SuperNews MAY IAG & NRMA Superannuation Plan. Stop press!! Federal Budget In this edition, you ll find: New insurance premiums

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1 IAG & NRMA Superannuation Plan MAY 2009 In this edition, you ll find: New insurance premiums Make contributions to your super the easy way with BPAY If you are a low income earner, what s a 100% guaranteed way to boost your super? With Employer SuperPay, you won t ever need another super fund! New super rules for temporary residents Investment market update (March Quarter) The Plan s investment performance to 30 April 2009 Recent unit prices Same sex and de facto reforms UNPRI update Tell us what you d like to know New insurance premiums The IAG & NRMA Superannuation Plan provides insurance cover that gives you and your family financial peace of mind 24 hours a day, seven days a week. The Plan s death cover includes a $10,000 funeral benefit. Disability cover is also available for financial support if you can t work should you become sick or injured, either temporarily or permanently. The Plan s Trustee has renegotiated its insurance premiums with our insurer, CommInsure. The new rates become effective from 1 July 2009 and are guaranteed until 30 June Based on these new rates, the Trustee sets the premium for members according to age and each $1,000 of cover. The new premiums are lower for all members over the age of 30. There will, however, be a slight increase for members aged 30 and under. The IAG & NRMA Superannuation Plan s size and bargaining power means we can offer you insurance cover at a lower cost than comparable retail insurance cover. What s more, if you are a new employee at work when you join the Plan, you are usually accepted for basic insurance cover without having to show the insurer that you are in good health. You can request a change to your level of cover at any time. You can also request more death or disability cover, but you will need to answer some health and lifestyle questions and your request must be accepted by CommInsure before the extra cover is provided. If you leave employment and become a reserved member of the Plan before age 65, your death and total and permanent disability cover will continue automatically unless you ask for your cover to stop. From age 55 (or from the date you become a reserved member if you are over 55), your continuing cover reduces at a uniform rate each month to zero in the month you reach age 65. The $10,000 funeral expenses benefit continues without reduction until you attain age 75. Premiums for continuing cover will be deducted from your super as long as you maintain a positive account balance in the Plan. If you are a spouse member, you can request to have death cover, however, you will need to answer some health and lifestyle questions and your request must be accepted by CommInsure. Premiums for spouse cover are deducted from the spouse s super account as long as it has a positive account balance. If you are a retained member of the Plan, similar continuing insurance arrangements apply. Details about the Plan s insurance cover including the new premium rates can be found in the Product Disclosure Statement available from the Plan s website, Stop press!! Federal Budget 2009 Here are the highlights of the superannuation changes proposed in the 2009 Federal Budget: Government co-contribution maximum will remain at $1,500 for 2008/09 year, but will reduce to $1,000 for 2009/10 year. Non-concessional (before tax) contributions caps to reduce from $50,000 to $25,000 from 1 July From 1 July 2009, salary sacrifice contributions may be included in income tests used to determine your eligibility for certain Government benefits, including the co-contribution. For more information about the budget changes and how they may apply to you, visit the IAG & NRMA Plan website,

2 Make contributions to your super the easy way with BPAY Making lump sum or regular after-tax contributions to your super couldn t be easier. Using member BPAY on the IAG & NRMA Super Plan website, your contributions can usually be received by the Plan within 24 hours. There s no delay due to mail delivery or cheque clearance which means your money gets to work right away. This can be a real plus when time is critical, say, at the end of the financial year, especially if you want to qualify for a Government s co-contribution payment. While other cocontribution eligibility conditions apply, all after-tax contributions must be received by the Plan by 30 June 2009 to qualify as a payment made in the 2009 financial year. You should check with your own bank or financial institution what timing applies for electronic transfers to the Plan s bank account (the Plan account is held with the ANZ bank). Using BPAY is easy. You need your own unique Customer Reference Number (CRN) which you use in the same way you make any other BPAY payment through your internet banking account. For your CRN, simply go the Plan s website, and sign into your account using your member number and PIN. Then go to your Contributions page. Click the BPAY advert, which will take you to the BPAY page, where you ll receive your CRN. Account log in>contributions>bpay You can use the same CRN each time you make a BPAY payment, which makes the whole process simple and convenient. You can schedule regular contributions directly from your bank account into your super account or you can make one off lump sum payments. (Please note that you won t need to do this for contributions made from your pay by payroll.) For more information, go to the BPAY link on the IAG & NRMA Plan website home page. Q: If you are a low income earner, what s a 100% guaranteed way to boost your super? A. Government co-contribution payment If your income* is less than $60,342 a year and you have made after-tax contributions to your super, you may qualify for the Government s co-contribution payment. Depending on your income*, co-contribution payments mean you can get up to $1.50 for every dollar you contribute prior to 30 June A maximum co-contribution of $1,500 per year applies. If your income* is less than $30,342 a year you will qualify for the maximum co-contribution, providing you contribute $1,000. Co-contribution payments work on a sliding scale. The more you earn, the less you receive from the Government. For the purposes of the co-contribution, your income* is determined by the tax office after you submit your tax return for that year and, if you qualify, your co-contribution payment is credited to your account in the Plan. There are no forms or applications to complete. The table below shows the maximum co-contribution you may be eligible for the year to 30 June 2009 based on your after-tax contribution amount and income*. If your personal super contribution is: And your $1,000 $800 $500 $200 income* is Your Super Co-contribution will be: $30,342 or less $1,500 $1,200 $750 $300 $32,342 $1,400 $1,200 $750 $300 $34,342 $1,300 $1,200 $750 $300 $36,342 $1,200 $1,200 $750 $300 $38,342 $1,100 $1,100 $750 $300 $40,342 $1,000 $1,000 $750 $300 $42,342 $900 $900 $750 $300 $44,342 $800 $800 $750 $300 $46,342 $700 $700 $700 $300 $48,342 $600 $600 $600 $300 $50,342 $500 $500 $500 $300 $52,342 $400 $400 $400 $300 $54,342 $300 $300 $300 $300 $56,342 $200 $200 $200 $200 $58,342 $100 $100 $100 $100 $60,342 $0 $0 $0 $0 * Income is your assessable income plus your reportable fringe benefits. 2 IAG & NRMA SUPERANNUATION PLAN

