Additional information about your superannuation

Transcription

1 Elphinstone Group Superannuation Fund 19 March 2018 Additional information about your superannuation Contents Important information 1 How super works 2 Benefits of investing with the Elphinstone Group 5 Superannuation Fund Risks of super 8 Fees and other costs 9 How super is taxed 14 Leaving employment 16 How to open an account 18 Issued by Elphinstone Group Superannuation Pty Ltd (ABN ), as Trustee of the Elphinstone Group Superannuation Fund (ABN ). MySuper Authorisation number

2 Important information The information in this document forms part of the Product Disclosure Statement (PDS) for the Fund s Accumulation section, dated 19 March This information should be read in conjunction with the other documents that form part of the Product Disclosure Statement. You should consider this information before making a decision about the relevant product. The information provided is general information only and does not take into account your particular objectives, financial circumstances or needs. It is not personal or tax advice. Any examples included are for illustration only and are not intended to be recommendations or preferred courses of action. You should consider obtaining professional advice about your particular circumstances before making any financial or investment decisions based on the information contained in this document. Neither the Trustee nor Elphinstone Group (Aust) Pty Ltd can provide you with financial advice. The Trustee will only provide factual information. Information on tax and superannuation legislation is current as at 1 July 2017, unless otherwise noted. The Trustee reserves the right to correct any errors or omissions. Information contained in this document that is not materially adverse is subject to change from time to time and may be updated if it changes. Updated information can be found at In addition, we will provide a hardcopy free of charge on request, if you contact the Fund Administrator on For further information: P am to 5.00pm weekdays (AEST) M The Fund Administrator Elphinstone Group Superannuation Fund PO Box 1442 Parramatta NSW 2124 W E egsfsuperadmin@linksuper.com 12

3 How super works Superannuation is an important part of financial planning for your working life and your retirement. Membership of the Fund is a joint commitment to your future, made between you and the Company. This guide provides additional information on how the Elphinstone Group Superannuation Fund and your superannuation work. Contributing to your superannuation Contributions to your superannuation account can come from a number of sources. Company contributions The Company contributes to the Fund on your behalf at a rate equal to the Superannuation Guarantee (SG) minimum. This rate is currently equal to 9.5% of your Ordinary Time Earnings (OTE). All employees will be entitled to receive this as the minimum Company contribution. Member contributions As an employee member, in addition to Company contributions, you can make additional voluntary contributions to your superannuation. You can make contributions from either your before-tax salary via salary sacrifice, (known as concessional contributions ) or after-tax salary (known as non-concessional contributions ). There are different tax implications depending on the type of contributions you make. For example, if you contribute from your before-tax salary, you are effectively reducing your taxable salary, which means you ll pay less income tax. Before-tax contributions are deducted from your gross salary and, along with Company contributions, are treated as concessional contributions for tax purposes, which means contributions tax must be paid. Whether this suits you depends on your personal circumstances. See page 14 for How super is taxed. If you contribute from your after-tax salary, no further tax is deducted from these contributions, as you have already paid income tax on your salary, provided your after-tax contributions are within the non-concessional contributions cap (see pages 14 to 15 for more information on tax). Extra tax applies to contributions above this cap. You may be able to claim a tax deduction for after-tax contributions you make. If you do so, you must give the Trustee a Notice of intent to claim or vary a deduction for personal super contributions form which must reach the Trustee by 30 June in the financial year you intend to claim the deduction. A copy of the form is on the Fund s website. Your before-tax contributions, together with Company contributions and any contributions for which you claim a tax deduction, are subject to the concessional contributions cap. Extra tax applies to contributions above this cap. If you are considering making before-tax or deductible contributions, you may wish to check with your Payroll Office to ensure that your intended contributions are below the cap. As everyone s situation is different, you should also consider seeking financial advice. You should note that once contributions are made to the Fund they generally cannot be returned to you until retirement or until you satisfy another special condition, see page 3. You can change your contribution choice at any time by completing the Application & Change form which is available from the website at or the Fund Administrator.? Concessional contributions include those made to your superannuation by the Company and any personal salary sacrifice contributions. Non-concessional contributions include after-tax contributions and certain contributions from non-salary sources, such as certain overseas transfers, contributions made for you by your spouse and excess concessional contributions not withdrawn from the superannuation system

