StatePlus Retirement Fund

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1 StatePlus Retirement Fund Additional Information Booklet ISSUED 10 NOVEMBER 2018 Issued by State Super Financial Services Australia Limited trading as StatePlus ABN , AFS Licence No , Trustee of the StatePlus Retirement Fund, ABN

2 2 Retirement Fund Before you start Information regarding the Tailored Super Plan USI , the Flexible Income Plan USI , the Transition to Retirement Pension USI the Personal Retirement Plan USI SSI0017AU and Allocated Pension Fund USI SSI0009AU is contained in the applicable Product Disclosure Statement (PDS) and various Booklets (which each form part of the relevant PDS), including this Retirement Fund Additional Information Booklet. You can obtain a copy of these documents without charge by contacting us. You can also download a copy of the relevant PDS and associated Booklets at stateplus.com.au/documents The information in this Booklet forms part of: the Tailored Super Plan PDS dated 10 November 2018 the Flexible Income Plan PDS dated 10 November 2018 the Transition to Retirement Pension PDS dated 10 November 2018 the Personal Retirement Plan PDS dated 10 November 2018 the Allocated Pension Fund PDS dated 10 November The information in each PDS and the Booklets is general information only and doesn t take into account your specific objectives, financial situation or needs. You may wish to consult your financial planner to obtain financial advice that is tailored to your personal circumstances. You should also consider the PDS and the Booklets before making any decision about whether to acquire or to continue to hold the relevant product. The information in each PDS and the Booklets may change from time to time. We may update information which is not materially adverse to you on stateplus.com.au/documents. A paper or electronic copy of any updated information can also be obtained without charge from your financial planner or by calling The Tailored Super Plan, Flexible Income Plan, Transition to Retirement Pension, Personal Retirement Plan and Allocated Pension Fund are offered in the StatePlus Retirement Fund (Retirement Fund). State Super Financial Services Australia Limited trading as StatePlus ABN , AFSL Number (referred to in this Booklet as StatePlus, the trustee, we, us) is the trustee of the Retirement Fund and the issuer of interests in the Tailored Super Plan, Flexible Income Plan, Transition to Retirement Pension, Personal Retirement Plan and Allocated Pension Fund. This Additional Information Booklet is issued solely by StatePlus. No other person (whether or not related to StatePlus) is responsible for the information contained in this Additional Information Booklet. None of StatePlus, the investment managers we appoint or our service providers, or their respective officers, employees or agents guarantee that your investment in the Retirement Fund will increase or retain its value, guarantee the repayment of the money you invest in the Retirement Fund or guarantee the performance of the Retirement Fund. For an explanation of important words and phrases, see the Glossary on page 40.

3 Additional Information Booklet 3 Contents How super works 4 How super in retirement works 10 Additional information about superannuation 15 Transactions 18 Special investment facilities 19 Transacting on your account 20 Transaction processing 27 Reporting 28 How super is taxed 29 How pensions are taxed 32 Other information 34 Glossary 40 Directory 43

4 4 Retirement Fund How super works (Personal Retirement Plan and Tailored Super Plan members only) How to invest? Please refer to page 21 for details on how to apply to invest in the Personal Retirement Plan or Tailored Super Plan. You can open your account with an initial investment of as little as $2,000. This can be made up of contributions or rollovers from other super funds. You can then make additional contributions of any amount. You can also establish a Regular Savings Plan. For details of the Regular Savings Plan please see page 19. If your application does not specify the investment option(s) (the Fund(s) ) for investment, we will contact you to obtain your investment allocation. If we are unable to contact you we may not be able to accept your application. Please note: we are not bound to accept any application and we may refuse an application without giving a reason. Who can invest in the Personal Retirement Plan or the Tailored Super Plan? You can invest in the Personal Retirement Plan or the Tailored Super Plan if you receive the applicable PDS for that product in Australia, and at the time of application you are in Australia. Subject to the rules on contributions set out below, we can accept the following typical types of contributions into the Personal Retirement Plan or the Tailored Super Plan: Contribution type Superannuation Guarantee and industrial instrument employer contributions Contribution description Contributions made by your employer into the Personal Retirement Plan or the Tailored Super Plan for your benefit. Employers may make contributions to the Personal Retirement Plan or the Tailored Super Plan to satisfy their Superannuation Guarantee obligations or, to comply with their obligations under an industrial instrument in which case they are called mandated contributions. Personal contributions Contributions you as a member make. Personal contributions can either be personal after-tax contributions, paid from your after-tax income or personal contributions for which you claim a tax deduction. Salary sacrifice and additional employer contributions You may be able to arrange for your employer to make contributions to the Personal Retirement Plan or the Tailored Super Plan instead of paying you an equivalent amount of pre-tax salary. These salary sacrifice contributions are treated as employer contributions. Your employer can also make additional contributions for your benefit over and above any Superannuation Guarantee, industrial instrument or salary sacrifice contributions. Spouse contributions Contributions your spouse pays into the Personal Retirement Plan or the Tailored Super Plan for your benefit. Rollovers You can rollover existing superannuation monies into the Personal Retirement Plan or the Tailored Super Plan. Government co-contributions Downsizer contributions You may be eligible to receive a co-contribution from the Government (up to $500 for the 2018/19 financial year) (see page 7 for more details). Contributions made from the proceeds of selling your home. If you are age 65 or older and meet the eligibility requirements, you may be able to make downsizer contributions into your superannuation of a total aggregate value of up to $300,000. See the Downsizing cap section for more information.

