Product Disclosure Statement

Transcription

1 Product Disclosure Statement Towers Watson Superannuation Fund 1 December About the Towers Watson Superannuation Fund How super works Benefits of investing with the Towers Watson Superannuation Fund Risks of super How we invest your money Fees and costs How super is taxed Insurance in your super How to open an account...7 About this Product Disclosure Statement This Product Disclosure Statement (PDS) is a summary of significant information and contains a number of references to important information (each of which forms part of the PDS). You should consider that information before making a decision about the product. The information provided in the PDS is general information only and does not take account of your personal financial situation or needs. You should obtain financial advice tailored to your personal circumstances. Information in this document that is not materially adverse is subject to change from time to time and may be updated if it changes. Updated information can be found at super. towerswatson.com/super/twsf or a copy can be obtained free of charge by contacting the Fund Administrator on

2 1. About the Towers Watson Superannuation Fund The Towers Watson Superannuation Fund (the Fund) is a superannuation fund specifically designed to cater for the superannuation needs of employees of Towers Watson Australia Pty Ltd (ABN ) and certain associated employers ( Willis Towers Watson ). The Trustee of the Fund is Wycomp Pty. Limited (ABN ) who is responsible for managing the Fund. Information about the Trustee, including executive remuneration and any other documents required to be disclosed under the superannuation legislation are available on the website at under Trustee Information. The Fund has two main sections the Accumulation section for employees who joined after 1 January 2011 and the Defined Benefit section for employees who joined prior to 1 January The Defined Benefit section is closed to new members. This PDS provides a summary of the benefits provided to Category D, Category B and Category I members. Category D (Accumulation benefits): permanent employees (including long-term contractors*) working at least 15 hours per week who commenced employment on or after 1 January 2011 or who elect to transfer to this category. Category B (Accumulation benefits): non-permanent employees and permanent employees working less than 15 hours per week. Category I (Insurance only): permanent employees working at least 15 hours per week (including long-term contractors*) who have chosen to have employer contributions paid to another fund. * A long-term contract is of at least six months duration. 2. How super works Superannuation is a way to save for retirement that is, in part, compulsory. For many people, it is likely to be their main source of income in retirement. Generally, if you are a Category D or B member, your employer contributes at least 9.5% of your Ordinary Time Earnings (OTE) to your super account this is known as the Superannuation Guarantee (SG). You can also contribute money to help your super grow. The money in your super account is invested and earns investment returns over the years until you retire. The Government provides tax savings, so the money contributed to your super account is generally taxed less than the tax you pay on your salary. This helps your super to grow. The Government has rules in place which mean you generally cannot access the money in your super account until you reach what is known as your preservation age generally between age 55 and 60 or you satisfy another condition of release. Contributions There are different ways you can contribute to your super. Company contributions Willis Towers Watson contributes money to your super fund on your behalf. Voluntary contributions to help your super grow, you have the option to contribute additional amounts to your super. You can generally make these contributions from your before-tax salary or after you have paid tax. However you cannot claim a tax deduction for after-tax contributions you make to the Fund. Government co-contributions if you make a contribution to your super from your after-tax salary and your salary is under the limit set by the Government, you may be eligible for an annual additional contribution from the Government. You can also transfer money you have in other super funds into the one account in the Fund. The Government places limits on how much can be contributed to super before extra tax applies see page 5 for more information. Choosing your super fund Choice of Fund legislation allows most working Australians to choose which super fund they wish to belong to. As an employee of Willis Towers Watson, you have an opportunity to participate in Choice of Fund if you wish. When you start employment, you must choose a superannuation fund to receive your SG contributions. You should read the important information about how super works before making a decision. Further details about how super works are contained in the Super Guide in the section How super works. Go to The material relating to how super works may change between the time when you read this Statement and the day when you acquire the product. 1 willistowerswatson.com

