Fidelity KiwiSaver Scheme. Investment Statement and application form prepared as at 23 August 2013

Transcription

1 Fidelity KiwiSaver Scheme Investment Statement and application form prepared as at 23 August 2013

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3 Important information (The information in this section is required under the Securities Act 1978) 1 Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. Choosing an investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: Page 1. What sort of investment is this? 7 2. Who is involved in providing it for me? 9 3. How much do I pay? What are the charges? What returns will I get? What are my risks? Can the investment be altered? How do I cash in my investment? Who do I contact with inquiries about my investment? Is there anyone to whom I can complain if I have problems with the investment? What other information can I obtain about this investment? 30 In addition to the information in this document, important information can be found in the current registered prospectus for the investment. You are entitled to a copy of that prospectus on request. The Financial Markets Authority regulates conduct in financial markets The Financial Markets Authority regulates conduct in New Zealand s financial markets. The Financial Markets Authority s main objective is to promote and facilitate the development of fair, efficient, and transparent financial markets. Financial advisers can help you make investment decisions Using a financial adviser cannot prevent you from losing money, but it should be able to help you make better investment decisions. Financial advisers are regulated by the Financial Markets Authority to varying levels, depending on the type of adviser and the nature of the services they provide. Some financial advisers are only allowed to provide advice on a limited range of products. When seeking or receiving financial advice, you should check the type of adviser you are dealing with: the services the adviser can provide you with: the products the adviser can advise you on. A financial adviser who provides you with personalised financial adviser services may be required to give you a disclosure statement covering these and other matters. You should ask your adviser about how he or she is paid and any conflicts of interest he or she may have. Financial advisers must have a complaints process in place and they, or the financial services provider they work for, must belong to a dispute resolution scheme if they provide services to retail clients. So if there is a dispute over an investment, you can ask someone independent to resolve it. Most financial advisers, or the financial services provider they work for, must also be registered on the financial service providers register. You can search for information about registered financial service providers at You can also complain to the Financial Markets Authority if you have concerns about the behaviour of a financial adviser. This is an Investment Statement for the purposes of the Securities Act For more information about investing, go to

4 2 The Fidelity KiwiSaver Scheme at a glance The Fidelity KiwiSaver Scheme at a glance The Fidelity KiwiSaver Scheme is a KiwiSaver retirement savings scheme offered by Grosvenor Investment Management Limited (the Manager or Grosvenor). By saving in the Fidelity KiwiSaver Scheme you are taking steps to saving towards financial independence and potentially improving your quality of life in retirement. The Fidelity KiwiSaver Scheme will enable you to access a range of incentives from the Government and from your employer. You can join the Fidelity KiwiSaver Scheme by completing the application form attached to this Investment Statement. You can access a range of Funds, including the Capital Guaranteed Kiwi Fund 1 and the Ethical Kiwi Fund. You can contact your financial adviser or Grosvenor if you need more information or for help in relation to the Fidelity KiwiSaver Scheme. Possible merger with the Grosvenor KiwiSaver Scheme Grosvenor is also the manager of the Grosvenor KiwiSaver Scheme. Grosvenor intends to explore the possibility of merging the Grosvenor KiwiSaver Scheme and the Fidelity KiwiSaver Scheme by the transfer of members from one of those schemes to the other, subject to appropriate regulatory approvals and other necessary steps to achieve this. No time frame has been set for undertaking such a merger. 1 For details of the guarantee provided by Fidelity Life to the Trustee in respect of the Unit Price of Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 (and the Manager s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages

