ASC Superannuation Fund

Transcription

1 ASC Superannuation Fund Pension Product Disclosure Statement Preparation date: 14 October 2010 The issuer and Trustee of the ASC Superannuation Fund (ABN: ) is The Trust Company (Superannuation) Limited, ABN: , AFSL No: , Address: PO Box 361 Collins Street West VIC Ph (03) , Fax: (03) The Administrator of the ASC Superannuation Fund is KPMG Superannuation Services Pty Limited, ABN: , AFSL No: , Address: PO Box H67, Australia Square NSW Ph (02) , Fax (02)

2 Contents Introduction... 1 About the Pension Division... 3 About pensions... 5 The Fund s investments Investment options you can choose Investment options you can choose (continued) Fees and other costs Fees and others costs (continued) Additional explanation of fees and costs Example of annual fees and costs for a balanced investment option Taxation Other information about the Fund Glossary of terms Further information and how to contact us... 45

3 Introduction Important information This Product Disclosure Statement ("PDS") relates to the Pension Division of the ASC Superannuation Fund ("Fund"). The Fund was established under a trust deed dated 14 January 1988, as amended from time to time ("trust deed"). The Fund is designed to provide financial security for you in retirement and protection for your family in the event of your death. The Fund is governed by the trust deed and relevant law and is operated by an independent trustee company, The Trust Company (Superannuation) Limited ("Trustee"), formerly known as Trust Company Superannuation Services Limited. The Trustee is legally obliged to act in accordance with the provisions of the trust deed and the relevant law. A copy of the trust deed is available for inspection by members at all reasonable times upon request, by contacting the Fund (contact details on the back page). This PDS provides important information about the Fund, benefits provided by the Pension Division in the Fund and relevant terms, conditions and other information. You should read it carefully. If you have any queries regarding your own personal circumstance and the Fund, you can contact the Fund (contact details on the back page). This PDS should be read in conjunction with the Fund s latest Pension Annual Report to members available on the Fund website of by contacting the Fund directly (contact details on the back page). A Glossary also appears at the back of the PDS to assist your understanding of some of the terms used in the PDS. The information provided in this PDS is a summary of the benefits and relevant terms and conditions, however, the terms of the trust deed governing the Fund have precedence over anything in this PDS. This PDS provides general information only and does not take into account your individual financial situation, circumstances or needs. You should take these into account when making decisions about your benefit in the Fund, for example, decisions regarding investment options, and consult an authorised or licensed financial adviser where required. All parties named in the PDS have consented to being named in the form and context in which they have been named and have not withdrawn their consent prior to printing of this PDS. Neither The Trust Company Limited (the Trustee s parent company), nor any of its subsidiaries, nor their respective officers, guarantees the capital invested by investors, the performance of specific investments or your account generally. Neither The Trust Company Limited, nor any of its subsidiaries, nor their respective officers, guarantees or has any liability in connection with the performance by the Trustee of its obligations under this PDS. From time to time, the Trustee may receive rebates or other benefits in respect of the Fund s investments. Any rebates or benefits are passed on to members through the calculation of unit prices. Changes to this PDS If a material alteration occurs that would make any statement in this PDS misleading, deceptive or materially adverse, or if there has been any material omission in this PDS, then the PDS will either be withdrawn immediately, or a Supplementary PDS will be issued correcting the statement or omission. Information contained in this PDS is up to date at the time of preparation. Information that is not materially adverse may, if it changes, be updated on the Fund website at In addition, we will provide this information to you in hard copy free of charge upon request to the Fund Administrator (see contact details on the back page). 1

4 Further information Further information regarding the Fund can be obtained from the Fund website, or by contacting the Fund (contact details on the back page). Where required, we will also provide you with other information regarding the Fund (including a copy of the trust deed or information previously made publicly available) upon request. We will tell you whether there is a charge for providing this information. 2

