Super Guide. Accumulation section 12 November United Technologies Corporation Retirement Plan

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1 United Technologies Corporation Retirement Plan Super Guide Accumulation section 12 November 2018 Inside How super works 3 Benefits of investing with the UTC Retirement Plan 5 Fees and other costs 7 How super is taxed 12 General information about the Plan 14 How to open an account 15 Special terms 16 Issued by Towers Watson Superannuation Pty Ltd (ABN , AFSL ) as Trustee of the United Technologies Corporation Retirement Plan (ABN ) MySuper Authorisation number UTC helpline

2 Contact us The Plan Administrator UTC Retirement Plan PO Box 1442 Parramatta NSW 2124 Helpline: Website: You can also write to: The Advisory Policy Committee C/- Barry Singer Otis Elevator Pty Ltd 363 George Street Sydney NSW 2000 Important information The information in this document forms part of the Product Disclosure Statement (PDS) dated 12 November 2018 for the Accumulation section of the Plan. It should be read in conjunction with the other documents which form part of the PDS. You should consider that information before making a decision about the product or whether your insurance is appropriate. The information provided in this PDS is general information only and does not take into account your particular objectives, financial circumstances or needs. It is not personal or tax advice. Any examples included are for illustration only and are not intended to be recommendations or preferred courses of action. You should consider obtaining professional advice about your particular circumstances before making any financial or investment decisions based on the information contained in this document. Investment returns can be positive or negative and are not guaranteed by the Trustee or the Company. Information on tax and superannuation legislation is current as at 12 November The Trustee reserves the right to correct any errors or omissions. Information contained 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 In addition, we will provide a hardcopy free of charge on request, if you contact the Plan s superannuation helpline on This guide provides further information on how your benefits work as an Accumulation member of the UTC Retirement Plan (the Plan). It also provides further information on the Plan s fees and costs and how super is taxed. This is only a guide to the benefits, which are laid down in full in the Trust Deed and Rules of the Plan. This guide cannot override the Trust Deed and Rules, which are the final authority on your entitlement under the Plan. 2 The UTC Retirement Plan

3 How super works Company contributions You will be advised of the level of contributions that will be paid by the Company into your Accumulation account. These contributions will be at least at the level required under the Superannuation Guarantee legislation. Voluntary member contributions You are not required to make your own contributions to the Plan, although you can choose to make voluntary after-tax or before-tax contributions directly from your pay. You need to make sure that the contributions to your super do not exceed the Government s caps on the amount of super that can receive concessional tax treatment. See page 12 for more information. You cannot make deductible personal contributions to this Plan. Contributions you make from after-tax salary are non-concessional contributions. Employer contributions and any contributions you ake from before-tax salary are concessional contributions. The Government has annual limits on the amount and type of contributions you can make that receive concessional tax treatment. See page 12 for details. Co-contributions If you are eligible, the Government pays a superannuation co-contribution on your voluntary after-tax contributions up to certain limits. The Government will contribute $0.50 for every dollar of member contributions to a maximum of $500 per year for those on incomes of $37,697* per year or less. This maximum co-contribution gradually reduces for each dollar that a person s total annual income exceeds $37,697*, until it phases out altogether for those on incomes of $52,697* per year and above. Your income, to determine eligibility, is your total assessable income including Company contributions, any before-tax member contributions and any reportable fringe benefits. Other eligibility conditions also apply. The Australian Taxation Office (ATO) automatically determines your eligibility for the co-contribution based on your personal income tax return lodged each year. If you are in the relevant income bracket and believe that you can benefit from the co-contribution, you may wish to speak to a licensed financial adviser, or contact the ATO on or See the Plan s website for any changes to these income limits or co-contribution amounts. * This is the threshold for the 2018/19 year. Rollovers You may transfer or roll over benefits into the Plan from other super funds. Rollover payments go into your Accumulation account and are invested according to your chosen investment option. Before you roll over, you should check if your other funds charge you any fees to do this or whether you have extra benefits, such as insurance, that might be lost if you roll the money out of the other funds. Super and housing First Home Super Saver Scheme This scheme allows first home buyers to make voluntary concessional or non-concessional contributions to superannuation and later access some of the funds towards the purchase of your first home. Voluntary contributions made after 1 July 2017 qualify and withdrawals can be made from 1 July Up to $15,000 of voluntary contributions can be counted per year towards this scheme, up to a total of no more than $30,000 over all years. Contributions tax will be deducted by the Plan from any concessional contributions that are counted towards the scheme, so a maximum of 85% of such eligible contributions can be withdrawn. The ATO will also calculate an amount of earnings that can be withdrawn with the eligible contributions. To find out how much of your contributions and earnings can be released you can apply for a determination from the ATO. You can apply multiple times for a determination. There are a number of eligibility and other conditions that apply to this scheme. There are also rules around when you can apply to the ATO to withdraw the contributions and earnings and how long you then have to purchase your first home. You can only ever apply to the ATO once to release an amount under the scheme, so you should be sure you are ready and comply with all the conditions before you apply. The ATO will then calculate your earnings before authorising your super plan to release your funds. They will be paid by your super plan to the ATO, which will deduct relevant taxes and pay the remainder to you. You should also note that the ATO must have released your funds under the scheme before you sign the contract to purchase or build your first home, or else you may have to pay extra tax called a FHSS tax. The ATO estimates that it can take around 25 business days for you to receive your money after they approve its release. For more information, please contact the superannuation helpline on Contributing money from home sale to super Homeowners aged 65 and over are allowed to contribute some of the proceeds of the sale of their principal home into super. This is designed to encourage older people to downsize their homes. If you have lived in the home for at least 10 years you can make a downsizer contribution of up to $300,000 into your superannuation fund. Couples are able to transfer up to $600,000 into super. The contract of sale must have been exchanged on or after 1 July Eligible downsizer contributions will not count towards your annual non-concessional contribution cap and can be made even if you do not meet the work test*. However, they will count towards the $1.6 million cap on the amount that can be held in pensions where earnings are exempt from tax. UTC helpline