4 Government co-contribution In 2017/18, if you make superannuation contributions from your after-tax salary and earn less than $51,813 a year, the Government will pay an extra contribution called a co-contribution of up to $0.50 to your superannuation fund for every $1 that you contribute. The maximum co-contribution payment is $500 for members earning less than $36,813 per year who make contributions of $1,000 or more. The maximum co-contribution payment of $500 reduces by 3.33 cents for every dollar of a member s income above $36,813 and phases out completely for those with an annual income of $51,813 or more. You cannot receive the co-contribution for contributions for which you claim a tax deduction. Other eligibility conditions also apply. The Australian Taxation Office (ATO) automatically determines your eligibility for the co-contribution after the end of each financial year once you have lodged your personal income tax return. If you are eligible, the ATO makes the relevant co-contribution payment to the Fund on your behalf. Comparing contributions Before-tax After-tax Income tax paid on your contributions 15% contributions tax Benefits tax applies if your benefit is paid before age 60 Government co-contribution may be available Rollovers You can transfer any other superannuation benefits you may have from another superannuation fund into the Elphinstone Group Superannuation Fund. This is called a rollover. Any amount you transfer is paid into your account in the Fund and will be invested in the same way as your Company and member contributions. Your rollovers, along with investment earnings, will be paid in addition to your main benefits when you leave the Fund. The Fund doesn t charge you to roll over money from other funds. You should, however, check if the other funds charge an exit fee, or if you will lose any important benefits such as insurance should you roll over your money out of that fund. If you want to make a rollover, please complete the Rollover form at the back of this guide. If you would like additional copies of the form, you can download a copy from or call the Fund Administrator on Preservation rules Your superannuation must be preserved in the superannuation system until you retire (or satisfy other special conditions). In other words, you can t take your superannuation money out to spend or invest in a non-superannuation plan. Generally, you can only take your benefit in cash when: You have reached age 65. You have reached age 60 and either ceased gainful employment after reaching that age or the Trustee is satisfied that you intend never again to be gainfully employed for more than 10 hours per week. You have retired from the workforce and reached your preservation age and the Trustee is satisfied that you intend never again to be gainfully employed for more than 10 hours per week. You satisfy special conditions and are allowed to have your preserved benefits released earlier, for example, in the event of total and permanent disability, a terminal medical condition, severe financial hardship or on compassionate grounds. You leave Australia permanently if you are a temporary resident (excluding a New Zealand citizen) and satisfy certain conditions. Your benefit may include an unrestricted non-preserved amount, a restricted preserved amount and a preserved amount. Any unrestricted non-preserved amount can be paid to you in cash at any time. It usually comprises the non-preserved portion of certain rollovers from other superannuation funds. Any restricted non-preserved amounts can be paid to you in cash when you stop working with your current employer. Your preservation age depends on when you were born, as shown in the table on the next page. 3

5 Preservation age Date of birth Preservation age Before 1 July Between 1 July 1960 and 30 June Between 1 July 1961 and 30 June Between 1 July 1962 and 30 June Between 1 July 1963 and 30 June After 30 June If you don't keep your superannuation in the Retained Benefits Division, any benefits that have to be preserved must be rolled over to a complying fund if you leave (see page 17 for more information). Your annual Personal Statement of Benefits will tell you how much (if any) of your superannuation is preserved. Choice of Fund and Portability Temporary residents If you are not an Australian or New Zealand citizen or resident and you accrued superannuation while in Australia on a temporary resident visa, you may be able to claim your superannuation when you return home. Applicable taxes will be deducted (these may be different to the taxes paid by other Fund members on their superannuation). If you do not claim your superannuation within six months of permanently departing Australia, the Trustee may be required to pay your superannuation to the ATO without your consent. You may then claim your superannuation from the ATO, but it may not earn any interest while with the ATO. Choice of Fund legislation allows most working Australians to choose which superannuation fund they want to belong to. As an employee of Elphinstone Group (Aust) Pty Ltd or an approved participating employer of the Elphinstone Group Superannuation Fund, you can participate in Choice of Fund and choose a complying fund other than this Fund for the superannuation contributions the Company makes on your behalf. It s important to keep in mind that Choice of Fund is optional. If you do not make a choice, Elphinstone Group (Aust) Pty Ltd will pay Company contributions to its default MySuper fund, which is this Fund. If you are considering choosing another superannuation fund, it s important that you first consider the possible implications of doing so on your superannuation, particularly your insurance cover which is an important part of your membership of this Fund. Your existing balance: If you want to choose another fund, your account will be automatically transferred to the Fund s Retained Benefits Division if it is more than $5,000 or to an Eligible Rollover Fund if it is less. (See pages 16 and 17 for more information.) Insurance: Your disablement insurance cover will cease immediately, and you will need to make your own arrangements, at your own cost, for disability cover, but your death and terminal illness insurance cover may continue in the Retained Benefits Division. However, if you choose another fund when you first commence employment, you will not be entitled to any automatic insurance cover in this Fund. See page 17 for more information on your insurance cover in the Retained Benefits Division. Fees: You should check the fees of any fund you are considering. Transfers out of the Fund: If you wish to make a partial benefit transfer to another fund, you must retain a minimum balance of $5,000 in this Fund. To transfer your existing balance you will need to complete a Transfer Request Form, which is available from the Fund Administrator. Transferring part of your account balance to another superannuation fund, (as opposed to redirecting your full account balance to another fund) does not affect your membership or insurance entitlements in the Fund provided there is enough money in your account to pay the insurance fees. Returning to the Fund: Once you have transferred your full benefit from the Fund, or if you chose another fund when you first commenced employment, you can rejoin the Fund at any time. However, you should keep in mind that you will not automatically be provided with insurance cover and will have to provide evidence of good health and be assessed and accepted by the insurer before any cover commences. For more information about Choice of Fund and portability, call the Fund Administrator on