3 3. Benefits of investing with the Towers Watson Superannuation Fund There are a number of benefits of being a member of the Towers Watson Superannuation Fund. For Category D and B members, Willis Towers Watson contributes at least the amount necessary to meet its SG requirements, currently 9.5% of your OTE, into the Fund. Contributions are made into the Fund monthly. The Company declares bonuses that are inclusive of superannuation so typically 9.5% of any bonus you may be eligible for must be directed to superannuation. You have the choice of five investment options for your super in the Fund. You must make an investment choice on joining the Fund, if you direct the Company s contributions to this Fund. You can make voluntary contributions to your super from your before-tax salary (via salary sacrifice) or after-tax salary. Please note that before-tax contributions are subject to Company consent. You can keep your entire super in the one fund by rolling over your previous super into your account in this Fund. To help protect you and your family from the unexpected, provided you meet the conditions on pages 5 and 6, the Fund provides permanent employees working at least 15 hours per week with life insurance and terminal illness cover as well as insurance if you become totally and permanently disabled. Category B members have insurance for death and terminal illness only. If applicable, you may also have the option to take out additional voluntary insurance for extra protection. Willis Towers Watson pays 0.5% of your Salary for the cost of standard insurance and all administration fees, which will count toward your concessional contribution limit. Investment, Family Law fees and voluntary insurance fees (if applicable) are the only fees charged to you as a member. You receive regular communication from the Fund. Each year you will receive a Personal Statement of Benefits outlining the value of your super, along with access to an Annual Report and periodic newsletters. You can keep track of your super via and make changes to your super online. You should read the important information about the benefits of investing with the Fund before making a decision. Further details about your benefits are contained in the Super Guide in the section Benefits of investing with the Fund. Go to The material relating to the benefits of investing with the Fund may change between the time when you read this Statement and the day when you acquire the product. 4. Risks of super As with all investments, there are risks with investing your super with the Fund. Your level of risk will vary depending on your age, investment timeframe, other investments and risk tolerance. Investment risk The Fund offers you a choice of five investment options. Each has a different strategy and different level of risk and expected return. The level of risk depends on the option s assets. Assets with the highest long-term returns may also carry the highest level of short-term risk. The value of your account in the Fund will vary and may rise or fall in line with the performance of the investment markets in which your money is invested. Returns from the Fund may be positive or negative and are not guaranteed. You should remember that past performance is not necessarily a reliable indicator of future performance. When you leave the Fund, you may get less than the amount of contributions paid in by you and your employer because of taxes, fees and low or negative investment returns. Other risks Being a member of the Fund does not automatically mean that you will have enough money to live on in your retirement. Your future superannuation savings and investment earnings may not be sufficient to adequately provide for your retirement. Your employer may decide to cease or vary its contributions to the Fund. The Fund s Trust Deed may be amended, or the Fund may close in the future. This may affect the value of your super account balance or payout. There is also the risk that the Fund will lose its complying status and therefore lose its tax concessions. The Trustee manages this risk by ensuring that the Fund is administered professionally and that it operates according to the requirements of the Trust Deed and law. A change in the laws that govern superannuation may impact on your ability to access your money in the future or affect the tax effectiveness of your super savings. Your insurance cover may not commence or may be restricted if you do not meet all the conditions for cover. The Fund may also be exposed to other risks such as changes in the economic and political climate, fraud or other criminal activities. Not all of these risks can be controlled by the Trustee. You will be kept informed about any material changes that may affect your super. You should read the important information about the risks of super before making a decision. Further details about risks are contained in the Super Guide under Risks of super. Details of investment risks are in the Investment Guide. For both documents, go to The material relating to the risks of super may change between the time when you read this Statement and the day when you acquire the product. 2 Product Disclosure Statement

4 5. How we invest your money The Fund gives you the flexibility to choose how your superannuation is invested. Investment choice applies to your total accumulation account balance in the Fund. You must choose one of the following five investment options: Aggressive Growth Balanced Moderate, or Cash. You must make an investment choice when you join the Fund or your application for Category D or B membership cannot be processed and you will join as a Category I (Insurance only) member. Making your choice You should make your initial investment choice on the Membership Application. To change your investment choice, you should: Complete an Investment Switching form, available from the Fund Administrator on or on the website at or Visit the Member Centre section of the website to make your choice online. No fees currently apply to change your investment choice. Each option has a different level of investment risk and likely return. When making your choice, you should consider the risk and likely return of each option and whether they suit your investment timeframe. Further details about investments, including information about the Fund s other investment options and investment risks, are contained in the Investment Guide. You should read the important information about investments before making a decision. Go to The material relating to investments may change between the time when you read this Statement and the day when you acquire the product. The Growth option Overview 1 Investment objectives Investment strategy Benchmark asset allocation Minimum suggested investment period This is a diversified strategy which invests across the major asset classes, but with a significant weighting towards return-seeking assets. This may be suitable for members who expect to invest their super for more than seven years. Investors may be seeking a diversified portfolio which aims to achieve moderate to high capital growth over the medium to long term with a high level of investment volatility (which may include periods of negative returns). To invest in a broadly diversified range of investments that will achieve a better return than the Balanced option over the medium to long term, accepting that annual returns will vary quite widely and be negative on occasions. To achieve a return (net of tax and investment fees) that exceeds the increase in CPI by at least 3.0% p.a. over moving 10-year periods. To limit the probability of achieving a negative gross of tax return over moving one-year periods to five years in 20. To invest largely in shares, property, hedge funds, multi asset funds and alternative credit (approximately 80%) with the balance in fixed interest investments. 10.0% Australian Shares 15.0% Multi Asset Funds 10.0% International Shares (unhedged) Alternative Credit 5.0% 10.0% International Shares (hedged) Australian Fixed Interest 10.0% 22.5% Emerging Market Shares Australian Inflation-linked Bonds 10.0% 5.0% 2.5% Fund of Hedge Funds Global Listed Property Cash 7 years or more Likelihood of a negative return in any 20-year period 2 4 to 5 years in 20 Volatility level 2 6: High very low very high 1 Note that this information is general in nature and is included as required by law. It is not intended to be a recommendation or statement of opinion in relation to any particular investment. Members are encouraged to seek their own advice if they are uncertain as to what might be most appropriate for them. 2 The volatility level shown 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. It is based on the Standard Risk Measure developed by the industry and 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 range of risks and potential losses and gains associated with their investments. 3 willistowerswatson.com