5 Additional Information Booklet 5 Rules on contributions The following table summarises the rules in relation to typical contributions: Contribution Rules Superannuation Guarantee and industrial instrument employer contributions Concessional contributions (personal contributions for which you claim a tax deduction, salary sacrifice contributions and additional employer contributions) Nonconcessional contributions (personal contributions for which you do not claim a tax deduction) Spouse Contributions (made by your spouse for your benefit) Downsizer contributions Under 65 Yes 1 Yes 1 Yes 1 Yes 1 No At least 65, and under 70 Yes 1 Yes, provided you satisfy the annual work test 1,2,5,6 Yes, provided you satisfy the annual work test 1,2,6 Yes, provided you satisfy the annual work test 1,2 Yes 4 At least 70 and under 75 Yes 1 Yes, provided you satisfy the annual work test 1,2,3,5,6 Yes, provided you satisfy the annual work test 1,2,3,6 No Yes 4 75 and over Yes 1 No 3 No 3 No Yes 4 1. Subject to the limits outlined in Capping of contributions below. 2. The annual work test requires you to have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in the financial year. 3. Contributions may be made up to 28 days after the end of the month in which you turn age 75. You must also have satisfied the annual work test. 4. From 1 July 2018, an individual aged 65 or over can make one or more contributions up to a total aggregate amount of $300,000 from the proceeds of selling their home, exempt from the contributions caps and work requirements. See the Downsizing cap section for more information. 5. Individuals aged 65 to 74 will need to satisfy the annual work test to be eligible to claim a tax deduction on their personal contributions. 6. The 2018 Federal Budget contained a proposal that from 1 July 2019, an individual aged between 65 and 74 with a total superannuation balance below $300,000 will be allowed to make voluntary contributions for the first year that they no longer satisfy the annual work test. Please note: At the time of writing this proposal has not yet been made law. See the Glossary for the definition of total superannuation balance. There is no age restriction on rollovers. Importantly, we will not accept any contributions made by you or for your benefit unless you have provided your Tax File Number (TFN) to us. Any amount received in these circumstances will be invested in a non-interest bearing trust account and, if you do not provide your TFN, returned to you within 30 days. Capping of contributions The Government limits the amount of contributions that can be made to your superannuation which receive favourable tax treatment. These limits are called contribution caps. There are two contribution caps: concessional contribution cap non-concessional contribution cap. Additional tax may be payable if you exceed the caps. Please refer to How super is taxed on page 29 for further details about the additional tax that may apply. The concessional contribution cap Concessional contributions are generally contributions for which a tax deduction is claimed and include employer contributions, salary sacrifice contributions and personal contributions you claimed as a tax deduction. The general concessional contribution cap for the 2018/19 financial year is $25,000. This cap is indexed annually in line with Average Weekly Ordinary Time Earnings (AWOTE), in increments of $2,500 (rounded down). Further, from 1 July 2018, individuals with a total superannuation balance under $500,000 on 30 June of the previous financial year can carry forward any unused concessional contribution cap amounts on a rolling five year basis. So the first year you could make carry forward concessional contributions over the general cap is in the 2019/20 financial year. See the Glossary for the definition of total superannuation balance. Concessional contributions in excess of the applicable concessional contributions cap are called excess concessional contributions. You may elect to have up to 85% of your excess concessional contributions for the financial year released from your superannuation account. Where you elect to leave the excess concessional contributions in super, the excess amounts will count towards the non-concessional contributions cap. Please note: A Superannuation Guarantee or industrial instrument employer contribution counts towards the concessional contributions cap.