5 Investment options 3 What Investment options are available? The Fidelity KiwiSaver Scheme has nine Investment Funds, each with a different risk profile Capital Guaranteed Kiwi Fund Conservative Kiwi Fund Asset Class Conservative Kiwi Fund Balanced Kiwi Fund Ethical Kiwi Fund Growth Kiwi Fund Asset Class Growth Kiwi Fund Aggressive Kiwi Fund Options Kiwi Fund You may also choose the Life Phases investment option (Life Phases) which automatically allocates your contributions and accumulated balances to Investment Funds based on your age. Please refer to pages 7-8 for further details. Capital Guaranteed Kiwi Fund 1 For investors who are seeking some degree of stability in the value of their investment, the Capital Guaranteed Kiwi Fund has the benefit of a guarantee from Fidelity Life Assurance Company Limited (Fidelity Life) that the Unit Price calculated as of 31 March 2014 will not be lower than the Unit Price calculated as of 31 March Investors may suffer a loss of capital if they withdraw from the Capital Guaranteed Kiwi Fund or switch to another Investment Fund or transfer to another KiwiSaver Scheme before 31 March 2014 and therefore before Fidelity Life transfers assets into the Scheme as required by the guarantee. Investors may suffer a loss of capital if they withdraw from the Capital Guaranteed Kiwi Fund or switch to another Investment Fund or transfer to another KiwiSaver Scheme after 31 March 2014 notwithstanding that Fidelity Life has transferred assets into the Scheme as required by the guarantee. This could be caused by a further deterioration in the value of the assets of the Capital Guaranteed Kiwi Fund following 31 March Ethical Kiwi Fund The Ethical Kiwi Fund aims to provide investors with the opportunity to avoid certain types of companies and investments. It thus supports investments that embrace the principles of ethical business practice. Currently, the Ethical Kiwi Fund uses its best endeavours to avoid securities issued by organisations earning a substantial share of their earnings from the following industries: tobacco alcohol gambling armament production The Ethical Kiwi Fund is a diversified fund, with investments in fixed interest and New Zealand, Australian and overseas shares. It is managed for the Fidelity KiwiSaver Scheme by Tyndall Investment Management New Zealand Limited (Tyndall). Options Kiwi Fund The Options Kiwi Fund is an alternative investment that invests in funds that invest in cash deposits, bills and other short-term financial instruments. It is managed for the Fidelity KiwiSaver Scheme by Tyndall. Much like a property investor can use their own house as security to buy more houses, the cash invested in the funds is used as security by Tyndall to sell option contracts to various major banks. Tyndall earns a premium for selling these options contracts. These options contracts are based on movements in Government bond rates. Currently most of these are over a 30-day period on United States Government 10 year bonds (but they can be for other time periods and other countries). They provide the bank counterparty with a payout if interest rates move by more than a prescribed margin in that time. If the 10 year Government bond rate moves up or down less than the margin, the fund does not have to make any payment on maturity of the option. If the 10 year Government bond rate moves more than the margin, then the fund must pay out on the contract. The Options Kiwi Fund s return (positive or negative) is a combination of the options premiums paid to the Options Kiwi Fund by the banks less any payout; plus any interest earned on the short-term cash deposits (this could be zero). Authorised Governments Bonds : New Zealand, Australia, Eurozone, United Kingdom and United States Bonds: 7 years to 15 years duration The Options Kiwi Fund is a high risk fund and is subject to significant volatility in short term returns. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Options Kiwi Fund is appropriate for you and if so, what proportion of your investment should be in the Options Kiwi Fund. 1 For details of the guarantee provided by Fidelity Life to the Trustee in respect of the Unit Price of Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 (and the Manager s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages

6 4 Investment funds Where the Investment Funds invest (target benchmark see note 1) Capital Guaranteed Kiwi Fund (see note 2) Where it invests A mix of cash, fixed interest, New Zealand, Australian and international shares, with at least 40% invested in cash Who it may suit Investors with a shorter-term time frame (up to seven years), seeking a high degree of capital stability in their investment Risk profile Very low International shares 10% New Zealand and Australian shares 5% Fixed interest 25% Cash 60% Conservative Kiwi Fund Where it invests A mix of cash, fixed interest, property and New Zealand, Australian and international shares, with at least 65% invested in cash and fixed interest Who it may suit Investors with a 5-10 year time frame, seeking capital stability with some investment growth Risk profile Low International shares 10% New Zealand and Australian shares 10% Property 5% Cash 25% Fixed interest 50% Asset Class Conservative Kiwi Fund Where it invests A mix of cash, fixed interest, property and New Zealand, Australian and international shares, with a maximum of 30% exposure to New Zealand, Australian and international shares Who it may suit Investors with a 5-10 year time frame seeking capital stability with some investment growth Risk profile Low International shares 12.5% New Zealand and Australian shares 12.5% Property 5% Cash 5% Fixed Interest 65% Balanced Kiwi Fund Where it invests A balanced mix of cash, fixed interest, property and New Zealand, Australian and international shares Who it may suit Investors with a 5-15 year time frame looking for a diversified portfolio balancing risk and return, but willing to accept some short term periods of negative returns Risk profile Medium International shares 30% New Zealand and Australian shares 12.5% Property 7.5% Cash 15% Fixed interest 35% Ethical Kiwi Fund Where it invests A mix of fixed interest, New Zealand, Australian and international shares selected in accordance with ethical investment guidelines Who it may suit Investors with a 5-15 year time frame wishing to invest in socially responsible investments, looking for a portfolio balancing risk and return, but willing to accept some periods of negative returns Risk profile Medium International shares 40% Fixed interest 40% New Zealand and Australian shares 20%

