The Executive Superannuation Fund

Transcription

1 The Executive Superannuation Fund PERSONAL DIVISION PRODUCT DISCLOSURE STATEMENT Issued: 10 September 2007 The issuer and Trustee of The Executive Superannuation Fund, RSE Registration No: R , is Trust Company Superannuation Services Limited, RSE Licence No. L , ABN: , Australian Financial Services Licence ( AFSL ) No: , Address: PO Box 361 Collins Street West VIC 8007 Ph (03) Fax (03) The Administrator of The Executive Superannuation Fund is KPMG Superannuation Services Pty Limited, ABN: , AFSL: , Address: PO Box H67, Australia Square NSW Ph (02)

2 Contents Contents... 2 Introduction...3 About the Plan... 4 Joining the Plan... 6 Member on-line access and the Plan web-site... 8 Contributions and rollovers... 9 Member investment choice The Plan s investment options Aggressive option Balanced option Conservative option Enhanced Cash option Fees and other costs Additional explanation of fees and costs Example of annual fees and costs for the Balanced investment option Insurance benefits Taxation Accessing your benefit in the Plan Other information about the Plan Glossary of terms Application for membership Personal Division Further information and how to contact us

3 Introduction Important Information This Product Disclosure Statement ("PDS") relates to members of the Personal Division of the Executive Superannuation Fund ("Fund") [Registrable Superannuation Entity ( RSE ) No. R ]. The Personal Division is referred to as the Plan in the remainder of this PDS. The Fund was established under a trust deed dated 14 June 1976, as amended from time to time. The Plan is designed to provide financial security for you in retirement and protection for both you and your family, in the event of your premature death or permanent disablement. The Plan is governed by the trust deed and relevant law and is operated by an independent trustee company, Trust Company Superannuation Services Limited ("Trustee") [RSE Licence No. L ]. The Trustee is legally obliged to act in strict accordance with the provisions of the trust deed and the relevant law. A copy of the trust deed is available for inspection by members at all reasonable times upon request, by contacting the Plan (contact details on the back page). This Product Disclosure Statement ("PDS") provides important information about the Plan, benefits provided by the Plan, its terms and conditions and other information. You should read it carefully. If you have any queries regarding your own personal circumstances and the Plan, you can contact the Plan (contact details on the back page). This PDS should be read in conjunction with the Plan s Annual Report to members, available on the Plan web-site or by contacting the Plan directly (contact details on the back page). The information provided in this PDS is a summary of the benefits and terms and conditions of the Plan, however, the terms of the trust deed governing the Plan have precedence over anything in this PDS. This PDS provides general information only and does not take into account your individual financial situation, circumstances or needs. You should take these into account when making decisions about your benefit in the Plan, for example, decisions regarding investment options, and consult a financial adviser where required. All parties named in this PDS have consented to being named in the form and context in which they have been named and have not withdrawn their consent prior to printing of this PDS. Neither Trust Company Limited (the Trustee s parent company), nor any of its subsidiaries, nor their respective officers, guarantees the capital invested by investors, the performance of specific investments or your account generally. Neither Trust Company Limited, nor any of its subsidiaries, nor their respective officers, guarantees or has any liability in connection with the performance by the Trustee of its obligations under this PDS. Changes to this PDS If a material alteration occurs that would make any statement in this PDS misleading, deceptive or materially adverse, or if there has been any material omission in this PDS, then the PDS will either be withdrawn immediately, or a Supplementary PDS will be issued correcting the statement or omission. Information contained in this PDS is up to date at the time of preparation. Information that is not materially adverse may, if it changes, be updated on the Plan web-site. In addition, we will provide this information to you in hardcopy free of charge upon your request. Further information Further information regarding the Plan can be obtained from the Plan web-site, or by contacting the Plan (contact details on the back page). Where required, we will also provide you with other information regarding the Plan (including a copy of the trust deed or information previously made publicly available) upon request. We will tell you whether there is a charge for providing this information. 3

4 About the Plan Superannuation is a means of saving for retirement on a regular basis. In addition to the savings element, the Plan also provides access to insured benefits in the event of death or permanent disablement. The Plan has been established on the accumulation principle and operates similarly to a bank account, in that contributions are allocated to specific accounts established for each member. However, your investment is not guaranteed. Members accounts continue to accumulate with both contributions and any investment earnings (net of relevant expenses and taxation), until a benefit payment becomes due. In the Plan, members can choose from a range of investment options for their accounts. This allows members to select an option to suit their individual financial situation, objectives and needs. Benefits of the Plan The Plan provides a number of benefits to both you and your dependants. These benefits include: Superannuation benefits payable upon retirement (or earlier in certain special circumstances) based on contributions and other amounts paid into your account after taking into account investment returns (which may be positive or negative) and relevant fees, costs and taxes; and For some members, insurance cover to provide protection for you and your family in the event of your death or permanent disablement. For further information, see page 27. Membership categories The Fund has a number of plans and divisions, as follows: The Plan for spouses and family members of KPMG staff, Partners or Executive Directors. In addition, unless they advise otherwise, KPMG staff, Partners or Executive Directors are automatically transferred to the Plan upon leaving KPMG. KPMG Staff Superannuation Plan for current staff of KPMG (excluding Partners and Executive Directors); KPMG Executive Superannuation Plan for current Partners and Executive Directors of KPMG. Pension Division If you wish to take out a Superannuation Pension from the Fund you will become a member of the Pension Division of the Fund. Each division of the Fund has its own relevant PDS. This PDS relates to members of the Personal Division (referred to as the Plan in this PDS). 4

