoulos Elizabeth, South Australia Effective 10 December 2014, Chris Juresko resigned as a Trustee Director and effective 19 February 2015, Scott Gibbins was appointed a Trustee Director. Appointed by GM Holden Ltd Kristen Hooke (Chair) Port Melbourne, Victoria Alex Menta Port Melbourne, Victoria Julianne Coleman Port Melbourne, Victoria Effective 27 March 2015, Chris Collison resigned as a Trustee Director and effective 26 May 2015, Alex Menta was appointed a Trustee Director. Independent appointed by the Trustee Board Kevin Kelly Fund Advisers The Trustee is assisted by the following advisers: Actuary Mercer Consulting (Australia) Pty Ltd Administrator and Consultants Mercer Outsourcing (Australia) Pty Ltd Auditor Deloitte Touche Tohmatsu Insurer CommInsure Investment Managers Russell Investment Management Ltd JANA Investment Advisers Investment Consultant Chant West Solicitor Maddocks Internal Auditor/Risk Management Consultant Compliance & Risk Services Pty Limited Who manages the investments? During the year, the assets of the Defined Benefit Section and the Growth, Balanced, Cautious and Conservative options were invested in the Russell Pooled Superannuation Trust. This Trust, through its underlying funds managed by Russell Investment Management Ltd, provides access to some of the leading asset class specialist investment managers in the world. The Fund invests in the Russell Pooled Superannuation Trust and not with the individual investment managers selected by Russell Investment Management Ltd. During the year, the Cash Option was invested in a Cash Option managed by JANA Investment Advisers. The Fund has 19 pensioners and the underlying assets are invested in the Pensions Cautious Option managed by JANA Investment Advisers. 17

19 FEES AND OTHER COSTS This section shows fees and other costs you may be charged. These fees and costs may be deducted from your account, from the returns on your investment, or from the Fund assets as a whole. You need to take into account the impact of tax as well. You do not pay GST on any of the fees and costs shown. The Trustee has the right to increase fees at any time. You will receive at least 30 days notice of any increase in fees. Type of fee or cost Amount How and when paid Fees when your money moves in or out of the Fund Establishment fee Nil Not applicable The fee to open your Fund membership Contribution fee The fee on each amount contributed either by you or your Employer There is no fee deducted from your contributions, but a buy/sell spread applies to contributions made to the Accumulation Section and Retained Benefit Section (see Management costs below) Not applicable Withdrawal fee The fee on each payment made by the Fund Termination fee The fee to close your Fund membership Management costs There is no fee when paying your full benefit in one payment. A fee of $78.29 for any partial payments Nil Deducted from the payment at the time of payment Not applicable The fees paid to administer your benefit Defined Benefit Section and Accumulation Section: Nil Not applicable The fees paid to the investment managers Buy/sell spread This applies when contributions are made, roll-ins/transfers received and withdrawals made. Service fees Investment Option Change Fee Family law fees Application for information (i.e. benefit valuation) in the format specified under the Family Law Act Retained Benefit Section: $1.44 per week up to 30 June 2015 and $1.46 per week from 1 July 2015 Defined Benefit Section: 0.40% p.a. of your Basic Contribution Account Accumulation Section and Retained Benefit Section: Growth Option: 0.48% p.a. of your account balance invested in this option Balanced Option: 0.45% p.a. of your account balance invested in this option Cautious Option: 0.42% p.a. of your account balance invested in this option Conservative Option: 0.39% p.a. of your account balance invested in this option Cash Option: 0.23% p.a. of your account balance invested in this option Accumulation Section and Retained Benefit Section: Buy/sell spread (refer to page 11 for explanation) Processing fee of $30.00 payable each time you request a change to your investment option Deductions are made from a member s account annually at 30 June or at earlier exit Deducted from the investment earnings before declaring the Section s net earning rate. Deducted from the investment earnings before declaring the unit prices. Deducted from the transaction amount through the daily unit price on the day of the transaction Deducted from your account balance at the time of the change $ Paid by person making the request at time request is made Splitting a benefit $70.00 Shared equally by both parties and will be deducted from each party s benefit at the time the benefit is split unless all of the benefit is going to the non-member spouse (in which case the non-member spouse pays the entire fee) Flagging a benefit None Not applicable 18