6 6 Retirement Fund The Federal Budget contained a proposal that from 1 July 2018, individuals whose income exceed $263,157 and who have multiple employers will be able to nominate that their wages from certain employers are not subject to the Superannuation Guarantee. This measure is intended to allow eligible individuals to avoid inadvertently breaching the concessional contribution cap as a result of receiving multiple compulsory Superannuation Guarantee contributions. As at the time of writing, this proposal has not yet been made law. The non-concessional contribution cap Non-concessional contributions are generally after-tax contributions, including personal after-tax contributions, spouse contributions and excess concessional contributions which have not been released (e.g. returned to you). Your non-concessional contributions are reduced by 100/85 of the amount of any excess concessional contributions released from superannuation. The general non-concessional contribution (NCC) cap is set at four times the general concessional contributions cap. For the 2018/19 financial year this is equal to $100,000 (4 times $25,000). Further, individuals with a total superannuation balance as at 30 June of the preceding financial year equal to or greater than the transfer balance cap ($1.6 million on 1 July 2018) will have an NCC cap of nil and will no longer be eligible to make non-concessional contributions without exceeding their NCC cap. If you are under age 65 in the relevant financial year you can potentially bring forward up to 2 years worth of non-concessional contributions without exceeding the cap. The amount you can bring forward will depend on your age and your total superannuation balance. The bring forward rule is automatically triggered as soon as non-concessional contributions exceed the non-concessional contributions cap for that year. Once you have triggered the bring-forward rule, it cannot be triggered again for a period of 2 years after the end of the financial year that it was initially triggered. The non-concessional bring forward rules, applicable for the 2018/19 financial year, are summarised in the table below Total superannuation balance on 30 June 2018 Age Bring forward period Non- concessional contribution cap Less than $1.4 million $1.4 million to less than $1.5 million Age 64 or under on 1 July 2018 Age 64 or under on 1 July years $300,000 2 years $200,000 $1.5 million to less than $1.6 million Age 64 or under on 1 July 2018 No bring forward period, general NCC cap applies $100,000 Less than $1.6 million Age 65 or over on 1 July 2018 No bring forward period, general NCC cap applies $100,000 $1.6 million or more Any age Nil Nil Please note: If you have triggered the bring-forward period in the or financial year but you have not fully used your bring-forward amount before 1 July 2017, transitional arrangements will apply. This means that the maximum amount of bring forward available will reflect the reduced annual contribution caps. Go to ato.gov.au for more information. Small business CGT contribution Amounts from the disposal of certain small business assets paid as after-tax contributions are excluded from the non-concessional contributions cap up to a lifetime limit, called the CGT Cap. The CGT Cap is indexed in line with AWOTE (in increments of $5,000, rounded down) and is $1,480,000 for the 2018/19 financial year. You need to inform us either, before, or at the time of the contribution that you intend for your contribution to be a small business CGT contribution to be eligible to partake in the CGT contribution benefit. Please see your financial planner for further details on the CGT Cap. Downsizing cap From 1 July 2018, if you are eligible and aged 65 or over, you can make contributions of up to $300,000 from the proceeds of selling your home. These contributions are not considered to be non-concessional contributions and are exempt from the normal contributions caps, work test and age contribution requirements. Although these contributions will not count towards your contribution cap, they will count towards your transfer balance cap (see the Transfer Balance Cap section on page 11 for information regarding this cap). This measure applies to a sale of a principal place of residence held for a minimum of 10 years where the contract of sale exchanged on or after 1 July Downsizing contributions can only be made by eligible individuals from the proceeds of sale of one home (i.e. this measure cannot be accessed again for a sale of a second home). Both members of a couple will be able to take advantage of this measure

7 Additional Information Booklet 7 for the same home, meaning $600,000 per couple can be contributed to superannuation through the downsizing cap. The contribution amount cannot be greater than the total sale proceeds of your home. Contributions must be made under this measure within 90 days of receipt of the proceeds of sale, usually the date of settlement, unless an extension has been granted by the ATO. You need to inform us either, before, or at the time of the contribution that you intend for your contribution to be a Downsizer contribution to be eligible. If you are ineligible to make a downsizer contribution then any amounts contributed will be treated as a non-concessional contribution and will count towards your non-concessional contribution cap. Go to ato.gov.au for more information, including for the eligibility requirements for this measure and the requirements that must be met in respect of the home that was sold to qualify for this measure. First Home Super Saver (FHSS) Scheme From 1 July 2018, to help you purchase a first home, if eligible, you can apply to the ATO for the release of voluntary concessional and non-concessional contributions you have made since 1 July 2017, up to a maximum of $15,000 in a single financial year and $30,000 in total. Only voluntary contributions (e.g. salary sacrifice and personal contributions, but not Superannuation Guarantee or other mandated employer contributions) which do not exceed the contribution caps may be eligible for withdrawal. You can withdraw: up to 85% of eligible voluntary concessional contributions, up to 100% of eligible voluntary non-concessional contributions, and deemed earnings on the contributions above, for the specific purpose of purchasing a first home. An application for a release of superannuation savings under this measure can only be made once and must be made to the ATO. Concessional contributions (and associated earnings) that are withdrawn will be taxed at marginal tax rates less a 30% offset, or at a rate of 17% if the ATO is unable to estimate your expected marginal tax rate. The ATO will withhold the tax on the released amount. Withdrawals of non-concessional contributions will not be taxed. The existing contribution caps will continue to apply. Strict rules apply to the types of property that can be purchased with such a withdrawal, the time in which a purchase must be made and the time for which the property must be occupied as a home. If you do not sign a contract to purchase or construct a home within 12 months from the time the first amount is released to you, you can: apply for an extension of time for a maximum of a further 12 months, or recontribute an amount into your superannuation fund - this amount must be a non-concessional contribution, which will count toward your non-concessional contribution cap, and be at least equal to your assessable released amounts, less any tax withheld, or keep the released amount and be subject to First Home Super Saver tax equal to 20% of your assessable released amounts. Go to ato.gov.au for more information, including for the eligibility requirements for this measure and the rules applicable to the purchase and occupation of the residential property. Government Co-Contribution Scheme The Federal Government has a superannuation co-contribution scheme, which means that for a low or middle-income earner, for every dollar you put into superannuation from your after-tax pay, the government may match it up to a maximum of $500 each financial year. To be eligible for a co-contribution, you need to: be under age 71 at the end of the financial year in which your after-tax contribution was made have total income (gross assessable income plus reportable fringe benefits plus reportable employer superannuation contributions less allowable business deductions) below the relevant higher income threshold ($52,697 for the 2018/19 financial year) earn at least 10% of your total income from carrying on a business, employment-related activities or a combination of both (for the purposes of this test, business deductions are not taken into account in the total income amounts) have lodged your income tax return with the Australian Taxation Office for the financial year not have been a temporary resident at any time during the financial year (unless you are a New Zealand citizen or the holder of a prescribed visa) have a total superannuation balance as at 30 June of the preceding financial year less than the transfer balance cap ($1.6 million on 1 July 2018) have not made non-concessional contributions in excess of your NCC cap for the financial year.