4 If the ATO determines that you were ineligible to make downsizer contributions or you exceed the $300,000 cap, your contributions will count as personal contributions, which may result in you exceeding your non-concessional contribution cap. The contributions also count towards your total superannuation balance, which may affect whether you can make non-concessional contributions in future years. Other conditions also apply. To make downsizer contributions you need to complete a Downsizer contribution into superannuation form available on the website. For more information, please contact the superannuation helpline on * If you are over age 65 there is usually a work test applied before you are able to make personal contributions to super. You need to be gainfully employed at least 40 hours in any period of 30 consecutive days in the financial year to which the contribution relates. Choice of fund By law, you can choose which super fund you belong to. If you decide you do not want to have your Company super paid into this Plan, you should advise on your Choice form that you want your contributions paid to another complying fund. If you choose to direct the Company s contributions to another fund, you will not be eligible for any benefits (including insurance cover) in the Plan. Should you later recommence contributions to the Plan after having chosen for your contributions to go into another fund during your current employment, satisfactory medical evidence may be required before your standard insurance cover commences. Payment of benefits In accordance with Government requirements, a member cannot generally receive any benefits in cash from the Plan while still employed by the Company. Employed members over their preservation age may be eligible to take out an Account-Based Pension through the Plan before retirement under the Government s transition to retirement rules. For more information, speak to a licensed financial adviser or read the Pension PDS. Exceptions apply in the following circumstances: A non-preserved component of a benefit rolled over to the Plan after 30 June 1994 (called an unrestricted non-preserved component) may be withdrawn at any time. The minimum withdrawal is $5,000 (or the entire unrestricted non-preserved component if this is less than $5,000). In circumstances of severe financial hardship or on compassionate grounds (see more details under Preservation rules below) and subject to any Government-imposed limits. A member over age 65 may withdraw part or all of their accrued benefit. The Government s portability rules allow you to transfer some or all of your benefits from the UTC Retirement Plan to another complying superannuation fund at any time. If, however, your UTC Retirement Plan account balance becomes insufficient to meet the insurance fees, your insurance cover in the Plan may cease (see the Insurance Guide). Preservation rules The Government has established preservation rules, which mean that some or all of your superannuation benefit must be retained in the superannuation system until one of the following events occurs: You retire from the workforce after your preservation age. Your preservation age depends on when you were born, as shown in the table to the right; DATE OF BIRTH PRESERVATION AGE Before 1 July July 1960 to 30 June July 1961 to 30 June July 1962 to 30 June July 1963 to 30 June July 1964 or later 60 You reach age 65; You die; You become totally and permanently disabled or suffer from a terminal medical condition (and meet the conditions of the legislation); You cease employment and your preserved benefit is paid in the form of a non-commutable lifetime pension or annuity; You are a temporary resident, and you permanently depart from Australia (release of your benefit may be subject to additional tax); Part or all of your benefit is released on grounds of severe financial hardship as defined in superannuation law (with the approval of the Trustee); or Part or all of your benefit is released on compassionate grounds as defined in superannuation law (with the approval of the Commonwealth Department of Human Services and the agreement of the Trustee). Your Personal Statement of Benefits shows how much of your super is preserved. When you leave service you may elect to receive your non-preserved benefit in cash or keep it in the superannuation system. If your total benefit is less than $200, you may also receive the benefit in cash (after the deduction of any tax due). For the purposes of the preservation laws retired means that you must have ceased gainful employment, and one of the following must apply to you: If you have reached your preservation age but are less than age 60, the Trustee must be satisfied that you intend never again to be gainfully employed more than 10 hours per week. If you are over age 60, either: You must have ceased gainful employment after reaching age 60; or The Trustee must be satisfied that you intend never again to be gainfully employed more than 10 hours per week. You can receive your benefit in cash after you have reached age 65 regardless of whether you are working or have ever worked. 4 The UTC Retirement Plan 4