6 Benefits of investing with the Elphinstone Group Superannuation Fund How your account works General reserve The Fund provides accumulation-style benefits. This means that your benefits in the Fund accumulate over time with Company contributions and any member contributions that you make to your superannuation. Investment earnings (which can be positive or negative) are also applied to your superannuation account, while taxes, fees and fees for insurance cover are deducted from it to give you a closing balance. Investment earnings (net of investment fees, tax and percentage-based administration fees) are applied to your benefits once a year at the final rate of your chosen investment option(s). The Fund s investment returns may also be reduced for an allowance to maintain the Fund s Operational Risk Financial Requirement reserve if required. Remember that the investment earnings on your superannuation can be positive, increasing the value of your superannuation, or negative, decreasing the value of your superannuation. Your superannuation account in the Fund will look like this: Tax Administration fees Insurance fees Other fees Opening balance + Company contributions Member contributions Rollovers +/ The Trustee maintains a general reserve, which is used over time to finance certain expenses. The general reserve is invested in the Balanced (MySuper) option. The level of reserve for the last three years is included in the Fund s Annual Report. Deferred tax assets Superannuation funds normally pay tax on capital gains. If the Fund experiences capital losses (which can arise, for example, due to falls on share markets), superannuation funds are allowed to accumulate the tax benefits associated with those losses and use them to offset the tax on future capital gains. The Fund may hold some capital losses from time to time. Australian Accounting Standards require that future tax benefits are recognised only to the extent that it is likely that future taxable gains will be available to utilise the capital losses. In order to prudently manage the Fund s tax position, the Trustee has imposed a limit on the level of taxation benefits arising from such capital losses. Where capital losses are below this limit, the calculation of investment earnings may be adjusted. Investment earnings = Closing balance The Fund has four different investment options for you to choose how your superannuation is invested. If you don t choose an option, your superannuation is invested in the Balanced option. This is the option for MySuper members. You can split your superannuation balance across the four different investment options. The Investment Guide at has more information. Each year, details of the investment earnings applied to your superannuation account, as well as details of any deductions from your account, are shown on your Personal Statement of Benefits. 5

