Newcastle Permanent Superannuation Plan

Transcription

1 Newcastle Permanent Superannuation Plan 2015 Annual Report December 2015 Issued by Mercer Superannuation (Australia) Limited (MSAL) ABN AFSL RSE Licence Number L as trustee of the Newcastle Permanent Superannuation Plan ABN

2 Table of Contents Introduction 2 Your Plan at a glance 3 Who manages your super? 4 About your investment options 4 Some important investment information 10 Changes to the Plan 11 Financial summary 11 Super News 12 Other information about your super 13 Introduction Welcome to your Annual Report for the Newcastle Permanent Superannuation Plan (Plan) for the year ending 30 June This report provides important information about how the Plan is managed and how the Plan's investments have performed during the year. It also provides information on the latest changes to superannuation that might affect you. The Plan has two divisions the Superannuation Division and the Pension Division. This report provides information for members of both divisions. Contact us For enquiries or to obtain a copy of the Plan's current Product Disclosure Statement for your division, please contact: The Plan Administrator, Newcastle Permanent Superannuation Plan GPO Box 4303, Melbourne VIC 3001 Superannuation Helpline: Plan's website at: newcastlepermanent.superfacts.com 2

3 Your Plan at a glance At 30 June 2015: The Plan had net assets of $148,690,990. There were 1,789 members in the Superannuation Division and 629 members in the Pension Division. The Plan consists of two sections, a Superannuation Division and a Pension Division. Full details of the benefits provided in each division are provided in the Plan's Product Disclosure Statements. If you would like a copy of the current Product Disclosure Statement for the Superannuation Division or the current Product Disclosure Statement for the Pension Division, call the Plan's Superannuation Helpline on or visit the Plan's website at: newcastlepermanent.superfacts.com where you can download a copy. You can also access up to date information about your personal benefits and entitlements by visiting the Plan website at: newcastlepermanent.superfacts.com The website allows you to: view your account balance update your contact details update your beneficiaries view your contribution history, account deductions or surcharge details. Simply enter your Member number and your PIN to sign into your account. Then, select the membership type of either Super member or Pension member from the buttons in the SIGN IN box, which is at the top right hand side of the login page. Please call the Superannuation Helpline if you have forgotten your PIN or if you need help using the Plan's website. Superannuation Division Performance For the financial year to 30 June 2015 the annual effective rates of return (i.e. the actual rates of investment earnings less tax and investment management fees) of the investment options were: Cash option 2.0% Conservative option 6.0% Balanced option 9.3% Growth option 9.5% For the Term Deposit option please refer to page 6 for the monthly rates for the 30 June 2015 financial year. Pension Division Performance For the financial year to 30 June 2015 the annual effective rates of return (i.e. the actual rates of investment earnings less investment management fees) for the investment options were: Cash option 2.4% Conservative option 6.9% Balanced option 10.4% Growth option 1.0.8% For the Term Deposit option please refer to page 7 for the monthly rates for the 30 June 2015 financial year. Investment choices You have a choice of a number of investment options in which to invest your super. Each option has a different investment profile allowing you to choose the type of investments that best suit your investment needs, investment timeframes and personal investment preferences. You are able to change your investment choice at any time if you circumstances change. Refer to page 4 of this Annual Report for details of your investment option choices. Other Plan features The Plan provides Superannuation Division members with insurance options to help you provide for yourself and your beneficiaries if you should die or become Totally and Permanently Disabled, subject to eligibility and acceptance by the insurer. In respect of the benefit payable from the Plan should you die, you can make a Binding Death Benefit Nomination or Preferred Beneficiaries Nomination to advise the Trustee of your payment preference. For Superannuation Division members, you: can make spouse contributions; can transfer your other superannuation entitlements into the Plan; have a choice of how to make personal contributions to the Plan after joining, either by making lump sum contributions and/or by regular contributions; can transfer to the Pension Division after age 55 if you'd like to receive your super as a pension. Certain eligibility criteria apply and if you are interested you should contact the Plan's Superannuation Helpline to obtain a copy of the Pension Division Product Disclosure Statement. You should also obtain advice from a licensed, or appropriately authorised, financial adviser before making any decisions about your super. Refer to the Plan's current Product Disclosure Statement for your division for further information about the Plan features listed above. Advice about your super Newcastle Permanent Building Society Ltd ( Newcastle Permanent') is the Plan's distributor and provides financial services * to members of the Plan. A Newcastle Permanent Adviser can provide you with personalised and strategic advice, tailored to your specific circumstances. The advisers are accredited, qualified and trained to provide quality advice on a broad range of financial issues. If you don't currently have a Newcastle Permanent Financial Adviser and would like to speak to one, please call (02) or visit your local Newcastle Permanent Branch. Adviser fees agreed between you and your Adviser for any personal superannuation advisory services # can be deducted from your account balance. Refer to the Plan's Product Disclosure Statement for information on Adviser Fees. * The Trustee does not accept any liability or responsibility arising in any way (including for negligence) for any financial services provided solely by Newcastle Permanent, its employees or agents. This is in accordance with the arrangement between the Trustee and Newcastle Permanent. # These are services in relation to your interest in the Plan, for example, advice in relation to making an investment choice or contributions, or about the insurance available in the Plan. 3