8 8 Retirement Fund If you earn more than the lower income threshold of $37,697 for the 2018/19 financial year (indexed annually in line with AWOTE), the maximum co-contribution of $500 is scaled back at the rate of cents in the dollar. If you earn the maximum threshold of $52,697 (for the 2018/19 financial year, set at $15,000 above the lower income threshold) or more, then no co-contribution is payable. To find out more about the Superannuation Co-contribution Scheme, ask your financial planner or go to Please note: The co-contribution does not count towards the non-concessional contributions cap. Government Low Income Superannuation Tax Offset (LISTO) For eligible individuals with an adjusted taxable income up to $37,000, the Federal Government will refund into your superannuation account the tax paid on concessional contributions up to a cap of $500. The ATO will determine whether you are eligible to receive a LISTO payment and will deposit the payment directly into your account. To find out more about the LISTO, ask your financial planner or go to Contribution splitting The splitting of contributions with your spouse may be permitted in certain circumstances. Some of the benefits of contribution-splitting are that you can effectively take advantage of 2 concessional contributions caps in the one account and it facilitates the ability to manage superannuation tax concessions between partners for lower overall tax. We recommend you seek financial advice before making a decision to split your contributions. You may be able to split with your spouse any concessional contributions that are made to your account in the Personal Retirement Plan or the Tailored Super Plan. The maximum amount that can be split is the lesser of: 85% of concessional contributions received for a financial year the concessional contributions cap for the financial year. For example, if you made concessional contributions of $25,000 in the 2018/19 financial year, the maximum you can split is $21,250, which is the lesser of 85% of your concessional contributions (being $21,250) and the concessional contributions cap for that financial year (being $25,000). Splittable contributions do not include: non-concessional contributions contributions made by your spouse to your super a contribution that has already been split government co-contributions transfers from foreign funds amounts rolled over from other funds contributions towards an account which is subject to a family law payment split or payment flag (see the Family Law section on page 38 for more information about family law payment splits and payment flags). Contributions splitting does not reduce the amount counted towards your concessional contribution cap. Any contributions that are split will form part of the taxable component of your spouse s account balance and are subject to the preservation rules. Your spouse receiving the split contribution must either: be under preservation age (see the section called What is your preservation age? ), or have reached their preservation age, be under 65 years and must not have retired. Contributions can generally be split after the conclusion of the financial year in which they are made or in the financial year in which they are made where the member s entire superannuation benefit is to be withdrawn before the end of that financial year as a rollover, transfer, lump sum benefit or combination of these (in which case the contributions must be split before the rollover, transfer or withdrawal is processed). For example, contributions made from 1 July 2018 to 30 June 2019 can be split from 1 July 2019 to 30 June However, if you transferred your entire benefit to another fund before 30 June 2019, you could split your contributions for that financial year before transferring the benefit. You can only request to split your contributions once every financial year. If you want to split your contributions, you must give us the prescribed Notice of intent to claim or vary a deduction for personal super contributions (NAT 71121), if applicable, before you lodge a Superannuation Contributions Splitting Application. For further information please contact us. When can you withdraw your benefits? Your superannuation benefit is divided into up to three components, unrestricted non-preserved, restricted non-preserved and preserved (see page 15 for further information on preservation amounts).