7 Your superannuation benefits You are entitled to a benefit when you: Retire; Leave the Company; Become totally and permanently disabled; or Die (paid to your dependants and/or estate). In certain circumstances a benefit may also be payable if you leave the Fund as a result of a terminal illness. What is my leaving service benefit? If you retire or leave the Company for any reason (other than death or disablement) you will be entitled to receive a leaving service benefit. This benefit is equal to your Total Account Balance. However, all or part of your benefit may need to be preserved in accordance with superannuation legislation (see pages 3 to 4 for details). What additional benefits are paid if I die or become totally and permanently disabled? If you die while you are a member of the Fund, a lump sum is payable to your dependants or your estate. This benefit is equal to the sum of your Total Account Balance and your insured benefit (if any). If you become totally and permanently disabled, a lump sum is also payable, if you are eligible. For details of your insurance refer to the Insurance Guide available from the website at com.au. Payment of your death benefit On joining the Fund you complete an Application & Change form, advising the Trustee to whom, and in what proportion, you would like your death benefit to be paid. If you prefer, or if you have no dependants, you may nominate your estate. In that case, the benefit will be distributed according to your Will, so it is important that you keep your Will up-to- date, especially if your circumstances change, such as a divorce, a new child or a marriage. Your nomination can be changed at any time by completing an Application & Change form available from the website at com.au. You can choose to make your nomination binding on the Trustee, or you can make a non-binding nomination. A binding nomination obliges the Trustee to pay your death benefit according to your stated wishes (provided the nomination is valid at the time of your death). Binding nominations have a fixed term of three years and can provide you with greater certainty about the payment of your benefit. However, it is your responsibility to update your binding nomination if your personal circumstances change (e.g. if you marry or have a child) or when your nomination expires. A non-binding nomination is not legally binding and has no fixed term but will act as a guide for the Trustee, who will investigate your circumstances at the time of your death and take your wishes into account when making its decision. When deciding who should receive your death benefit, remember that current Superannuation Law and the Fund s Trust Deed generally allow it to be paid to: Your personal legal representative (your estate); Your current spouse (including a de facto partner of either sex with whom you live on a genuine domestic basis); Your children (including step children, adopted children, your spouse s children and unborn children); Any person who is financially dependent on you; or Any person with whom you have an interdependency relationship. An interdependency relationship is where: 1. Two people have a close personal relationship; 2. They live together; 3. One or each of them provides the other with financial support; and 4. One or each of them provides the other with domestic support and personal care. However, if two people have a close personal relationship and either one, or both, suffers from a physical, intellectual or psychiatric disability, then they are still considered to have an interdependency relationship for the purposes of the Law and are not required to fulfil the other three criteria. The Law includes details of various matters that the Trustee must consider in deciding whether two people have an interdependency relationship. Your parents, brothers or sisters are unlikely to be dependants under the Law. To be dependants, they would have to rely on you for financial support or be in an interdependency relationship with you. If you don t have any dependants, you should nominate your estate. Whatever type of nomination you choose, it is important that you keep your nominated beneficiaries up-to-date, especially if your circumstances change. If you would like to make a nomination or change your current nomination, you will need to complete the Application & Change form available on the Fund s website at elphinstonegroupsuperfund.com.au.? About binding nominations Valid for three years, they must then be renewed. Generally only valid if you nominate a dependant (as outlined) or your legal personal representative. It is your responsibility to ensure your nomination is up-to-date. The Fund will advise you when your nomination is due to expire

8 Family Law and your superannuation Your superannuation can generally be split as part of a property settlement in the event of your divorce or separation. The Trustee will be required to split your benefit if it receives a Court Order or an agreement between you and your former spouse. If your superannuation is split, your account will be reduced. If this affects you, you will be advised of how your benefit will be reduced. Any current applicable activity fees are shown in Fees and other costs (see pages 9 to 13). For more information about the Family Law legislation and how it may affect your superannuation, contact the Fund Administrator on Bankruptcy and your superannuation Any personal contributions to superannuation made on or after 27 July 2006 (excluding the Company s SG contributions) may be recoverable by creditors in the event of your bankruptcy if these contributions are demonstrated to have been made with the specific intention of defeating creditors. You will be advised if this affects you. 7

9 Risks of super There are certain risks associated with membership of the Fund. Some of the risks are common to all superannuation funds. For example, there is the risk that the Fund will close or wind up. If that were to happen, the Trust Deed determines how the Trustee must react. Changes are frequently made to Superannuation Law, which may affect a member s ability to access their superannuation benefits. You will be advised of any changes that may affect your benefits in the Fund. Changes can also occur to the taxation of superannuation or income, which may affect the value of your superannuation benefits or the net benefit paid. Another risk is that the Fund may lose its compliance status and therefore lose its tax concessions. The Trustee manages this risk by ensuring that the Fund is administered professionally, that it operates in accordance with the requirements of the Trust Deed and Law, and the Trustee uses the services of a professional consulting firm to keep up-to-date. For more information on investment risks, please see the Investment Guide. For more information on insurance risks, see the Insurance Guide. Both documents are available from the website at elphinstonegroupsuperfund.com.au

10 Fees and other costs DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30-year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You or your employer, as applicable, may be able to negotiate to pay lower fees. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( has a superannuation calculator to help you check out different fee options. This section shows fees and other costs that you may be charged. These fees and other costs may be deducted from your money, from the returns on your investment or from the assets of the superannuation fund as a whole. Other fees, such as activity fees and insurance fees may also be charged, but these will depend on the nature of the activity or insurance chosen by you. Taxes, insurance fees and other costs relating to insurance are set out in another part of this document. Please note that the Trustee has already negotiated (and will continue to monitor) the fees and management costs of the Fund on your behalf. There is no scope to negotiate lower fees and management costs on an individual basis. You should read all the information about fees and other costs because it is important to understand their impact on your investment. 9