4 Who manages your super? The trustee of the Plan is a company, Mercer Superannuation (Australia) Limited ABN (MSAL or Trustee), Australian Financial Services Licence #235906, Registrable Superannuation Entity (RSE) Licence #L , which operates the Plan in accordance with the governing documents and applicable law. The Trustee has not incurred any penalties under section 38A of SIS during the year ended 30 June Trustee directors are responsible for the operation of the Plan. In particular, they're responsible for making sure: your rights as a member are protected your super payout is worked out in accordance with the rules applying to the Plan assets are invested properly and the general operation of the Plan is in accordance with the governing documents and applicable law. The current directors of MSAL are as follows: Non-executive directors Eve Crestani (Chair) Brian Benger Martin Stevenson Jan Swinhoe Sue O'Connor Executive director Ben Walsh Service providers to the Trustee The Trustee appoints a number of service providers to assist it in running the Plan. Details of the service providers at 30 June 2015 are set out below: Administration and Communications Mercer Outsourcing (Australia) Pty Ltd Auditor PricewaterhouseCoopers Insurer TAL Life Limited (TAL) Investment Managers Newcastle Permanent Building Society Limited (NPBS) Mercer Investments (Australia) Limited (MIAL) Plan Sponsorship and Distribution Services Newcastle Permanent Building Society Limited (NPBS) Superannuation Consulting Mercer Consulting (Australia) Pty Ltd Indemnity insurance The directors of MSAL are provided with professional indemnity insurance to protect them against any honest mistakes that may occur in running the Plan. About your investment options As a member of the Plan, you have a choice of any one or a combination of the following nine investment options: Cash-type Options Cash Term Deposit Diversified Options * Largely Passively Managed Conservative (Enhanced Indexed) ** Moderately Conservative (Enhanced Indexed) ** Moderate Growth (Enhanced Indexed) ** Diversified Shares (Indexed) **, and Actively Managed Conservative (Active)ˆ Moderate Growth (Active)ˆˆ Assertive (Active)ˆˆˆ * These options hold assets across a number of different asset types ** New options introduced on 27 July 2015 ˆ Prior to 27 July 2015 was called Conservative ˆˆ Prior to 27 July 2015 was called Balanced ˆˆˆ Prior to 27 July 2015 was called Growth By selecting one or more of the Diversified investment options, you are investing your super in a set mix of shares, property, fixed interest, term deposits, cash and other types of assets. The mix of assets in the option you choose will determine the level of risk and earnings that you can expect for your super. Please refer to the Plan's Product Disclosure Statements for more information about any of the investment options available through the Plan. How investment returns are calculated Cash investment option Cash crediting rate The Cash crediting rate (the rate of investment earnings allocated to the Cash investment option) is determined based on the actual earnings of the investment option after an allowance for investment tax and any investment management fees *. The Trustee declares the Cash crediting rate based on the returns earned on the underlying deposits held with NPSB, as declared by NPBS. You will be advised of the crediting rate applicable from time to time in each Member Benefit Statement you receive. * Earnings on the Pension Division's assets are not subject to tax. Therefore, there is no deduction for tax in the Pension Division's crediting rate for the Cash investment option. Term Deposit investment option crediting rate The crediting rate for the Term Deposit investment option (the rate of investment earnings allocated to the investment option upon completion of the 12 month term) is declared by the Trustee based on the returns earned on the underlying deposits held with NPBS, and after making an allowance for any investment tax * and any investment management fees. Please refer to the Plan's Product Disclosure Statements for more information. * Earnings on the Pension Division's assets are not subject to tax. Therefore, there is no deduction for tax in the Pension Division's crediting rate for the Term Deposit investment option. 4