5 6. Fees and costs DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30-year period (e.g. reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You or your employer, as applicable, may be able to negotiate to pay lower fees. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( has a superannuation calculator to help you check out different fee options. These are the main fees to set up and manage your account based on the Fund s Growth option. Information in this section can be used to compare costs of the Fund with other similar superannuation funds. These fees and costs may be deducted from your account in the Fund or from the returns on your investment. Other fees, such as activity fees and insurance fees for voluntary insurance cover, may also be charged, but these will depend on the nature of the activity or insurance chosen by you. Refer to page 6 for details of the insurance fees. Fees shown include GST and stamp duty if applicable. ASIC s superannuation calculator at can be used to check the effect of fees and costs on your account balance. Example of annual fees and costs The table below gives an example of how the fees and costs in the Growth option for this superannuation product can affect your superannuation investment over a one-year period. You should use this table to compare this superannuation product with other superannuation products. Example Growth option Balance of $50,000 Investment fees PLUS Administration fees PLUS Indirect costs for the Growth option EQUALS Cost of product Fee changes 1.05% per year Nil Nil For every $50,000 you have in the superannuation product, you will be charged $525 each year.* And, for every $50,000 you have in the superannuation product, you will be charged Nil in administration fees. And, indirect costs of Nil each year will be deducted from your investment. If your balance was $50,000, then for that year you will be charged fees of $525 for the superannuation product. * The fee shown is the maximum investment fee applicable. Additional fees may apply. All fees and charges are current as at the date of this PDS and may be revised by the Trustee from time to time without your consent. The Trustee may also introduce new fees. You will generally be given 30 days notice of changes to fees and charges. Towers Watson Superannuation Fund Type of fee Amount How and when paid Investment fee Growth option: 0.95% to 1.05% per year ($9.50 to $10.50 per Deducted from investment returns before they are applied to your accounts. $1,000) Administration Nil Not applicable. fee Buy-sell spread Nil Not applicable. Switching fee Nil Not applicable. Exit fee Nil Not applicable. Advice fees relating to all members investing in a particular investment option Nil Not applicable. Other fees and costs 1 Other fees may apply Indirect cost ratio Nil Not applicable. 1 Fees for activities such as Family Law matters, or insurance fees for voluntary insurance, may apply (see Additional explanation of fees and costs in the Super Guide). For definitions of various fees, refer to the website at Further detail about fees and costs, including definitions of various fees, is contained in the Super Guide under Fees and other costs. You should read the important information about fees and costs before making a decision. Go to The material relating to fees and costs may change between the time when you read this Statement and the day when you acquire the product. 4 Product Disclosure Statement