11 The fees and costs for the MySuper option and each investment option offered by the Fund are set out below. Elphinstone Group Superannuation Fund Type of fee Amount How and when paid Investment fee 1 Growth option 0.20% p.a. to 0.30% p.a. ($2.00 to $3.00 per $1,000) Balanced (MySuper) option 0.20% p.a. to 0.30% p.a. ($2.00 to $3.00 per $1,000) Deducted from monthly returns prior to the returns being credited to your account. Administration fee Conservative option 0.20% p.a. to 0.30% p.a. ($2.00 to $3.00 per $1,000) Cash option 0.10% p.a. to 0.15% p.a. ($1.00 to $1.50 per $1,000) $410 $460 p.a. plus 0.30% p.a. ($3.00 per $1,000) The dollar fee is deducted from your account at the end of each month and on leaving the Fund. The percentage-based fee is deducted from monthly returns prior to the returns being credited to your account. The amounts shown are estimates. Buy-sell spread Nil for amounts switched less than $250,000 Growth option 0.24% of the amount switched ($2.40 per $1,000) Balanced (MySuper) option 0.17% of the amount switched ($1.70 per $1,000) Deducted from your account when you change your investment option(s), if applicable (based on the option you switch into). Conservative option 0.19% of the amount switched ($1.90 per $1,000) Cash option Nil Switching fee $50 Deducted from your account each time you change investment options. Exit fee Advice fees relating to all members investing in a particular MySuper product or investment option Other fees and costs 2 $772 members whose Fund benefits are transferred to the new superannuation provider at the transfer date* $ members who withdraw or transfer their entire account balance to another superannuation fund before the transfer date* $ members who make a partial withdrawal or partial transfer to another superannuation fund from their account balance before the transfer date* Nil Other fees may also apply Deducted from your account when you leave or are transferred from the Fund or when you withdraw money from the Fund. If you have been in the Fund for two years or less as at the transfer date* and your Fund benefits are transferred to the new superannuation provider at the transfer date, the Company will make an additional contribution of $772 to cover your exit fee. Not applicable. Indirect cost ratio Nil Not applicable. 1 Includes transactional and operational costs. 2 Insurance fees and fees for certain activities you request may apply (see pages 11 to 13). * This is the date that the Fund will be closed and members will be transferred to another superannuation provider see Fund closure announcement and Q&As at for more information

12 Example of annual fees and costs for the Balanced (MySuper) option This table gives an example of how the fees and costs in the Balanced (MySuper) option for this superannuation product can affect your superannuation investment over a one year period. You should use this table to compare this superannuation product with other superannuation products. EXAMPLE Balanced (MySuper) option BALANCE OF $50,000 Investment fees 0.30% p.a. ($3.00 per $1,000) For every $50,000 you have in the superannuation product you will be charged $150 each year* PLUS Administration fees PLUS Indirect costs for the Balanced (MySuper) option EQUALS Cost of product $460 p.a. plus 0.30% p.a. ($3.00 per $1,000) Nil And, for every $50,000 you have in the superannuation product you will be charged $150 each year* in administration fees plus $460 per year regardless of your account balance And, indirect costs of nil each year will be deducted from your investment If your balance was $50,000, then for that year you will be charged fees of $760 for the superannuation product * The top of the fee range is quoted on a gross of tax basis. The dollar fee shown would apply only if the maximum estimated fee applies. The percentage-based fee is an estimate only. Where the Trustee claims a tax deduction for fees, the full benefit will be passed to members via a positive adjustment to investment earnings. Note: Additional fees may apply. And if you leave the superannuation fund, you may also be charged an exit fee (see page 10 for the amount) and a buy-sell spread which also applies whenever you make an investment switch of $250,000 or more. The buy-sell spread for exiting is nil. Additional explanation of fees and costs 1. Buy-sell spread A buy-sell spread may be charged by a fund to reflect costs incurred by the fund or charged by the Investment Managers when you change investment options. The buy-sell spreads shown in the table on page 10 are charged to recover costs incurred by the Fund s Investment Managers when you change investment options, including the difference between the acquisition and disposal prices paid by the Managers for the Fund s investments. Buy-sell spreads are only charged for changing investment options where the amount switched is $250,000 or more and are based on the option you transfer into. Any buy-sell spread is in addition to the switching fee which also applies when you change investment options. 2. Administration fees These fees include administration, consulting, audit, legal and other fees incurred by the Fund. The dollar fee is deducted from your account at the end of each month and when leaving the Fund. The percentage-based fee is deducted from monthly investment returns earned by your chosen option(s) before the returns are applied to your accounts and is an estimate only. 3. Investment fees The investment fee ranges that apply to the Fund s investment options are shown in the table on page 10. Where the Trustee claims a tax deduction for investment fees and indirect costs, the full benefit of this deduction is passed to members. 4. Taxes and insurance fees The following taxes and insurance fees are deducted from your accounts in the Fund: The fee for your insurance cover, generally based on an age-based scale and the level of cover you have chosen. For details, refer to the Insurance Guide. Contributions tax generally at the rate of 15% from Company contributions and any salary sacrifice contributions to your accounts. Excess contributions tax in certain circumstances if your contributions exceed caps set by the Government (see page 14). No-TFN tax on your concessional (employer and before-tax) contributions if you have not provided the Fund with your TFN. Any surcharge tax assessed by the ATO as being applicable to you. The tax is deducted from your accounts when the assessment is received by the Fund. The surcharge was abolished with effect from 1 July 2005, but the Fund may still receive assessments for you in respect of earlier years. Any Division 293 tax in certain circumstances. More information on tax can be found on page