5 About the Pension Division The Fund provides superannuation benefits to employees of ASC Pty Limited and ASC Shipbuilding Pty Limited, as well as to the spouses of these employees. The Fund also provides pensions to members, through the Fund s Pension Division. Benefits of the Pension Division The Pension Division provides benefits to both you and your dependants. These benefits include: Pension benefits to pensioner members; and Benefits for your family in the event of your death. The Pension Division does not provide Death and Total and Permanent Disability or Salary Continuance insurance cover. Transition to Retirement pensioners may continue any insurance cover they had in the Fund s Superannuation Division subject to meeting the necessary eligibility criteria (and maintaining at least $5,000 within their account in the Superannuation Division to ensure they have sufficient funds to meet any insurance premiums and other fees that may be deducted during the year). Your insurance requirements should be considered having regard to the broader arrangements available from the Fund. Risks of the Pension Division There are a number of significant risks associated with investments in the Pension Division of this Fund (as with any superannuation fund). The level of risk associated with an investment option will depend on the nature of the underlying assets or investments (for e.g. options with a higher allocation of assets to shares may be considered higher risk). The extent to which underlying assets or investments are diversified may also have an impact on risk. The Fund s investment options employ different asset allocation strategies and these should be considered when assessing the risks associated with a particular investment option. Significant risks include: Market risk: Various economic, technological, political, legal and social factors have an effect on the value of investment markets and may affect the value of your investment in your chosen investment option within the Fund. The Trustee and the Fund s underlying investment managers seek to reduce and manage this market risk through specific investment strategies adopted for each of the available investment options, as described in the Member Investment Choice section of this PDS on pages 15 to 20. Investment risk: Investment risk can be described as the variability of returns or the chance of negative returns. An investment that has a high chance of fluctuations or negative returns is considered high risk and an investment with a low chance of negative returns is considered low risk. Generally, share investments are considered high risk and cash or fixed interest investments are considered low risk. Investment risk is also affected by the length of time that an investment is held because the chance of a negative return may decrease (and the potential for higher returns may increase) the longer that an investment is held. For example, a share investment held over a period of only one year might be considered very high risk compared to a share investment held over a much longer period (say 10 years). Over the long term, high-risk investments may, therefore, lead to greater returns than low risk investments. 3

6 Risks associated with various investments options may change depending on the economic environment and other external factors. This means that different asset classes perform differently at different times. For example, returns in relation to shares may increase over a period, whereas, the returns in relation to fixed interest investments may decrease over the same period of time. The Fund s underlying investment managers seek to minimise these risks by assessing and analysing information relating to these investments from a number of sources and by diversifying investments across a range of assets and asset classes. All of the investment options (except the Cash option) involve, to varying degrees, diversification across a range of assets or asset classes. You can help to manage your investment risk by diversifying your investments and by making investment choices suited to your personal circumstances including your investment timeframe. However, should you leave this product or withdraw monies within a few years of joining the product, fluctuations in investment returns (in addition to fees, costs and taxes) may result in you getting back less than you have contributed. Superannuation fund risk: There may be other risks specific to the Fund s operations. As with any other superannuation fund, these risks include the possibility of changes to the Fund or its internal operations such as changes to key staff involved in the management of the Fund or a disruption of its systems. The Trustee seeks to minimise these risks by taking into account the best interests of members at all times when making decisions about the Fund and maintaining a risk management and compliance framework in accordance with the legislative requirements. Risk of changes in the legal environment: Superannuation laws, the Corporations Act, Australian taxation laws and other laws affect the Fund and the Fund s investments. Changes in superannuation laws may affect your ability to access your benefit in the Fund. Changes in taxation laws may also affect the value of your benefit. For an indication of the risk profile of each investment option, refer to page 18. 4

7 About pensions A superannuation pension allows you to receive some or all of your superannuation benefits as an income stream, as opposed to a lump sum payment. The Fund offers two types of superannuation pensions: A standard Superannuation Pension (called a Superannuation Pension in this PDS). These Superannuation Pensions are highly flexible. You can select the frequency of your pension payments as well as the size of the pension payments you wish to receive, above a required minimum amount (refer to the How your pension payments are calculated section on pages 8-9 for more details). A Superannuation Pension taken out under Transition to Retirement rules (called a Transition to Retirement Pension in this PDS). These pensions are also flexible but are subject to some additional restrictions. You can select the frequency of your pension payments as well as the size of the pension payments you wish to receive provided they meet required minimum and maximum limits (refer to the Transition to Retirement pensions section on page 11 for more details). You can commute a Superannuation Pension (end your pension and take the remaining assets as a lump sum) or take a portion of your account balance underlying the pension as a lump sum (partial commutation), at any time. If you have taken out a Transition to Retirement Pension, you will be unable to commute the pension until you retire or in other circumstances prescribed by relevant law (see the Transition to Retirement pensions section on page 11 for further details). Upon your death, a Superannuation Pension or Transition to Retirement Pension can revert to a dependant, or be paid to a non dependant as a lump sum. The assets supporting your pension can be invested in your chosen investment option. Investment returns (which may be positive or negative) will be allocated to your pension account balance via the unit price, with fees and costs deducted as outlined on pages Note: As a result of Government legislation designed to counteract money laundering and terrorism financing, you may be required to provide proof of identity prior to accessing your benefits in the form of a pension. See the Antimoney laundering and counter terrorism financing (AML/CTF) requirements section on page 35 for more information. Eligibility to commence a pension Only existing members of the Fund are eligible to commence a pension from the Fund s Pension Division. Spouses of members of the Fund can also join the Fund in order to commence a pension via the Pension Division. To begin a pension (with the exception of a Transition to Retirement Pension - refer to the Transition to Retirement pensions section on page 11 for further information) you must have access to all or part of your superannuation benefits i.e. you must generally be an Australian citizen, New Zealand citizen or a permanent resident of Australia who has satisfied one of the following conditions of release. 5