9 Additional Information Booklet 9 The Federal Government has placed restrictions on when you can withdraw money from superannuation. You can make a withdrawal from the Personal Retirement Plan or the Tailored Super Plan: to access your unrestricted non-preserved benefit if you satisfy a condition of release (see section on What are the conditions of release? on page 15) to effect a payment split under family law to pay an excess contributions tax liability to pay a superannuation surcharge liability (where liabilities arose prior to 1 July 2005) at any time by transferring your benefit to another complying superannuation fund or to a retirement savings account in certain circumstances by transferring your benefit to a complying income stream. Please note: under the First Home Super Saver Scheme (see the First Home Super Saver Scheme section on page 7), eligible individuals may be able to access a limited portion of their preserved benefits attributable to voluntary contributions and associated earnings for the purpose of purchasing their first home. Where applicable, an amount will be deducted from any withdrawal to meet tax and superannuation surcharge requirements. There are special rules and procedures for withdrawing from a non-unitised Fund (i.e. Fixed Term Fund) investment before maturity. Please refer to the Investment Booklet Fixed Term Fund for further information. When you make an eligible withdrawal, we will redeem sufficient units and/or close sufficient Fixed Term Fund investments from your account balance to satisfy the amount of the withdrawal request, as well as any tax payable on the withdrawal. Please refer to Transacting on your account on page 20 for instructions on how to transact on your account. How much will I receive when I withdraw my benefit? The amount you receive as a benefit when you withdraw a lump sum from your account is dependent upon such factors as your age and the amount of: contributions net of tax your initial investment tax payable in relation to the lump sum withdrawal (if you are over age 60, no tax is payable) investment earnings or losses (net of any applicable tax) fees and costs (net of any applicable tax). A superannuation lump sum is made up of only two components, a tax-free component and a taxable component (which may be comprised of taxed and/or untaxed elements). By way of example for the Personal Retirement Plan or Tailored Super Plan, if in 2018/19: your account balance was $400,000 the account comprised $300,000 of taxable component (all of which is taxed element) and $100,000 tax-free component you are permanently retired and aged 58 (assuming your preservation age is 56) no other superannuation lump sums have been paid to you since reaching preservation age, and you withdrew a single lump sum of $300,000 you would be entitled to: Amount of benefit $300,000 Less: tax on exit (see note) ($ 3,400) Net benefit paid to bank $296,600 Please note: To calculate the tax payable on your lump sum withdrawal follow these steps. Step 1: Calculate the tax free percentage by dividing the tax free component by your account balance, e.g. $100,000/$400,000 = 25% Step 2: Calculate the tax free component of the withdrawal by multiplying the tax free percentage calculated in step 1 by the withdrawal amount, e.g. 25% of $300,000 = $75,000 Step 3: Calculate the taxable component of the withdrawal (all of which is taxed element) by subtracting the tax free component calculated in step 2 from the total withdrawal e.g. $300,000 minus $75,000 = $225,000 Step 4: Calculate the taxable amount over the low rate cap ($205,000 in 2018/19) by subtracting the low rate cap from the taxable component calculated in Step 3 e.g. $225,000 minus $205,000 = $20,000. If this amount is less than zero, then no tax is payable.

10 10 Retirement Fund Step 5: Calculate the tax payable by multiplying the amount calculated in Step 4 by 15% plus the Medicare levy (2.0% in 2018/19) e.g. 17% of $20,000 = $3,400 The low rate cap in the above example is for the 2018/19 financial year. This example is for illustrative purposes only and is based on the factors stated. It is not intended to be indicative of the superannuation benefit you are entitled to or the actual tax that will be payable on your withdrawal. Trans-Tasman portability You may transfer retirement savings between Australia and New Zealand after your permanent migration from one country to the other. The transfer of retirement savings is voluntary for members. You may only transfer your superannuation balance in the Personal Retirement Plan or the Tailored Super Plan to a New Zealand KiwiSaver scheme. Once the superannuation monies are in a KiwiSaver scheme, there are restrictions on when these funds can be accessed, such as: it cannot be used to purchase your first home it cannot be moved to a third country it can be accessed when the member reaches 60 years of age and satisfies the Australian definition of retirement at that age. We recommend you consult a KiwiSaver specialist before transferring all or part of your retirement savings in the Personal Retirement Plan or the Tailored Super Plan to a KiwiSaver scheme as there may be currency risks and tax consequences. At this time, the Personal Retirement Plan and the Tailored Super Plan do not accept transfers from KiwiSaver schemes. How super in retirement works (Allocated Pension Fund, Transition to Retirement Pension and Flexible Income Plan members only) How do you invest in the Allocated Pension Fund, the Flexible Income Plan or the Transition to Retirement Pension? Please refer to page 25 for details on how to apply to invest in the Allocated Pension Fund, Flexible Income Plan or Transition to Retirement Pension. The minimum initial investment in the Allocated Pension Fund, Flexible Income Plan and Transition to Retirement Pension is $20,000. The maximum amount you can invest in the Allocated Pension Fund or Flexible Income Plan is your available space under the Transfer Balance Cap. See page 11 for more information on the Transfer Balance Cap. There is no maximum investment for the Transition to Retirement Pension. If your application does not specify the Fund(s) for investment, we will contact you to obtain your investment allocation. If we are unable to contact you we may not be able to accept your application. We are not bound to accept any application for the Allocated Pension Fund, the Flexible Income Plan or Transition to Retirement Pension and may refuse an application without giving a reason. Who can invest in the Allocated Pension Fund or the Flexible Income Plan? You can invest in the Allocated Pension Fund or the Flexible Income Plan if: you have satisfied a condition of release with a nil cashing restriction (i.e. a condition of release that does not restrict the form or amount of the benefit that can be paid) and your superannuation benefit consists solely of unrestricted non-preserved amounts (see page 14 for further information on preservation amounts and conditions of release),you receive the PDS in Australia, and at the time of application you are, in Australia, and An Australian citizen or permanent resident. The Allocated Pension Fund and the Flexible Income Plan have been developed to help you manage your income stream in retirement. They are each designed for retirees, semi-retired people or those about to retire, who are looking to: rollover their superannuation monies into an income stream product defer tax on cashing in their superannuation monies and take advantage of the superannuation pension tax concessions, or receive a regular income stream from their superannuation monies. You can start an Allocated Pension Fund or Flexible Income Plan account by rolling over your existing superannuation from other superannuation products, including the Personal Retirement Plan or Tailored Super Plan.

