Bendigo SmartStart Pension

Transcription

1 Bendigo SmartStart Pension Product Disclosure Statement Dated 1 July 2013 The trustee and issuer is Sandhurst Trustees Limited, ABN AFSL , a subsidiary of Bendigo and Adelaide Bank Limited, ABN AFSL Issued by Sandhurst Trustees

2 2 Bendigo Wealth Retirement Solutions

3 Bendigo SmartStart Pension Product Disclosure Statement Dated 1 July 2013 This Product Disclosure Statement (PDS) is issued by Sandhurst Trustees Limited (ABN , AFSL No ) ( Sandhurst, Us, or We ), the trustee and issuer of interests in the Bendigo SmartStart Pension ( Pension ). The Pension is a part of The Bendigo Superannuation Plan ABN ( the Plan ) which was established by a trust deed dated 3 June 1988 (as amended from time to time). Sandhurst is a wholly owned subsidiary of Bendigo and Adelaide Bank Limited (ABN , AFSL No ) ( the Bank ) and is part of the Bendigo and Adelaide Bank Group, which comprises the Bank and its related entities. Contents Page Important information 4 Other information 4 1. About the Pension 5 2. About Sandhurst 7 3. How the Pension works 7 4. How we invest your money Risks Fees and costs Taxation Additional information 36 Bendigo SmartStart Pension 3

4 Important Information It is important that you consider the information in this PDS in its entirety before making an investment decision about the Pension. The PDS contains important information about the Pension and will help you decide whether this product will meet your needs. The information in the PDS is general information only and does not take account of your personal financial situation or needs. You should assess your own objectives, financial situation or needs before deciding to acquire an interest in the Pension. Before making an investment decision, we recommend that you obtain financial advice tailored to your personal circumstances from a licensed financial adviser. Details of each of the investment options available and the product disclosure statements for the accessible managed funds can be accessed from our website. Sandhurst, the Bank and its related entities do not guarantee the repayment of capital invested, the payment of income or the Pension s investment performance. An investment in the Pension does not represent a deposit with, or liability of Sandhurst, the Bank or its related entities. The Bank does not stand behind or guarantee the performance of Sandhurst. Sandhurst is not an authorised deposit-taking institution within the meaning of the Banking Act Accessing up-to-date information Information in this PDS is subject to change from time to time. Where the changes are not considered materially adverse, Sandhurst will make updated information available at its website at Other information The offer to invest in the Pension is available to persons receiving a copy (electronic or otherwise) of the most up-to-date PDS for the Pension within Australia. If you receive the PDS and Application Form electronically, you should ensure that you have received the complete Application Form and PDS. If you are unsure whether the electronic documents are complete, you should contact Sandhurst. A printed copy of this PDS or a product disclosure statement for an underlying investment option is available free of charge by contacting Sandhurst. The PDS does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer including, but not limited to, investors in the United States of America. Applications from outside Australia will not be accepted. All references to dollar amounts in this PDS are in Australian currency. There are a number of technical terms in this PDS that are explained in the Glossary section towards the end of this PDS. You can obtain a paper copy of this updated information free of charge by calling If you would like a printed copy of this PDS, you can contact your licensed financial adviser or phone our Customer Service Centre on Contact Information Sandhurst Trustees Limited Bendigo SmartStart Pension GPO Box 529 Hobart Tasmania 7001 Phone: Fax: superannuation@bendigobank.com.au Website: 4 Bendigo Wealth Managed Retirement Funds Solutions

5 1. About the Pension The Bendigo SmartStart Pension is an account-based pension which aims to provide a low-cost and easy-to-use solution to help you in your retirement or as you transition to retirement. An account-based pension is a flexible and tax-effective means of converting a lump sum retirement benefit into a regular income stream that you receive in your retirement or when you reach Preservation Age (to find out more about your Preservation Age and when you can access your money in a pension refer to page 7). Members of the Plan, can start one of two types of account-based pensions: A Standard Pension This enables individuals who have permanently retired and have reached their Preservation Age to convert their superannuation savings into a tax-effective income stream. A Transition to Retirement Pension (TTR Pension) If you have reached your Preservation Age, but are still working, you can still use your super to commence a tax-effective income stream. You can do this in combination with reducing your hours of work to slowly ease into retirement. Or it can be used to boost your income while you are still contributing to super from your salary. Unless specified, references to pension/s in this PDS refers to both the Standard Pension and TTR Pension. The Pension offers you the choice of a range of diversified and other defensive investment options managed by leading investment professionals, a low-cost fee structure and online access. Key features of the Pension: Low fees Lump sum withdrawals Flexibility Peace of mind Range of choices Possible tax advantages Secure online acces Help and advice An easy-to-use and low cost Pension solution to help you fund your retirement. There are no entry fees or any fees for rollovers, withdrawals or investment switching. There is an account keeping fee of $98 per annum, an administration fee of 0.20% per annum plus investment fees from 0.39% to 0.99% per annum. For further information on fees please refer to section 6. Are generally allowed at any time unless your account is a TTR Pension. For further information please refer to section 3. Note there may be tax implications of making lump sum withdrawals. You can choose the pension payments you receive each year, as long as you stay within applicable minimum and (for TTR Pensions) maximum limits. The limits depend on your age and the type of Pension. Your Pension investments are managed by professional investment managers, including Sandhurst itself. You can choose from 10 different ready made diversified investment funds, an income fund and a cash investment option. earnings on your Pension are in most circumstances tax-free. Income payments and lump sum withdrawals from your Pension may be concessionally taxed, and are generally tax-free for those aged 60 and over. You can view, monitor and switch your investments and amend your account details online, as well as accessing our various calculators and learning tools. Our Customer Service team can provide you with any help you need to understand the Pension. If you need personal financial advice, we can refer you to a Bendigo financial adviser. Bendigo SmartStart Pension 5