8 Conditions of release The following are the conditions of release that allow you to access your superannuation benefits. You have reached your preservation age as set out in the table below and permanently retired from the workforce; or Date of birth Preservation age Before 1 July July June July June July June July June After 30 June You have reached age 60 and ceased an employment arrangement; or You have reached age 65; or You have died; or You have become permanently incapacitated, as defined in superannuation legislation, at any age; or You have been diagnosed with a terminal medical condition as defined in superannuation legislation Money you can use to begin your pension You can begin a pension utilising your account balance already held within the Fund and/or you can roll over benefits from another superannuation fund or other sources permitted by the relevant law. If you are eligible, you can also roll over an Employment Termination Payment ( ETP ) to the Fund to begin your pension. The payment of ETPs to superannuation funds can only be made in limited circumstances. This will apply to people with entitlements on termination of employment specified in existing employment contracts as at 9 May 2006, provided that payments are made prior to 1 July Other amounts, such as certain disablement amounts on settlement of a disability claim (outside of superannuation), proceeds from the sale of a small business and superannuation sourced from a foreign superannuation fund, can be paid into superannuation. The acceptance of other amounts into the Fund from these other sources may be subject to contribution rules applicable to superannuation funds and give rise to different taxation implications (depending on your personal circumstances). If you are going to receive any of these amounts or are considering payment of them into superannuation, we recommend you obtain advice from a licensed or authorised adviser. 6

9 Note: For more information about what monies can be contributed or transferred to the Fund, see the Fund s Superannuation Division PDS available on request from the Fund s website or by contacting the Fund Administrator (contact details on the back page). You cannot add additional money to your pension once it has begun. As such, you may need to consolidate your various superannuation account balances and any ETPs you receive, into a single account within the Fund s Superannuation Division which is invested in accordance with your chosen (or the default) investment option in the Superannuation Division, prior to commencing a pension. Alternatively, you may commence more than one pension from the Fund using separate superannuation entitlements. Pension application form To commence a pension, whether or not you are already a member of the Fund, you must complete the Pension Application Form found at the back of this PDS. The form allows you to: provide your personal details select the amount of your pension payments (subject to Government limits); indicate your preferred beneficiaries, and whether or not you would like your pension to revert to a dependant (reversionary beneficiary) upon your death; select an investment option; and provide your Tax File Number ( TFN ). Once your application has been accepted a pension account will be established in the Fund for you. The pension account is treated as a separate superannuation interest for taxation and other purposes. Cooling-off period Provided you have not exercised any right or power in relation to your pension, you have a 14 day period (a coolingoff period) in which you may cancel your pension and transfer/rollover your benefit to the Fund s Superannuation Division or another fund, if you are not completely satisfied. The cooling off period commences from the earlier of the date the Fund confirms that your application has been accepted, or five days after the application has been accepted. Any request to cancel your pension must be in writing. The amount rolled over or paid out of your pension may be adjusted to take into account any variation in the value of the investment and any applicable fees, costs or taxes incurred or payable by the Fund in relation to the pension (as permitted under government legislation). In the event that you cancel your pension, your benefit can only be paid directly to you if you have applied for a standard Superannuation Pension. The cancellation of Transition to Retirement Pensions is subject to preservation rules in superannuation legislation. Any preserved or restricted non-preserved benefits must be transferred to the Superannuation Division or rolled over to another regulated superannuation fund or pension product. 7