20 FINANCIAL SUMMARY This is a summary of the Fund s audited accounts for the year ended 30 June You can request a copy of the audited accounts and auditor s report from the Fund Secretary. Changes in net assets for the year ended June 2015 $ 2014 $ Net Assets at beginning of the year 720,664, ,367,277 Investment Earnings Change in Net Market Value of Investments 43,079,067 69,624,410 Investment Income 112, ,001 Management fee rebates 2,009,875 2,109,500 Contributions Member contributions Defined Benefit Section: After Tax Member Basic 1,331,054 1,468,296 Voluntary Additional Contributions 904, ,930 Government Co-contributions 19,165 27,175 Employer contributions Defined Benefit Section Salary Sacrifice Member Basic 5,068,502 4,983,032 Employer 8,670,485 - Salary Sacrifice Voluntary Contributions 3,022,229 2,611,993 Supplementary Superannuation Contributions and Contributions for Casual and Fixed Term employees 6,560,050 8,102,393 Other Income Member Transfers In 1,077, ,906 Insurance Proceeds 339,006 1,037,351 Sundry 545 4,151 Total Income 72,193,833 91,687,138 Less Outgoings Benefit Payments 73,269, ,404,518 General Administration Expenses 2,247,292 2,044,445 Insurance Premiums 884,315 1,098,985 Surcharge Payments Income Tax Expense 3,032,096 1,842,149 Total Outgoings 79,433, ,390,408 Equals Net Assets at end of year 713,424, ,664,007 Net assets at 30 June 2015 $ Investments 2014 $ Cash at Bank 9,690,015 4,006,787 Pooled Superannuation Trusts 686,060, ,990,588 Life Policies 17,339,697 17,532,572 Other Assets Contributions Receivable 2,338,125 1,226,830 Investment Income Receivable 6,816 9,815 GST Receivable 33,040 39,019 Future Income Tax Benefit 25,898 28,394 Prepayments 47,668 49,702 Total Assets 715,542, ,883,707 Less Liabilities Benefits payable 439,668 7,207,764 Creditors and Accrued Expenses 221, ,040 Income Tax Payable 1,120, ,293 Provision for Deferred Income Tax 335, ,603 Total Liabilities 2,117,287 8,219,700 Net Assets 713,424, ,664,007 19

21 ADDITIONAL INFORMATION If you have a query Most queries can be sorted out over the phone, but if we are unable to help you immediately, you may be asked to put your question in writing. If you are not satisfied with the response, you should write to the Fund Secretary, who will pass on your complaint to the Trustee. You can expect a decision within 90 days. The Trustee always seeks to resolve any complaints to the satisfaction of all concerned and in the best interests of all members of the Fund. However, if you have followed the steps outlined above and are not satisfied with the outcome, you may be able to take the matter to the Superannuation Complaints Tribunal (SCT). The SCT is an independent body that aims to resolve certain types of superannuation disputes. Any complaints must be lodged with the SCT within certain time limits. For more information about requirements and time limits, you can contact the SCT via its online complaint service at or call the SCT on If the SCT accepts your complaint, it will try and help you and the Fund reach a mutual agreement through conciliation. If conciliation is unsuccessful, the complaint may be referred to the SCT for a determination that is binding. Like to know more? There are Member Guides available on the Fund website containing information about your benefits and the rules governing the Fund. You also receive an annual Benefit Statement containing important personal information about your benefits in the Fund. Other documents relating to the Fund that are available for you to look at are the: Trust Deed, latest audited accounts and auditor s report, and Privacy Policy. If you have a question about your benefits in the Fund, please contact the Fund Administrator. Please note that none of the Trustee Directors, the Fund Secretary or the Fund Administrator is able to give any personal financial advice relating to your own circumstances. Surcharge For some higher income earners and members who had not supplied their TFN, there has been an additional tax known as the surcharge on certain contributions and some termination payments made by your employer. The surcharge ceased at 30 June Although the surcharge has been removed in respect of future contributions, it will apply in respect of the period up to 30 June This means that the ATO will continue to issue surcharge assessments in respect of contributions and termination payments made before 1 July If the Fund is required to pay surcharge tax in respect of you, the tax payable is deducted from your benefit in the Fund. If you roll over benefits into the Fund from another super fund, any liability to pay the surcharge for contributions made to that fund that has not been paid may be transferred to the Fund. If we receive a surcharge assessment after you have left the Fund, we will return it to the ATO. The ATO will either forward it to the Fund to whom your benefit was paid to or to you if your benefit was paid direct to you. Special tax treatment Super can be one of the most effective ways to save because it is taxed at a lower rate than many other forms of income. To get this tax advantage, your Fund must operate according to a strict set of laws. To show that your Fund has followed these laws, the Trustee lodges a return each year with the Australian Prudential Regulation Authority. The Trustee is unaware of any event that occurred during the year that would affect this special tax treatment. The Fund is a regulated complying superannuation fund for the purposes of government legislation. No penalties were imposed on the Trustee under the Superannuation Industry (Supervision) or Corporations legislation during the year. 20