5 Benefits of investing with the UTC Retirement Plan An overview of your benefits Your benefit on retirement or leaving employment with one of the Companies is the total balance in your Accumulation account. As shown in the box below, the value of your Accumulation account is made up of contributions and investment returns less any taxes or fees that may apply. The Accumulation account also holds any voluntary member contributions you make and any amounts you roll into the Plan from other funds. Your options on leaving When you leave, you will receive confirmation of your final benefit from the Plan Administrator. You will be asked to nominate whether you want to: Invest your benefit in an Account-Based Pension, if eligible (see page 6); Become a Deferred Benefits member of the Plan (a minimum amount of $1,000 applies); Take any part of your benefit in cash (if allowed under the preservation rules); Accumulation account If eligible, the Plan also provides insurance cover if you die or become totally and permanently disabled while a Plan member. The Plan provides standard insured benefits to Accumulation members of up to two times your salary depending on your age. Eligible members can also purchase additional voluntary insurance. Eligible members can obtain up to $50,000 of additional voluntary insurance without providing medical evidence on the occurence of certain Life Events. Some conditions apply. For further details, see the Insurance Guide available from the website at How you choose to invest your Accumulation account may have a significant impact on the value of your Accumulation account. You have a choice of seven options for the investment of your Accumulation account. For further details, see the Investment Guide available from the website at = Company contributions + Voluntary member contributions + Rollovers from other funds +/ Investment earnings Taxes, investment, administration, insurance and any other fees and any benefits paid Roll over part or all of your benefit to another complying superannuation fund; and/or Continue your insurance cover via a personal policy without providing evidence of good health (see the Insurance Guide for details). If your benefit is more than $1,000, it will be automatically transferred to the Deferred Benefits section of the Plan until you advise the Plan Administrator otherwise. Who can help me make my decision? You may wish to seek advice from a licensed financial adviser in deciding on your super choices. Here are some tips for choosing a licensed financial adviser: Ask if the financial adviser is licensed by ASIC, the government regulator; Check that the financial adviser has indemnity insurance and is a member of a professional body such as the Financial Planning Association (FPA); Find out how long the financial adviser has been in business and ask about their research facilities; Find out how they will charge you. Do they charge a fee for service or rely on commissions from the amount of money you might invest? Make sure they are professional and impartial. The FPA can put you in touch with a licensed financial adviser in your area. Call them on or visit UTC helpline

6 If your benefit is less than $1,000, it will be transferred to the Plan s Eligible Rollover Fund (ERF) if you have not advised the Plan Administrator otherwise within 28 days of leaving the Company or choosing another fund for your future Company contributions. If your benefit is transferred to an ERF, you will no longer be a member of, or have any rights under, the Plan. The ERF is: Colonial Super Trace Approved Eligible Rollover Fund Locked Bag 5429 Parramatta NSW 2124 Phone: Contact: The Administrator You should note that the investment and crediting rate policies of the ERF may be different from those that applied in the Plan. In addition, the ERF does not offer any insurance cover. You should seek advice from a licensed financial adviser about whether the ERF is a suitable investment for you. Account-Based Pension If you are over your preservation age (see page 4), and have a minimum benefit of $50,000, you have the option to buy an Account-Based Pension or a Transition to Retirement Account-Based Pension from the Plan. This pays you a regular income from your account until your balance is used up. The balance of your account earns investment returns based on the performance of your chosen investment option. The total amount that may be paid to you each year is subject to limits set by the Government. More details are contained in the Pension PDS and the Plan s latest Annual Report. Payment of your death benefit You can nominate your beneficiaries on the Application and change form to assist the Trustee in paying your benefits in the event of your death. It is important that you keep your nomination up to date if your circumstances change. You can change your nomination at any time by completing the Nomination of beneficiaries section of the Application and change form or online at The Plan s Trust Deed gives the Trustee discretion to decide how your death benefit should be paid. This is to make sure that the appropriate person receives the benefit at the time of your death. The Trustee will take your nomination into account, but is not bound by it. See the Special Terms on page 16 for details about who you can nominate as a dependant. Leave without pay While you are on leave without pay (including parental leave), Company contributions made on your behalf will cease. If you have chosen to make regular contributions of your own, they will also stop for this period. Your insurance cover and insurance fees will continue for up to 24 months during your absence. Contact the Plan s superannuation helpline on for more information. Temporary Residents If you are not a New Zealand citizen or Australian citizen or resident, and you accrued your super while in Australia on a temporary resident visa, you may be able to claim your super when you permanently leave Australia. Applicable taxes will be deducted if required. If you do not claim your super within six months of permanently departing Australia, the Trustee may be required to pay your super to the ATO without your consent. You can claim your super from the ATO at any time, but it may not earn any interest while with the ATO. 6 The UTC Retirement Plan