5 Term Deposit investment option break crediting rate If any part of your account balance is invested in the Term Deposit investment option and a break trigger event occurs, a further cost will apply. Please refer to the Plan's Product Disclosure Statements for more information. The cost is in the form of a reduced Term Deposit crediting rate, known as the Term Deposit break crediting rate. This means the Term Deposit crediting rate you were quoted at the commencement of your investment term will no longer apply and you will receive the Term Deposit break crediting rate for your whole investment term. The Term Deposit break crediting rate is calculated as a percentage of the Term Deposit crediting rate quoted when you commenced your investment in the Term Deposit investment option. The percentage (as a sliding scale) will depend on the number of days and months you have completed to the end of your term at the time the investment switch or voluntary withdrawal is made or at the time you leave the Plan see the table below. ˆ When the break trigger event occurs rate that will apply Within 7 days of commencement Between 8 days and less than 3 monthsˆ Between 3 months and less than 6 monthsˆ Between 6 months and less than 9 monthsˆ Between 9 months and less than 12 monthsˆ Term Deposit break crediting No interest is payable 20% of the crediting rate applies* 40% of the crediting rate applies* 60% of the crediting rate applies* 80% of the crediting rate applies* Months are counted according to the number of days in that calendar month. * The percentage payable is calculated based on the actual number of days of the term you have completed. Please refer to the Plan's Product Disclosure Statements for more information about the Term Deposit investment option. Other investment options unit prices For all other options in which you may invest, your investment (less any fees, costs and/or taxes are deducted) buys what are known as units in your chosen investment option(s). The number of units purchased depends on the unit price at the relevant time. For example, if you invest $1,000 (i.e. after any fees, costs and/or taxes are deducted) and the unit price of your selected investment option(s) is $1.00 at that time, then1,000 units would be bought on your behalf. Unit prices for each investment option are normally calculated on a daily basis. The unit price basically reflects the underlying asset value of the investment option divided by the number of units in that option, less a provision for expected tax and any investment management fees, and after an allowance for any transaction and operational costs is made. The value of your account balance at any time is simply the number of units allocated to your account multiplied by their unit price at that time. Net investment earnings on your chosen investment option (which may be positive or negative) will be reflected via changes in the unit prices. If the net investment earnings for an option are positive over a particular period, the unit price will increase. If the net investment earnings are negative (a loss), the unit price will decrease. The effective rate of net investment earnings for a given period can therefore be determined by the proportionate increase (if a positive return) or decrease (if a negative return) in the unit prices from the start to the end of the period. Investment Performance to 30 June 2015 The tables below show for each of the investment options in force at 30 June 2015, the investment option's annual effective rate of net investment earnings (i.e. the actual rate of return on the underlying investment option net of tax, if applicable, investment management fees and any performance fees) over the past five years. Note that the Plan's Term Deposit investment option shown below was introduced on 1 September Also note the options' names in force at 30 June 2015 are used as previously noted, these names changed as at 27 July Please note past performance should not be relied upon as an indicator of future performance. 5

6 Superannuation Division Single year investment returns to 30 June 1 5 year compound average rate of return to 30 June (%) 2014 (%) 2013 (%) 2012 (%) 2011 (%) (% pa) Cash Conser vative 3ˆ Balanced 3ˆˆ Growth 3ˆˆˆ Superannuation Division - Term Deposit Investment Option Returns Commencement date of each Perm Term Deposit (each has a 12 month investment period) Crediting Rate (after 15% investment tax) 1 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun (% pa) 6

7 Pension Division Single year investment returns to 30 June 1 5 year compound average rate of return to 30 June (%) 2014 (%) 2013 (%) 2012 (%) 2011 (%) (% pa) Cash Conser vative 3ˆ Balanced 3ˆˆ Growth 3ˆˆˆ Pension Division - Term Deposit Investment Option Returns Commencement date of each Perm Term Deposit (each has a 12 month investment period) Crediting Rate 1 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun (% pa) 1 Annual effective rates of return are actual rates of return less investment management fees and any performance fees. 2 From 1 July 2008, the earning rate declared by NPBS is based on the RBA cash rate. 3 Effective 19 April 2010, the Plan's investment manager for the Conservative, Balanced and Growth options changed; hence the investment returns up to 8 April 2011 were achieved under the previous manager's investment philosophy and approach. 4 The Term Deposit was introduced on 1 September ˆ Renamed to Conservative (Active) from 27 July 2015 ˆˆ Renamed to Moderate Growth (Active) from 27 July 2015 ˆˆˆ Renamed to Assertive (Active) from 27 July

8 Some details* about investment options in place at 30 June 2015 Investment Objective # Investment Option Term Deposit Cash Conservativeˆ Balancedˆˆ Growthˆˆˆ To achieve an annual return (after tax and investment management fees) that exceeds the cash rate declared by the Reserve Bank of Australia (RBA) less an adjustment for tax. To achieve an annual return (after tax and investment management fees) of at least the Reserve Bank of Australia (RBA) cash rate less an adjustment for tax. To achieve a return (after tax and investment management fees) that exceeds CPI increases by at least 1.5% pa over rolling and three year periods. To achieve a return (after tax and investment management fees) that exceeds CPI increases by at least 3.5% pa over rolling and five year periods. To achieve a return (after tax and investment management fees) that exceeds CPI increases by at least 4% pa over rolling and six year periods. Standard Risk Measure # Very Low Very low Low to Medium Medium to High Medium to High How option was invested at 30 June by asset type: % % % % % Australian Shares Overseas Shares (a) Property & Infrastructure (b) Alternative assets (b) Fixed Interest (c) Growth Fixed Interest Cash * Note that due to rounding, the sum of the individual numbers within the table may not add up to 100%. ** For more detailed information about these options, refer to the Plan's Product Disclosure Statement. # These details are current at the date of issue of this report. (a) (b) (c) ˆ ˆˆ ˆˆˆ May include overseas developed and emerging markets investments with currency hedging to Australian dollars. May include exposure to overseas investments which may have currency exposure hedged back to Australian dollars. Currency exposure normally substantially or fully hedged to Australian dollars. Renamed to Conservative (Active) from 27 July 2015 Renamed to Moderate Growth (Active) from 27 July 2015 Renamed to Assertive (Active) from 27 July