7 5 Where the Investment Funds invest (target benchmark see note 1) Growth Kiwi Fund Where it invests A mix of cash, fixed interest, property and New Zealand, Australian and international shares, with at least 50% of assets invested in growth investments, particularly international shares Who it may suit Investors with a longer-term time frame (10-45 years) looking for growth and able to tolerate a larger risk of negative annual return periods Risk profile Medium to high International shares 52.5% Cash 5% Fixed interest 17.5% Property 10% New Zealand and Australian shares 15% Asset Class Growth Kiwi Fund Where it invests A mix of cash, fixed interest, property and New Zealand, Australian and international shares, with at least 75% of assets invested in growth investments, which are: New Zealand, Australian and international shares; and property Who it may suit Investors with a longer-term time frame (10-45 years) looking for growth and able to tolerate a larger risk of negative annual return periods Risk profile Medium to high International Cash 5% shares 40% Fixed Interest 10% Property 5% New Zealand and Australian shares 40% Aggressive Kiwi Fund (see note 3) Where it invests International shares, New Zealand and Australian shares, derivatives, fixed interest and cash Who it may suit Investors looking for performance over the long-term (10-45 years) and who can tolerate a high level of volatility (significant ups and downs in the short term value of their investment) associated with investing into such investments Risk profile High Options Kiwi Fund (see note 4) Where it invests Short-term fixed interest investments, used as security for issuing derivatives (selling put and call options contracts) Who it may suit Investors with a 7-15 year time frame who are looking to earn above average returns, but who are willing to accept the significant short term market volatility and losses that may occur from the strategy of issuing options on United States Government and other countries bonds Risk profile High Growth assets 75%* Cash Options contracts Fixed interest Options, cash & fixed interest 25% * Growth assets are assets where capital growth appreciation is expected such as shares and property. NOTES: 1. The actual holdings of each Investment Fund will vary around the benchmark refer to the table showing the asset allocation ranges under the heading What sort of investment is this? 2. For details of the guarantee provided by Fidelity Life to the Trustee in respect of the Unit Price of Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 (and the Manager s intentions with regard to a replacement guarantee as at 31 March in each subsequent year) see pages The Aggressive Kiwi Fund is a high risk fund and is subject to significant volatility. The Aggressive Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or increase losses. The Aggressive Kiwi Fund has a substantial holding in shares, which are susceptible to the risk that their value will fall due to either a general market fall, due to economic downturn or political or legislative change, or stock specific factors such as poor company management, poor company results or change in demand for a share. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Aggressive Kiwi Fund is appropriate for you and if so, what proportion of your investment should be in the Aggressive Kiwi Fund. 4. The Options Kiwi Fund is a high risk fund and is subject to significant volatility in short term returns. The Options Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or generate substantial losses by those funds, and therefore by the Options Kiwi Fund. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Options Kiwi Fund is appropriate for you and if so, what proportion of your investment should be in the Options Kiwi Fund.

8 6 Joining the Fidelity KiwiSaver Scheme To join, you will need to: read this Investment Statement complete the application form attached to this Investment Statement provide proof of identity (see the application form for more detail) If you are employed, you must contribute via salary deduction. If you are not employed and are contributing directly, you will also need to: complete the direct debit form provide a deposit slip from your bank account so we can verify the account details. If you are making any payments by cheque, please make your cheque payable to Guardian Trust Fidelity Nominees Limited. If you are enrolling a child: who is under 16, all of the child s parents/guardians (acting jointly) must sign the application form who is aged 16 or 17, the child must co-sign the application form with a parent/guardian Return the application form (and other documents as required) to your financial adviser or the Manager Investor identification The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires Grosvenor to verify the identity of all investors. When you apply to join the Scheme, you will be asked to provide Grosvenor with certain information about you. Important information By becoming a member of the Fidelity KiwiSaver Scheme in accordance with the KiwiSaver Act 2006 you agree to be bound by the provisions of the Fidelity KiwiSaver Scheme s Trust Deed. You also authorise the Manager and the Trustee to: use information about you for statistical purposes as long as you are not identified, and for providing you with information about the Manager and its services. disclose information held about you by the Manager or any of its related companies, to the Trustee, Inland Revenue, to third parties for processing on the Manager s behalf, where required by law, or with your consent. invest contributions received by the Scheme on your behalf in the Default Investment Fund (currently the Balanced Kiwi Fund), unless you give the Manager an Investment Direction (including selecting Life Phases (see pages 7-8 for details)). send s to you should you provide the Manager with your address, in respect of the Fidelity KiwiSaver Scheme and any further services. Any personal information held by the Manager or Trustee about you will be stored securely. You have the right to access and correct personal information by contacting the Manager or the Trustee. Where you have invested through a financial adviser, you authorise the Manager to disclose information about you to that financial adviser or to any other financial adviser allocated to service your account. KiwiSaver Member Account Once you are enrolled in the Fidelity KiwiSaver Scheme, you will be able to access your KiwiSaver member account via the website