6 How to open an account To open a Pension account, complete the Application Form and send the completed form to us in accordance with the instructions contained in the Application Form. Identification You will be required to provide appropriate documentation with your Application Form to enable us to identify you. The following lists the acceptable documents that you can provide for this purpose. Either One of the following documents only: driver s licence issued under State or Territory law; or passport Or One of the following documents Birth certificate or birth extract; Citizenship certificate issued by the Commonwealth; or Pension card issued by Centrelink that entitles the person to financial benefits. AND One of the following documents Letter from Centrelink regarding a Government assistance payment; or Notice issued by Commonwealth, State or local council within the past twelve months that contains your name and residential address. For example : - Tax Office Notice of Assessment; or - Rates notice from local council. Certification of personal documents All copied pages of ORIGINAL proof of identification documents (including any linking documents) need to be certified as true copies by any individual approved to do so (see below). The person who is authorised to certify documents must: sight the original and the copy and make sure both documents are identical; and make sure all pages have been certified as true copies by writing or stamping certified true copy followed by their signature, printed name, qualification (e.g. Justice of the Peace, Australia Post employee, etc.) and date. The following people can certify copies of the originals as true and correct copies: a permanent employee of Australia Post with five or more years of continuous service; a finance company officer with five or more years of continuous service (with one or more finance companies); an officer with, or authorised representative of, a holder of an Australian Financial Services Licensee (AFSL), having five or more years continuous service with one or more licensees; a notary public officer; a police officer; a registrar or deputy registrar of a court; a Justice of the Peace; a person enrolled on the roll of a State or Territory Supreme Court or the High Court of Australia, as a legal practitioner; an Australian consular officer or an Australian diplomatic officer; a judge of a court; a magistrate; or a Chief Executive Officer of a Commonwealth court. 6 Bendigo Wealth Retirement Solutions

7 2. About Sandhurst Sandhurst is the trustee of the Plan and issuer of the Pension. Sandhurst is a wholly owned subsidiary of Bendigo and Adelaide Bank Limited and forms part of Bendigo Wealth, the wealth division of the Bank. Established in 1888, Sandhurst is a highly experienced provider of financial services aiming to create, enhance and protect wealth. Sandhurst offers a range of products and services including investment and funds management, superannuation, pensions, access to funeral bonds, the management of estates and trusts, and the provision of corporate trustee and custodial services. 3. How the Pension works The benefits and features are generally the same for both a Standard Pension and TTR Pension. However, a TTR Pension has certain restrictions on when you can make lump sum withdrawals while you are still working and there is a maximum amount of income that can be taken each year. Eligibility to invest Standard Pension In order to commence a Standard Pension you must satisfy one of the following conditions: permanently retire from the workforce after reaching your Preservation Age; this depends on your date of birth, as shown in the table below; reach age 65; leave or change your job after age 60; or suffer permanent incapacity. TTR Pension You can commence a TTR Pension if you have reached your Preservation Age but are still working. Preservation Age Date of birth Age Before 1 July July 1960 to 30 June July 1961 to 30 June July 1962 to 30 June July 1963 to 30 June After 30 June Setting up your Pension You can start your Pension by: rolling over funds to the Pension from another superannuation fund; rolling over your balance or part of your balance from your Bendigo SmartStart Super account into the Pension; making a one off personal contribution (that is not tax deductible); or a combination of the above. To transfer funds into the Pension, you will need to complete a Request to Transfer Form. This will instruct your super fund to transfer the funds into your Pension account. A copy of the Request to Transfer form is available with the Application Form or from our website.` Bendigo SmartStart Pension 7