3 With Employer SuperPay, you won t ever need another super fund! As an IAG & NRMA Superannuation Plan member, you can have all your contributions from most employers paid into your Plan account. So you ll only ever need one super account! SuperPay gives employers an easy and secure way to make employer Superannuation Guarantee, salary sacrifice and voluntary after-tax contributions on behalf of employees who are members of the Plan. Once registered on the IAG & NRMA Superannuation Plan website, the employer will receive their sign-on details, making future visits simple. SuperPay advantages include: Efficient, secure method of remitting contributions Ability to submit contributions for members on a regular basis Available 24/7 A history of electronic transactions is available to help keep track of contributions made for members Reduced paperwork Prompt investment of money for members. The IAG & NRMA Superannuation Plan charges no fee for this service your employer should check with their bank in case their bank has fees that apply for BPAY. More information is available on the Plan s website: Keep all of your super in the IAG & NRMA Superannuation Plan, regardless of who you work for. Even if you start working for another employer, you don t have to leave the Plan. By completing a Standard Choice form (available from the Plan s website or the Helpline) and giving it to your employer, in most cases you can have all your super contributions paid into your account in the Plan. Keeping all of your super together in the Plan means you can continue to enjoy the benefits of the Plan, making managing your super easy. New super rules for temporary residents If you are a temporary resident or a former temporary resident, new rules regarding your superannuation became effective on 1 April These new rules relate to when you can access your super and the tax that may apply to your payment when it s paid to you. The article, Important changes to rules on super, gives more information and is available on the Plan s website: Quick links> Library>Choose a topic Legislation>Important changes to rules on super 3 IAG & NRMA SUPERANNUATION PLAN

4 MAY 2009 Investment market update (March Quarter) All asset sectors performed poorly over the first two months of the March quarter as further indications of a deepening global recession continued to emerge. However, markets showed signs of recovery towards the end of the quarter following suggestions that some economic indicators were bottoming. In particular, share markets around the world rebounded in March after major positive policy announcements by the UK and US governments. The Australian share market also rose strongly in March, registering its first positive monthly return since August Domestic and global bond returns were flat over the quarter as the effect of the rise in longer term yields largely offset interest income. Significant developments over the quarter were: The Reserve Bank of Australia cut the cash rate by a full 1% to 3.25% in February before pausing in March despite market expectations of a further cut. (However, since the end of March, the RBA has cut the cash rate by another 0.25% to 3.00% p.a., only part of which has been passed on by the commercial banks to their mortgage borrowers.) Domestic economic data was largely negative. Unemployment reached a four-year high of 5.2% and the fourth quarter of 2008 saw the first fall in GDP in eight years as the economy shrank by 0.5%. On the whole, US economic data was poor. GDP fell 6.2% compared with the previous quarter, its worst performance since The trade deficit, retail sales and industrial production weakened over the quarter whilst consumer sentiment and housing starts recovered some ground in March. Several central banks continued their monetary easing with the European Central Bank, the Bank of England (BoE), Canada s central bank and New Zealand s central bank all cutting their cash rates. The US Federal Reserve, the BoE and the Bank of Japan announced plans to increase their purchases of fixed income securities, thereby increasing liquidity in their economies. Australian shares The Australian share market rallied in March, posting a strong month. The S&P/ ASX300 Index recorded a gain of 8.1%, the best monthly return since December However, this was not enough to make up for the ground lost in January and February. The S&P/ASX300 Index closed the quarter 1.8% lower but still outperformed other major share markets. Factors supporting Australian shares included reasonable valuations, high dividend yields, lower cash rates and well capitalised banks compared to global peers. Overseas shares The first two months of 2009 saw a massive sell-off global share markets due to deteriorating economic data and continuing concerns about a worsening global recession. Global markets finally stabilised in March. However, the MSCI World (ex Aust) index still delivered a loss of 10.3% in local currency terms for the quarter as a whole with all major markets recording losses in local currency terms. The return for unhedged Australian investors was further eroded to minus 11.9% after the Australian dollar appreciated 3.2% on a tradeweighted basis. Property Listed property trusts were the worst performing asset class for the second quarter in a row. Australian listed property returned minus 24.8% over the quarter. Fixed interest Australian bonds (UBS Composite Bond Index) returned 0.3% for the March quarter giving a return of 12.8% over the previous 12 months. Global bond yields decreased following the reduction in cash rates by a number of major central banks. The Citigroup World Government Bond Index returned 0.3% for the quarter on a fully hedged basis. Currency The March quarter produced mixed returns for the Australian dollar. It was down 0.3% against the US dollar, was flat against the Pound and appreciated against the Yen and the Euro. On a tradeweighted basis, the Australian dollar appreciated 3.2%. 4 IAG & NRMA SUPERANNUATION PLAN