5 Risks of the Plan There are a number of significant risks associated with investments in superannuation funds and associated with particular investment options within superannuation funds. These include: Market risk Various economic, technological, political, legal and social factors have an effect on the value of investment markets and may affect the value of your investment in your chosen investment option within the Plan. The Trustee and the Plan s investment managers seek to reduce and manage this market risk through the specific investment strategies adopted for each investment option, as described on pages Investment risk Investment risk can be described as the variability of returns or the chance of negative returns. An investment that has a high chance of fluctuations or negative returns is considered high risk and an investment with a low chance of negative returns is considered low risk. Generally, share investments are considered high risk and cash or fixed interest investments are considered low risk. Investment risk is also affected by the length of time that an investment is held because the chance of a negative return may decrease (and the potential for higher returns may increase) the longer that an investment is held. For example, a share investment held over a period of only one year might be considered very high risk compared to a share investment held over a much longer period (say 10 years). Over the long term, high risk investments may, therefore, lead to greater returns than low risk investments. Risks associated with various investment options may change depending on the economic environment and other external factors. This means that different asset classes perform differently at different times. For example, returns in relation to shares may increase over a period, whereas, the returns in relation to fixed interest investments may decrease over the same period of time. The investment managers seek to minimise these risks by assessing and analysing information relating to these investments from a number of sources and by diversifying investments across a range of assets and asset classes. All of the investment options offered by the Plan involve, to varying degrees, diversification across a range of assets or asset classes. However, should you leave the Plan or withdraw monies within a few years of joining the Plan, fluctuations in investment returns (in addition to taxation, fees and costs) may result in you getting back less than you have contributed. Superannuation fund risk Risks specific to the Plan, as with any other superannuation fund, include the possibility of changes to the Plan or its internal operations such as changes to key staff involved in the management of the Plan or a disruption of its systems. The Trustee seeks to minimise this risk by taking into account the best interests of members at all times when making decisions about the Plan and maintaining a risk management and compliance framework in accordance with legislative requirements. Risk of changes in the legal environment Superannuation laws, the Corporations Act, Australian taxation laws and other laws affect the Plan and the Plan s investments. Changes in superannuation laws may affect your ability to access your benefit in the Plan. Changes in taxation laws may also affect the value of your benefit. 5

6 Joining the Plan Commencement of membership Former staff, Partners or Executive Directors of KPMG If you were an employee or Partner of KPMG participating in another division of the Fund, you will be transferred to the Plan upon your termination of employment or retirement from the Partnership. This will occur automatically and does not depend on whether you complete the Personal Division Application Form attached to the back of this PDS. Upon transfer, your investment option will remain unchanged, and the fees and costs applicable to your investment will be the same. Your death and Total and Permanent Disablement ( TPD ) insurance benefits will also be continued at the same level as at the date you terminated employment or retired from the Partnership (provided you continue to meet relevant eligibility criteria). The premiums in relation to this insurance will be deducted from your account in accordance with the premium rates applicable to voluntary insurance cover (see page 30 for further details). Insurance benefits will not continue for insurance only members, or casual staff who do not have insurance through the Fund. If you do not wish to continue your insurance cover, you must complete the Personal Division Application Form, attached to the back of this PDS, indicating that you do not wish your cover to continue. If you wish to make contributions to the Plan in the future, you must also complete the Personal Division Application Form, attached to the back of this PDS, or the Plan will be unable to accept future contributions from you either personal contributions or contributions from an employer. Other members Individuals such as spouses and family members of KPMG staff, Partners or Executive Directors are eligible to join the Plan. To join, you must complete the Personal Division Application Form, attached to the back of this PDS. On the Application Form you can provide the following details: Your personal details name, address, date of birth etc.; Your Tax File Number ( TFN ); Your preferred beneficiaries (whom you nominate to receive your benefit in the event of your death); and Your chosen investment option. Upon commencement of your membership, you will receive a letter from the Plan, welcoming you as a member of the Plan and providing you with information about the Plan. Proof of age It is not necessary to provide proof of age upon joining the Plan, however, this may be required should an insurance claim be made, at the time of submitting a claim. Such proof may include your birth certificate, passport, naturalisation certificate, etc. Note: From 12 December 2007, as a result of Government reforms designed to counteract money laundering and terrorism, you may be required to provide proof of identity or meet other requirements, as determined by the Trustee from time to time, prior to being able to access your benefits in cash (called customer identification requirements). You will be notified of any requirements when applicable. Cooling off period for non KPMG staff, Partners or Executive Directors If you join the Plan as a spouse or family member of a KPMG staff member, Partner or Executive Director, once your account in the Plan is established, you have 14 days (the cooling off period ) in which to decide if the Plan will meet your needs. The period commences from the earlier of the date the Plan confirms that your application has been accepted, or five days after the application has been accepted. During this time, you may terminate your membership in the 6