8 If you want to commence a Pension with other types of contributions (for example if you are self-employed and want to make tax deductible personal contributions), you will need to make this contribution to an accumulation superannuation account (such as an account in Bendigo SmartStart Super ), accompanied by the Australian Taxation Office approved form Notice of intent to claim or vary a deduction for personal super contributions. Once this has been processed, you can then roll over your benefits to start the Pension. The form is available on our website. For members who are under 65 making personal or spouse contributions that are not tax deductible, there is currently a maximum of $450,000 that you can make as a one off contribution. For those members over 65, the maximum amount is $150,000. Each of these limits is subject to you not having already exceeded your contributions cap for personal contributions. These limits are imposed by the Federal Government and may change in the future. If you have money in more than one super or pension account, you should consider consolidating your accounts (such as in a Bendigo SmartStart Super account) prior to rolling over your funds to commence the Pension, as no additional contributions can be made once the Pension has been established. You would have to set up a separate pension, or commute your existing Pension (if eligible) and consolidate your funds before re-commencing the Pension. Insurance There is no insurance offered with the Pension. You should consider the impact that rolling over funds in order to commence the Pension will have on your current insurance arrangements within super. Minimum investment amount The minimum investment amount for commencement of the Pension is $10,000. Sandhurst reserves the right to increase or decrease this amount in the future. Maximum investment amount There is no maximum investment amount. Account structure When you commence a Pension, a Member Account will be set up for you, made up of two sub-accounts: your Cash at Bank and your Account. Cash at Bank Your Cash at Bank is an interest-bearing deposit account set up to facilitate payments into or out of your Member Account, for example: investment income; fees and costs; and pension payments. Your Cash at Bank allows us to pay expenses and make other payments without having to sell down your Pension assets to make these payments. When you commence a Pension, 1.5% of your initial rollover amount (less fees and costs) will be held in your Cash at Bank. The Cash at Bank holding is targeted at 1.5% of your Member Account balance. The value of your Cash at Bank is checked twice weekly and/or at the end of each month. If your balance falls outside the range of 0.5% to 2.5% of your Member Account balance, we may restore the balance to 1.5% of your Member Account balance by either buying or selling assets based on the investment strategy specified by you in your membership Application Form or your latest switching instructions. Please note that if there are insufficient assets available from any of the investment options within your elected investment strategy your Cash at Bank will be restored by selling assets from your remaining investment options at our discretion. Account Your Account holds your investment options. You can choose to invest in up to 12 investment options. Further information on the available investment options can be found on pages 12 to 25. We invest your funds according to the investment strategy you nominate on your Application Form (or as amended by you from time to time). We aim to invest your funds into your selected investment option/s within three business days after we receive your instructions. Pension payments come from your Cash at Bank Your pension payments are deducted from your Cash at Bank. If we need to top up your Cash at Bank to the level necessary to meet your pension payments and maintain the minimum Cash at Bank balance, we will sell down the assets as mentioned above. 8 Bendigo Wealth Retirement Solutions

9 How long your Pension will last How long your Pension will last depends on a number of factors, including: the amount of your initial investment; the returns you earn in your chosen investment option/s; the pension payment amounts and payment frequency; and whether you make any lump sum withdrawals (if you are eligible to do so). Pension payments will continue until your Member Account balance is nil. It is possible that your Pension may not provide you with enough money to provide you with an adequate regular income for the rest of your life. This risk is commonly called longevity risk. We recommend you seek professional advice about this. Pension you can receive each year You must take a minimum pension payment from your account each year. The minimum payment is calculated as a percentage of your account balance based on your age, as follows: Age at 1 July each year Minimum annual payment (as % of account balance) Under or over 14 Above amounts maybe subject to change from time to time (the minimum payment amounts for pensions were halved by the Federal Government for the , and years and reduced by 25% for the and years). The annual amount of your pension payments are re-calculated each 1 July based on the 30 June closing balance of your account. You can elect to have your pension payments adjusted by the Consumer Price Index (CPI) or by a certain percentage. If you commence your Pension after 1 July, your minimum income limit will be calculated on a pro-rata basis for the first year. If the commencement date of your Pension is on or after 1 June in a financial year, no payment is required to be made for that financial year. For a Standard Pension there is no maximum amount of income that you can take each year. The maximum amount that you can draw each year from a TTR Pension is 10% of the account balance. We recommend that you seek advice when working out how much income you will need each year, to make sure you can maintain the income from your Pension over your retirement years. You have the ability to adjust your pension payment amount and frequency at any time, subject to meeting the applicable minimum and maximum limits (described previously). If you would like to change the amount or frequency, you can advise us using a Membership Variation Advice form available from our website. How pension payments are made Your pension payments are paid from your Cash at Bank into your nominated bank account (for more information on your Cash at Bank see page 8). You can choose to receive your pension payments: monthly; quarterly; half-yearly; or annually. Just tick the appropriate box on the Application Form. You can vary your pension payments by using a Change of Details form available from our website. When can you withdraw or commute lump sums from your Pension? Standard Pension For a Standard Pension, full or partial lump sum withdrawals (known as commutations) can be made at anytime. The minimum withdrawal amount is $1,000. If your account balance is below $1,000, you must withdraw the total account balance. TTR Pension Lump sum payments from a TTR Pension can only be paid in the following limited circumstances: to access an unrestricted non-preserved benefit; to pay a superannuation contributions surcharge; to pay a Family Law split; upon receipt of a release authority from the Australian Taxation Office; Bendigo SmartStart Pension 9