7 Fees and other 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 (for example, 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. This section shows fees and other costs that you may be charged. These fees and other costs may be deducted from your money, from the returns on your investment or from the assets of the superannuation fund as a whole. Other fees, such as activity fees and insurance fees may also be charged, but these will depend on the nature of the activity or insurance chosen by you. Taxes, insurance fees and other costs relating to insurance are set out in another part of this document. You should read all the information about fees and other costs because it is important to understand their impact on your investment. UTC helpline

8 UTC Retirement Plan Type of fee Amount How and when paid Investment fee Administration fee A percentage of your total Accumulation account balance in the Plan: High Growth 0.80% p.a. to 0.85% p.a. ($8.00 to $8.50 per $1,000) High Growth/Balanced 0.75% p.a. to 0.80% p.a. ($7.50 to $8.00 per $1,000) Balanced (MySuper) 0.70% p.a. to 0.75% p.a. ($7.00 to $7.50 per $1,000) Balanced/Stable 0.63% p.a. to 0.68% p.a. ($6.30 to $6.80 per $1,000) Stable 0.55% p.a. to 0.60% p.a. ($5.50 to $6.00 per $1,000) Stable/Cash 0.33% p.a. to 0.38% p.a. ($3.30 to $3.80 per $1,000) Cash 0.10% p.a. to 0.15% p.a. ($1.00 to $1.50 per $1,000) 0.22% p.a. ($2.20 p.a. per $1,000) of your account balance, plus $90 p.a., subject to a maximum total fee of $1,200 p.a. Buy-sell spread Nil Not applicable. Switching fee Nil Not applicable. Deducted from monthly investment returns before the returns are applied to your Plan account. Note if you have not chosen an investment option, the fee for the Balanced (MySuper) option will apply. Deducted monthly, based on your account balance at the start of the month. Exit fee $105 ($107 from 1 January 2019) Applies to each payment from the UTC Plan, including amounts rolled out, cash payments to members (excluding Account-Based Pension members), and each excess contributions tax payment. Advice fees relating to all members investing in a particular MySuper product or investment option Other fees and costs 1 Nil Other fees may also apply. Not applicable. Indirect cost ratio Nil Not applicable. 1 Insurance fees and fees for certain activities you request may apply (see pages 9 to 10). 8 The UTC Retirement Plan

9 Example of annual fees and costs The table gives an example of how the fees and costs in the Balanced (MySuper) option* for this superannuation product can affect your superannuation investment over a 1 year period. You should use this table to compare this superannuation product with other superannuation products. EXAMPLE Balanced (MySuper) option BALANCE OF $50,000 Investment fees 0.75% p.a.* For every $50,000 you have in the superannuation product you will be charged $375 each year* PLUS Administration fees PLUS Indirect costs for the superannuation product EQUALS Cost of product 0.22% p.a. plus $90 p.a. subject to a maximum total fee of $1,200 p.a. Nil And, for every $50,000 you have in the Plan you will be charged $110 each year plus $90 in administration fees regardless of your balance. 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 $575 for the superannuation product. * The investment fee shown is the maximum fee. Note: Additional fees may apply. And if you leave the superannuation fund, you may also be charged an exit fee of $105 ($107 from 1 January 2019) and a buy-sell spread. The buy/sell spread for exiting is 0% (this will equal to $0 for every $50,000 you withdraw). Additional explanation of fees and costs 1. Buy-sell spread A buy-sell spread may be charged by a fund to reflect costs incurred by the fund or charged by the investment managers when you make contributions, roll money into the fund, or change investment options. The Plan does not currently charge a separate buy-sell spread; instead, these costs are included in transactional and operational costs. However, the Trustee reserves the right to charge a buy-sell spread in the future. See to the right for more information. 2. Administration fees These fees include administration, consulting, audit, legal and other fees incurred by the Plan. Administration fees are deducted from your account monthly. 3. Investment fees The investment fee ranges that apply to the Plan s investment options are shown in the table on page 8. They are estimates of the ongoing fees that will be charged. 4. Taxes and insurance fees The following taxes and insurance fees are deducted from your accounts in the Plan: Contributions tax generally at the rate of 15% from Company contributions and any salary sacrifice contributions to your accounts. Any deductions available to the Plan, such as for expenses, reduce the amount of tax deducted. Excess contributions tax in certain circumstances if your contributions exceed caps set by the Government (see page 12). No-TFN tax on your concessional (employer and before-tax) contributions if you have not provided the Fund with your TFN. Any surcharge tax assessed by the ATO as being applicable to you. The tax is deducted from your benefits when the assessment is received by the Plan. The surcharge was abolished with effect from 1 July 2005, but the Plan may still receive assessments for you in respect of earlier years. More information on tax can be found on page Transactional and operational costs These costs are incurred by the Plan and its investment managers, and may include brokerage, settlement and custody costs, the difference between the acquisition and disposal prices paid by the managers for the Plan s investments, clearing costs, costs associated with currency hedging and stamp duty on investment transactions. They may also include additional fees charged by some of the Plan s investment managers if they out-perform their specified objective. These additional fees are only charged on the portion of the assets of the relevant investment option held by the manager. Transactional and operational costs related to explicit transaction costs are included in the investment fee, based on the amount of these costs incurred by the Plan or its investment managers during the Plan year prior to the date of this PDS (i.e. the year ending 30 June 2018). They therefore represent a cost to you. Implicit transaction costs (e.g. bid/ask spreads) are also included in the total transactional costs shown in the table on page 10. UTC helpline