10 UK pension transfers The Fund is registered with the UK s HM Revenue and Customs as a Qualifying Recognised Overseas Pension Scheme ( QROPS ). This allows the Fund to accept transfers of pension assets members may currently hold in the UK. If you are considering such a transfer, you should be aware that the UK authorities have released guidance surrounding the tax implications of such a transfer. Any such transfer must be either deposited into your account in the Fund s Superannuation Division, or used to commence a pension (it cannot be paid into your pension account once your pension has commenced). The guidance relates specifically to transfers that are in excess of the non-concessional contributions cap applicable under Australian taxation laws ($150,000 per year or $450,000 over rolling three-year periods for those under the age of 65). Where the amount transferred to the Fund exceeds your non-concessional contributions cap, the benefit will be subject to excess contributions tax at the rate of 46.5%. Where you are liable for additional tax, you must pay the additional tax by requesting the Trustee (via presentation of an ATO Release Authority to the Trustee) to deduct the amount from your benefit in the Fund and pay it to the ATO on your behalf. The UK authorities have confirmed that, where you are under the UK retirement age, any payment out of the Fund to cover the additional tax will be considered an unauthorised payment and will be subject to additional UK tax. As can be seen from the above, the transfer of monies to Australian funds can be complex. There may be other taxation implications for any lump sum transferred from an overseas fund depending on your personal circumstances. As such, members should seek appropriate advice prior to considering overseas transfers and, in particular, amounts that are in excess of the non-concessional contributions cap. Up to date information relating to UK pension fund transfers may also be made available on the website or by contacting the Fund (see contact details on the back page). How your pension payments are calculated Each financial year, you are able to select the pension amount that you will receive that year. The amount you receive must be equal to or above a certain prescribed minimum level set by the Government, based upon your age. The prescribed minimum levels for the relevant age bands are as follows: Annual percentage Age payment amount* Under * For the 2010/2011 financial year, the annual percentage payment amount has been halved. At the date of preparation of this PDS, this does not apply in future financial years, however any changes to the prescribed minimum level are available by contacting the Fund (see contact details on the back page). 8

11 Your age and opening account balance are measured on the day on which the pension begins, or 1 July of the relevant financial year (if it is not the first year of your pension). If your pension does not commence on 1 July, the pension percentage is applied proportionally for the number of remaining days in the financial year, in order to determine the minimum pension amount. However, no pension payment is required if a pension is commenced in the month prior to 1 July. Partial lump sum withdrawals or transfers to another superannuation fund (where permissible) do not count towards meeting the prescribed minimum pension amount. Above this minimum amount you can select to receive any amount in pension payments that you choose, up to 100% of your account balance (with the exception of a Transition to Retirement Pension, which is limited to 10% per annum of your opening account balance and your account balance each 1 July). Example Your account balance is $400,000 and you are aged 66 at the beginning of the financial year. The minimum pension amount you can elect to take for the year is $20,000, calculated as follows: 5% x $400,000 = $20,000 If you elect to take monthly pension payments, each pension payment will be $1,666, calculated as follows: $20,000 / 12 = $1,666 Note: For the 2010/2011 year the minimum annual pension amount and monthly pension payments shown in this example may be halved Note: if you are under age 60, your pension payments may be subject to tax. See the Taxation section on page 27 for further details. The Fund administrator will calculate and advise you of your minimum pension amounts (and maximum pension amounts, where applicable) each year, from which you can elect the amount you would like to receive. You can change the pension payment amount or, in the case of a pension other than a Transition to Retirement Pension, apply to take out a lump sum payment (commutation) at any other time. Please refer to the Fees and other costs section on pages of this PDS for information in relation to any charges that may apply. Any variation in your regular pension payment will be presumed to be an irregular pension payment unless you otherwise elect. Commuting your pension You can commute (end your pension and take the remaining assets as a lump sum) or take a portion of your account balance underlying the pension as a lump sum (partial commutation) at any time, except in the case of a Transition to Retirement Pension. Any lump sum commutation (where permissible) must be withdrawn proportionately from the tax-free and taxable components of your pension (see the Taxation section on page 27 of this PDS for more information). You cannot nominate the components from which a lump sum payment is withdrawn. 9

12 In addition, superannuation legislation requires that, in any year in which all or any part of a pension is commuted, a pro-rata payment amount of the minimum payment for that year must be paid except in certain limited circumstances, for example, if the commutation arises due to death of the pensioner or to give effect to an entitlement of a nonmember spouse under a family law payment split. Payments made in commutation or part commutation of a pension may be subject to tax at lump sum rates based upon the components of the taxable component of your pension account balance, the minimum pension income received, and your age at the date of payment. Should you wish to commute a pension, you should discuss your intention to commute with a licensed or authorised adviser before you take any action in this respect. Frequency of pension payments Upon commencement of your pension, you may select the frequency with which you receive pension payments from any of the following options: Monthly Quarterly Half yearly Yearly Generally, you must receive at least one pension payment per financial year. You can change the frequency at which you receive your pension payments at any time during the life of your pension. Duration of your pension The duration of your pension will be determined by a number of factors including: The amount of assets with which you started the pension; The size of pension payments you receive; Any lump sum amounts you withdraw from your pension (where permissible); The investment returns your pension account balance earns (which can be positive or negative); and Any fees, costs and taxes deducted from your pension account. Your pension will not operate for any guaranteed period. It will last only as long as your account balance lasts. As such, it is your responsibility to monitor your pension assets to appropriately fund your retirement. Investment of your pension account The account supporting your pension is invested in your chosen investment option(s) (or default investment option where you have not made an investment choice). Your account balance will be debited with the amount of the pension payments made to you each year, and with the applicable fees, costs and taxes (see the Fees and other costs section of this PDS on pages for further information). Investment returns will be allocated to your account via the movement in the unit price (see the Investments section of this PDS on page 16 for further details). How do I know the value of my pension account? You will be provided with an Annual Member Statement showing your entitlement in the Fund as at the Fund s annual review date of 30 June each year. The information is also available upon request by contacting the Fund (contact details on the back page). 10