10 to purchase another non-commutable income stream; as a payout on your death or terminal illness; or to rollover to another complying superannuation fund. Lump sum withdrawals will affect your Member Account balance. If you are considering making a lump sum withdrawal, we recommend you seek advice from a licensed financial adviser to discuss the issues mentioned above and any tax or other implications that may apply. Death benefits As a member of the Plan, you can nominate for a death benefit to be paid in the event of your death. The amount of the death benefit will be the balance of your Member Account (after any fees and tax) when you die. You can choose one of two ways of nominating who you would like to receive your benefit upon your death: binding nomination; or reversionary beneficiary. If you do not make a binding nomination or a reversionary pension nomination, in the event of your death any benefits will be paid to your Legal Personal Representative. Binding Nomination You can direct Sandhurst as to who you want to receive your death benefit. You do this by completing a Binding Death Benefit Nomination form. The beneficiaries you name in your Binding Death Benefit Nomination must be either your Dependants for superannuation purposes or your Legal Personal Representative. A binding nomination must be reconfirmed by you every three years. If you make a valid binding nomination, we are bound to follow your instructions regardless of whether circumstances have changed (e.g. you have re-married or have had children since you made the nomination) so it is important to ensure that you keep your nomination up to date. Further information is available on the Binding Death Benefit Nomination Form available with the Application Form or from our website. Reversionary beneficiary Upon commencement of your Pension, you have the ability to nominate one of your Dependants as your reversionary beneficiary. If accepted by Sandhurst, upon your death your income payments will automatically revert to the nominated person. Upon acceptance by us, a reversionary beneficiary nomination is binding on us and irrevocable. This means you cannot change your reversionary beneficiary without commuting your current Pension and starting a new pension. If you have nominated a reversionary beneficiary your benefit will be paid to that person as a pension (subject to your nomination meeting the requirements below), or they can request to redeem the remaining money in the income stream as a lump sum payment. There may be tax implications if they withdraw the benefit as a lump sum payment. To make a reversionary beneficiary nomination, please complete the relevant section on the Application Form. If you would like your death benefit to be paid as a reversionary pension, then: you must nominate only one person on your Application Form; that person must be an eligible pension beneficiary. An eligible pension beneficiary includes a person who is at the time of your death: - your spouse (legally married or de facto spouse); - your child or children under the age of years or over but: under 25, if financially dependent on you; or with a disability as defined under section 8(1) of the Disability Services Act 1988; - a person with whom Sandhurst is satisfied you have an interdependency relationship when you die; or - any other person who is wholly or partially financially dependent on you when you die. Any reversionary pension paid to a child will terminate when the child turns 25, and any remaining balance will be paid as a lump sum to the child (unless the child is disabled, as defined above). This means that an adult child over the age of 25 cannot be nominated as a reversionary pensioner unless they are disabled. 10 Bendigo Wealth Retirement Solutions

11 Monitoring your Pension Once you become a member of the Plan, you can access the following account details on our website your Member Account balance; your investment portfolio; and your transaction history. To use this facility, you need to apply for a password. You can do this by following these steps: access the website (see above) select Products / Superannuation / Bendigo SmartStart Superannuation/Login/ Register, and follow the prompts. The registration process requires you to provide us with your address that a confirmation will be issued to. Maintaining your Pension We understand that your circumstances can change after you commence your Pension and that you may want to alter your initial pension arrangements (or instructions), such as your chosen investments, your pension payment amount or frequency, binding death nominations and your personal details. To help ensure your Pension meets your current requirements we have developed a number of simple forms for your use which you can access: at or by contacting our Customer Service Centre on You can also switch your investments and amend your account details online. Refer to Monitoring your Pension earlier in this section for instructions on how to access our online services. Once you have website access you have the ability to switch investments and update your personal details online. Confirmation of transactions Transactions will be confirmed where required by law as soon as practicable. You can also check transactions yourself by logging onto your account via our website. Member Statements and Annual Report An Annual Statement is issued to you each year. Your Annual Statement sets out your current account balance and summarises transactions that occurred during the period including any fees, costs and taxes deducted. You can elect to receive your Annual Statements electronically. You just need to provide us with your address. If you elect to receive your Annual Statements electronically, we will send them to your nominated account until you tell us otherwise. An annual report which includes financial, management and investment information for the Plan is prepared as at 30 June each year and a copy is made available to each member via our website or you can request a copy be sent to you. You may also arrange to view copies of the audited accounts, the auditor s report and the Trust Deed. Bendigo SmartStart Pension 11