10 The total transactional and operational costs are shown in the table below. Investment option Transactional and operational costs Not included in investment fee Total High Growth 0.18% 0.06% 0.24% High Growth/ Balanced 0.18% 0.07% 0.26% Balanced 0.19% 0.08% 0.27% Balanced/ Stable 0.18% 0.09% 0.27% Stable 0.18% 0.09% 0.27% Stable/Cash 0.09% 0.05% 0.14% Cash 0.00% 0.01% 0.01% These amounts are estimates. To the extent they are part of the investment fee, these costs are deducted from the investment earnings of each investment option before those earnings are applied to your accounts. 6. Operational risk financial requirement reserve Super funds are required to set aside financial resources to address their operational risks. The Trustee has built up an operational risk financial requirement reserve (ORFR reserve) in the Plan equal to 0.25% of the aggregate of members net assets funded by setting aside a small portion of the Plan s defined benefit assets. The reserve is invested the same way as the Plan s defined benefit assets. The Trustee periodically monitors the reserve to ensure that it remains close to its target level. Should the reserve fall below a predetermined shortfall limit, the Trustee will enact a plan for its replenishment, however it is currently the policy of the Company that any replenishment plan will also be funded from the Plan s defined benefit assets and that members will not be required to contribute to the replenishment. The Trustee will update members at least annually on the status of the reserve. 7. Activity fees If you or your spouse require information on your benefit in relation to a Family Law matter, a fee of $361 ($370 from 1 January 2019) will be charged for each date at which information is required. You, or your spouse, are required to pay this fee at the time of any request for information it is not deducted from your accounts. In addition, if your super is split under a Family law agreement or court order, fees will apply for the splitting of your super and the payment of an amount to your former spouse. These fees are normally shared evenly between you and your former spouse, unless your agreement or court order provides otherwise. The fees may be paid by you and/ or your spouse by cheque, or otherwise will be deducted from the applicable benefit. The fee for establishing an entitlement to your spouse is $269 ($275 from 1 January 2019). All fees include GST where applicable. 8. Borrowing costs and direct property operational costs In accordance with ASIC relief, borrowing costs and direct property operational costs have been excluded from the investment fees disclosed in this PDS. Borrowing costs may be incurred by the Plan s investment managers and relate to the use of credit facilities that are not derivatives by the managers. Direct property operational costs include rates and utilities, maintenance costs and other property operating costs to the extent that the costs are not recovered from tenants. They therefore represent an additional cost to you. The percentages excluded from the table on page 8 are outlined in the following table: Investment option Direct property operational costs Borrowing costs High Growth 0.04% 0.07% High Growth/Balanced 0.04% 0.07% Balanced 0.04% 0.07% Balanced/Stable 0.04% 0.07% Stable 0.04% 0.07% Stable/Cash 0.02% 0.04% Cash 0.00% 0.00% These amounts are estimates. These costs are deducted from the investment earnings of each investment option before those earnings are applied to your accounts. 9. Fee changes Some of the fees are dependent on the fees charged by the Plan s service providers. Some of these fees may be indexed annually (e.g. in line with increases in Average Weekly Ordinary Time Earnings); others depend on the services provided to the Plan each year. The Trustee reserves the right to increase the fees without your consent if necessary in order to manage the Plan. We may also introduce new fees. You will generally be given at least 30 days notice of any fee increases. The fees shown are current at 12 November 2018, unless otherwise stated. Further details of the fees, costs and taxes paid by the Plan can be found in the Plan s Financial Statements. A summary is included in the Plan s Annual Report which is issued after 30 June each year. 10 The UTC Retirement Plan 10