7 Plan by providing notice to the Trustee in writing of your wish to cease your membership unless you have exercised a right or power that you may have in relation to the product. Any contributions that have been made to the Plan during that time will be rolled over to a superannuation fund of your choice (unless they are able to be paid in cash under superannuation legislation). You will not have any fees in relation to your membership or the termination of your membership with the Plan deducted directly from your account. However, any benefits you have with the Plan may be adjusted to take into account any variation in the value of your investment during your period of membership (after taking into account relevant fees, costs and taxes in calculating investment returns) or any insurance premiums deducted. 7

8 Member on-line access and the Plan web-site You can access your account details on-line through the Plan web-site at Logging on to the web-site To log on to the web-site, you need to provide your member number in the Plan and your password. You will be provided with your member number and initial password details upon joining the Plan. You can personalise your password when you logonto the web-site for the first time. Individual member account details You can view the following details regarding your account on-line: Your membership details such as your name, date of birth, the date you joined the Fund etc.; Your up to date account balance and benefit quotes; You can also update/provide certain details regarding your account such as: Your address details; Your nominated beneficiaries; and Your TFN. You can also access general information about the Plan on the web-site, such as investment updates, as well as all Plan booklets and forms. The web-site is provided by the Administrator to the Plan, KPMG Superannuation Services Pty Limited (AFSL No ). With the exception of the Plan documentation issued by the Trustee, which can be accessed via the web-site (such as this PDS), the Trustee is not responsible for the information provided on the web-site. More information in relation to the web-site, including how to obtain access to the web-site, can be obtained from the Plan (contact details on the back page). The transaction history of your account; Your nominated beneficiaries; Your insurance details; and Details regarding your chosen investment option. 8

9 Contributions and rollovers Concessional contributions this, we recommend you consult an appropriately qualified adviser. Concessional contributions include self employed contributions for which you claim a deduction, any Superannuation Guarantee (SG) contributions made by your employer(s) on your behalf, and any additional contributions you choose to make from your pre-tax salary (salary sacrifice contributions). Contribution types Contributions as a self employed person You can make contributions directly to the Plan as a self-employed person, provided that any salary and wages (and reportable fringe benefits) earned as an employee or director are not more than 10% of the your total assessable income (including reportable fringe benefits). In most instances, your employer will contribute 9% of your salary to the Plan, up to the prescribed maximum in superannuation guarantee legislation (the maximum contribution for the 2007/2008 financial year is $13,129 per annum). All contributions net of relevant taxes and expenses, are immediately fully vested and must be preserved (the concept of preservation is discussed on page 36). Employers are required to pay the 9% SG contributions on a quarterly basis, by certain prescribed dates as follows: Quarter July September Required payment date 28 October Only self employed contributions for which a deduction is claimed are treated as concessional contributions. October December January March 28 January 28 April Note: from 1 July 2007, a deduction can be claimed for 100% of self employed contributions made. While there is no limit on the amount of deduction that can be claimed, a limit on the amount of concessional contributions that can be made to superannuation applies. Superannuation Guarantee contributions You can request that your employer pay your superannuation contributions into the Plan. Employers that are subject to Choice of Fund legislation are generally required to implement your request. Not all employers are subject to Choice of Fund legislation. You should contact your employer to find out whether Choice of Fund legislation applies to them. To assist you with making your request to your employer, you can obtain a Standard Choice Form with the details regarding the Plan already filled in for you from the Plan web-site, or by contacting the Plan (contact details on the back page). If you give this information to your employer, they will be able to contribute to the Plan on your behalf. Whether you decide to request your employer to contribute to this Plan should be considered having regard to your personal situation. If you would like advice about April - June 28 July Salary sacrifice contributions Your employer may agree with you to make additional voluntary superannuation contributions to the Plan on your behalf in lieu of pre-tax remuneration (called salary sacrifice contributions ). This should be arranged with your employer. Limits on concessional contributions Concessional contributions are limited to $50,000 per annum per individual for each financial year. The limit applies across all superannuation funds to which concessional contributions are made. For people aged 50 or more, this limit is $100,000 per annum up until 1 July The $50,000 limit will be periodically increased in line with AWOTE in $5,000 increments. Concessional contributions made up to the $50,000 (or $100,000) limit will be taxed by the Plan at the rate of 15%. 9