12 4. How we invest your money menu You can invest the funds in your Account in up to 12 investment options with differing risk and return profiles including: a cash investment; the Sandhurst Strategic Income Fund; and a choice of 10 diversified funds consisting of 5 actively managed funds and 5 passively managed funds. The diversified funds are listed below: Active Funds Bendigo Defensive Wholesale Fund Bendigo Conservative Wholesale Fund Bendigo Balanced Wholesale Fund Bendigo Growth Wholesale Fund Bendigo High Growth Wholesale Fund Passive Funds Bendigo Defensive Index Fund Bendigo Conservative Index Fund Bendigo Balanced Index Fund Bendigo Growth Index Fund Bendigo High Growth Index Fund Sandhurst has designed the Pension s investment menu to offer you choice and flexibility for investing your superannuation assets. How you invest may depend on your pension phase, your personal circumstances and your risk profile. Whether you choose to invest in a single investment option or a combination of investments, you can switch your investments at any time at no cost. If you do not make an investment choice, your money will be invested into the default investment strategy. The default investment strategy is the Bendigo Conservative Index Fund. If you no longer wish to be invested in the default investment strategy and wish to make your own investment choice, you can opt out by notifying us of this in writing at any time. The funds that you have allocated to be invested are pooled with monies of other members of the Plan and are currently invested via a Pooled Superannuation Trust (SMF Master Pooled Superannuation Trust ABN ). Sandhurst is the responsible entity and issuer of the Sandhurst Strategic Income Fund and the diversified funds listed above. Sandhurst s role as responsible entity for these funds is separate to its role as trustee for the Plan and issuer of the Pension. A reference to Responsible Entity in this PDS is a reference to Sandhurst acting in its capacity as the responsible entity of one or more of the Sandhurst managed funds. Changes to the investment menu Sandhurst regularly monitors and reviews the investment options available and investment mechanisms (including the pooled superannuation trust) to ensure that the existing investment options and mechanisms continue to be appropriate and suit the investment needs of members. Sandhurst may add, suspend or restrict further investments to an investment option or close an investment option. Sandhurst may do this if it becomes aware of new investment opportunities or changes to the existing investment option, such as a change to the investment manager, investment objective and strategy, asset classes, underlying investment managers or underlying investments. If an investment option is withdrawn from the menu, Sandhurst may redeem and transfer your investments held in that investment option to another investment option which Sandhurst considers has similar risk/ return characteristics. Sandhurst will notify you of any such change where possible prior to the change or as soon as practicable after the change. At this time you will also be provided with the opportunity to make your own selection. Any changes to the investment menu or the investment mechanism which Sandhurst considers not materially adverse to you will be communicated to you via the Plan s website as soon as practical. Passive investment options These funds aim to create wealth for investors by providing diversified investment options across a range of asset classes that benefit from investment market performance over the long-term. The funds aim to achieve this by: investing in investment markets via fund managers that specialise in managing and operating index funds; and tactically managing the Asset Allocation of each fund within the asset class ranges. The Responsible Entity determines the allocation of amounts to each asset class on an ongoing basis. 12 Bendigo Wealth Retirement Solutions

13 The names of the current investment managers and the asset classes they manage are available on our website. These may change from time to time without prior notice to you. Active investment options These funds may have different investment managers for each specific asset class. In an endeavour to ensure the best possible result for investors and to meet the performance objectives of the investment options, the performance of each investment manager is regularly monitored and assessed by the Responsible Entity. Consequently, the composition of the investment managers may change from time to time without prior notice to you. The names of the current investment managers and the asset classes they manage are available on our website. Sandhurst Strategic Income Fund The Responsible Entity also currently manages the assets of the fund and may employ the expertise of specialist investment managers from time to time. The fund actively invests in money market securities, term deposits, various types of bonds and other fixed income securities, with an objective of outperforming its benchmark after management fees. Cash investment option The underlying assets are on deposit with a bank or invested in a cash style managed fund chosen by Sandhurst. Standard Risk Measure We have provided the Standard Risk Measure for each investment option in the following tables which is based on industry guidance to assist you to compare investment options that are expected to deliver a similar number of negative annual returns over any 20 year period. The Standard Risk Measure is not a complete assessment of all forms of investment risk, for instance it does not detail what the size of a negative return could be or the potential for a positive return to be less than you may require to meet your objectives. Further, it does not take into account the impact of administration fees and tax on the likelihood of a negative return. You should still ensure you are comfortable with the risks and potential losses associated with your chosen investment option/s. The principles and guidelines to this measure are set out in the paper Standard Risk measure: Guidance Paper For Trustees available for download from our website. Industry Standard Risk Measure Risk band Risk label Estimated number of negative annual returns over any 20 year period 1 Very low Less than Low 0.5 to less than 1 3 Low to medium 1 to less than 2 4 Medium 2 to less than 3 5 Medium to high 3 to less than 4 6 High 4 to less than 6 7 Very high 6 or greater Switching investment options You can switch between investment options at any time using the online switching service. No switching fees are charged, however, transaction costs (in the form of buy/sell spreads) usually apply (see Fees and costs for more information). Switch requests will be processed when relevant unit prices are next declared, which occurs at least twice a week. We aim to acknowledge your request within three business days. It is recommended you consult a licensed financial adviser before making any decision to switch between investment options. Bendigo SmartStart Pension 13