9 Investment managers As at 30 June 2015, the Plan's investments were invested with the following investment managers: Investment Manager Newcastle Permanent Building Society Limited Newcastle Permanent Building Society Limited Mercer Investments (Australia) Limited Product Cash Portfolio Term Deposit Portfolio Mercer High Growth Fund Mercer Growth Fund Mercer Conservative Growth Fund Type Building Society account Building Society accounts Wholesale Investment Fund Wholesale Investment Fund Wholesale Investment Fund % of investments at 30 June Total Use of derivatives The Trustee does not undertake day to day management of derivative instruments on behalf of the Plan. The Plan's investment managers may use derivatives to assist in managing their investment portfolios. These derivative instruments may not be used to gear the portfolios. The Trustee considers the risks and the controls in place by analysing the managers' Part B Derivative Risk Statements (DRSs). The Trustee receives regular reporting of the managers' compliance with their DRSs. Socially responsible investing Decisions to invest in or realise investments underlying the Plan's investment options are based on key financial and managerial criteria. The Trustee does not separately consider social, environmental or ethical factors or labour standards to make these decisions. 9

10 Some Important Investment Information The Trustee's broad investment objective for the Plan overall, is to maximise investment returns over longer periods of time relative to objectives, subject to constraints imposed by the need to contain fluctuations in returns over shorter periods within acceptable limits. However, within each investment option, the Trustee has specific objectives. These are explained in the sections that follow: Each investment option has guidelines for investing For each investment option, the Trustee has an investment strategy and objectives covering how and where your money will be invested. While having investment objectives and an investment strategy are required by law, having a strategy helps ensure that the Plan maximises investment returns while maintaining an acceptable level of risk. Please note that the objectives are not a forecast or guarantee of future performance. The investment policy also covers other related matters such as the appointment of investment managers and guidelines for investing in derivatives. The Trustee regularly monitors each investment option's performance against their objectives and strategy and changes are made where necessary. A copy of your Plan's investment policy statement is available on request. There are different levels of investment risk associated with each of the Plan's investment options. Please refer to the Plan's Product Disclosure Statements for your division for more information. You can obtain a copy of the current Product Disclosure Statements by contacting NPBS or by calling the Plan's Superannuation Helpline on or by logging onto the Plan's website. Investment Risk and the Standard Risk Measure Most investments, including super, have some element of risk associated with them. Generally, investment risk is the chance that your investment will perform differently to what you expect. Your investment in the Plan could rise or fall in value or produce a return which is less than you anticipate. Rises and falls in value occur for a variety of reasons and sometimes quickly. The Standard Risk Measure (SRM) is the estimated number of negative returns in any 20 year period. It is a tool to help you compare investment risk across investment options. The SRM is based on industry guidance and is not a complete assessment of investment risk. It does not take into account: What the size of the negative return could be If the size of a positive return will be enough to meet your objectives, or The impact of administration fees and tax on the likelihood of a negative return. You should check you are comfortable with the risks and potential losses associated with your chose investment option(s). The SRM consists of seven risk labels: Risk label Very high Estimated number of negative annual returns over any 20 year period 6 or more High Between 4 and 6 Medium to high Between 3 and 4 Medium Between 2 and 3 Low to medium Between 1 and 2 Low Between 0.5 and 1 Very low Less than 5 Risk labels are not a guarantee of the number or frequency of negative annual returns for an investment option. For details of the SRM for each investment option refer to Some details about investment options in place at 30 June 2015 on page 8 of this Annual Report. For more information on the risks associated with each investment option refer to the Product Disclosure Statement or call the Plan's Superannuation Helpline on