10 Any concessional contributions made in excess of the $50,000 (or $100,000) limit will be taxed at the top marginal rate of 45%, plus the Medicare levy. The liability for the excess tax (at 30%, plus the Medicare levy) will be levied on you personally by the ATO, i.e. you will receive a notice from the ATO requesting payment of the excess tax. However, on receipt of the notice, you can nominate a superannuation fund to release monies to pay the liability. In addition, any excess contributions you make above the limit will be counted towards your nonconcessional contribution limit (see below). Additional tax where you have not provided your TFN Where you joined the Plan or another division of the Fund prior to 1 July 2007, if you have not provided your TFN to the Plan, any concessional contributions that you or your employer make above $1,000 in any year will be taxed at the top marginal rate of 45%, plus the Medicare levy. You can provide your TFN via the Plan web-site or by contacting the Plan (contact details on the back page). If you join the Plan after 30 June 2007, your employer will automatically provide your TFN to the Plan. Amounts excluded from the concessional contributions cap Some amounts that can be contributed or transferred to superannuation do not count towards your concessional contribution cap as follows: Rollovers (including those from an overseas superannuation fund) subject to some special rules for any untaxed amounts; Government co-contributions; and Employment termination payments up to $1m, received up until 1 July 2012, if contracted for prior to 9 May See page 11 for details regarding how contributions can be made to the Plan. Non-concessional contributions Non-concessional contributions are contributions you make to superannuation from your after tax salary (also known as undeducted contributions). You can make up to $150,000 of nonconcessional contributions to superannuation each financial year. This limit will be periodically increased in line with AWOTE, so that it is three times the cap on concessional contributions (see above). If you are under age 65, you can average this limit over three years, i.e. you can make contributions of $450,000 in one year, provided you do not make any additional non-concessional contributions for the following two years. Contributions made up to the $150,000 (or $450,000) limit will not be taxed by the Plan. Any contributions in excess of the limit will be taxed at the top marginal rate of 45%, plus the Medicare levy. The liability for this tax will be levied on you personally by the ATO. You must then nominate a superannuation fund to release monies to pay the liability. Any excess contributions you make above the limit will remain in the Plan. Inability to make non-concessional contributions where you have not provided your TFN You will be unable to make non-concessional contributions to the Plan if you have not provided your TFN. Any non-concessional contributions that you attempt to make to the Plan will be returned where required by law, after taking into account any allowable adjustments for investment fluctuations and reasonable costs. Other amounts measured against the nonconcessional contributions cap The following amounts also count towards your non-concessional contributions cap: Any excess concessional contributions you make (see pages 9-10); The non-taxable portion of any benefit transferred from an overseas superannuation fund; and Contributions made to your account by your spouse, eligible spouse contributions (see below for further details). Amounts excluded from the non-concessional contributions cap Some amounts that can be contributed or transferred to superannuation are not counted towards your non-concessional contribution cap. They are as follows: Rollovers from within the superannuation system; The taxable portion of a benefit transferred from an overseas superannuation fund. 10

11 Note, the untaxed portion will count towards your non-concessional limit; Government co-contributions; Proceeds from the sale of qualifying small business assets which have been held for 15 years (subject to a lifetime limit of $1 million); and Settlements for injuries resulting in permanent disablement made to the Plan within 90 days of receiving the payment. See page 11 for details regarding how contributions can be made to the Plan. Contributions for your spouse or other family members As a member of the Plan, you can make nonconcessional (undeducted contributions) to the Fund on behalf of your spouse or other family member if they are also a member of the Fund. An eligible spouse contribution may attract a tax rebate of up to $540 per year for the contributing spouse (see page 35 for details). These contributions will count towards the recipient s non-concessional contribution limit. All contributions must be fully preserved (see page 36 for further details). Eligibility to contribute to superannuation Any person under age 65 may contribute to superannuation, regardless of whether or not they are employed. From the ages of 65 to 69, you must have worked at least 40 hours during a continuous 30-day period during the financial year ( work test ) in order to be able to make a contribution to superannuation. From the age of 70 to 74, only mandated employer contributions can be accepted and personal contributions can be accepted only if you have worked at least 40 hours during a continuous 30 day period during the financial year ( work test ). From 1 July 2007, non-mandated employer contributions can be made if you satisfy the work test. You cannot make personal contributions to superannuation past the age of 74. Generally, from age 75, no contributions other than award contributions can be made to superannuation. From 1 July 2007, contributions made to the Plan in contravention of these eligibility rules must be refunded by the Trustee in certain circumstances. A refund may be adjusted for any allowable investment fluctuations and reasonable costs. Government co-contributions Some members of the Plan may be eligible to receive the Government co-contribution. The Government co-contribution applies to nonconcessional (undeducted contributions) made by low and middle income earners. The Government co-contribution will match eligible personal non-concessional contributions made by qualifying low and middle income earners by $1.50 for each $1.00 you contribute, up to $1,500. The Government co-contribution will be paid annually to qualifying low and middle income earners superannuation funds. The maximum co-contribution for a financial year is $1,500 and is available to people earning an assessable income plus reportable fringe benefits of $28,980* or less. The maximum co-contribution amount phases out by 5 cents per dollar of income up to an income of $58,980*, when it phases out completely. The Government co-contribution (the amount contributed by the Government) does not count towards either your concessional or nonconcessional contribution caps. *These thresholds are subject to indexation and may increase in future years. For up to date information about the Government co-contribution, go to How to contribute to the Plan Contributions to the Plan must be made by cheque, payable to Trust Company Superannuation Services Limited ATF The Executive Superannuation Fund. Cheques should be accompanied by a Contribution Form (available on the Plan web-site or by contacting the Plan), detailing your membership number and name (or your spouse s if the contribution is for them), and the type of contribution - employer SG, member after-tax, spouse contribution etc. Contributions cannot be made to the Plan electronically. Rolling over into the Plan If you have benefits in another superannuation fund, Retirement Savings Account or Approved Deposit Fund, you may choose to transfer these 11