14 The following tables outline the key features of each of the Pension s investment options. Fund Name objective: strategy: Performance benchmark: timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the : Cash investment To perform broadly in line with the performance benchmark (before fees). Provide regular income while seeking to maintain liquidity and capital stability. Cash 100% Performance is measured against the UBS Bank Bill Index. Recommended for at least a 1 year investment period. This investment offers regular income and capital stability. It is suitable for monies that will be required to meet short term cash flow requirements and for investors who may be close to or in retirement or highly risk adverse. Very low (Risk band 1) From time to time the benchmarks may change. Updated information will be available on our website. 14 Bendigo Wealth Retirement Solutions

15 Fund Name Sandhurst Strategic Income Fund (ARSN ) objective: strategy: To outperform the performance benchmark (after fees) over any two year period. To invest in a diversified portfolio of mainly domestic interest bearing securities across a range of maturities. The fund will adjust its investments in line with our view of prevailing market conditions to optimise returns and control volatility. Exposure Max Min Bank deposits 100% 30% Money market securities 70% 0% Target exposure limits: Primary Government bonds 70% 0% Semi government and Supranational bonds 50% 0% Corporate bonds and floating rate notes 50% 0% Asset backed securities 40% 0% Secondary Hybrids and other securities 30% 0% Primary securities total 100% 70% Secondary securities total 30% 0% Performance benchmark: timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: UBS Bank Bill Index. Recommended for at least a 2 year investment period. This fund is intended to suit an investor primarily seeking regular income. The fund may be suited to an income portfolio or the defensive asset allocation of your total portfolio. Very low (Risk band 1) The investment objectives (including the performance benchmark, target exposure limits and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. Bendigo SmartStart Pension 15

16 Fund Name Bendigo Defensive Wholesale Fund (ARSN ) objective: strategy: To outperform the performance benchmark (before fees). To invest via a selection of high quality investment managers that specialise in managing specific asset classes. The fund invests predominantly in income generating defensive assets (Australian fixed interest, international fixed interest and cash) whilst limiting exposure to growth assets (Australian shares, international shares and property securities). Min Max Neutral Australian shares 4% 14% 9% International shares 2% 12% 7% Target asset allocation: Property securities 0% 9% 4% Australian fixed interest 15% 45% 30% International fixed interest 15% 35% 25% Cash 10% 40% 25% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 9% Performance benchmark: MSCI World ex-australia Accumulation Net Index (A$) 7% S&P/ASX 300 Property Accumulation Index 4% UBS Australian Composite Bond Index 30% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 25% UBS Bank Bill Index 25% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 2 year investment period. This fund is intended to suit an investor seeking an income focused portfolio with low capital volatility. Low (Risk band 2) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. 16 Bendigo Wealth Retirement Solutions

17 Fund Name Bendigo Conservative Wholesale Fund (ARSN ) objective: strategy: To outperform the performance benchmark (before fees). To invest via a selection of high quality investment managers that specialise in managing specific asset classes. The fund invests in income generating assets (Australian fixed interest, international fixed interest and cash) with a lower weighting to capital growth assets (Australian shares, international shares and property securities). Min Max Neutral Australian shares 10% 30% 20% International shares 5% 25% 15% Target asset allocation: Property securities 0% 10% 5% Australian fixed interest 12% 32% 22% International fixed interest 8% 28% 18% Cash 10% 30% 20% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 20% Performance benchmark: MSCI World ex-australia Accumulation Net Index (A$) 15% S&P/ASX 300 Property Accumulation Index 5% UBS Australian Composite Bond Index 22% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 18% UBS Bank Bill Index 20% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 3 year investment period. This fund is intended to suit an investor seeking a regular income and moderate capital growth from a conservative diversified portfolio of income and capital growth assets. Medium (Risk band 4) The investment objectives (include the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. Bendigo SmartStart Pension 17

