Newcastle Permanent Superannuation Plan (the Plan) Member Newsletter September 2013

Transcription

1 Newcastle Permanent Superannuation Plan (the Plan) Member Newsletter September 2013 Contents: New NPBS Adviser Fee arrangements for Superannuation Advice available from 1 October 2013 Page 1 Investment performance to 2013 Page 2 Investment option name changes Page 4 Member Protection removed Page 4 Establishment of an Operational Risk Reserve Page 4 Super update Page 4 Please read this newsletter to learn more about the following important updates: New NPBS Adviser Fee arrangements available from 1 October 2013 Investment performance to 2013 Change in the names of each investment option in the Plan Removal of the rules protecting low account balances from fees (member protection) The Operational Risk Reserve (ORR) a new requirement under Stronger Super Super Update which includes information about: o Stronger Super o an increase in the concessional contribution cap from 1 July 2013; o changes to Superannuation Guarantee contribution rates; and o changes to Minimum Pension Factors. New NPBS Adviser Fee arrangements Personal Superannuation Advice Services From 1 October 2013, you will now have the ability to have Adviser Fees for any personal superannuation advisory services # provided to you by the licensed advisers of the Newcastle Permanent Building Society (NPBS Advisers), deducted from your account balance, subject to certain conditions. These fees can take the form of a one-off fee for ad hoc services or an ongoing fee for regular advice, and must be specified in dollar terms. 1

2 If you and your NPBS Adviser agree to an ongoing NPBS Adviser Fee for the provision of ongoing advice services, this agreement will remain valid for two years. Any on-going NPBS advice services provided thereafter will require a new agreement with your NPBS financial adviser. Members who joined the Plan before 1 October 2013 can elect to take-up this new fee basis at any time after 1 October To take-up the new fee basis you need to complete and return an Advice Fee Deduction Form - by completing this form you will also be revoking any current arrangements in place to pay Contribution Fees in the Plan. Thereafter if you and your NPBS Adviser agree to vary the amount of any on-going NPBS Adviser Fee, or agree to a deduction of any one-off NPBS Adviser Fee, you must notify the trustee in writing by completing the appropriate form available from the Plan s website at: newcastlepermanent.superfacts.com or you can call the Plan s Superannuation Helpline on Any change to the NPBS Adviser Fees deducted from your account balance will only take effect after the appropriate form has been received and processed by the trustee. Any NPBS Adviser Fees agreed between you and your NPBS Adviser cannot be deducted from your account if your balance is less than $1,000. Where a member agrees to the deduction of an NPBS Adviser Fee, the trustee will pay the amount agreed to the Newcastle Permanent Building Society, subject to the arrangements between the trustee and NPBS regarding such payments. # Superannuation Advisory Services are services relating to your interest in the Plan, for example advice in relation to investment choice, making contributions or insurance cover. Investment performance to 2013 The following tables show the investment performance of the Plan s investment options to 30 June The returns shown for the Superannuation Division are shown after deduction of fees and taxes. For the Pension Division, the returns for the investment options are not taxed, so the returns are shown after deduction of fees only. Please refer to the footnotes below for additional detail. Superannuation Division Investment option 1 Year to 30 June Years to 10 Years to Perm Cash 2.7% 3.5% 4.1% Perm Conservative 6.5% 4.4% 4.7% Perm Balanced 14.3% 3.1% 4.4% Perm Growth 17.2% 2.6% 4.9% 2

3 Perm investment option declared crediting rates 1 July July 2011 N/A 1 August August 2011 N/A 1 September September October October November November December December January January February February March March April April May May June June Pension Division Investment option 1 Year to 30 June Years to 10 Years to Perm Cash 3.2% 4.2% 4.9% Perm Conservative 7.5% 5.2% 5.5% Perm Balanced 16.3% 3.8% 5.2% Perm Growth 18.6% 3.2% 5.7% Perm investment option declared crediting rates 1 July July 2011 N/A 1 August August 2011 N/A 1 September September 2011 N/A 1 October October November November December December January January February February March March April April June May June June Notes: 1. Past performance should not be relied upon as an indicator of future performance. 2. Annual effective rates of return are actual rates of return less investment management fees and any performance fees. 3. Up to 2008, the earning rate declared by Newcastle Permanent Building Society Limited on the deposits held by them was based on the RBA cash rate less 0.25% p.a. From 1 July 2008, the earning rate declared by NPBS is based on the RBA cash rate. 4. The Perm investment option was introduced on 1 September 2011 in the Superannuation Division and on 1 October 2011 in the Pension Division. 3