12 into the Plan. Such amounts will accrue earnings as per your other benefits in the Plan. Advantages of rolling over benefits into the Plan may include: The Plan may have lower administration fees than the current superannuation fund, Retirement Savings Account or Approved Deposit Fund where your benefit is currently located; and You only pay administration fees to one fund as a consequence of consolidating your benefits. All employment termination payments rolled over into a superannuation fund must be fully preserved. From 1 July 2007, the payment of employment termination payments to superannuation funds can only be made in limited circumstances. This will apply to people with entitlements upon termination of employment, specified in existing employment contracts as at 9 May 2006, provided that payments are made prior to 1 July To roll over other superannuation benefits that you may have to the Plan, refer to the Instruction Guide, available on the Plan web-site or by contacting the Plan (contact details on the back page). You may incur fees or lose benefits if you withdraw benefits from your other fund (contact your other fund for more information). The guide contains instructions on how to roll over your superannuation benefits to the Plan. 12

13 Member investment choice You can choose how your account in the Plan is invested. The Plan allows you to choose from a range of investment options for your superannuation. The Plan offers four investment options to members of the Plan: The Aggressive option; The Balanced option; The Conservative option; and The Enhanced Cash option. Long term investment strategies The Aggressive, Balanced and Conservative options are the Plan s long term investment options. The options are designed to suit different time horizons and levels of risk. You need to choose the one that best suits your circumstances. You can select one of these into which your account balance (or a portion of it) and any contributions will be invested. Short term investment option The Enhanced Cash option is intended to be used as a short term investment option. You can invest a specified dollar amount of your account balance (up to 100%) into the Enhanced Cash option however, any ongoing contributions you make will be invested in your underlying long term investment strategy. You can elect to move any amount into or out of the Enhanced Cash option on a monthly basis. The investment options that the Plan offers are described in more detail on the following pages. How often can I change my investment choice? You can alter your long term investment option or move an amount into or out of the Enhanced Cash option once per month. The table below shows the switching dates for 2007/08 and the due date by which you need to return your "Investment Choice Form" to effect a switch. Due date of request 2007 While there is no fee charged by the Plan for switching investment options, you should however be aware that a buy/sell spread (a fee charged by the Plan s investment managers for the redemption and acquisition of assets) may apply. Further details regarding buy/sell spreads are contained at pages 22 and 24. How do I change my investment choice? You can change your investment choice by completing an Investment Choice Form, available on the Plan web-site or by contacting the Plan (contact details on the back page). What if I don t choose an option? If you don t choose an investment option when you first join the Plan (either in this division or another division of the Plan), your account balance and future contributions will be invested in the Balanced option (the Plan s default option). Trustee considerations Switch effective date 17 September September October October November November December December January January February February March March April April May May June June 2008 The Trustee of the Plan does not take into account labour standards, environmental, social or ethical considerations in making investment decisions or selecting investment managers. 13

14 Choosing an investment option The information contained in the PDS is of a general nature only. It does not take into account your individual objectives, financial situation or needs. As such, you should consider your investment goals and the time your superannuation will be invested, as part of your investment choice decision. When making an investment choice, the performance of the investment options may also be considered, however, past performance is not necessarily an indicator of future performance. If required, contact a licensed or authorised financial planner before making an investment decision, to ensure that your investment choice fits in with your overall financial plan and goals. Past investment performance is not necessarily an indicator of future investment performance. The Trustee does not guarantee that you will earn any specific rate of return on your investment or that your investment will gain or retain its value. How do I know the value of my account and benefits in the Plan? You will be provided with an Annual Member Statement showing your account and benefit entitlements in the Plan as at the Plan s annual review date of 30 June each year. This information is also available on the Plan web-site or by contacting the Plan (contact details on the back page). Allocation of investment returns to your account The Trustee has adopted a policy of fully allocating the Plan s investment earnings (net of relevant taxes, fees and costs) to members accounts. As such, it does not hold any investment fluctuation reserves. The net earnings of your chosen investment option are based on the option s actual investment earnings, less relevant taxes, fees and costs, and are equal to the net investment return. (For details regarding fees and costs deducted from earnings see pages 20-26). Net earnings are allocated to your account on a pro-rata daily basis and are compounded annually each 30 June or when you elect to change investment options. The net earnings of the Plan s investment options are subject to normal investment market movements and future investment performance cannot be guaranteed. As a result, the crediting rate of any investment option may be positive or negative. If you leave the Plan or withdraw monies from your chosen investment option within a few years of joining the Plan or making an investment choice, you may get back less than the amount of contributions paid into the Plan because of the level of investment returns earned by the investment option in which your account is invested and the deduction of relevant taxes, fees and costs. 14