11 Changes to the Plan during the year The following section details the changes that were made to the Plan over the past year which may have impacted your super or may impact your super in future. Lower minimum initial investment for the term deposit investment option From 1 April 2015, the minimum initial investment applicable to the Plan's Term Deposit investment option was reduced from $40,000 to $10,000. For Superannuation Division members who are already invested in the Term Deposit or are planning to invest in the future, no other terms and conditions apply. For Pension Division members, in addition to the lower minimum inital investment amount, another change is that the maximum amount of your total account balance that can be invested in the Term Deposit investment option has increased from 75% of your total account balance to 85% of your total account balance. Please refer to the Product Disclosure Statement (PDS) for more information about investing in the Term Deposit investment option. Insurance premiums for Superannuation Division members revised as at 1 July 2015 The death and total and permanent disablement (TPD) insurance cover provided by the Plan is insured under a policy with TAL Life Limited (TAL). Under the policy TAL is entitled to review the insurance premium rates every three years. The Trustee agreed to accept the premiums put forward by TAL following their review, the result of which was that, from 1 July 2015, the cost of death only cover or death and TPD cover increased. Please refer to the Member Notice May 2015 for more information on the changes in premium rates. Financial summary Set out below is a summary of the Plan's audited accounts for the year ended 30 June You can request a copy of the audited accounts and auditor's report by contacting the Plan's Superannuation Helpline on Statement of change in financial position 2014/2015 Net Assets at 30 June 2014 $160,515,613 plus Net investment revenue $4,995,257 Employer contributions $1,710,702 Member contributions $2,884,599 Transfers in $2,999,493 Insurance proceeds $36,300 Total revenue $12,626,351 less Benefits paid $23,109,699 General administration expenses $747,438 Group life insurance premiums $86,488 Income tax expense $507,349 Total expenses $24,450,974 Net assets at 30 June 2015 $148,690,990 Statement of financial position at 30 June 2015 Assets Investments $146,834,954 Other assets $2,159,432 Total assets $148,994,386 less Liabilities Provision for income tax $0 Other liabilities creditors and accruals $303,396 Total liabilities $303,396 equals Net assets available to pay benefits at 30 June 2015 $148,690,990 11

12 Super News Following several years of legislation requiring significant change to how super funds operate, the year was somewhat quieter. However change never stops and we have listed below the major changes which have occurred since last year's annual report. There are also a number of changes which the Government still intends to progress. We note the Government has announced there will be no unexpected changes to superannuation legislation during the current Parliament, however there continues to be considerable debate in the media relating to superannuation tax with some organisations pushing for reductions in the tax benefits for high income earners and those with large superannuation balances. Tax may be a significant issue leading up to the next Federal election. The debate on gender inequality in the superannuation system is also starting to heat up and over the next year or so we may see moves which would encourage a greater build-up of super for women. Set out below is a summary of the key changes in super that have taken place since the last annual report. Summaries of other proposed Government changes are also listed. The following matters are now legislation: Superannuation Guarantee From 1 July 2014, the minimum employer superannuation contribution (Superannuation Guarantee) increased from 9.25% to 9.5% of Ordinary Time Earnings. The rate was previously planned to increase in steps to 12% by 1 July As indicated in last year's annual report, the Government was attempting to defer these increases by three years. However it eventually obtained Parliament's agreement to a six year deferral. Following this change, this rate is now scheduled to increase to 10% from 1 July 2021 with further increases each subsequent 1 July until the rate reaches 12% in The timetable for these increases is now: Income Year New Rate % 2015/ / / / / / / / / / /26 12 Low Income Earners Government Superannuation Contribution The Low Income Earners Government Superannuation Contribution (LIEGSC) currently applies to contributions made on or after 1 July The LIEGSC is designed to offset the tax paid on superannuation guarantee contributions (at least at the 9% level) of individuals earning up to $37,000. After originally attempting to remove the LIEGSC from 1 July 2013, the Government has now amended the legislation to remove the LIEGSC for contributions made from 1 July It will continue to apply to contributions made before 1 July Excess non-concessional contributions As announced in the May 2014 Budget, the Government has introduced an option for individuals with excess non-concessional contributions made from 1 July 2013 to withdraw the excess contributions and a notional amount of associated earnings. If the withdrawal option is taken, the associated earnings will be taxed at the individual's marginal tax rate. Associated earnings will be calculated using a standard formula set out in the legislation and will differ from the actual earnings. Any excess non-concessional contributions which are not withdrawn will be subject to excess non-concessional contributions tax. Changes in age pension assets and income tests A number of changes to the income and assets tests for various Social Security pensions (including the age pension) have been announced in the Federal Budgets in 2014 and 2015 and subsequently been passed by Parliament. From 1 January 2015, account-based superannuation income streams are subject to the normal deeming rules for social security pension income tests, subject to grandfathering of the current rules for qualifying persons in receipt of a Social Security pension at 31 December The grandfathering only applies to an account-based superannuation income stream held at 31 December Eligibility for grandfathering will cease if the Social Security pension a person was receiving at 31 December 2014 ceases, or if the account-based superannuation income stream held at 31 December 2014 ceases (e.g. on transfer to another provider) with the balance in the income stream product subject to the deeming rules after that time. This change was announced in the May 2014 Federal Budget. From 1 January 2017, the assets test will be varied as announced in the May 2015 Budget. There will be two main outcomes: The level of assets which can be held before they start to impact the age pension has been increased which will result in an increase in the age pension for some retirees The rate at which the age pension is reduced for each $1,000 of additional assets has been increased from $1.50 to $3.00 per fortnight. This will significantly reduce the age pension for some pensioners. The Government has also decided not to proceed with several other changes announced in 2014 relating to the indexation of social security pensions and freezes in various thresholds. Concessional contributions limit for The concessional (before tax) contribution limit for is $35,000 for those age 50 or over at 30 June Concessional contributions include employer and salary sacrifice contributions. The cap for younger people is $30,000. These are the same levels as the previous year. Non-concessional contributions limit for The non-concessional (post tax) contribution limit for is $180,000. However a member under age 65 on 1 July 2015 can (unless they have already done so in the prior two years) generally bring forward two years of non-concessional contributions and make non-concessional contributions of up to $540,000 in 2015/16. This bring-forward' provision will automatically be triggered if non-concessional contributions of more than $180,000 are made in and excess non-concessional contributions will only arise if total non-concessional contributions for 2015/16 and the next two years exceed $540,000. Disclosure using electronic means Recent changes announced by the Australian Securities and Investments Commission provide super funds with more opportunities to provide material on web-sites and by rather than on paper. This should provide super funds with greater opportunities to develop more interesting and engaging material for members as well as saving considerable printing costs. 12