4 Investment option name changes From 1 October 2013, the word Perm, will be removed from the names of the investment options. As a result, the investment option names will be Cash, Conservative, Balanced, Growth and. There will be no changes to the investment fees or investment strategy as a result of this change. If you would like further information about the investment options available through the Plan or would like to make an investment switch, call the Plan s Superannuation Helpline on Member Protection removed Previously member protection rules meant that the fees and charges that could be applied to account balances under $1,000 were generally limited to no more than the investment earnings on the account balance. The cost for member protection in the Plan was met from the administration fees deducted from members account balances and was not an additional cost to members. The Government removed the member protection rules from 1 July 2013, however the trustee has decided that if your account balance is under $1,000 the member protection rules will continue to apply to you until 30 September From 1 October 2013, member protection will no longer apply and the fees and charges applied to account balances under $1,000 will no longer be limited to the investment earnings Establish Operational Risk Reserve (ORR) As part of new Stronger Super requirements (see the Super Update section below for more information on Stronger Super), which came into force on 1 July 2013, the trustee is now required under law to establish and maintain an operational risk reserve (ORR). The purpose of the ORR is to provide resources to protect members interests should a loss arise due to an operational failure. The ORR will be used to rectify a loss to members in certain circumstances. The trustee has set a target of 0.25% of the Plan s assets for the ORR. It is expected that this target will be reached in three years time commencing from 1 July 2013, with an amount of 0.08% being set aside each year from the Plan s operating budget to form the ORR. In future years, the Plan s annual financial statements (summarised in the trustee s Annual Report issued each year) will show the amount held in the ORR and details any payments out of the ORR. At this stage there is no levy being charged to members to fund the ORR although the trustee reserves the right to do so should it be necessary. If this occurs you will be notified in advance. Super Update Stronger Super Stronger Super is a parcel of reforms implemented by the Federal Government designed to strenghten the Australian retirement system. It is one of the most significant reforms in the industry in almost 20 years and covers four main areas which are summarised below. Governance The Government s measures to strengthen the integrity of the superannuation system will improve trustee and Plan related decisions, efficiency and effectiveness, and thus help grow member superannuation entitlements. SuperStream On 1 Juy 2013 the Government commenced the implemenation of SuperStream, a package of measures designed to enhance the back office of superannuation. When fully implemented, these measures will improve the productivity of the superannuation system and make the system easier to use. 4

5 Self-managed superannuation funds The Government is implementing a range of measures relating to self-managed superannuation funds (SMSF). Reforms in this area will improve their integrity and increase community confidence in the sector. They will also improve the operation and efficiency of the sector by enabling more efficient transactions, including rollovers from superannuation funds regulated by the Australian Prudential Regulation Authority. MySuper From 1 Janury 2014 superannuation funds will be required to offer a default superannuation product called MySuper if the fund wants to accept mandated superannuation contributions from members who do not exercise investment choice. As all new Plan members actively select their investment option, the Plan will not be incorporating a MySuper product. Higher concessional contributions cap from 1 July 2013 From 1 July 2013 a higher concessional (before-tax) contribution cap of $35,000 a year applies for people aged at least 59 on Concessional contributions include employer and salary sacrifice contributions. This higher cap is not indexed. For the year, this higher cap will be extended to anyone over age 49 on Superannuation Guarantee increase from 1 July 2013 From 1 July 2013, Superannuation Guarantee (SG) contributions increased to 9.25%, and there is no longer an upper age limit for receiving SG contributions, meaning that workers over age 70 will receive SG contributions. The SG percentage will eventually rise to 12% from 1 July 2019, as follows: Financial Year Rate (%) 2012/ / / / / / / / Superannuation Guarantee (SG) refers to the compulsory superannuation contributions made by employers on behalf of their employees. Prior to 1 July 2013 an employer was required to contribute at least 9% of an employee s salary toward the employee s superannuation account. 5

6 Minimum pension factor table The table below shows the minimum percentage that applies for the financial year commencing 1 July Your pension during the financial year commencing 1 July 2013 is calculated based on the minimum percentage (according to your age) as described in the table below. Age* Percentage of Account Balance^ Under 65 4% % % % % % % * Age is your age as at the start of the financial year or when you start a pension in the case of the first year ^ In the year in which your pension commences, the minimum payment is based on the number of days remaining in the financial year. No minimum payment is required if the pension commences on or after 1 June. Disclaimer: This notice has been prepared for the general information of members in both the Superannuation and Pension Divisions of the Plan. It does not take into account any member s individual financial objectives, financial situation or needs. We recommend that you obtain advice from a licensed, or appropriately authorised, financial adviser before acting on any information contained in this notice. While all due care and diligence has been taken in the preparation of this notice, the trustee reserves the right to correct any errors or omissions. If there are any inconsistencies between the terms of the Plan trust deed or its insurance policies and this notice, the terms of the trust deed and insurance policies prevail. The Plan s Superannuation Helpline and the Plan s website are provided by Mercer Outsourcing (Australia) Pty Ltd ABN , Australian Financial Services Licence # For further information on the Plan s new investment arrangements, please refer to the current Product Disclosure Statement for Superannuation Division members or Pension Division members. You should be aware that the value of an investment may rise or fall from time to time. The investment performance of each investment option is not guaranteed by the trustee or Newcastle Permanent Building Society Limited (NPBS) and may be positive or negative. However, NPBS guarantees that the rate of return on the underlying deposits in which the Perm Cash and Perm investment options invest will not be negative. Issued by Mercer Superannuation (Australia) Limited (MSAL) ABN , AFSL as trustee of the Plan ABN MSAL is a wholly owned subsidiary of Mercer (Australia) Pty Ltd ABN The Newcastle Permanent logo is a trademark of Newcastle Permanent Building Society Limited ABN