15 The Plan s investment options Aggressive option Investment objectives Returns (net of fees) exceeding: CPI + 4.5% p.a. over rolling 5 year periods The simulated (net of fees) return of a portfolio invested in market indices in line with the option s benchmark asset mix, over rolling 5 year periods Risk profile Potential long term return Likely variability of return Potential for negative returns High High 1 in 4 years on average Benchmark Investment strategy asset mix Investment strategy allocation of assets to fund managers Fund manager returns year ending 30 June Historical net earning rates year ending 30 June Aust Shares 58% Int Shares 30.5% Property 6% Private Equity 0.5% Aust Fixed Int 2% Internat Fixed Int 1.5% Cash 1.5% Fund manager Benchmark Allocation Barclays International Alpha Equity Fund 15.0% MFS Global Equity Trust 14.0% MIR Australian Equities Fund 13.0% BT Wholesale Core Australian Share Fund 11.0% State Street Global Advisors Active Aust Equity Fund 10.0% Suncorp Investment Management Aust Equity Trust 8.0% WestLB Mellon Australian Equity Trust 8.0% Maple Brown Abbott Australian Equity Trust 6.0% National Corporate Investments MLC Moderate Trust 6.0% Credit Suisse Property Fund 6.0% BT Institutional Enhanced Cash and Trust Cash 1.5% Schroder Fixed Income Fund Standard Class 1.5% Fund manager Barclays International Alpha Equity Fund 19.7% 1.4% 17.6% MFS Global Equity Trust 21.5% -0.1% 18.8% MIR Australian Equities Fund 25.1% 33.7% 26.6% BT Wholesale Core Australian Share Fund 25.1% 26.0% 23.9% State Street Global Advisors Active Aust Equity Fund 24.4% 28.4% 18.2% National Corporate Investment MLC Moderate Trust Trust 14.4% 13.1% 13.3% Suncorp Investment Management Aust Equity Trust 26.5% 26.6% 19.3% WestLB Mellon Australian Equity Trust 19.4% 25.5% 18.2% Maple Brown Abbott Australian Equity Trust 16.4% 21.5% 23.7% Credit Suisse Property Fund 13.2% 17.2% 14.5% BT Institutional Enhanced Cash 4.9% 4.9% 4.7% Trust Cash Management Fund 4.1% 4.0% 3.8% Schroder Fixed Income Fund Standard Class 3.3% 6.9% 3.2% % 12.44% 20.95% % -5.60% Past performance is not a reliable indicator of future performance. The fund managers utilised by the Fund may be changed at the discretion of the Trustee. 15

16 Balanced option Returns (net of fees) exceeding: Investment objectives Risk Profile CPI + 3.0% p.a. over rolling 5 year periods The median return of the Morningstar Australian Wholesale Investment Trusts Multisector Growth Index over rolling 5 year periods Potential long term return Likely variability of return Potential for negative returns Moderate High Moderate High 1 in 5 years on average Benchmark Investment strategy asset mix Aust Shares 40% Int Shares 23% Property 7% Aust Fixed Int 17% Internat Fixed Int 8% Cash 5% Investment strategy allocation of assets to fund managers Fund manager returns year ending 30 June Historical net earning rates year ending 30 June Fund manager Benchmark Allocation National Corporate Investments MLC Moderate Trust 23.0% Schroder Fixed Income Fund Standard Class 18.0% Barclays International Alpha Equity Fund 8.0% BT Wholesale Core Australian Share Fund 7.5% MFS Global Equity Trust 7.5% State Street Global Advisors Active Aust Equity Fund 7.0% Suncorp Investment Management Aust Equity Trust 7.0% WestLB Mellon Australian Equity Trust 7.0% Credit Suisse Property Fund 6.0% BT Institutional Enhanced Cash and Trust Cash 5.0% Maple Brown Abbott Australian Equity Trust 4.0% Fund manager National Corporate Investments MLC Moderate Trust 14.4% 13.1% 13.3% Schroder Fixed Income Fund Standard Class 3.3% 6.9% 2.2% Barclays International Alpha Equity Fund 19.7% 1.4% 17.6% BT Wholesale Core Australian Share Fund 25.1% 26.0% 23.9% MFS Global Equity Trust 21.5% -0.1% 18.8% State Street Global Advisors Active Aust Equity Fund 24.4% 28.4% 18.2% Suncorp Investment Management Aust Equity Trust 26.5% 26.6% 19.3% WestLB Mellon Australian Equity Trust 19.4% 25.5% 18.2% Credit Suisse Property Fund 13.2% 17.2% 14.5% BT Institutional Enhanced Cash 4.9% 4.9% 4.7% Trust Cash Management Fund 4.1% 4.0% 3.8% Maple Brown Abbott Australian Equity Trust 16.4% 21.5% 23.7% % 11.48% 14.45% -5.33% -5.19% Past performance is not a reliable indicator of future performance. The fund managers utilised by the Fund may be changed at the discretion of the Trustee. 16