11 11 Fee Definitions Activity fees A fee is an activity fee if: (a) the fee relates to costs incurred by the trustee of a superannuation fund that are directly related to an activity of the trustee: (i) that is engaged in at the request, or with the consent, of a member; or (ii) that relates to a member and is required by law; and (b) those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee. Administration fees An administration fee is a fee that relates to the administration or operation of the superannuation fund and includes costs that relate to that administration or operation, other than: (a) borrowing costs; and (b) indirect costs that are not paid out of the superannuation fund that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the fund or in an interposed vehicle or derivative financial product; and (c) costs that are otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee. Advice fees A fee is an advice fee if: (a) the fee relates directly to costs incurred by the trustee of a superannuation fund because of the provision of financial product advice to a member by: (i) a trustee of the fund; or (ii) another person acting as an employee of, or under an arrangement with, a trustee of the fund; and (b) those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee. Buy-sell spreads A buy-sell spread is a fee to recover transaction costs incurred by the trustee of a superannuation fund in relation to the sale and purchase of assets of the fund. Exit fees An exit fee is a fee to recover the costs of disposing of all or part of members interests in the superannuation fund. Indirect cost ratio The indirect cost ratio (ICR), for a MySuper product or an investment option offered by a superannuation fund, is the ratio of the total of the indirect costs for the MySuper product or investment option, to the total average net assets of the superannuation fund attributed to the MySuper product or investment option. Investment Fees An investment fee is a fee that relates to the investment of the assets of a superannuation fund and includes: (a) fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and (b) costs that relate to the investment of assets of the fund, other than: (i) borrowing costs; and (ii) indirect costs that are not paid out of the superannuation fund that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the fund or in an interposed vehicle or derivative financial product; and (iii) costs that are otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee. Insurance fees A fee is an insurance fee if: (a) the fee relates directly to either or both of the following: (i) insurance premiums paid by the trustee of a superannuation fund in relation to a member or members of the fund; (ii) costs incurred by the trustee of a superannuation fund in relation to the provision of insurance for a member or members of the fund; and (b) the fee does not relate to any part of a premium paid or cost incurred in relation to a life policy or a contract of insurance that relates to a benefit to the member that is based on the performance of an investment rather than the realisation of a risk; and (c) the premiums and costs to which the fee relates are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an advice fee. Switching fees A switching fee for a MySuper product is a fee to recover the costs of switching all or part of a member s interest in a superannuation fund from one class of beneficial interest in the fund to another. A switching fee for superannuation products other than a MySuper product, is a fee to recover the costs of switching all or part of a member s interest in the superannuation fund from one investment option or product in the fund to another. UTC helpline

12 How super is taxed How are my contributions taxed? When concessional contributions are paid into the Plan, generally a contributions tax of 15% applies. If the Plan does not have your Tax File Number, this tax increases to 47%. How are investment earnings taxed in the Plan? Investment earnings are generally taxed at the rate of 15%. This rate reduces if deductions and imputation credits are available to the Plan s investment managers. How is my super benefit taxed? The tax payable on benefits depends on a number of factors, including: The type of benefit being paid (retirement, disability or death); Who receives the benefit; Whether you were an Australian citizen or permanent resident when the benefit was paid. Higher tax applies to benefits paid to temporary residents who permanently leave Australia; and How you receive the benefit (e.g. lump sum amount or pension) and your age. If you are age 60 or over, generally all lump sum payments and pensions paid to you from a taxed super fund (such as this Plan) will be tax free. Death benefits paid to non-dependants are taxed. Benefits paid to departing temporary residents may also be taxed. Contribution caps The Government sets limits or caps that affect how super contributions are taxed. What are concessional contributions? Concessional contributions include: Company contributions; Personal salary sacrifice contributions; and Personal contributions for which you have claimed a tax deduction (note that you cannot make deductible personal contributions to this Plan). What are non-concessional contributions? Non-concessional contributions include: After-tax contributions for which you have not claimed a tax deduction; Excess concessional contributions not withdrawn from superannuation; and Certain other contributions from non-salary sources (e.g. certain overseas transfers). They do not include rollovers or co-contributions. What are the caps on contributions? These are the Government s limits or caps on how much can be contributed to super each year before extra tax applies. What is the annual cap? What tax applies if my contributions are within the cap? Concessional contributions $25,000 regardless of your age. Generally 15% contributions tax.*^ Non-concessional contributions # $100,000, however, if your total super balance on 30 June 2018 was more than $1.6 million, any non-concessional contributions you make in 2018/19 will be excessive. # 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 superannuation balance on 30 June 2018 was greater than $1.4 million. Transitional rules apply if you brought forward contributions in 2016/17. * If your relevant income is over $250,000 per year, you may receive an additional tax assessment from the Australian Taxation Office (ATO). ^ If you earn less than $37,000 per year you may receive a refund of the 15% contributions tax deducted from your concessional 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 super fund. Nil 12 The UTC Retirement Plan 12