11 Additional Information Booklet 11 Who can invest in the Transition to Retirement Pension? You can invest in the Transition to Retirement Pension if: you have reached preservation age, you are under 65, you have not met a condition of release with a nil cashing restriction, you receive the PDS in Australia, and at the time of application you are: in Australia, and an Australian citizen or permanent resident. The Transition to Retirement Pension is designed for semi-retired people or those about to retire who have reached their preservation age and who are looking to: continue working whilst supplementing their income retain control over their financial strategy and invested capital receive a regular income stream from their superannuation monies. You can start a Transition to Retirement Pension by rolling over your existing superannuation from other superannuation products, including the Personal Retirement Plan or Tailored Super Plan. In order to start a Transition to Retirement Pension you must have reached preservation age (between ages 55 and 60, depending on your date of birth) and be under age 65. Additional investments You cannot make any additional contributions or rollovers to an Allocated Pension, Flexible Income Plan or Transition to Retirement Pension once the pension has commenced. For this reason we recommend, if you need to rollover from multiple superannuation funds or make multiple contributions to start your Allocated Pension, Flexible Income Plan or Transition to Retirement Pension account, you consolidate your monies in an accumulation superannuation product first. Transfer Balance Cap There is a legislative limit on the amount you can contribute to eligible retirement phase income stream accounts (such as the Allocated Pension and Flexible Income Plan) in your lifetime. This limit is called the Transfer Balance Cap. The cap commenced on 1 July 2017 with an initial limit of $1.6 million. The cap is indexed periodically in increments of $100,000 in line with inflation. The cap remains at $1.6 million for 2018/19. The cap applies to the total amount of superannuation that you have transferred into the retirement phase, across all income stream accounts from all providers you hold these amounts in. The ATO maintains a transfer balance account for each individual that transfers a superannuation benefit into an eligible retirement phase income stream product. When you transfer a benefit into a retirement phase income stream account the ATO will add this amount to your transfer balance account. Similarly if you make an eligible withdrawal or commutation the ATO will subtract this amount from your transfer balance account. Pension payments do not impact your transfer balance account. The cap does not apply to any subsequent growth or losses in your income stream account. Transition to retirement income streams do not count towards the cap. However, if your transition to retirement income stream is converted into a retirement phase income stream, the account balance of your transition to retirement income stream at the time of conversion will be included in your Transfer Balance Cap. See the Conversion of a Transition to Retirement Pension section on page 14 for details of when a transition to retirement income stream is converted into a retirement phase income stream. If you have not triggered a credit (increase) in your transfer balance account, you will benefit from the full increase of any indexation of the cap. If you have commenced a retirement phase income stream but have not fully utilised the cap, any indexation will be applied only to the proportion of your unused transfer balance cap. Indexation is not available for those who have completely utilised their transfer balance cap. Once your transfer balance account reaches the Transfer Balance Cap you are no longer eligible to transfer superannuation benefits into retirement phase income stream accounts (unless one or more debits (decreases) are triggered in your transfer balance account, causing your transfer balance to fall below the Transfer Balance Cap). If you exceed the Transfer Balance Cap the ATO will instruct you to withdraw the excess amount, including notional earnings on the excess, from one of your retirement phase income stream accounts. Any excess amount (including notional earnings) will need to either be withdrawn and paid to you directly or transferred into a superannuation accumulation account, where earnings are taxed at up to 15%. Additionally you will be liable to pay additional tax on this excess amount (including notional earnings). Please see page 33. Therefore, if we receive a commutation authority from the ATO, in relation to you exceeding the Transfer Balance Cap, we will be required to transfer the excess amount out of your Allocated Pension Fund or Flexible Income Plan account. We will first try and contact you to get instructions on where you would like the excess paid, which can be withdrawn by you from your account or rolled back into a superannuation accumulation account. If we are unable to get instructions from you then we will transfer

12 12 Retirement Fund the excess amount into your Tailored Super Plan or Personal Retirement Plan account. If you do not have a Tailored Super Plan or Personal Retirement Plan account we will open a Tailored Super Plan account for you in the StatePlus Retirement Fund for this purpose, which will reflect your current asset allocation under the Allocated Pension Fund or Flexible Income Plan account. A simple example of how the transfer balance account works is as follows: if on 1 July 2018 you had no investments in any retirement phase income stream account and subsequently rolled over $1.2 million into the Flexible Income Plan in January 2019 your transfer balance account would be $1.2 million. Your available space under the Transfer Balance Cap would be $400,000 ($1.6 million minus $1.2 million). This is the maximum amount you could further invest into an income stream account until the transfer balance cap is increased. For more information about the Transfer Balance Cap, contact your financial adviser or go to ato.gov.au. Pension payments What pension payments will you receive? You can choose whether to receive pension payments fortnightly, monthly, quarterly, half yearly or annually. We will redeem units from your account balance in accordance with your withdrawal profile to process your pension payment. Please see page 17 for more information on the withdrawal profile and what happens if you haven t nominated a withdrawal profile. How much can you receive as pension payments? You can choose the amount of your pension payments as long as the total amount meets legislative requirements. You are also able to index your selected pension payment amounts so that they increase over time. You can do this by either indexing to match inflation, as measured by the Consumer Price Index (CPI), or choose your own annual percentage between 0.1% and 10%. Indexation will be applied on 30 June each year. If you hold a Transition to Retirement Pension, any indexation of your pension payment amounts will be subject to the applicable legislative maximum payment limits (see below for further information). Generally speaking, you must receive at least one pension payment every financial year. However, if you commence your pension on or after 1 June in any financial year, you can choose to receive your first pension payment in the next financial year. The amount paid to you in pension payments each year must be at least equal to the legislated minimum amount for that year. To calculate your minimum pension amount: look up the minimum percentage factor applicable for your age by using the table below, then for the financial year your pension commenced, multiply the minimum percentage factor by your opening account balance. This amount can then be pro-rated for the number of days in the financial year your account was open for any other financial year, multiply the minimum percentage factor by your account balance on 1 July of that financial year. Age on 1 July of the applicable financial year Minimum percentage factor (%) 2018/19 financial year Under or more 14