9 Fidelity KiwiSaver Scheme in detail 7 1. What sort of investment is this? The securities offered in this Investment Statement are an interest in the Fidelity KiwiSaver Scheme (Scheme), a registered KiwiSaver scheme designed for long-term savings and which enables you and other members to obtain the benefits of professional investment management. Membership of the Scheme To be eligible to join the Scheme you must be under the New Zealand superannuation qualification age (currently 65) (unless you transfer from another KiwiSaver scheme), entitled to permanently reside in New Zealand and normally living in New Zealand (subject to certain exceptions). You can become a member of the Scheme in one of three ways: By completing and returning the application form attached to this Investment Statement, and having your application accepted by the Manager. If you are allocated to the Scheme under the KiwiSaver Act 2006 (KiwiSaver Act) because your employer has agreed with the Manager that the Manager will provide access to the Scheme for the employer s new employees (Employer s Chosen Scheme) and as such you are subject to automatic enrolment, or you have given your employer a KiwiSaver deduction notice and you have not chosen your own KiwiSaver scheme within the required time frame. If you are an employee of an employer that has entered into a participation agreement with the Manager to provide access to the Scheme to its employees (Participating Employer). This Investment Statement is for individual members and employees of employers who have selected the Scheme as its Employer s Chosen Scheme. A separate Investment Statement will be provided for employees of Participating Employers, along with a supplement setting out the terms and conditions of the Participating Employer s participation in the Scheme. Crown contributions and other benefits The Government will make certain contributions to a KiwiSaver scheme of which you are a member. The current Government contributions are: an initial and one-off kick start $1,000 contribution if this is the first KiwiSaver scheme of which you are a member. for the period 1 July to 30 June, for every dollar you contribute, you will receive a member tax credit of fifty cents, up to the maximum of $ per annum for most members. This will be paid into your account following receipt from Inland Revenue. In the year you first join KiwiSaver, the tax credit will be prorated from the month you joined. a first home deposit subsidy of up to $5,000 subject to eligibility requirements. Further details on this subsidy are located under the heading entitled First home benefit on page 21. Currently if you join as an employee you will benefit from a minimum compulsory contribution from your employer of 3% of your gross salary or wages subject to certain exceptions. Certain criteria and conditions apply to these Government and other benefits. Not all members will qualify for all benefits. Contact the Manager for further information. Life Phases Life Phases is an investment process that automatically allocates your contributions and accumulated balance(s) to an Investment Fund(s) based on your age. Life Phases aims to reduce your risk exposure over time by changing where your investments are allocated and moving a higher proportion of your savings into more conservative investments as you approach retirement age. Life Phases recognises that retirement savers can usually tolerate higher investment risk at a younger age with the potential for greater returns over the long term. Life Phases also recognises that retirement savers usually need lower investment risk as they near retirement with more stable returns. If you choose Life Phases as your Investment Direction, you will not have to (nor can you) make a decision about which Investment Fund(s) you should invest in. Your Investment Direction will be predetermined as detailed in the table below. Life Phases will allocate new contributions and switch your existing balance(s) (Life Phases Rebalancing) every five years starting at 40 years of age and ending at 60 years of age. You can opt out of Life Phases at any time by contacting the Manager and providing a new Investment Direction. Life Phases Rebalancing takes place as follows: Life Phases Rebalancing age Up to 40 years years 100% Growth Kiwi Fund 50% Growth Kiwi Fund 50% Balanced Kiwi Fund years 100% Balanced Kiwi Fund years 50% Balanced Kiwi Fund 50% Conservative Kiwi Fund years 100% Conservative Kiwi Fund 60+ years Fidelity KiwiSaver Scheme Investment Fund allocation 50% Conservative Kiwi Fund 50% Capital Guaranteed Kiwi Fund

10 8 Fidelity KiwiSaver Scheme in detail (continued) If you are an existing member of the Fidelity KiwiSaver Scheme and you select Life Phases, your current Investment Direction will be rebalanced and existing balance(s) switched to the asset allocation that matches your current age as per the above table. No switching fees will be charged for any Life Phases Rebalancing. The Life Phases process will begin on each Life Phases Rebalancing anniversary date (Rebalancing Anniversary Date) i.e. the next business day following your relevant birthday as in the table above. For members whose birthday is 29 February, the Rebalancing Anniversary Date will be 28 February if 29 February does not occur in that year. Once all pending transactions are cleared and processed through your account, the Life Phases Rebalancing will take place. From time to time, the age ranges applying to Life Phases Rebalancing age may be adjusted and Investment Fund allocation specific to particular age bands may be added or deleted. Members who have selected Life Phases will thereafter have their holdings rebalanced in accordance with these changes at their next Rebalancing Anniversary Date (as amended) or earlier at the Manager s discretion. In the event of a change in Life Phases Rebalancing age ranges or Investment Fund allocation, the Manager will provide notice to all Members who have selected Life Phases prior to the change(s) taking effect. Life Phases may not be appropriate for all Members. Life Phases has been designed for the typical saver committed to saving for retirement. Your personal circumstances will change over time and these changes could result in the Life Phases asset allocation not providing a level of risk appropriate to your individual situation. If your personal circumstances do change we recommend that you consult an Authorised Financial Adviser to determine an appropriate Investment Direction. Investment Funds The Scheme s Investment Funds are listed below: Capital Guaranteed Kiwi Fund 1 Conservative Kiwi Fund Asset Class Conservative Kiwi Fund Balanced Kiwi Fund (Default Investment Fund) Ethical Kiwi Fund Growth Kiwi Fund Asset Class Growth Kiwi Fund Aggressive Kiwi Fund* Options Kiwi Fund** The assets and liabilities attributable to each Investment Fund in the Scheme are segregated from the assets and liabilities of each other Investment Fund and the Manager keeps separate records for each Investment Fund. However, the Scheme is a single trust fund. Each Investment Fund consists of a mix of assets that are determined on the basis of the investment guidelines applicable to each Investment Fund. The Manager may change the investment guidelines from time to time (subject to providing prior notice to the Trustee). The existing asset allocation ranges contained in the investment guidelines for the Investment Funds are summarised in the table below: Conservative Kiwi Fund Asset Class Conservative Kiwi Fund Balanced Kiwi Fund Asset Class Growth Kiwi Fund Growth Kiwi Fund Capital Guaranteed Kiwi Fund 1 Ethical Kiwi Fund Fixed Interest 30% 85% 50% 80% 0% 85% 5% 15% 0% 70% 0% 40% 35% 45% Cash 5% 65% 0% 10% 0% 40% 0% 10% 0% 25% 40% 100% N/A NZ and Australian Shares 5% 25% 5% 15% 5% 40% 35% 45% 10% 40% 0% 10% 15% 25% International Shares 5% 25% 5% 15% 10% 40% 35% 45% 20% 60% 0% 20% 35% 45% Property 0% 20% 0% 10% 0% 20% 2.5% 10% 0% 20% N/A N/A Aggressive Kiwi Fund* Options contracts, cash and fixed interest 10% 40% Growth assets 60% 90% Options Kiwi Fund** Fixed interest investments, cash and options contracts 100% 1 For details of the guarantee provided by Fidelity Life to the Trustee in respect of the Unit Price of the Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 (and the Manager s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages * The Aggressive Kiwi Fund is a high risk fund and is subject to significant volatility. The Aggressive Kiwi Fund invests in funds which use some gearing and derivatives (options contracts) that could enhance any returns or increase losses. The Aggressive Kiwi Fund has a substantial holding in shares, which are susceptible to the risk that their value will fall due to either a general market fall, due to economic downturn or political or legislative change, or stock specific factors such as poor company management, poor company results or change in demand for a share. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Aggressive Kiwi Fund is appropriate for you and if so, what proportion of your investment should be in the Aggressive Kiwi Fund. ** The Options Kiwi Fund is a high risk fund and is subject to significant volatility in short term returns. The Options Kiwi Fund invests in funds which use gearing and derivatives (options contracts) that could enhance any returns or generate substantial losses by those funds, and therefore by the Options Kiwi Fund. Losses can occur quickly. You should seek advice from an Authorised Financial Adviser regarding whether the Options Kiwi Fund is appropriate for you and if so, what proportion of your investment should be in the Options Kiwi Fund.