13 Transition to Retirement Pensions Generally, you can start a Transition to Retirement Pension if you are an Australian citizen, New Zealand citizen or permanent resident of Australia and have reached your preservation age, but have not yet fully retired from the workforce. The conditions surrounding a Transition to Retirement Pension are the same as those for a Superannuation Pension taken out upon retirement, with the exception of the following additional conditions: A maximum of 10% of your account balance can be taken as pension payments in any one year, regardless of age calculated on your pension commencement date and each 1 July thereafter (permissible commutations other than family law splits are excluded from the calculation of this maximum); and You are unable to make any partial or lump sum withdrawals from the pension (commutations) until you satisfy a condition of release, such as fully retiring (see the Conditions of release section of this PDS on page 6 for more information). Once you retire, or satisfy a condition of release, your pension will continue and become a standard Superannuation Pension. The additional restrictions outlined above will no longer apply. Example Your account balance is $400,000, you are aged 56 at the beginning of the financial year and commence a Transition to Retirement Pension. The minimum pension amount you can elect to take for the year is $16,000, calculated as follows: 4% x $400,000 = $16,000 (or $8,000 in the 2010/2011 year) The maximum pension amount you can elect to take for the year is $40,000, calculated as follows: 10% x $400,000 = $40,000 To ensure you meet the legislative requirements in relation to a Transition to Retirement Pension, you must elect to take an annual pension payment of greater than the minimum, but no more than $40,000. There are other limited circumstances in which a Transition to Retirement Pension may be commuted as follows: in order to transfer from the Pension Division back into the Superannuation Division of the Fund; or to rollover your benefit into the accumulation section of another complying superannuation fund or retirement savings account; or on death. If your Transition to Retirement Pension includes any unrestricted non-preserved component, it can be taken as a cash sum at any time (i.e. as a partial commutation). Where you wish to commence a Transition to Retirement Pension and keep making or receiving contributions into the Superannuation Division, you will need to retain at least $5,000 within your account in the Superannuation Division to ensure you have sufficient funds to meet any insurance premiums and other fees that may be deducted during the year. 11

14 What happens to your pension if you die? Reversionary pension continuation of pension You can, if you wish, nominate an eligible dependant, which includes your spouse, a child under the age of 18, a financially dependant child aged or a permanently disabled child aged 18 or more as a reversionary beneficiary to continue to receive your pension in the event of your death. After your death, the pension payments will continue to be received by your reversionary beneficiary. Your reversionary beneficiary nomination will not be effective if, at the date of your death, the person you have nominated is not an eligible dependant. In these circumstances, your benefits will be paid as a lump sum at the discretion of the Trustee. Once a child reversionary beneficiary reaches age 25, the pension must be commuted to a lump sum (tax free) unless the child is permanently disabled. Where a dependant does not wish to continue to receive the benefit in the form of an income stream, they can elect to receive it as a lump sum (however different taxation consequences will apply depending on when the decision to commute is made). Any person that is not a dependant that you would like to receive some or all of your benefit upon your death, must receive the benefit as a lump sum. Superannuation Pension payments are unable to be continued to a nondependant. Different taxation treatment applies to the pension depending on the recipient of your pension. Refer to the Taxation section of this PDS on page 27 for further information in respect of the taxation consequences of the payment of a death benefit to a dependant or non-dependant beneficiary. Lump sum payments - types of beneficiary nomination The Fund offers you two types of beneficiary nominations to allow you to confirm your intentions for the payment of the benefit from the Fund as a lump sum upon your death. The two types of nominations are as follows: 1. Binding beneficiary nomination; and 2. Discretionary beneficiary nomination. These nominations apply to lump sum payments only and will apply to any benefits you accrue in the Pension Division, until such time as the nomination expires, is revoked or replaced with another valid and effective nomination. Unless you specify otherwise, any binding nomination you make for your pension account will not apply to any account you have in the Superannuation Division A summary of each type of beneficiary nomination is outlined below. Please consider each type of nomination and, where appropriate, seek qualified estate planning, financial or taxation advice, prior to choosing the one that is right for you. Different taxation implications may apply depending on how any death benefits are paid. For example, antidetriment payments (which represent a refund of contributions tax previously paid by the Fund) are only applicable to lump sum death benefits payable to certain beneficiaries. See the Taxation section of this PDS for more details. 12