6 7. How super is taxed All taxes due are paid to the Australian Taxation Office when required. Tax on contributions Generally, 15% contributions tax is deducted from concessional contributions (such as the Company s and your salary sacrifice contributions) when received by the Fund. This tax does not apply to any after-tax contributions. The Government has set limits or caps on the amount that can be contributed to super each year before extra tax applies. The 2017/2018 limits are: What is the annual cap? What tax applies if my contributions are within the cap? Tax on investment earnings A tax of up to 15% is deducted from the Fund s net investment returns before the earnings are applied to your account. Tax on withdrawals Concessional contributions $25,000 regardless of your age. Generally 15% contributions tax.*^ Non-concessional contributions $100,000 # Nil. # If you are under age 65 and you want to make larger non-concessional contributions to your super fund, you may be able to bring forward up to two years of caps, to make total contributions of up to $300,000 over three years. The maximum you can contribute over three years is $300,000 and further restrictions may apply if your total super balance on 30 June 2017 was greater than $1.4 million. Transitional rules apply if you brought forward contributions in the 2015/16 or 2016/17 years. If your total super balance on 30 June 2017 was more than $1.6 million any non-concessional contributions you make in the 2017/18 year will be excessive. * If your relevant income is over $250,000 per year, you may receive an additional tax assessment on your concessional contributions from the ATO. ^ If you earn less than $37,000 per year you may receive a refund of the 15% contributions tax deducted from your compulsory Company contributions through the low income super tax offset. The refund ranges from $10 to $500 a year. Each year the ATO will determine whether you are eligible, and if so, will pay the refund to your superannuation fund. Lump sum payments made from the Fund after age 60 are generally tax free. Tax may apply before age 60 and will be deducted before your benefit is paid to you. You should provide your Tax File Number (TFN) to the Fund. This may save you tax. Normally Willis Towers Watson will provide your TFN to the Fund when you start work. If you don t provide your TFN, higher tax can apply to certain payments and some types of contributions cannot be accepted. 8. Insurance in your super To help protect you and your family from the unexpected, the Fund provides (to eligible members): Death, Terminal illness and Total and Permanent Disablement cover, and The option to take out additional voluntary insurance to top up your death, terminal illness and disablement benefits. Cover generally starts automatically on the day you start employment and join the Fund, provided you were at work and medically fit to carry out all of the duties and work hours of your usual occupation. Your type and level of cover depends on your category of membership. Cover for Category D members If you are a permanent employee working at least 15 hours per week, you may receive insured benefits in addition to the balance of your account in the Fund if you die, suffer a terminal illness or become totally and permanently disabled. If you are a Category D member and you die while employed by the Company, a lump sum benefit is payable equal to the sum of: (a) your Leaving Service Benefit plus (b) an Insured Benefit of: 15% Future Membership from the date of death to your 65th birthday Annual Salary where Future Membership is calculated in years and complete months. There is no insurance cover after age 65. Your Leaving Service Benefit is equal to your Total Accounts. You are also eligible for a benefit if you suffer a Terminal Illness or are Totally and Permanently Disabled. This is calculated in the same way as the death benefit above assuming you had died on the date you were first absent from work as a result of your disability or the date you are diagnosed with a Terminal Illness. In the case of permanent part-time employees, Annual Salary is your equivalent full-time salary. You cannot change or opt out of this standard cover. If you have taken out any additional voluntary insurance (see page 6) this will be paid in addition to the benefit described above. Further details about tax are contained in the Super Guide under How super is taxed. You should read the important information about tax before making a decision. Go to The material relating to tax may change between the time when you read this Statement and the day when you acquire the product. 5 willistowerswatson.com