11 9 2. Who is involved in providing it for me? The Scheme: The name of the scheme is the Fidelity KiwiSaver Scheme (the Scheme). The Scheme is a KiwiSaver scheme established by trust deed on 27 June The Scheme is currently governed by a consolidated trust deed dated 21 September 2012 (as amended by a Deed of Amendment of Trust Deed dated 13 August 2013) entered into between The New Zealand Guardian Trust Company Limited (as Trustee of the Scheme) and Fidelity Life, the initial manager of the Scheme (the Trust Deed). The Manager agreed to be bound by the terms of the Trust Deed by a Deed of Undertaking dated 23 August 2013 between The New Zealand Guardian Trust Company Limited as the Trustee, Fidelity Life as retiring manager and Grosvenor as the new manager (Manager s Deed of Undertaking). The Scheme has been in operation since 27 June The Trustee The trustee of the scheme is The New Zealand Guardian Trust Company Limited (the Trustee). As at the date of this Investment Statement, the Trustee can be contacted at the following address: The New Zealand Guardian Trust Company Limited PO Box 1934, Auckland Level 7, Vero Centre, 48 Shortland Street, Auckland Telephone: (09) The Trustee s address may change from time to time. Please contact Fidelity KiwiSaver Scheme Services at for up to date information. The Trustee has been granted a licence under section 16(1) of the Securities Trustees and Statutory Supervisors Act 2011 to act as a trustee in respect of debt securities, unit trusts, and KiwiSaver Schemes, and as a statutory supervisor for participatory securities, for a term expiring 16 March A copy of the Trustee s licence, including the conditions on the licence, can be obtained at the FMA s website: and clicking on Help Me Comply, Trustees, Licenced Trustees and Statutory Supervisors, The New Zealand Guardian Trust Company Limited or the Trustee s website: All of the conditions and reporting obligations under the Trustee s licence have been duly satisfied by the required dates. If you have any queries about the Trustee s licence, please contact the Trustee in the first instance. The Manager Grosvenor Investment Management Limited is the manager (the Manager or Grosvenor), investment manager and registrar of the Scheme. As at the date of this Investment Statement, the Manager can be contacted at the following address: Grosvenor Investment Management Limited Level 5, Alcatel-Lucent Building Manners Street PO Box Wellington 6142 or phone The Manager s address may change from time to time. Please contact Fidelity KiwiSaver Scheme Services at for up to date information. The directors of the Manager as at the date of this Investment Statement and a brief summary of their relevant qualifications and experience are set out below: Allan Seng Tong Yeo BCA (Hons), BA Mr Yeo is also a director of Grosvenor Financial Services Group Limited (the ultimate parent company of the Manager) and has held a number of senior banking roles with Barclays Bank PLC in New Zealand, Australia and the United Kingdom. Mr Yeo is currently the Managing director of Tranzact Financial Services Limited, an ASX listed entity, in which Grosvenor Financial Services Group Limited holds a substantial shareholding. Mr Yeo is also a director of TriMax Assurance Services Limited, an insurance joint venture company. David Ian Beattie (Joint Chief Executive Officer of Grosvenor Financial Services Group Limited) has been appointed as an alternate director for Allan Yeo. Peter Brian Christensen BA (Hons), Dip. Tchg, CFP CM Mr Christensen is also a director of Grosvenor Financial Services Group Limited (the ultimate parent company of the Manager) and has over 27 years experience in the financial planning industry. Mr Christensen is also a key principal in Camelot NZ Limited Partnership, which is one of the largest independent financial advisory groups in New Zealand. Mr Christensen is an Authorised Financial Adviser, CFP CM and member of the IFA. Stephen Charles Benton Dip Bus Studies, CFP CM, CLU Mr Benton is also a director of Grosvenor Financial Services Group Limited (the ultimate parent company of the Manager) and has 30 years experience in the financial services industry specialising in corporate financial planning and personal investment advice. Mr Benton has extensive knowledge and expertise in Government Superannuation and National Provident Fund analysis, is an Authorised Financial Adviser, and a CFP CM qualified member of the IFA.