15 1. Binding beneficiary nomination You can elect to make a binding death benefit nomination, which means that upon your death, the Trustee is obliged to pay any remaining account balance to the person(s) you have nominated, provided the nomination is valid and effective at the date of death. With a binding death benefit nomination, the nominated individuals must be either a dependant and/or your legal representative. To be accepted, your binding nomination must be witnessed by two individuals who are over the age of 18 (and not your nominated beneficiaries). A binding death benefit nomination remains valid for only three years, so you must renominate beneficiaries every three years if your nomination is to remain binding on the Trustee. You can also amend or revoke your binding nomination at any time. Any amendment or revocation must also be in writing and signed before two witnesses (as described above). Where a binding nomination is no longer valid, it becomes a discretionary nomination, whereby the decision as to whom your death benefit is paid lies with the Trustee. If there is any other information you reasonably need to understand your right to make a binding nomination, please contact the Fund Administrator (contact details on the back page). 2. Discretionary beneficiary nomination By utilising a discretionary beneficiary nomination, you may nominate a dependant and/or legal personal representative to receive your benefit within the Fund upon your death, however, the Trustee has the discretion to pay your benefit to whom it believes is the most appropriate recipient. Whilst full consideration is given to your wishes when utilising a discretionary beneficiary nomination, it is important to realise that, where you have dependants or a legal personal representative, the Trustee is required, under the Fund s Trust Deed, to pay the benefit to your dependants or legal personal representative in such proportions as the Trustee sees fit. However, in the situation where you do not have any dependants or a legal personal representative, the Trustee has the discretion to pay the benefit to a third party who is a non-dependant. In making a payment to a nondependant, the Trustee takes into account your personal circumstances at the time of your death in making its decision, however, the Trustee may distribute the benefit to individuals that you have not nominated. Note that concessional tax treatment is afforded to death benefits paid to a dependant of the deceased (however, a dependant for tax purposes does not include a child aged 18 or more unless they are otherwise dependent because of their financial or personal situation or an interdependant). A summary of the taxation rules applicable to death benefits is contained on pages 28-29, however, for advice about how the taxation rules may affect you, contact a professional tax adviser. General beneficiary information You can nominate more than one beneficiary and a combination of a reversionary beneficiary and other beneficiaries if you choose. You should notify the Trustee whenever you decide to alter your beneficiary nomination. You can update your nominated beneficiaries at any time by completing a Nomination of Beneficiary Form, or by contacting the Fund Administrator (contact details on the back page). 13

16 If you are unsure which nomination is right for your, seek professional advice. Further, it is always advisable to make a will. If you would like to do so, you should consult a solicitor or the office of the Public Trustee. While the Trustee will take your will into consideration as an indication of your intentions, it will not be bound to follow it. Insurance benefits Pension members who have ceased employment with ASC Pty Limited or ASC Shipbuilding Pty Limited and rolledover their benefit into the Pension Division will no longer have access to the insurance benefits provided within the Superannuation Division. Members who take out a Transition to Retirement Pension within the Fund and continue to receive contributions into the Superannuation Division from ASC Pty Limited or ASC Shipbuilding Pty Limited will maintain their insurance benefits within the Fund until such time as they terminate employment (30 days after cessation) or reach age 65, at which time insurance benefits cease. A minimum of $5,000 must be retained in your Superannuation Division account at the time you determine to commence a Transition to Retirement pension, if contributions are to continue to be made or received by the Fund on your behalf. Members should refer to the Superannuation Division PDS for further information regarding insurance benefits. 14

17 The Fund s investments To ensure investment flexibility with the Fund, you can choose how your account balance is invested. The Fund allows you to choose from a range of investment options for your pension account: The Aggressive Option; The Growth Option; and The Cash Option. Members can select any one of the three options or a combination of options. There is no minimum amount of money that you must have in any particular option. These options are designed to suit different time horizons and levels of risk. You need to choose the one that best suits your circumstances. The investment options that the Fund offers are described in more detail in the following pages. You should review your investment strategy regularly to ensure that it continues to suit your circumstances and fits in with your overall financial plan. Investment choice for your Pension account balance Your Pension account balance can be split between multiple investment options. You can split the investment of your account balance in any proportion between the three investment options. If you select more than one investment option, after your account balance has been invested in the proportions nominated by you, no adjustments are made to your existing balance s allocation to each option (i.e. the account balance is not re-balanced so that your nominated proportions are maintained over time). This means your account balance s allocation to each option will fluctuate from time to time. What if you don t choose an option? If you do not choose an investment option for your Pension account, your account will be invested in the Growth Option (the default investment option). Further information about the Growth Option is contained on pages of this PDS. Changing your investment options You can change your choice of investment option(s) at any time (subject to normal withdrawal and applications procedures) by completing an Investment Choice Form available on the Fund website, by submitting an online request via the Fund website, or by contacting the Fund (contact details on the back page). While there is no fee charged for changing your investment option(s), you should however be aware that a buy/sell spread (reflecting fees charged by the Fund s underlying investment managers for the redemption and acquisition of assets) may apply. Further information about unit pricing and buy/sell spreads are contained in the Fees and other costs section on page 21 of this PDS. 15