13 Additional Information Booklet 13 If your minimum pension amount for a financial year has not been reached by the date of the last payment due to be made to you in the financial year, an additional payment will be made to ensure the minimum amount is paid. Any lump sum withdrawals, also known as commutations, will not count towards calculating whether the minimum amount has been paid from your account in that year. By way of example, consider the situation if you had an Allocated Pension or Flexible Income Plan which you started on 24 November 2018 with a purchase price of $150,000, and you were aged 65. In the first year the minimum payment amount is 5% of $150,000 times 219/365 = $4,500. The amount of the payment will be tax free as you are over age 60. For further information on taxation, please refer to page 32. Please note: The example above is illustrative only and is based on the factors stated. It should not be taken to provide an estimate of the minimum amount you must be paid in respect of your Allocated Pension or Flexible Income Plan. There is no upper limit for pension payments on an Allocated Pension or Flexible Income Plan. If you hold a Transition to Retirement Pension, the amount paid to you in pension payments each year must not exceed the legislated maximum amount for that year. The maximum limit is: for the financial year your Transition to Retirement Pension commenced, 10% of your account balance as at the commencement date of your pension for any other financial year, 10% of your account balance on 1 July of that financial year. The maximum limit is not pro-rated or adjusted in any way if you commence or redeem your Transition to Retirement Pension part way through a financial year. By way of example, consider the situation if you had a Transition to Retirement Pension which you started on 24 November 2018 with a purchase price of $150,000. The maximum payment amount is 10% of $150,000 = $15,000. If on the following 1 July your account balance was $140,000 your maximum payment amount for that financial year would be 10% of $140,000 = $14,000. Please note: The example above is illustrative only and is based on the factors stated. It should not be taken to provide an estimate of the maximum amount you must be paid in respect of your Transition to Retirement Pension. How are pension payments made? Pension payments are paid directly to the bank, credit union or building society account in your name that you have nominated. Pension payments are not made by cheque. You may elect to receive your pension on a fortnightly, monthly, quarterly, half yearly or annual basis. You can also nominate a specific date during the year to start your pension payments, and any subsequent payments will be based on the frequency you have chosen. You can only choose dates from the 1 st to the 28 th of the month, or for monthly frequencies, the last day of the month. If the nominated date is not a business day, the pension payment will occur on the first business day thereafter. Please note that the nominated pension payment date is when the transaction is generated and it is also the unit price date. It is not the date you receive the payment in your nominated bank, credit union or building society account. The unit price is provided the following day, and the banking payment is completed on the third day. You should expect the payment in your nominated bank, credit union or building society account within 3 to 5 business days from the nominated pension payment date. You can change the amount or frequency of your pension payments at any time. Please call us on or visit our secure website to make any changes to your pension payments. When can you withdraw your benefits? You can withdraw a lump sum from your Allocated Pension or Flexible Income account at any time. The minimum withdrawal amount is $500. You can only withdraw lump sums from your Transition to Retirement Pension account balance from any unrestricted non-preserved amounts in your account, if you meet an applicable condition of release or if it is for a purpose permitted by law. The minimum withdrawal amount is $500. There are special rules and procedures for withdrawing the Fixed Term Fund investment before maturity. Please refer to the Investment Booklet Fixed Term Fund for further information. When you make an eligible withdrawal, we will redeem sufficient units and/or close sufficient Fixed Term Fund investments from your account balance to satisfy the amount of the withdrawal request, as well as any tax payable on the withdrawal. Please refer to Transacting on your account on page 20 for instructions on how to transact on your account.