13 5. Transactional and operational costs These costs are incurred by the Fund and its Investment Managers, and may include brokerage, settlement and custody costs, the difference between the acquisition and disposal prices paid by the Managers for the Fund s investments, clearing costs, costs associated with currency hedging and stamp duty on investment transactions. Part of these costs is recovered by the buy-sell spread charged when you switch $250,000 or more between investment options. The remaining transactional and operational costs are included in the investment fee based on the amount of these costs incurred by the Fund or its Investment Managers during the financial year to 30 June They therefore represent a cost to you. The percentage included in the investment fee in the table on page 10 in respect of transactional and operational costs is: Growth option 0.03% p.a. Balanced (MySuper) option 0.06% p.a. Conservative option 0.10% p.a. Cash option Nil These amounts are estimates. To the extent they are part of the investment fee, these costs are deducted from the investment earnings of each investment option before those earnings are applied to your accounts. 6. Reserves Superannuation funds are required to set aside financial resources to address their operational risks. The Trustee has built up an operational risk financial requirement reserve (ORFR reserve) in the Fund equal to 0.25% of net assets funded by setting aside a small portion of the Fund s investment earnings. The reserve is invested in the Balanced (MySuper) option. The Trustee periodically monitors the reserve to ensure that it remains close to its target level. Should the reserve fall below a predetermined shortfall limit, the Trustee will enact a plan for its replenishment. This may include deducting further amounts from investment earnings. Any such deductions will be included in the investment fee of each investment option. Members will be advised if such deductions are required. The Trustee also maintains a general reserve, which is used over time to finance certain Fund expenses. The general reserve is also invested in the Balanced (MySuper) option. The level of reserves for the last three years is included in the Fund s Annual Report. 7. Activity fees If you or your spouse require information on your benefit in relation to a Family Law matter, a fee of $220 will be charged for each date at which information is required. You, or your spouse, are required to pay this fee at the time of any request for information it is not deducted from your accounts. In addition, if your superannuation is split under a Family Law agreement or court order, fees will apply for the splitting of your superannuation and the payment of an amount to your former spouse. These fees are normally shared evenly between you and your former spouse, unless your agreement or court order provides otherwise. The fees may be paid by you and/ or your spouse by cheque, or otherwise will be deducted from the applicable benefit. The fee for establishing an entitlement to your spouse is $165. All fees include GST where applicable. 8. Fee changes Some of the fees are dependent on the fees charged by the Fund s service providers. Some of these fees may be indexed annually (e.g. in line with increases in Average Weekly Ordinary Time Earnings); others depend on the services provided to the Fund each year. The Trustee reserves the right to increase the fees without your consent if necessary in order to manage the Fund. We may also introduce new fees. You will generally be given at least 30 days notice of any fee increases. The fees shown are current at the date of this PDS, unless otherwise stated. Further details of the fees, costs and taxes paid by the Fund can be found in the Fund s Financial Statements. A summary is included in the Fund s Annual Report which is issued after 30 June each year