13 What happens if I exceed the caps? This table shows the extra tax applicable if you exceed the caps: How much tax applies to the excess if I exceed the limit? Concessional contributions Your marginal tax rate less 15% (reflecting tax already paid by the Plan), plus an interest charge. Non-concessional contributions If you withdraw the excess from super: Nil tax on contributions. Associated earnings taxed at your marginal tax rate. If you leave excess in super: up to 47%. If you exceed the concessional contributions cap, you can elect to release up to 85% of the excess contributions from the superannuation system. The amount will be paid by your super fund to the ATO and used to meet any of your outstanding tax liabilities (including the tax on the excess contributions) with the remainder then paid back to you. Amounts that you withdraw will not count towards your non-concessional contributions cap. If you exceed the non-concessional cap, you can elect to release the excess contributions from super, together with an amount of associated earnings. The amount of associated earnings is determined by the ATO and may not reflect the actual earnings on your super contributions. The ATO will send you a form to enable you to make your elections. Providing your Tax File Number (TFN) Under the Superannuation Industry (Supervision) Act 1993, the Plan is authorised to collect your TFN, which will only be used for lawful purposes. These purposes may change in the future as a result of legislative change. The Trustee may disclose your TFN to another superannuation provider when your benefits are being transferred, unless you request the Trustee of your superannuation fund in writing that your TFN not be disclosed to any other superannuation provider. It is not an offence if you don t quote your TFN to the Plan, but the following consequences may apply: The Plan cannot accept your non-concessional contributions; All concessional contributions will be taxed at 47%; You may miss out on co-contribution payments from the Government; You could pay additional tax when you draw down your super benefits; and It may be difficult to trace and consolidate different super accounts (and benefits) in your name. UTC helpline

14 General information about the Plan How your Plan is managed The Plan is managed by a Trustee company, Towers Watson Superannuation Pty Ltd (ABN , AFSL ). Towers Watson Superannuation Pty Ltd has been licensed to act as a trustee of superannuation funds by the prudential regulator of super funds in Australia, the Australian Prudential Regulation Authority (APRA). Towers Watson Superannuation Pty Ltd is a subsidiary of Towers Watson Australia Pty Ltd (ABN , AFSL ), a company that also acts as actuary and consultant and administrator to the Plan (administration via an outsourced arrangement with Australian Administration Services Pty. Limited (ABN ) a Corporate Authorised Representative (No ) of Pacific Custodians Pty Limited (ABN , AFSL ). The Trustee is responsible for ensuring that the Plan is managed and administered in accordance with Government legislation. The Trustee also ensures that the Plan s assets are invested in an appropriate manner. The Advisory Policy Committee An Advisory Policy Committee is responsible for ensuring that members interests are represented in the management of the Plan. The Committee comprises equal numbers of Company-appointed and member-elected representatives. An election for the member representatives is generally held every three years. The Advisory Policy Committee has an important and ongoing role in: Monitoring the performance of the Plan and its investment options; Ensuring that the Trustee and other service providers meet agreed service standards; Providing a key link between members and the Trustee; and Providing input into the Plan s benefit design. Details on the current Advisory Policy Committee members can be found in the Plan s latest Annual Report. Other information A number of documents such as the Plan s Trust Deed, latest Annual Report and various Trustee policies are available on the Plan s website. Other documents such as the latest financial statements are available on request. You can also refer to one of the following for more information about your benefits under the Plan: The latest Annual Report and Investment Guide, which provide you with information about investing and your investment choices within the Plan; The Insurance Guide which provides further details on the Plan s insurance; Your annual Personal Statement of Benefits; The Plan s website, The superannuation helpline on ; and Regular Plan newsletters with all the latest Plan information. Reduction of benefits on separation or divorce It is generally possible to split your superannuation as part of a property settlement in the event of separation or divorce. The Trustee will be required to split your benefit if it receives a Court Order through a relevant court, or by agreement between a couple after obtaining legal advice. If your super benefit is split, your account will be adjusted for the amount paid to your spouse. Any fees incurred will be your responsibility. Refer to pages 7 to 11 for details of fees. Loans Under the law, it is not possible for you to borrow money from the Plan. In addition, you should note that you cannot use your expected benefits as security for a loan from any other source such as a bank, building society or finance company. 14 The UTC Retirement Plan 14