18 Fund Name Bendigo Balanced Wholesale Fund (ARSN ) objective: strategy: To outperform the performance benchmark (before fees). To invest via a selection of high quality investment managers that specialise in managing specific asset classes. The fund invests across the asset classes of Australian shares, international shares, property securities, Australian fixed interest, international fixed interest and cash. Min Max Neutral Australian shares 18% 48% 33% International shares 10% 30% 20% Target asset allocation: Property securities 2% 12% 7% Australian fixed interest 7% 27% 17% International fixed interest 5% 23% 13% Cash 0% 20% 10% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 33% Performance benchmark: MSCI World ex-australia Accumulation Net Index (A$) 20% S&P/ASX 300 Property Accumulation Index 7% UBS Australian Composite Bond Index 17% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 13% UBS Bank Bill Index 10% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 4 year investment period. This fund is intended to suit an investor seeking capital growth and regular income from a diversified portfolio of growth and income generating assets. Medium to high (Risk band 5) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. 18 Bendigo Wealth Retirement Solutions

19 Fund Name Bendigo Growth Wholesale Fund (ARSN ) objective: strategy: To outperform the performance benchmark (before fees). To invest via a selection of high quality investment managers that specialise in managing specific asset classes. The fund primarily invests in growth assets with a small exposure to income generating assets. Min Max Neutral Australian shares 27% 57% 42% International shares 15% 45% 30% Target asset allocation: Property securities 3% 13% 8% Australian fixed interest 3% 13% 8% International fixed interest 2% 12% 7% Cash 0% 10% 5% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 42% Performance benchmark: MSCI World ex-australia Accumulation Net Index (A$) 30% S&P/ASX 300 Property Accumulation Index 8% UBS Australian Composite Bond Index 8% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 7% UBS Bank Bill Index 5% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 5 year investment period. This fund is intended to suit an investor primarily seeking long term capital growth with moderate income from a diversified portfolio of growth assets. Investors should be prepared to accept volatility in the value of their investment over a rolling short term period. High (Risk band 6) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. Bendigo SmartStart Pension 19

20 Fund Name Bendigo High Growth Wholesale Fund (ARSN ) objective: strategy: To outperform the performance benchmark (before fees). To invest via a selection of high quality investment managers that specialise in managing specific asset classes. The fund focuses on investment in capital growth assets through exposure to growth assets. Min Max Neutral Target asset allocation: Australian shares 35% 65% 50% International shares 22% 52% 37% Property securities 5% 15% 10% Cash 0% 10% 3% The fund s performance is measured against a composite benchmark, consisting of the following sharemarket indices in the proportions indicated: Performance benchmark: S&P/ASX 300 Accumulation Index 50% MSCI World ex-australia Accumulation Net Index (A$) 37% S&P/ASX 300 Property Accumulation Index 10% UBS Bank Bill Index 3% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 7 year investment period. This fund is intended to suit an investor seeking long-term capital growth, from a portfolio of growth assets. Investors should be prepared to accept volatility in the value of their investment over a rolling short term period. High (Risk band 6) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. 20 Bendigo Wealth Retirement Solutions

21 Fund Name Bendigo Defensive Index Fund (ARSN ) objective: strategy: To match or exceed the performance benchmark (before fees). To invest via a selection of index funds and cash that seeks to track the performance of selected benchmarks for each asset class. The fund invests predominantly in income generating defensive assets (Australian fixed interest, international fixed interest and cash) whilst limiting exposure to growth assets (Australian shares, international shares and property securities). Min Max Neutral Australian shares 4% 14% 9% International shares 2% 12% 7% Target asset allocation: Property securities 0% 9% 4% Australian fixed interest 15% 45% 30% International fixed interest 15% 35% 25% Cash 10% 40% 25% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 9% Performance benchmark: MSCI World ex-australia Accumulation Net Index (50% unhedged and 50% $A Hedged) S&P/ASX 300 Property Accumulation Index 4% 7% UBS Australian Composite Bond Index 30% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 25% UBS Bank Bill Index 25% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure Changes to the Fund: Recommended for at least a 2 year investment period. This fund is intended to suit an investor seeking an income focused portfolio with low capital volatility. Low (Risk band 2) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. Bendigo SmartStart Pension 21

22 Fund Name Bendigo Conservative Index Fund (ARSN ) objective: strategy: To match or exceed the performance benchmark (before fees). To invest via a selection of index funds and cash that seek to track the performance of selected benchmarks for each asset class. The fund invests in income generating assets (Australian fixed interest, international fixed interest and cash) with a lower weighting to capital growth assets (Australian shares, international shares and property securities). Min Max Neutral Australian shares 10% 30% 20% International shares 5% 25% 15% Target asset allocation: Property securities 0% 10% 5% Australian fixed interest 12% 32% 22% International fixed interest 8% 28% 18% Cash 10% 30% 20% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 20% Performance benchmark: MSCI World ex-australia Accumulation Net Index (50% unhedged and 50% $A Hedged) S&P/ASX 300 Property Accumulation Index 5% 15% UBS Australian Composite Bond Index 22% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 18% UBS Bank Bill Index 20% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 3 year investment period. This fund is intended to suit an investor primarily seeking a regular income and moderate capital growth from a conservative diversified portfolio of income and capital growth assets. Medium (Risk band 4) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. 22 Bendigo Wealth Retirement Solutions