14 Fee definitions Activity fees A fee is an activity fee if: (a) the fee relates to costs incurred by the trustee of a superannuation fund that are directly related to an activity of the trustee: (i) that is engaged in at the request, or with the consent, of a member; or (ii) that relates to a member and is required by law; and (b) those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee. Administration fees An administration fee is a fee that relates to the administration or operation of the superannuation fund and includes costs that relate to that administration or operation, other than: (a) borrowing costs; and (b) indirect costs that are not paid out of the superannuation fund that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the fund or in an interposed vehicle or derivative financial product; and (c) costs that are otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee. Advice fees A fee is an advice fee if: (a) the fee relates directly to costs incurred by the trustee of a superannuation fund because of the provision of financial product advice to a member by: (i) a trustee of the fund; or (ii) another person acting as an employee of, or under an arrangement with, a trustee of the fund; and (b) those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee. Buy-sell spreads A buy-sell spread is a fee to recover transaction costs incurred by the trustee of a superannuation fund in relation to the sale and purchase of assets of the fund. Exit fees An exit fee is a fee to recover the costs of disposing of all or part of members interests in the superannuation fund. Insurance fees A fee is an insurance fee if: (a) the fee relates directly to either or both of the following: (i) insurance premiums paid by the trustee of a superannuation fund in relation to a member or members of the fund; (ii) costs incurred by the trustee of a superannuation fund in relation to the provision of insurance for a member or members of the fund; and (b) the fee does not relate to any part of a premium paid or cost incurred in relation to a life policy or a contract of insurance that relates to a benefit to the member that is based on the performance of an investment rather than the realisation of a risk; and (c) the premiums and costs to which the fee relates are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an advice fee. Investment fees An investment fee is a fee that relates to the investment of the assets of a superannuation fund and includes: (a) fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and (b) costs that relate to the investment of assets of the fund, other than: (i) borrowing costs; and (ii) indirect costs that are not paid out of the superannuation fund that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the fund or in an interposed vehicle or derivative financial product; and (iii) costs that are otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee. Switching fees A switching fee for a MySuper product is a fee to recover the costs of switching all or part of a member s interest in a superannuation fund from one class of beneficial interest in the fund to another. A switching fee for superannuation products other than a MySuper product, is a fee to recover the costs of switching all or part of a member s interest in the superannuation fund from one investment option or product in the fund to another. Indirect cost ratio The indirect cost ratio (ICR), for a MySuper product or an investment option offered by a superannuation fund, is the ratio of the total of the indirect costs for the MySuper product or investment option, to the total average net assets of the superannuation fund attributed to the MySuper product or investment option. 13

15 How super is taxed The information that follows is current at the date of publication of this document, unless otherwise noted. A number of taxes may apply to your superannuation. These include: Contributions tax generally at the rate of 15%, which is deducted from all concessional contributions. If you have not provided your Tax File Number to the Fund, the rate of tax that applies to concessional contributions increases substantially to 47%. If your relevant income is over $250,000 you may receive an additional tax assessment from the Australian Taxation Office (ATO), for a further 15% tax on your concessional contributions. Tax on investment earnings at up to 15% less any applicable deductions that may be available to the Investment Managers or the Fund. This tax is deducted from the Fund s investment earnings before they are applied to your account. Excess contributions tax may apply if your contributions exceed certain caps set by the Government (see to the right for more information). Tax on benefits that are paid in cash. The amount of tax payable depends on a number of factors including: What type of benefit is paid (retirement, disability or death); Who receives the benefit; Whether you were an Australian citizen or permanent resident when the benefit is paid. Former holders of certain temporary resident visas may pay more tax on their benefits; How you receive the benefit (e.g. lump sum amount or pension); and Your age when you receive the benefit. For example, if you are aged 60 or over, all lump sum payments and pensions paid to you from a taxed superannuation fund (such as the Elphinstone Group Superannuation Fund) will be tax-free. If you are less than age 60, any lump sum amounts paid to you will consist of two tax components a tax-free component and a taxable component. All taxes deducted are paid to the ATO when required. Tax limits The Government sets limits or caps that affect how superannuation contributions and benefits are taxed. What are the caps on contributions? These are the Government s limits or caps on how much can be contributed to superannuation each year before extra tax applies. What is the annual limit? What tax applies if my contributions are within the cap? Concessional contributions $25,000 regardless of your age. Generally 15% contributions tax.*^ Non-concessional contributions # $100,000, however, if your total superannuation balance on 30 June 2017 was more than $1.6 million any non-concessional contributions you make in the 2017/18 year will be excessive. Nil. # If you are under age 65 and you want to make larger non-concessional contributions to your superannuation fund, you may be able to bring forward up to two years of caps, to make total contributions of up to $300,000 over three years. The maximum you can contribute over three years is $300,000 and further restrictions may apply if your total superannuation balance on 30 June 2017 was greater than $1.4 million. Transitional rules apply if you brought forward contributions in the 2015/16 or 2016/17 years. * If your relevant income is over $250,000 per year, you may receive an additional tax assessment from the ATO. ^ If you earn less than $37,000 per year you may receive a refund of the 15% contributions tax deducted from your compulsory Company contributions through the low income superannuation tax offset. The refund ranges from $10 to $500 a year. Each year the ATO will determine whether you are eligible, and if so, will pay the refund to your superannuation fund