14 14 Retirement Fund How much will I receive when I withdraw my benefit? The amount you receive as a benefit when you withdraw a lump sum from your account is dependent upon factors such as your age and the amount of: your initial investment tax payable in relation to the lump sum withdrawal (if you are over age 60, no tax is payable) investment earnings or losses fees and costs (net of any applicable tax). A lump sum withdrawal is made up of only two components, a tax-free component and a taxable component (which may be comprised of taxed and/or untaxed elements). By way of example for the Flexible Income Plan or the Allocated Pension Fund, if in 2018/19: your account balance was $300,000 the tax free component of your account was 25% you are permanently retired and aged 58 (assuming your preservation age is 56), and no other superannuation benefits or employment termination payments have been paid to you previously, you would be entitled to: Amount of benefit $300,000 Less: Tax on exit (see note) ($3,400) Net benefit paid in cash $296,600 Please note: To calculate the tax payable on your lump sum withdrawal, follow these steps. Step 1: Calculate the tax free component of the withdrawal by multiplying the tax free component of your account (expressed as a percentage) by the withdrawal amount e.g. 25% of $300,000 = $75,000. Step 2: Calculate the taxable component of the withdrawal (all of which is taxed element) by subtracting the tax free component calculated in step 1 from the total withdrawal e.g. $300,000 minus $75,000 = $225,000. Step 3: Calculate the taxable amount over the low rate cap ($205,000 in 2018/19) by subtracting the low rate cap from the taxable component calculated in step 2 e.g. $225,000 minus $205,000 = $20,000. If this amount is less than zero, then no tax is payable. Step 4: Calculate the tax payable by multiplying the amount calculated in Step 3 by 15% plus the Medicare levy (2.0% in 2018/19) e.g. 17% of $20,000 = $3,400. The low rate cap in the above example is for the 2018/19 financial year. The example above is for illustrative purposes only and is based on the factors stated. It should not be taken to contain or provide an estimate of any withdrawal benefits you will receive from the Allocated Pension Fund or Flexible Income Plan or the actual tax payable on your withdrawal. Conversion of a Transition to Retirement Pension Your Transition to Retirement Pension will be converted into a retirement phase income stream when: you turn age 65, or you notify us in writing that: you have satisfied the retirement condition of release (i.e. you have reached your preservation age (between ages 55 and 60, depending on your date of birth) and permanently retired from work, or you have reached age 60 and left or changed your employer), or you have a terminal medical condition, or you have suffered permanent incapacity. When your Transition to Retirement Pension is converted to a retirement phase income stream: the tax treatment of the pension will change - see the How pensions are taxed section on page 32 for further information,the legislative maximum income payment restriction of 10% p.a. will no longer apply, and the restriction on withdrawing lump sums from your account will no longer apply. If you are invested in the Transition to Retirement Pension and you satisfy one of the criteria above for your Transition to Retirement Pension to be converted into a retirement phase income stream, you must provide us with instructions: to transfer the balance of your account either to the Flexible Income Plan or to another superannuation product, or to withdraw your funds. If you do not provide us with such instructions, your account will automatically be transferred to the Flexible Income Plan as a retirement phase income stream.

15 Additional Information Booklet 15 If you notify us in writing that you have satisfied the retirement condition of release, that you have a terminal medical condition or that you have suffered permanent incapacity, you will also need to provide us with instructions as to how your Transition to Retirement Pension is to be dealt with. If we do not hear from you before you turn age 65, we will seek to contact you close to your 65th birthday to get your instructions. If you do not provide us with such instructions, your account will automatically be transferred to the Flexible Income Plan as a retirement phase income stream. When your Transition to Retirement Pension transfers to the Flexible Income Plan you will receive a minimum pension payment from the Transition to Retirement Pension if the legislative minimum amount has not been met for the financial year. Your minimum pension payment for the financial year you enter the Flexible Income Plan will be prorated for that year. Additional information about superannuation (All members) Preservation The Federal Government has placed restrictions on when you can withdraw money from superannuation. Your superannuation benefit is divided into up to three components, with different restrictions on when you can get access to each component: unrestricted non-preserved you can access this amount at any time restricted non-preserved generally you can access this amount when you stop working for the employer who has contributed to your account preserved you can access this amount when you satisfy a condition of release, subject to any cashing restrictions imposed on the condition of release (see below). All superannuation contributions and investment earnings since 1 July 1999 are preserved. Any nonpreserved amounts you accumulated before this date remain as non-preserved. What are the conditions of release? Superannuation is a long-term investment for your retirement. The Australian Government has placed restrictions on when you can get access to most of your superannuation savings. Generally, your preserved or restricted non-preserved superannuation savings can only be paid out in certain circumstances including: if you die reaching age 65 reaching preservation age (see following section called What is your preservation age? ) and permanently retiring from work reaching preservation age (see the following section called What is your preservation age? ) and receiving your savings in the form of a transition to retirement income stream or noncommutable pension reaching age 60 and leaving or changing your employer becoming permanently incapacitated if you are an eligible temporary resident, permanently departing Australia being a lost member who is found, and the value of your benefit in the Retirement Fund, when released, is less than $200 if you have a terminal medical condition if you have a valid release authority in relation to excess concessional contributions, excess non-concessional contributions, a Division 293 tax assessment or a First Home Super Saver Scheme determination. You may be able to cash some of your benefit in other situations, such as if you suffer severe financial hardship or on compassionate grounds and you meet the criteria as stated in superannuation law. What is your preservation age? When were you born? Preservation age Before 1 July Between 1 July 1960 and 30 June Between 1 July 1961 and 30 June Between 1 July 1962 and 30 June Between 1 July 1963 and 30 June Born after 30 June