13 Transfers from the UK Following changes to UK legislation effective from April 2015, almost all Australian funds are no longer able to accept transfers from UK pension schemes. Further, where part or all of a member's benefit has previously been transferred from the UK, the changes in the UK may result in adverse UK tax consequences where benefits are transferred from one Australian fund to another. It is understood negotiations are occurring between Australia and the UK authorities to try and free up the transfer process again. What else is changing in super? Briefly, the main Government proposals still to be legislated at the time of going to press are: Trustee Boards The Government has announced a proposal to improve the governance of superannuation funds by requiring at least one-third of the directors of a super fund trustee, including the Chairperson, to be independent. This change together with a number of related requirements are intended to be implemented from around 1 July 2016 although there will be a transition period for existing funds to move to the new rules. At this stage, consultation on the changes is continuing and the precise requirements to be considered independent have not been finalised. Lost super accounts A number of initiatives through the Australian Taxation Office (ATO) have already been put in place to help reunite members with lost super accounts. The account balance threshold for lost super' to be transferred to the ATO has increased from $200 to $2,000 from 31 December 2012, and the Government has announced a further increase to $4,000 from 31 December 2015 and again to $6,000 from 31 December These accounts will receive interest equal to increases in the Consumer Price Index (CPI) after being transferred to the ATO. Other general information about your super Special tax treatment Super is one of the most effective ways to save because it's generally taxed at a lower rate than many other forms of investment. To get this tax advantage, the Plan must operate according to a strict set of laws. The Trustee is unaware of any event occurring during the year that would affect the Plan's special tax treatment. Making a superannuation contribution over the counter at a local Newcastle Permanent branch If you choose to make a contribution into the Plan over the counter at a local Newcastle Permanent branch, your contribution will be temporarily deposited into a Newcastle Permanent Building Society holding account. Note that this is an arrangement operated by the Newcastle Permanent Building Society and therefore is not part of the standard operations of the Plan. Accordingly, your contribution will not be able to be invested into your super account in the Plan until such time as it is received by the Plan's Trustee, by way of a transfer from the Newcastle Permanent Building Society holding account to the Plan's bank account. This transfer process usually takes about 24 hours but in some cases it may take a little longer, such as over a weekend or public holiday, and may also be affected by the time of day you make your deposit. Therefore, your contribution will only be subject to investment earnings, which may be either positive or negative according to the investment option you have chosen in the Plan, from the time it is received in the Plan's bank account not necessarily the day you made the contribution over the counter at Newcastle Permanent. Continuing your death cover after you leave the Plan If you are less than age 60 and you have not left the Plan as a result of ill health, or made a TPD claim, you may be able to choose to continue (as a separate individual policy) any death cover you have under the Plan. You need to apply for continuation of cover and pay the applicable premium within 60 days from the date you leave the Plan and certain conditions apply (refer to the Plan's PDS for more information). The cover will be provided under an individual policy and will be at your own expense. Note that the availability of this cover is subject to the terms and conditions which apply to the policy at that time. If you would like more information or wish to arrange a continuation option call the Plan's Superannuation Helpline on Notify us of a change in your circumstances If you have been accepted for death only cover or death and TPD cover, and you change your occupation, or are travelling or employed overseas for longer than three (3) years, please contact the Plan's Superannuation Helpline so that we can ensure your insurance cover continues and that your premiums are calculated correctly. Operational Risk Reserve The Trustee is required under law to establish and maintain an operational risk reserve (ORR). The purpose of the ORR is to provide resources to protect members' interests should a loss arise due to an operational failure. The ORR will be used to rectify a loss to members in certain circumstances. As at 30 June 2015 the ORR was $136,837. There have been no payments from the ORR in the year to 30 June At this stage there is no levy being charged to members to fund the ORR although the Trustee reserves the right to do so should it be necessary. If this occurs you will be notified in advance. 13