5 MAY 2009 The Plan s investment performance to 30 April 2009 The returns for the ten months to 30 April 2009 reflect the uncertainty which has prevailed in the investment markets for most of the financial year. However, the returns for March and April are all positive, helping to recover some of the ground lost as a result of the global financial crisis and supporting indications that the downturn may have slowed. The table below shows the returns for each option for one, four and ten months (financial year) to 30 April Returns are quoted after the deduction of tax (not applicable to pension options) and expenses. Option One month to 30 April 2009 % Four months to 30 April 2009 % Ten months (financial year) to 30 April 2009 % Australian shares Shares Growth Balanced Conservative Cash Allocated Pension Option One month to 30 April 2009 % Four months to 30 April 2009 % Ten months (financial year) to 30 April 2009 % Pension Growth Pension Balanced Pension Conservative Pension Cash Recent unit prices The unit prices as at 31 Dec 2008 and 14 May 2009: Option 31 Dec May 2009 Australian shares Shares Growth Balanced Conservative Cash Allocated Pension Option 31 Dec May 2009 Pension Growth Pension Balanced Pension Conservative Pension Cash IAG & NRMA SUPERANNUATION PLAN

6 Same sex and de facto reforms In 2008, legislative reforms were enacted to: bring de facto (including same sex) couples within the jurisdiction of the Family Court of Australia in respect of their superannuation entitlements; remove discrimination against same sex couples in the provision of superannuation benefits. The Plan has recently approved changes to its rules to give effect to these reforms. The first significant implication of these changes is that a de facto spouse will be potentially able to claim a split of a member s benefit under the Plan, in the same way a married spouse has been able to for several years. In addition, for Plan purposes, a dependant of a member will generally include a same sex partner and a child of a same sex partner. The most immediate impact of this is that the same sex partner and the child will now be included among those eligible to be considered by the Trustee to receive all or part of a member s death benefit. In addition, a member will be eligible to split certain entitlements with a same sex partner, in the same way a member has been able to split entitlements with an opposite sex partner for several years. UNPRI update - Environmental, Social and Ethical Considerations The Trustee has signed the United Nations Principles for Responsible Investment (UNPRI). The Trustee is continuing to work with the Plan s asset consultant to formulate protocols to ensure that appropriate weight is given to social, environmental and ethical factors, as well as labour standards, when making investment decisions. A number of actions have been taken consistent with the objectives of the UNPRI. In particular: Expertise in this area was a specific criterion considered in the selection of Mercer as Asset Consultant to the Plan. Invesco s approach to environmental, social and corporate governance issues was a factor in the recent decision to invest in the Invesco Wholesale Global Property Securities Fund. The Plan has invested in two separate pooled funds managed by Generation Investment Management, an investment manager with a particular focus on sustainable stocks. The Plan participated in the 2009 UNPRI Survey, thereby providing a benchmark against which the Plan s future progress in implementing the objectives of the UNPRI can be measured. The Plan s asset consultant, Mercer, presented to the Directors at the recent Strategy Day on Implementing the PRI. Tell us what you want to know Your feedback and suggestions regarding your super are important to us. To make SuperNEWS as useful and informative as possible, tell us what superannuation issues concern you and what information you need to plan for retirement. If you have any comments to make regarding this newsletter, please include these as well. We will try to cover these issues where possible in the coming editions of SuperNEWS. You can fax your comments to SuperNEWS on (02) or your comments to troy.maguire@iag.com.au Helpline (1300 IAG NRM) Please note: The information provided in this newsletter is of a general nature only. It is not intended as financial advice. If you require financial advice about your superannuation or about savings, you are encouraged to discuss your particular circumstances with a qualified Financial Adviser. Issued by IAG & NRMA Superannuation Pty Limited - ABN as Trustee of the IAG & NRMA Superannuation Plan - ABN IAG & NRMA SUPERANNUATION PLAN G /09