17 Conservative option Returns (net of fees) exceeding: Investment objectives Risk Profile CPI + 2.0% p.a. over rolling 5 year periods The median return of the Morningstar Australian Wholesale Investment Trust Multisector Moderate Index over rolling 5 year periods Potential long term return Likely variability of return Potential for negative returns Moderate Low Moderate Low 1 in 10 years on average Benchmark investment strategy asset mix Aust Shares 16% Int Shares 9% Property 5% Aust Fixed Int 30.5% Internat Fixed Int 11.5% Cash 28% Investment strategy allocation of assets to fund managers Fund manager returns year ending 30 June Historical net earning rates year ending 30 June Fund manager Benchmark Allocation Schroder Fixed Income Fund Standard Class 37.5% BT Institutional Enhanced Cash and Trust Cash 28.0% National Corporate Investments MLC Moderate Trust 15.0% Credit Suisse Property Fund 4.5% BT Wholesale Core Australian Share Fund 2.5% State Street Global Advisors Active Aust Equity Fund 2.5% Suncorp Investment Management Aust Equity Trust 2.0% WestLB Mellon Australian Equity Trust 2.0% Barclays International Alpha Equity Fund 2.0% Maple Brown Abbott Australian Equity Trust 2.0% MFS Global Equity Trust 2.0% Fund manager Schroder Fixed Income Fund Standard Class 3.3% 6.9% 3.2% BT Institutional Enhanced Cash 4.9% 4.9% 4.7% Trust Cash Management Fund 4.1% 4.0% 3.8% National Corporate Investments MLC Moderate Trust 14.4% 13.1% 13.3% Credit Suisse Property Fund 13.2% 17.2% 14.5% BT Wholesale Core Australian Share Fund 25.1% 26.0% 23.9% State Street Global Advisors Active Aust Equity Fund 24.4% 28.4% 18.2% Suncorp Investment Management Aust Equity Trust 26.5% 26.6% 19.3% WestLB Mellon Australian Equity Trust 19.4% 25.5% 18.2% Barclays International Alpha Equity Fund 19.7% 1.4% 17.6% Maple Brown Abbott Australian Equity Trust 16.4% 21.5% 23.7% MFS Global Equity Trust 21.5% -0.1% 18.8% % 8.96% 8.45% 2.07% 1.88% Past performance is not a reliable indicator of future performance. The fund managers utilised by the Fund may be changed at the discretion of the Trustee. 17

18 Enhanced Cash option Investment objectives Risk Profile Returns (net of fees) meeting or exceeding: Return of the UBS Bank Bill Index in all years The median return of the Morningstar Australian Wholesale Investment Trusts Bonds Australian Cash Index over rolling 5 year periods Potential long term return Likely variability of return Potential for negative returns Low Low Rarely if ever Benchmark investment strategy asset mix Cash 100% Investment strategy allocation of assets to fund managers Fund manager returns year ending 30 June Fund manager Benchmark Allocation BT Institutional Enhanced Cash Fund 100.0% Fund manager BT Institutional Enhanced Cash Fund 4.9% 4.9% 4.7% Historical net earning rates year ending 30 June Historical net earnings rates are not available as this option was only introduced in Past performance is not a reliable indicator of future performance. The fund managers utilised by the Fund may be changed at the discretion of the Trustee. 18

19 Notes to the summaries of investment options Investment objectives The investment objectives are the investment returns that an investment option aims to achieve over a certain time frame. The investment objective is a benchmark that the Trustee uses to measure the performance of the Plan and should not be taken to be a promise or forecast of future returns. Neither the Trustee nor any of its associated entities guarantees the investment performance of the Plan. References to the Morningstar Australia Wholesale Investment Trusts Multisector Indices are to groups of managers included in fund manager surveys conducted by Morningstar. Risk profile The risk profile shows the assessed level of risk (measured as variability of return) and return for the investment option based on the nature of the underlying investments. For more information about risks, see the Risks of the Plan section of this PDS. Benchmark asset allocation The benchmark asset mix is the investment option s target allocation to the different asset classes. The actual allocation to the different asset classes will be close to the benchmark asset mix but will be determined by the allocations to the underlying investment managers and the asset allocations made by the option s underlying investment managers and may fluctuate from time to time. Investment manager asset allocations The option s benchmark allocation to each of the managers describes the target allocation to each manager and may vary from time to time. You have no individual influence over how much of your money is invested directly with a particular investment manager or investment fund. This information is shown for illustrative purposes only. The Trustee can alter underlying investment managers or investment funds from time to time without prior notification to you. Investment manager returns The investment manager returns show the annual return (net of applicable taxes and investment management fees) achieved by each of the investment managers utilised by the option over recent financial years. As the investment vehicles utilised by the Fund do not deduct taxes on behalf of the Plan, returns have been shown after making an adjustment for tax to the gross returns reported by the managers. Past returns are not a reliable indicator of future returns. Net earning rates The net earning rates indicate the annual rate of net earnings achieved by the investment option over 5 financial years (or lesser period, where the investment option has not been in existence for 5 years) after taking into account any relevant taxes, fees and costs. For more information about how net earning rates are determined, see page