14 Keep your nomination of beneficiaries up to date You have the option of nominating one or more beneficiaries to receive your super payout if you die while you're a member of the Plan. There are two options for nominating your beneficiaries: 1. You can make a binding death benefit nomination, which requires the Trustee to distribute your super payout in accordance with your wishes in the event of your death, and the Trustee will be bound by your nomination as long as it remains valid and is still in effect. Any binding nomination you make must be made on the form issued by the Trustee for this purpose and to remain valid must be renewed every three years, or earlier if your family circumstances change; or 2. You can nominate who you would prefer to receive your super benefit in the event of your death. However, the nominations you make are only an indication of your preference and are not binding on the Trustee the Trustee will make a decision as to whom your benefit is paid, taking into account your nomination as well as other information. Any binding death benefit nomination you make, if valid, will automatically override any preferred death benefit nomination you have made or any nomination you make in your Will (if applicable), unless you have nominated your legal personal representative, in which case it will be distributed according to your Will. It's important that the Plan has a record of your wishes as to who you'd like to receive your super benefit. You should make sure you let the Trustee know who your nominated beneficiaries are and review your nomination regularly. If you wish to change your nominated dependants, or find out more about making either a binding death benefit nomination or a preferred death benefit nomination, call the Plan's Superannuation Helpline. Unclaimed money Your payout may be sent to the Australian Tax Office (ATO) if you no contributions or rollovers have been received for more than 12 months and either: We have not been able to contact you and your payout is less than $2000*,or We do not have enough information to properly identify you. If you are over 65, have received no contributions or rollovers in the past two years and we have been unable to contact you for a period of 5 years, then your payout will be considered to be unclaimed money and will be sent to the ATO. *This amount is changing to $4,000 from 31 December 2015 and $6,000 from 31 December You can approach the ATO to claim any such money directly. There are also other circumstances under which we may be required by law to transfer your payout to the ATO. Refer to the ATO website at for more information. Superannuation surcharge Although this surcharge has been abolished, the Plan may still receive surcharge assessment notices from the ATO relating to a period where a surcharge applied. If the Plan receives a notice in relation to your account, the amount assessed will be deducted from your account in the Plan. If you roll over benefits into the Plan from another super fund or from your employer, any liability to pay the surcharge for contributions made to that other fund that has not been paid or in respect to the employer payment may be transferred to the Plan. If the Plan receives a notice or an amended notice after you have left the Plan, it will generally be forwarded to the fund to which your benefit was paid or to your if the benefit as paid directly to you. Paying your super if you leave Australia You may be eligible to access your super and have it paid directly to you after you have left Australia as long as: you entered Australia on a temporary visa, and you will be leaving Australia, and your temporary visa will soon expire or will be cancelled, and you are not an Australian or New Zealand citizen or permanent resident. Call the Helpline for more information on: how to make an application to the trustee for the release of your super for this reason and what will happen to your super if you make such an application. Note that if at least 6 months has passed since the expiry or cancellation of your temporary visa and you have left Australia and have not claimed your super from your plan the trustee may be required to transfer your super to the Australian Taxation Office (ATO). If this happens, you will need to contact the ATO to claim your super, which will be paid subject to the deduction of tax. The ATO will provide the trustee with details of the members whose super must be transferred in these circumstances. Note that the tax rates on super payouts to a temporary resident who has left Australia are higher than those which apply to permanent residents or Australian or New Zealand citizens. Interest (or investment earnings) in respect of temporary residents is not paid on amounts paid by the ATO (except in certain limited circumstances). The transfer to the ATO can be required even if you are still employed by your Australian employer. If your benefit is transferred to the ATO in these circumstances and you need help to prove to the ATO that you are entitled to that benefit, please contact the Helpline. In most cases, the trustee is required to provide a member with an exit statement when their benefit has been paid out of the fund. However, the Australian Securities and Investments Commission has provided trustees with relief from this requirement where benefits are paid to the ATO in these circumstances. This relief has been granted because most temporary residents do not advise the trustee of their overseas address details. The trustee intends to rely on this relief. This means that the trustee is not obliged to notify or give an exit statement to a non-resident where a benefit has been transferred to the ATO in these circumstances. Eligible Rollover Fund If we've written to you twice and both times the mail has been returned unclaimed and you are under age 65, or if the balance of your account in the Plan falls below $1,200, then the Trustee may transfer your super benefit to an Eligible Rollover Fund (ERF). When your benefit has been paid to the ERF, you are no longer a member of or have any rights under the Plan. The conditions of the ERF are different from those of the Plan. In particular, ERFs generally offer no insurance cover. The ERF selected for the Plan is: The SuperTrace Eligible Rollover Fund (SuperTrace) Locked Bag 5429 Parramatta NSW 2124 Telephone: Fax: The trustee of SuperTrace is Colonial Mutual Superannuation Pty Ltd (CMS). Set out below is a summary of some of the more significant features of SuperTrace, current as at the date of this Annual Report: All assets of SuperTrace are invested in the Policy issued to CMS by the Colonial Mutual Life Assurance Society Limited (CMLA). The Policy is currently invested solely in the Capital Stable Fund in the CMLA's No. 2L Statutory Fund. The Capital Stable Fund and the CMLA No. 2L Statutory Fund invest in assets that can fluctuate in value. There is no investment choice available to members. The investment objective of the Capital Stable Fund is to provide a reasonably high level of security and consistent returns. The investment strategy for the assets in the Capital Stable Fund is to invest in a broad range of assets with a majority in defensive investments. Investment returns are credited to members' accounts as an annual crediting rate effective 30 June. The crediting rate is derived from the earning rate of the SuperTrace Policy which is net of tax on investment earnings, less any asset charge. The crediting rate is not guaranteed and the rate applied can be negative. The following fees and charges apply in SuperTrace: an asset charge of 1.95% p.a. (actual cost net of tax) is deducted from the earnings of SuperTrace prior to the crediting rate being declared 14