22 WHAT TO DO WHEN YOU LEAVE YOUR EMPLOYER If you are about to leave your employer make sure you respond promptly to letters from the Trustee about your benefit payment. If your benefit is more than $1,000 and you are under age 65, and you do not respond to the Trustee within 90 days of leaving, your benefit will be automatically transferred to the Fund s Retained Benefit Section. If your benefit is less than $1,000 and you are under age 65, and you do not respond to the Trustee within 90 days of leaving, your benefit will be transferred to an Eligible Rollover Fund (ERF). Upon transfer, you will no longer be a member or have any rights under the Holden Employees Superannuation Fund. The ERF used by the Fund is AMP Eligible Rollover Fund. Set out below is a summary of some of the significant features of the AMP Eligible Rollover Fund, current at the date of this Trustee report: The assets of the AMP Eligible Rollover Fund are invested in a capital guaranteed life insurance policy (Policy) issued to AMP Superannuation Limited (ASL). The Policy is a participating policy in AMP Life s No. 1 Statutory Fund (AMP No 1 Fund). There is no investment choice available to members within the AMP Eligible Rollover Fund. The investment return (crediting rate) will not be negative. The investment strategy for the AMP Eligible Rollover Fund is to invest in a core portfolio of cash and fixed interest, with limited exposure to equities and alternative investments. AMP Life declares multi-tiered crediting rates of investment earnings (interest) with respect to the Policy. The amount to be credited to a member s account is calculated based on a member s daily balance and credited annually (or on withdrawal). There are no fees charged directly to a member s account by ASL. Administration and investment fees as well as taxes (including earnings tax) are deducted by AMP Life before declaring any interest to be credited under the Policy. The AMP Eligible Rollover Fund is unable to accept contributions from members or their employers, however rollovers from other superannuation funds are permitted. The AMP Eligible Rollover Fund does not provide insurance cover. The AMP Eligible Rollover Fund undertakes many activities to assist in locating any lost super you may have so you can consolidate all your accounts (including your AMP Eligible Rollover Fund account) into your active super account. Should you wish to know more about the AMP Eligible Rollover Fund, contact an AMP Customer Service Officer on for a copy of their Product Disclosure Statement or go to amp.com.au. If you have reached age 65 and have not told the Fund how and where to pay your benefit, and you cannot be contacted, then your benefit will be considered to be unclaimed money. It will then be placed with the ATO. You will then need to contact the ATO to find out how to claim your benefit. In the past, unclaimed money was sometimes put to State or Territory unclaimed money authorities. Continuing your insurance The Fund s insurance policy provides a continuation option for death cover, which you may exercise if you are eligible (there are certain conditions that apply). This allows you to apply for a replacement individual insurance policy with the insurer within 60 days after your cover under the Fund s insurance policy ceases without the requirement to provide satisfactory evidence of good health. Cover under the continuation option is generally available up to the insured amount at the date your cover under the Fund s policy ceases. The cost of continuing your cover outside the Fund will be based on the insurer s prevailing individual policy premium rates, terms and conditions. You will need to pay the premium for any individual policy you take out under the continuation option. For more information, refer to the Information Sheet Insurance arrangements and options when you leave employment on the Documents & forms page of the Fund website. When you leave employment, you should call the Fund Helpline on for more information about continuing your insurance. 21

23 WHO TO CONTACT Log onto the Fund s website Call Fund Helpline Fund Administrator at holden@mercer.com Write to the Fund Administrator Holden Employees Superannuation Fund c/o Mercer Outsourcing (Australia) Pty Ltd GPO Box 4303 Melbourne Vic 3001 Write to the Fund Secretary Holden Employees Superannuation Fund c/o Mercer Outsourcing (Australia) Pty Ltd GPO Box 9946 Melbourne Vic