18 The Trustee reserves the right to change the investment options offered or close or terminate investment options. Where investment options are closed or terminated, the Trustee also reserves the right to transfer existing investments to a new option selected by it. However, you will be informed if this happens. Trustee considerations The Trustee does not take into account labour standards, environmental, social or ethical considerations in making investment decisions or selecting underlying investment managers. Underlying investment managers may take these factors into account, however they do so in their own right and not on behalf of the Trustee. Choosing an investment option The information contained in the PDS is general information only. It does not take into account your individual objectives, financial situation or needs. As such, you should consider your investment goals and the time your superannuation will be invested, as part of your investment choice decision. When making an investment choice, the performance of the investment options may also be considered, however, past performance is not necessarily an indicator of future performance. If required, contact a licensed or authorised financial adviser before making an investment decision, to ensure that your investment choice fits in with your overall financial plan and goals. How are investment returns passed on to members? The Fund is a unit-linked Fund. What this means is that amounts credited to your account buy investment units in the investment options that you have nominated. The number of units that you buy depends on the allocation unit price that is available on the day that the allocation of the amount to your account is processed. Units are sold when deductions are made from your account to pay pension payments, fees, costs or taxes, when you are paid a lump sum benefit or, in some cases, when you switch from one investment option to another investment option (see below). Units are sold based on the redemption unit price applicable on the date the withdrawal is processed. The value of the amount paid to you, or the number of units sold, will depend upon the next redemption unit price on the day that a transaction is processed. Any difference between the allocation price and redemption price of a unit is called the buy/sell spread and will vary from one investment option to the other. A buy/sell spread is not currently charged for members of the Pension Division. Unit prices are usually updated on a daily basis, which means that the performance of your superannuation account will keep up-to-date with the investment performance of your chosen investment option. When calculating the unit price of the underlying investment pool, movements in cash flow, and any taxes, fees, costs, rebates or benefits related to the Fund (and which are not deducted directly from or allocated directly to Member s accounts), are taken into account. If the underlying investments are performing well, then generally the unit price and hence, the value of your account will go up. If the underlying investments are not performing well, then generally the unit price will go down, as will the value of your account. 16

19 The Trustee reserves the right to change the frequency of the calculation of the unit prices, to defer applications, switches and withdrawals, and/or to defer valuation of the unit prices if the Trustee believes that this is in the best interests of all members or it is required to do so by law. Up-to-date unit price information is available by contacting the Fund (contact details on the back page). If you leave the product or withdraw monies from your chosen investment option within a few years of joining the product or making an investment choice, you may get back less than the amount of your investment because of the level of investment returns earned by the investment option in which your account is invested and the deduction of taxation, fees and costs. Past investment performance is not necessarily an indicator of future investment performance. The Trustee does not guarantee that you will earn any specific rate of return on your investment or that your investment will gain or retain its value. Monitoring your investments You should monitor the performance of your investment in relation to your investment objectives, financial situation and needs. You should also bear in mind that your personal objectives, situation or needs may change over time and that this could lead to a need to readjust the investment portfolio for your Pension from time to time. You can monitor your investment in a number of ways: By visiting the Fund s website at By calling or ing the Fund Administrator (contact details on the back page). 17