20 Fees and other costs The below statement is information required to be provided in this PDS under Government Regulations. Complete information regarding the fees charged by the Plan can be found on pages 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 Plan 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 may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the Plan 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 fee calculator to help you check out different fee options. Please note that the Plan does not charge contribution fees. The Plan s fees and costs are not negotiable. This document shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the Plan assets as a whole. Taxes and insurance costs are set out in another part of this document. You should read all the information about fees and costs because it is important to understand their impact on your investment. 20

21 Type of fee or cost Amount How and when paid Fees when your money moves in or out of the Plan (Note: none of the fees of the Plan are negotiable) Establishment Fee The fee to open your investment. Contribution Fee The fee on each amount contributed to your investment either by you or your employer. Withdrawal Fee The fee on each amount you take out of your investment. Termination Fee The fee to close your investment. Management Costs The fees and costs for managing your investment. Service Fees** Investment Switching Fee Nil Nil $30.75 Nil Aggressive option Balanced option Conservative option Enhanced Cash option The fee for changing investment options Nil 1.12%* of Plan assets + $63.96 p.a. comprising: Administration fee $63.96 Investment management fee 0.63%* Operational & compliance fee 0.35% Trustee fee 0.075% Consulting and other fees 0.065* 1.04%*of Plan assets + $63.96 p.a. comprising: Investment management fee 0.55%* Operational & compliance fee 0.35% Trustee fee 0.075% Consulting and other fees 0.065* 0.90%* of Plan assets + $63.96 p.a. comprising: Administration fee $63.96 Investment management fee 0.41%* Operational & compliance fee 0.35% Trustee fee 0.075% Consulting and other fees 0.065* 0.74%* of Plan assets + $63.96 p.a. comprising: Administration fee $63.96 Investment management fee 0.25%* Operational & compliance fee 0.35% Trustee fee 0.075% Consulting and other fees 0.065* Not applicable Not applicable Deducted from members' accounts at the time a benefit payment is processed. Not applicable $63.96 fee deducted from members accounts annually at 30 June or on a pro-rata basis upon a benefit being paid from the Plan. Percentage of assets fee is deducted from earnings prior to the allocation of earnings to members accounts. Not applicable (See the section on buy/sell spreads on pages 22 & 24) * The above fee is an estimate only and includes estimated investment management fees based on the investment managers underlying the investment option (as shown on pages 15 to 18) and the fee levels reported by the managers as at the time of preparation of this PDS. In relation to the Enhanced Cash Option, the estimated investment management fee represents the fees charged to other funds by the managers underlying this option, even though this option was not introduced to the Plan until The actual fees deducted from net earnings may vary from year to year. Please refer to page 23 of the PDS for additional information. ** Additional service fees apply. See "Service fees" section in the "Additional explanation of fees and costs" section on pages 22 and

22 Additional explanation of fees and costs Below is a summary of some of the additional fees and costs that may apply in the Plan. Further information in relation to all the fees and costs that may apply in the Plan is provided in this additional explanation of fees and costs section. Type of fee or cost Amount How and when paid Premiums for insurance The cost of any insurance cover applicable to you or that you elect to take out. Premiums are charged on an age based scale per $1,000 sum insured. See the table on page 30. The premiums charged include a 5% insurance administration fee, paid to the Administrator of the Plan for administering the insurance benefits. Premiums deducted from accounts annually or upon exit from the Plan. Buy/Sell spreads The fees charged by the underlying investment managers of the Plan for the selling and redemption of assets. Splitting and flagging fees These fees are charged at the time that requests for information or splitting and flagging requests are made. Investment option change Maximum % of members accounts Balanced > Aggressive 0.22% Conservative > Aggressive 0.39% Enhanced Cash > Aggressive 0.51% Aggressive > Balanced 0.06% Conservative > Balanced 0.19% Enhanced Cash > Balanced 0.35% Aggressive > Conservative 0.05% Balanced > Conservative 0.01% Enhanced Cash > Conservative 0.17% Aggressive > Enhanced Cash 0.00% Balanced > Enhanced Cash 0.00% Conservative > Enhanced Cash 0.00% Processing an application for information $50 Processing payment splits $100 Placing a payment flag on a benefit $100 Lifting a payment flag on a benefit $50 Deducted from members accounts at the time a switch is processed (for further details, see page 24). The fee for information requests is charged to the individual making the request and payable via cheque. Fees relating to splitting or flagging are deducted from the benefit at the time of processing the request. (For further detail see the additional explanation on page 24). 22