15 Service providers The Trustee may use the services of Towers Watson Australia Pty Ltd to provide general financial advice to members. The Trustee does not provide financial advice and any advice provided to members in writing, electronically, in person or via telephone will be provided by Towers Watson Australia, not the Trustee. Towers Watson Australia is licensed to provide advice and the Trustee is neither recommending nor endorsing that advice. Details of the Plan s other major service providers are included in the latest Annual Report. The Trust Deed The Trust Deed is a formal document that sets out the rights and duties of all employer participants, and outlines the rules under which it is administered and benefits are paid. If there are any differences to this PDS, then the Trust Deed is the final authority. Contact the Plan Administrator if you wish to see a copy of the Trust Deed (see page 2) or a copy can be found on the website. Amendments and termination While the intention of the Companies is to continue the Plan indefinitely, future circumstances may necessitate amendment or termination of the Plan and, in either case, members will be advised if this occurs. In general terms, no change can be made to the Trust Deed and Rules which will reduce the amount of a member s accrued benefit at the date of such change, without first receiving member consent. How to open an account Joining the Plan You are eligible to join the Plan from the first day of your employment with the Company. To join you should: 1. Read the Product Disclosure Statement 2. Decide: If you wish to make voluntary member contributions. How you wish to invest your Accumulation account. Whether you want to purchase additional voluntary insurance. Who you wish to nominate as your beneficiary for any death benefit. 3. Complete an Application and change form. The form is available from Human Resources or your Company payroll contact. You can also download it from the Plan s website, Your privacy The Trustee of the Plan believes that your privacy is important and, in accordance with the Privacy Act, has developed a privacy policy to protect your personal information. If you are concerned about a possible interference with your privacy, or if you want to obtain a copy of the Plan s privacy policy, you should contact the Plan s superannuation helpline on or a copy is available on the website. If your concerns are not resolved to your satisfaction, you may contact the Office of the Australian Information Commissioner on UTC helpline

16 Special terms Enquiries or complaints If you have any questions or would like more information about the Plan, please contact: The Plan Administrator United Technologies Corporation Retirement Plan PO Box 1442 Parramatta NSW 2124 Helpline: Website: In most cases, your enquiry will be resolved over the phone. If not, you may be asked to write to the Plan. The matter will be referred to the Trustee and you should receive a reply within 90 days. You can request the Trustee s reasons for its decision on your complaint if reasons have not already been provided. A copy of the Trustee s Enquiries and Complaints Policy is available on the Fund s website at or by contacting the Fund s helpline on If you are not satisfied with the Trustee s response, you may contact the Australian Financial Complaints Authority (AFCA), except in relation to privacy-related matters. AFCA provides fair and independent financial services complaint resolution that is free to consumers. There are some complaints that AFCA cannot consider such as complaints relating to the management of the Plan as a whole. In addition, time limits may apply. Please contact the Plan s helpline on or refer to AFCA s website at as soon as possible for further information. You can contact AFCA at: Australian Financial Complaints Authority GPO Box 3 Melbourne VIC info@afca.org.au Tel: For privacy-related matters, please contact the Office of the Australian Information Commissioner on Accumulation account: operates like a savings account. Contributions go in and (where applicable) fees, taxes and insurance fees come out. Investment earnings (which may be positive or negative) are applied according to the investment option you choose. Accumulation benefits: is the style of benefits provided to members of the Accumulation section of the Plan. Your benefits are based on your Accumulation account. Accumulation member: a permanent employee of a participating employer who is a member of the Plan, and who is not a Defined Benefit member. Account-Based Pension: once you have reached your preservation age, you can invest all or part of your super in an Account-Based Pension in the Plan. The amount you invest goes into an account in your name, where it continues to earn investment earnings based on your chosen investment option, and the Plan pays you a regular income from your account. Over time, the pension is paid from the earnings and the original capital amount until it runs out. The money in the account remains in your name, and will be passed on to your beneficiaries if you die while a Plan member. If you take an Account-Based Pension while you are still working, your pension will be subject to the transition to retirement rules. Actively at work: means you are actively performing all the duties of your usual occupation, working your usual hours free from any limitation due to illness or injury and not in receipt of and/or entitled to claim income support benefits from any source including worker s compensation benefits, statutory motor accident benefits or disability income benefits (including government income support benefits). Company/Companies: Australian companies in the UTC Group participating in the Plan, including Otis, Carrier, AHI-Carrier, Chubb, Sanscord, Sikorsky and Pratt & Whitney. Concessional contributions: include Company contributions and personal salary sacrifice contributions. They also include tax-deductible personal contributions and may include certain taxable parts of overseas transfers. 16 The UTC Retirement Plan 16