12 10 Fidelity KiwiSaver Scheme in detail (continued) Paul Gerard Foley LLB, BCA Mr Foley is also a director of Grosvenor Financial Services Group Limited (the ultimate parent company of the Manager). Mr Foley obtained an LLB and BCA from Victoria University of Wellington and is a senior corporate/commercial lawyer based in Wellington, where he is a partner in Minter Ellison Rudd Watts. Mr Foley is Deputy Chairman of the Board of the National Provident Fund and a director of NZX listed New Zealand Oil and Gas Limited. Mr Foley has over 25 years experience working with companies in the financial services, manufacturing and energy fields. Murray Alexander McCaw AMP Harvard Mr McCaw is also a director of Grosvenor Financial Services Group Limited. Mr McCaw is a company director and consultant specialising in corporate strategy and marketing. Mr McCaw has over 20 years experience as a Chief Executive and independent director across a broad spectrum of New Zealand industries, including energy, motor vehicles and information technology. Amongst other governance roles, Mr McCaw is Chairman of Luxury Lodges of New Zealand Limited, a member of the NEC New Zealand Limited Advisory Board, and a trustee and Chairman of the Audit Committee of the Hawke s Bay Sport Park Trust. The directors of the Manager may change from time to time without notice. Please contact the Manager for the current names of its directors. An up to date list of directors of the Manager is also available on the Companies Office website at The directors of the Manager can be contacted at the address of the Manager detailed above. The Manager is also the manager of the Grosvenor KiwiSaver Scheme and the Grosvenor Investment Series. The Manager is a wholly owned subsidiary of Grosvenor Financial Services Group Limited. Grosvenor Financial Services Group Limited is a promoter of the Scheme (Promoter). The contact details of the Promoter and its directors are the same as the contact details of the Manager detailed above. Every director of Grosvenor Financial Services Group Limited who is not also a director of the Manager will also be a promoter of the Scheme. As at the date of this Investment Statement, every director of the Promoter is also a director of the Manager. Grosvenor has therefore taken over all the duties of Fidelity Life with respect to the Scheme excluding the guarantee provided to the Trustee by Fidelity Life in respect of the Capital Guaranteed Kiwi Fund. For details of the guarantee provided by Fidelity Life to the Trustee in respect of the Unit Price of the Units in the Capital Guaranteed Kiwi Fund as at 31 March 2014 (and the Manager s intentions with regard to a replacement guarantee as at 31 March in each subsequent year), see pages Fidelity Life and the Promoter have entered into a Transitional Services Agreement under which Fidelity Life has agreed to provide, for a limited time, certain administration services to Grosvenor and the Promoter to assist with the management of the Scheme. Responsible Investment Responsible investment, including environmental, social and governance considerations, is taken into account in the investment policies and procedure of the Scheme as at the date of this Investment Statement. You can obtain an explanation of the extent to which responsible investment is taken into account in those policies and procedures: on the Manager s website on the Internet at which is publicly accessible at all reasonable times; and from the Manager, free of charge, upon request. Responsible investment, including environmental, social and governance considerations, is taken into account in the investment policies and procedures of the Ethical Kiwi Fund to the extent set out in the policies and procedures described above. Currently, best endeavours are used to avoid the Ethical Kiwi Fund investing in securities issued by organisations which derive a substantial share of their earnings from the following industries: tobacco gambling alcohol armament production See page 3 for more information on the Ethical Kiwi Fund. As at the date of this Investment Statement, responsible investment considerations are not taken into account for the investment policies and procedures for any funds other than the Ethical Kiwi Fund. The directors of the Promoter and the Promoter s contact details may change from time to time. Please contact the Manager for current details. Pursuant to a Deed of Retirement and Appointment of Manager entered into between Fidelity Life, Grosvenor and The New Zealand Guardian Trust Company Limited as trustee of the Scheme, Fidelity Life has retired as the manager of the Scheme and Grosvenor has been appointed as manager of the Scheme with effect from the date of this Investment Statement.