16 What are concessional contributions? Concessional contributions include Company contributions and any contributions you make to superannuation from your before-tax salary (i.e. by salary sacrifice), or a personal contribution for which you claim a tax deduction. What are non-concessional contributions? Non-concessional contributions include: After-tax contributions for which you have not claimed a tax deduction; Excess concessional contributions not withdrawn from superannuation; and Certain other contributions from non-salary sources (e.g. contributions made for you by your spouse and certain overseas transfers). They do not include rollovers or co-contributions. What happens if I exceed the caps? This table shows the extra tax applicable if you exceed the caps: Providing your Tax File Number Providing your Tax File Number (TFN) to your superannuation fund is not compulsory; however, doing so ensures that you don t pay any more tax on your contributions than you need to. Significant consequences apply to members of superannuation funds who have not advised their superannuation fund of their TFN. These include: Taxing their concessional (employer, deductible and before-tax) contributions at up to 47% (including Medicare levy); and Prohibiting superannuation funds from accepting any non-concessional contributions from these members. If you have not previously provided your TFN to your employer and you wish to do so, contact your Payroll Office to obtain the appropriate form. On receipt of your completed form, your employer will then pass this information onto the Fund within 14 days. How much tax applies to the excess if I exceed the limit? Concessional contributions Your marginal tax rate less 15% (reflecting tax already paid by the Fund), plus an interest charge. Non-concessional contributions If you withdraw the excess from superannuation: Nil tax on contributions. Associated earnings taxed at your marginal tax rate. If you leave the excess in superannuation: 47% (including Medicare levy). If you exceed the concessional contributions cap, you can elect to release up to 85% of the excess contributions from the superannuation system. The amount will be paid by your superannuation fund to the ATO and used to meet any of your outstanding tax liabilities (including the tax on the excess contributions) with the remainder then paid back to you. Amounts that you withdraw will not count towards your non-concessional contributions cap. If you exceed the non-concessional contributions cap, you can elect to release the excess contributions from superannuation, together with an amount of associated earnings. The amount of associated earnings is determined by the ATO and may not reflect what your superannuation contributions actually earnt. The ATO will send you a form to enable you to make your elections. 15

17 Leaving employment Your options when you leave the Company When you leave the Company, you will receive a statement showing the balance in your superannuation account and the options you have for your superannuation here is a summary: Retain your benefits in the Fund If you leave the Company and have more than $5,000 in the Fund, your superannuation will be transferred automatically into an account in your name in the Fund s Retained Benefits Division (see page 17) until you instruct the Fund Administrator otherwise. When you leave the Company, if your superannuation balance is less than $5,000, you will have 90 days in which to instruct the Fund Administrator how you would like your benefit to be paid. Your superannuation will remain fully invested in your chosen investment option(s) (or the Balanced option, which is the option for MySuper members, if you have never made an investment choice) for the 90 day period or until you notify the Fund. The Trustee may roll your benefit over to an Eligible Rollover Fund (ERF) if: You fail to give the Fund Administrator instructions within 90 days of receiving details of your benefit; or The superannuation fund you nominate won t accept your benefit. The ERF is: AMP Eligible Rollover Fund PO Box 300 Parramatta NSW 2124 Phone: Contact: The Administrator Once your benefit is transferred to the ERF, you stop being a member of the Elphinstone Group Superannuation Fund and no longer have any rights under the Fund. You will then need to contact the ERF directly about your benefit. You can also obtain the ERF s Product Disclosure Statement using the contact details above. The investment and crediting rate policy of the ERF may be different to those that applied in the Fund. Also, the ERF may not offer any insurance cover. You should seek advice from a licensed Financial Adviser about whether the ERF is a suitable investment for you. Roll over to another superannuation fund You can roll your superannuation into another fund of your choice, providing it is a complying superannuation fund under Law. Take a cash payment You can take any unrestricted non-preserved amount (refer to your Personal Statement of Benefits) in cash, net of tax. If you are under age 60, tax may apply to the taxable component of this amount (if any). For partial payments, the tax components of the payment will be in proportion to your total benefit. You cannot choose, for example, to withdraw only your tax-free component. Amounts paid by the Fund to members aged 60 or over are tax free. Apply for an Account-Based Pension The Fund offers a retirement Account-Based Pension and a Transition to Retirement Pension which provide members with regular pension payments at or near retirement. Your superannuation is invested in an account which receives investment returns based on your chosen investment option(s). Regular pension payments are made within limits set by the Government. Payments continue until the balance in your account runs out. If you are retired or over age 65 you are also able to make lump sum withdrawals. If you apply for a Transition to Retirement Pension, you are able to continue working and receive a regular income from your superannuation. To be eligible for either Pension you need to be over your preservation age and have at least $15,000 in superannuation to invest. For more details on either Pension, refer to A Guide to your Account-Based Pension, which is available from the Fund s website at com.au