7 Example Consider a member with Total Accounts of $50,000. If the member dies at age 44, with an Annual Salary of $70,000 and no additional voluntary insurance, then the benefit would be: $50, % 21 years (i.e. period from age 44 to age 65) $70,000 = $50, $70,000 = $270,500 The Company pays 0.25% of your salary for the cost of your standard insurance cover in the Fund. This fee paid by the Company will count towards your concessional contributions cap. The Terminal Illness benefit is an advance payment of your death benefit up to a maximum of $3 million payable when you are diagnosed as having less than 12 months to live. Cover for Category B members A lump sum Death or Terminal Illness benefit is payable if a Category B member dies or is diagnosed with a Terminal Illness while employed by the Company, equal to your Leaving Service Benefit plus an Insured Benefit. There is no Total and Permanent Disablement cover available. The benefit for a Category B member on Total and Permanent Disablement is equal to your Leaving Service Benefit. The Insured Benefit for a Category B member is based on your age at the date of Death or Terminal Illness and ranges from $50,000 for ages 20 to 34, reducing at older ages to $7,000 at ages 50 to 55. There is no insurance cover for members aged 56 or above. You cannot change or opt out of this cover. The Company pays 30 cents per week for the cost of your standard insurance cover in the Fund. The fees paid by the Company will count towards your concessional contributions cap. Cover for Category I members A Death, Terminal Illness or Total and Permanent Disablement benefit is payable to Category I members if they are a permanent employee working at least 15 hours per week. The Insured Benefit for Category I members is calculated in the same way as for a Category D member. The cost of this cover is met by the Company. The fees paid by the Company will count towards your concessional contributions cap. To provide you with greater security around who receives your super in the event of your death, you have the choice of making either a binding or non binding nomination. To nominate your preferred beneficiaries, please complete a Nomination of Beneficiaries Form available from the website at Working less than 15 hours per week Permanent employees working less than 15 hours per week are eligible for Category B benefits on Death or Terminal Illness. There is no Total and Permanent Disablement cover available. Additional voluntary insurance The Trustee recognises that employees may have different insurance needs at various stages of life. Additional voluntary insurance (AVI) is available to Category D members. You can take out insurance payable on Death only or on Death and TPD. Voluntary cover is based on a unit scale. The amount of cover is based on your age at the date of death or total and permanent disablement, and ranges from $50,000 per unit at age 24 or less, reducing at older ages to $2,200 per unit at age 64. Terminal Illness cover is included with death cover. You can apply for additional voluntary insurance cover on the Membership Application or the Voluntary Insurance form, or you can contact the Fund Administrator (see page 7 for contact details). Your eligibility to increase your cover is subject to approval by the Fund s insurer and, if required, to you providing evidence of good health. Your cover does not commence until approved by the Fund s insurer. You can change or cancel your additional cover at any time by advising the Fund Administrator. The cost of any additional cover that you purchase will be deducted from your accounts. The standard fee for each unit of insurance is as follows: Type of AVI Fee per week per unit Death* and TPD $0.40 Death* only $0.30 * Includes Terminal Illness. Further details about insurance including the amount of cover, important conditions, exclusions, risks and fees are contained in the Super Guide in the section Insurance in your super. This information may affect your entitlement to insurance cover. You should read the important information about insurance before making a decision, including whether the insurance is appropriate for you. Go to The material relating to insurance may change between the time when you read this Statement and the day when you acquire the product. 6 Product Disclosure Statement

8 9. How to open an account Joining the Towers Watson Superannuation Fund is easy! Just follow these simple steps. 1. Read this PDS carefully to learn about the options and features available to you. 2. Consider your super choices for: Investments Voluntary contributions Rollovers Your insurance cover, and Your beneficiaries. Remember, you must make an investment choice when you join Category D or B of the Fund or your application for membership cannot be processed and you will join the Fund as a Category I (Insurance only) member. Once you have made your choices, complete and return the Membership Application available from the Fund s website at Enquiries or complaints If you have any questions, would like to make a complaint or would like more information about the Fund, please contact: The Fund Administrator Link Super Pty Limited PO Box 1442 Parramatta NSW 2124 Helpline: TWSFsuper@linksuper.com In most cases, your enquiry will be resolved over the phone. If not, you may be asked to write to the Fund. The matter will be referred to the Trustee and you should receive a reply within 90 days. In certain circumstances, you may be able to request the Trustee s reasons for its decision on your complaint. If you are not satisfied with the Trustee s response, you may wish to contact the Superannuation Complaints Tribunal (SCT) except in relation to privacy-related matters. The SCT is an independent body set up by the Federal Government to deal with enquiries or complaints that the Trustee has not dealt with to your satisfaction. The SCT may mediate the dispute. You can contact the SCT on or write to: The Secretariat Superannuation Complaints Tribunal Locked Bag 3060 Melbourne VIC info@sct.gov.au Protecting your personal information The Trustee believes your privacy is important and so has developed a privacy policy to protect your personal information. The policy outlines how the Fund collects and manages your personal information. A copy of the policy is available by calling the Fund Administrator on If you wish to make an enquiry or complaint regarding the privacy of your superannuation information, you should contact the Fund Administrator in the first instance. The Fund s enquiries and complaints procedure also applies to privacy-related complaints. If your concerns are not resolved to your satisfaction, you may contact the Office of the Australian Information Commissioner on How to contact us The Fund Administrator Link Super Pty Limited PO Box 1442 Parramatta NSW 2124 Helpline: TWSFsuper@linksuper.com Website: If you have queries about Choice of Fund or initial enquiries about the Fund, you can also contact: Joanne Ma Human Resources Towers Watson Australia Pty Ltd Phone: Fax: You should read the important information about your account in the Fund before making a decision. Further details about your account are contained in the Super Guide under How to open an account. Go to The material relating to opening an account may change between the time when you read this Statement and the day when you acquire the product. Issued by Wycomp Pty. Limited (ABN ), as Trustee of the Towers Watson Superannuation Fund (ABN ). 7 willistowerswatson.com