13 11 3. How much do I pay? The amount that you must contribute to the Scheme will depend on whether you make contributions to the Scheme directly, have contributions deducted from your salary or wages by your employer and paid to the Scheme via Inland Revenue, or you pay contributions to the Scheme via Inland Revenue. Contributing via your employer If you are an employee, your employer must make deductions of contributions from your salary or wages and pay those contributions to the Scheme via Inland Revenue. Currently the contributions that your employer is required to deduct must be either: 3% of your gross salary or wages that you earn at that job; or 4% of your gross salary or wages that you earn at that job; or 8% of your gross salary or wages that you earn at that job. This amount will be deducted from your after tax pay. Gross salary or wages has the meaning given to it in the KiwiSaver Act. In summary, gross salary or wages includes most taxable payments of salary or wages that your employer pays to you and includes overtime and bonuses. If you do not specify your contribution rate, the 3% contribution rate will apply. To change the rate at which you currently contribute (either 3%, 4% or 8%), you must give notice to your employer. You may only change your contribution rate at intervals no less than three months apart, unless your employer agrees otherwise. You are not required to make these contributions if you have been granted a contributions holiday by Inland Revenue. For information on applying for a contributions holiday, please refer to the section on contributions holidays on pages Your employer will also be required to make a matching contribution of 3% of your gross salary or wages subject to certain exceptions. For the purposes of calculating compulsory employer contributions, the definition of an employee s gross salary or wages excludes ACC and weekly compensation payments, parental leave paid from public funds and redundancy payments. Under current legislation, and subject to certain conditions, ongoing contributions by a member s employer to an existing superannuation scheme for the member s benefit will count towards the member s compulsory employer contribution requirements. Further details about employer contributions are available from the Manager. All employer contributions to a KiwiSaver scheme must be paid through Inland Revenue except employer contributions for purposes other than an employee s retirement benefits which can be paid directly to the relevant KiwiSaver scheme. All contributions that Inland Revenue receives on your behalf during the three-month period after the earlier of the date Inland Revenue receives your first KiwiSaver contribution and the date when Inland Revenue is given notice or otherwise knows that you are a member of the Scheme, will generally be forwarded to the Scheme as soon as practicable after the end of that three-month period. During such three-month period, such contributions will be held in an Inland Revenue holding account and accumulate interest (which is not subject to tax). The three-month period may be extended until the amount contributed meets the minimum threshold amount agreed between Inland Revenue and the Manager. You can also contribute additional amounts via Inland Revenue using form IR586. No minimum amount applies. Contributing via Inland Revenue You, or anybody else on your behalf (except your employer), may at any time make payment of contributions to Inland Revenue, who will then forward them onto the Scheme by: using the Pay tax option on your bank s internet banking facility; sending a cheque to Inland Revenue; or paying over the counter at a Westpac bank branch (use the payment reference KSS plus your IRD number). When making such contributions to Inland Revenue, the contribution must be accompanied by your name, address, IRD number and any other information that Inland Revenue requires. Contributing directly If you are not employed and would like to make contributions directly to the Scheme, or you are employed and contributing via your employer but would like to make additional contributions, you can make contributions in either of the following two ways. The first is to set up a direct debit payment to the Scheme s bank account and the second is by making lump sum contributions as described in the section below entitled Lump sum contributions. To make a direct debit payment directly to the Scheme s bank account from your bank account, please fill out the direct debit form attached to this Investment Statement and send it in with your application form. If you choose to contribute directly, the minimum monthly contribution is $50 ($20 if you are aged under 18). If you would like to alter, stop or recommence your direct debit, you may do so at any time provided that you give notice to the Manager that you intend to do so and that the minimum monthly contribution is met if you have not stopped contributing.

14 12 Fidelity KiwiSaver Scheme in detail (continued) Lump-sum contributions You and other persons on your behalf may contribute additional lump sums to the Scheme of at least $1,000, or a lower amount in the absolute discretion of the Manager at any time. These lump sums will not give rise to any additional contribution entitlements from your employer. Payments by cheque must be made out to the Trustee s nominee company, Guardian Trust Fidelity Nominees Limited, and forwarded to the Manager at the address below: Grosvenor Investment Management Limited Level 5, Alcatel-Lucent Building Manners Street PO Box Wellington 6142 Direct debits and payment by cheque must be accompanied by your IRD number. If any payments are not accompanied by your IRD number, the Manager may not be able to process the payment and allocate units to your accounts in the Scheme. If at any time the value of your Member s Accumulation is nil or negative, you will cease to be a member of the Scheme. Crown contributions and other benefits The Government will make certain contributions to a KiwiSaver scheme of which you are a member. As at the date of this Investment Statement, the Government contributions are: a one-off kick start $1,000 contribution if this is the first KiwiSaver scheme of which you are a member. This $1,000 contribution will be made approximately three months after the earlier of: the date of your first contribution to a KiwiSaver scheme; or the date when Inland Revenue is notified, or otherwise knows, that you are a member of a KiwiSaver scheme. If you have transferred from a complying superannuation fund and you were a member of the complying superannuation fund for more than three months, the Government contribution will be made as soon as practicable after the day on which Inland Revenue is given notice that you have transferred. The $1,000 Government contribution will be credited in accordance with your Investment Direction. for the period 1 July to 30 June in each year, for every dollar you contribute, you will receive a tax credit of fifty cents, up to the maximum of $ per annum. This tax credit will be paid into your account following receipt from Inland Revenue. In the year you first join KiwiSaver, the tax credit will be prorated from the month you joined. This may change in the future. The tax credit will not apply in respect of members under the age of 18, or members who have become entitled to receive a benefit on end payment date (members who have reached the later of New Zealand superannuation qualification age (currently age 65) or who have been a member of a KiwiSaver scheme for five years) or subject to certain limited exceptions in respect of members who do not have their principal place of residence in New Zealand. The tax credit will be credited in accordance with your Investment Direction. a first home deposit subsidy of up to $5,000 subject to eligibility requirements. Further details on this subsidy are located under the heading entitled First home benefit on page 21. The Government contributions may change in the future. Transferring from another superannuation scheme You may transfer any amount into this Scheme from any other KiwiSaver or superannuation scheme. By joining the Scheme you will be initiating the closure of your membership in your current KiwiSaver scheme and the transfer of your benefit to this Scheme. Transfers of funds from UK pension plans to the scheme This summary of the implications of transferring your UK Pension plan funds to the Scheme is based on the Manager s understanding of UK Pension rules as at the date of this Investment Statement. Future changes to those rules could subsequently and adversely affect the treatment of UK Pension plan transfers to the Scheme and payments from the Scheme. The Scheme is a qualifying recognised overseas pension scheme (QROPS), accepted by Her Majesty s Revenue and Customs (HMRC) as such. This means that transfers from a UK Pension plan to the Scheme will not incur HMRC tax charges if the amount transferred is within your remaining lifetime allowance. If your UK Pension plan contains any guaranteed minimum benefits such as those contained in a defined benefit scheme or a final salary scheme, such guarantees will not apply to any sums transferred from the UK Pension plan to the Scheme. If you transfer funds from a UK pension plan to the Scheme, you will only be able to access those funds by making a permitted withdrawal under the KiwiSaver Act. Until you have been a UK tax non-resident for five clear and complete UK tax years (the UK tax year runs from 6 April to 5 April), any withdrawals or transfers you make from the Scheme may render you liable for HMRC tax charges. These may be significant, up to 55% of the withdrawal or transfer amount. The imposition of these tax charges depends on the application of the complex rules applying to UK pension schemes. We therefore recommend you take professional tax advice if you wish to make a withdrawal or transfer from the Scheme within this five year period.