15 SuperTrace is unable to accept contributions from Members or their employers; however rollovers from other superannuation funds are permitted. SuperTrace does not provide insurance cover. Should you wish to know more about SuperTrace, contact a SuperTrace Customer Service Representative on between 8.30am and 6pm Monday to Friday Eastern Standard Time or go to for a copy of their latest Product Disclosure Statement and Incorporation by Reference documents. Further information available As a member of the Plan, you would have received a range of material containing information about your membership on joining. You also receive regular Member Benefit Statements setting out important personal information about your super benefits in the Plan. Other Plan documents available, on request, are the: governing documents; investment policy statement and derivative risk statement; latest audited accounts and auditor's report; inquiries and complaints procedures; privacy policy; and risk management plan. If you'd like a copy of any of these documents, or have a question about your benefits in the Plan, please contact the Plan's Superannuation Helpline on or write to the Plan Administrator (see below). Please note that neither the Trustee, its directors nor the Plan's Superannuation Helpline is able to give any personal advice relating to your own circumstances. Plan Administrator Newcastle Permanent Superannuation Plan GPO Box 4303, Melbourne Vic 3001 Enquiries and Complaints The Trustee has a process in place for dealing with member enquiries or complaints. To make an enquiriy or complaint you can: Call the Plan's Superannuation Helpline on Or Write to the Plan's Enquiries and Complaints Office, Newcastle Permanent Superannuation Plan, c/o Mercer Superannuation (Australia) Limited, GPO Box 4303 Melbourne Vic 3001 The Trustee tries to deal with all matters in a timely manner and generally replies to enquiries within 28 days. However, responses to some complaints may take longer, although the Trustee aims to respond within no more than 90 days. If you have a complaint and you're not satisfied with the response, you can generally request a formal reconsideration by the Trustee. The Trustee always seeks to resolve any complaints to the satisfaction of all concerned and in the best interests of all the members of the Plan. However, if you have made a complaint and are not satisfied with the outcome or after at least 90 days has passed, you may be able to take the matter to the Superannuation Complaints Tribunal. The Tribunal is an external dispute resolution system for most complaints by members of super funds. You must lodge any complaints must be lodged with the Tribunal within certain time limits. For more information about the requirements and time limits, you can call the Tribunal on If the Tribunal decides to proceed with your complaint, it will try and help you and the Trustee reach a mutual agreement through conciliation. If conciliation is unsuccessful, the complaint is referred to the Tribunal panel for a determination. Protecting your privacy The Trustee collects, uses and discloses personal information about you, such as your name, address, date of birth, gender, occupation, tax file number and any information that is required in order to manage your super benefits. This personal information may be disclosed as necessary to the Plan's administrator and professional advisers, insurers, Government bodies, and other parties. The Privacy Policy sets out in more detail how we deal with your personal information and who you can talk to if you wish to access and seek correction of the information we hold about you. It also provides detail about how you may lodge a complaint about the way we have dealt with your information and how that complaint will be handled. You have the right to access any of your personal information held by the Plan, unless one of the exceptions listed in the Act applies. A fee may apply for providing this information. 15