20 Investment options you can choose Members may select one or any combination of the investment options shown below. The investment objectives and relative returns shown below are not a promise or guarantee of any particular benefit. The investment objectives have been established by the Trustee in accordance with superannuation legislation and provide the basis upon which investment performance is assessed. The suggested investment time frame, risk and relative returns shown indicate, in general terms, the timeframe, risk and returns typically associated with particular investment option, however they do not take into account your personal situation (including risk profile) and should be assessed having regard to your personal objectives, financial situation or needs. Investment Option Aggressive Growth Cash Investment Strategy Strategy is to invest in long term investments in a diversified portfolio of Australian & International shares with the aim of providing capital growth over the medium to long term. This option is generally actively managed and invests in shares which are assessed as undervalued relative to long term earnings potential. May be suitable for those who are prepared to accept the prospect of capital losses in the short term and who are seeking high growth. Investors should have a good understanding of how share-markets work, and understand that significant short term losses may be incurred while seeking the highest possible long term performance. Strategy is to invest in medium to long term investments with the potential for moderate / high returns. May be suitable for members who accept the possibility of a decline of capital value in any given years. This is the default investment option if you do not choose an option. Strategy is to invest in conservative investments with the potential for security of capital and secure returns. May be suitable for members who are cautious or who are investing for relatively short periods of time. Investment Objectives To provide a high relative return over the suggested time frame of investment. A significant proportion of the return from shares is likely to arise from changes in capital values. Returns depend on many factors, including company earnings, global interest rates and the global economic outlook and currency movements. To provide moderate to high returns through a diversified investment portfolio. This option is geared towards longerterm growth, but carries less investment risk than the Aggressive option due to investing across a broader range of asset classes. To provide a secure return with low risk of capital loss over any time period. This option aims to outperform the UBS Australian Bank Bill index over the medium term (before investment fees) by using an active investment strategy. For investments held over the suggested time frame the risk of capital losses is lower. Portfolio features Suggested Time Frame 5 7 years 3 5 years 0 2 years Risk High (subject to currency movements) Moderate Low Relative Returns High Moderate / High Low 18

21 Investment options you can choose (continued) Asset Allocation (Benchmark) Aggressive Growth Cash Benchmark Australian Shares 55% Growth Assets: (Australian/International shares and Listed Property) 71% Cash 100% International Shares 45% Interest Bearing Assets: (Diversified Debt) 29% Cash/Liquids 0% Cash/Liquids 0% Manager Allocation (As at 30 June 2010) Investment Managers and Investment Styles 1 Platinum International Fund BT Wholesale Core Australian Share Fund AMP Australian Equity Fund Walter Scott Global Equity Fund Aggressive Growth Cash International shares value style Australian shares neutral style Australian shares growth bias International shares growth style MLC (NCIT) Moderate Trust MBA Diversfied Investment Trust Trust Cash Management Fund Style neutral diversified Value bias diversified manager Cash account UBS Cash Fund Trust Cash Management Fund Style neutral active Cash account Trust Cash Management Fund Cash account Historical investment option net earning rates year ended 30 June* Aggressive Growth Cash % -9.71% 4.67% % % 4.66% % 11.72% 3.14% *Historical net earning rates prior to 2007/08 are not available, as the Pension Division was only introduced from 1 July Investment performance is based on the movement of redemption prices for each investment option and is net of relevant fees and costs. For more information about unit prices see page 16. For more information about fees and costs see pages Past performance is not a reliable indicator of future performance. The investment managers utilised by the Fund may be changed at the absolute discretion of the Trustee. You have no ability to choose the underlying investment managers. Important Note: For further information about the investment option summaries, see the notes on the next page. 1 For further explanation of the investment styles, contact the Fund Administrator (contact details on the back page). 19

22 Notes to the summaries of investment options Investment objectives The investment objectives are the investment returns that an investment option aims to achieve over a certain time frame. The investment objective is a benchmark that the Trustee uses to measure the performance of the investment options and should not be taken to be a promise or forecast of future returns. Neither the Trustee nor any of its associated entities guarantees the investment performance of the Fund or its investment options. Portfolio features The portfolio features show indicative information about the timeframe, assessed level of risk (based on variability of return) and potential return for the investment option based on the nature of the underlying investments. For more information about risks, see the Risks of the Plan section on pages 3 4 of this PDS. The portfolio features provide general information only and do not take into account your personal objectives, financial situation or needs. Benchmark asset allocation The benchmark asset mix is the investment option s target allocation to the different asset classes. The actual allocation to the different asset classes will usually be close to the benchmark asset mix but will be determined by the allocations to the underlying investment managers and the asset allocations made by the option s underlying investment managers. Asset allocations may also fluctuate from time to time due to market movements and transactions. Updated asset allocation information is provided in the Fund s Annual Reports. Investment manager asset allocations The option s benchmark allocation to each of the underlying investment managers describes the target allocation to each manager and may vary from time to time. Updated investment manager allocation information is provided in the Fund s Annual Reports. You have no individual influence over how much of your money is invested directly with a particular investment manager or investment fund. This information is shown for illustrative purposes only. The Trustee can alter underlying investment managers or investment funds from time to time without prior notification to you. Note: the Trust Cash Management Fund is a product issued by The Trust Company Limited, a related entity of the Trustee, on an arms length and commercial basis. Investment option net earning rates The net earning rates indicate the annual rate of net earnings achieved by the investment option, less relevant fees, costs and taxes (for more information about fees and costs deducted from earnings, see the Fees and other costs section on pages of this PDS). 20