15 13 As a condition of the Scheme s QROPS status, the Manager must report to HMRC about the withdrawals or transfers you make from the Scheme. By transferring your UK Pension plan funds to the Scheme, you authorise this reporting to occur and agree to provide the Manager with any further information it requires to make these reports. This important information regarding withdrawals of UK Pension plan funds from the Scheme is also located under the heading entitled What returns will I get?. Transferring your UK Pension plan funds to the Scheme is an important decision. It is recommended that you discuss proposed transfers with your UK and New Zealand tax advisers as well as your UK pension provider. The Manager may impose conditions on any UK Pension plan funds transferred. The Manager does not guarantee that the Scheme will retain QROPS status at all times. If the QROPS status of the Scheme is lost, your UK tax implications may change in relation to transfers into the Scheme. None of the Manager, Trustee or any other person involved in providing the Scheme to you takes any responsibility for any HMRC tax charges that arise as a result of you transferring your UK Pension plan funds to the Scheme, making subsequent withdrawals or transfers from the Scheme or the Scheme losing its QROPS status. Accounts When you become a member of the Scheme, the Manager will establish an account, in your name. The balance of your account is measured in units. The units represent the interests that you hold in the various Investment Funds you have chosen. When contributions are received into the relevant Investment Fund, you are effectively buying a number of units at what is known as the Unit Price. The Unit Price reflects the value of the investments made by each Investment Fund, and as the value of the investments rise or fall in value, so too does the value of each unit. Investment fund units The number of units that you receive for contributions made to the Scheme on your behalf will be calculated by dividing the amount contributed including interest accrued (if any) (net of the amount that the Manager considers appropriate to deduct for fees, expenses, or other liabilities) at the relevant Unit Price immediately following the determination of the Unit Price on the first Valuation Time after receipt and allocation of the contribution or transfer to a Members Account. Each unit held in your account gives you the right to participate in any profits or losses of the relevant Investment Fund or Investment Funds you choose to invest in. However, units held in your account do not give you any interest over any particular part of an Investment Fund or any of the assets of any Investment Fund. Investment Direction When you apply for membership in the Scheme, you are required to provide an Investment Direction (including Life Phases (see pages 7-8 for more detail)). The Investment Direction must specify the proportion of one or more Investment Funds in which you would like your contributions and other amounts received by the Scheme on your behalf invested. For example, you could provide an Investment Direction that states that you would like your contributions invested 15% in the Conservative Kiwi Fund, 50% in the Balanced Kiwi Fund and 35% in the Growth Kiwi Fund. The result would be that for every $100 of contributions made to the Scheme on your behalf: $15 would be invested in units in the Conservative Kiwi Fund $50 would be invested in units in the Balanced Kiwi Fund $35 would be invested in units in the Growth Kiwi Fund. If you do not provide an Investment Direction, or provide an incorrect Investment Direction, the contributions made to your accounts will be invested in units in the Default Investment Fund (currently the Balanced Kiwi Fund). Switching Investment Funds You can amend your Investment Direction to switch Investment Funds without charge once a calendar month in respect to future contributions, and/or contributions already invested. A $60 fee will apply for any switches after the first one, each calendar month. Cooling off New employees of an employer who has selected the Scheme as the Employer s Chosen Scheme who are not already members of another KiwiSaver scheme will automatically become members of the Scheme. Such Members may choose to opt out of membership of the Scheme at any time from the 13th day to the 55th day after starting the new employment. A new employee wishing to opt out of the Scheme must give an opt out notice either to their employer or to Inland Revenue in the form of the opt out notice contained in the employee s KiwiSaver information pack or in any other form acceptable to Inland Revenue.