23 Fund Name Bendigo Balanced Index Fund (ARSN ) objective: strategy: To match or exceed the performance benchmark (before fees) To invest via a selection of index funds and cash that seek to track the performance of selected benchmarks for each asset class. The fund invests across the asset classes of Australian shares, international shares, property securities, Australian fixed interest, international fixed interest and cash. Min Max Neutral Australian shares 18% 48% 33% International shares 10% 30% 20% Target asset allocation: Property securities 2% 12% 7% Australian fixed interest 7% 27% 17% International fixed interest 5% 23% 13% Cash 0% 20% 10% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 33% Performance benchmark: MSCI World ex-australia Accumulation Net Index (50% unhedged and 50% $A Hedged) S&P/ASX 300 Property Accumulation Index 7% 20% UBS Australian Composite Bond Index 17% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 13% UBS Bank Bill Index 10% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 4 year investment period. This fund is intended to suit an investor primarily seeking capital growth and regular income from a diversified portfolio of growth and income generating assets. Medium to high (Risk band 5) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. Bendigo SmartStart Pension 23

24 Fund Name Bendigo Growth Index Fund (ARSN ) objective: strategy: To match or exceed the performance benchmark (before fees). To invest via a selection of index funds and cash that seek to track the performance of selected benchmarks for each asset class. The Fund primarily invests in growth assets with a small exposure to income generating assets. Min Max Neutral Australian shares 27% 57% 42% International shares 15% 45% 30% Target asset allocation: Property securities 3% 13% 8% Australian fixed interest 3% 13% 8% International fixed interest 2% 12% 7% Cash 0% 10% 5% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: S&P/ASX 300 Accumulation Index 42% Performance benchmark: MSCI World ex-australia Accumulation Net Index (50% unhedged and 50% $A Hedged) S&P/ASX 300 Property Accumulation Index 8% 30% UBS Australian Composite Bond Index 8% Barclays Capital Global Aggregate Bond Index (A$ Hedged) 7% UBS Bank Bill Index 5% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 5 year investment period. This fund is intended to suit an investor primarily seeking long term capital growth with moderate income from a diversified portfolio of growth assets. Investors should be prepared to accept volatility in the value of their investment over a rolling short term period. High (Risk band 6) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. 24 Bendigo Wealth Retirement Solutions

25 Fund Name Bendigo High Growth Index Fund (ARSN ) objective: strategy: To match or exceed the performance benchmark (before fees). To invest via a selection of index funds and cash that seek to track the performance of selected benchmarks for each asset class. The Fund invests in capital growth assets plus a small investment in cash. Min Max Neutral Target asset allocation: Australian shares 35% 65% 50% International shares 22% 52% 37% Property securities 5% 15% 10% Cash 0% 10% 3% The fund s performance is measured against a composite benchmark, consisting of the following indices in the proportions indicated: Performance benchmark: S&P/ASX 300 Accumulation Index 50% MSCI World ex-australia Accumulation Net Index (50% unhedged and 50% $A Hedged) 37% S&P/ASX 300 Property Accumulation Index 10% UBS Bank Bill Index 3% timeframe: Type of investor to whom this investment is suited: Standard Risk Measure: Changes to the Fund: Recommended for at least a 7 year investment period. This fund is intended to suit an investor seeking long term capital growth from a portfolio of growth assets. Investors should be prepared to accept volatility in the value of their investment over a rolling short term period. High (Risk band 6) The investment objectives (including the performance benchmarks, target asset allocations and investment strategy) and underlying investment managers may change from time to time. Updated information will be available on our website. performance For information on the past performance of the Pension s investment options, please refer to our website. Valuing your investment portfolio The balance of your Member Account is the total value of your Account and Cash at Bank. Each of the Pension s investment options is unitised, and the unit prices associated with the units rise and fall in line with the value of the assets of each investment option. Unit prices are calculated and declared at least twice a week, and their value is applied to your Member Account. You can check the value of your Member Account online at any time via our website. Delays in processing investment instructions Sometimes it may not be possible to act on your instructions in a timely fashion (e.g. there may be insufficient information, or certain requirements may not have been met). In these cases you and/ or your financial adviser will be contacted. Sandhurst reserves the right to refuse or delay processing of your instructions for any reason. In such cases, Sandhurst accepts no liability for any losses incurred. Labour standards, or environment, social or ethical considerations Sandhurst does not take into account labour standards or environmental, social or ethical considerations in the selection of investment options for the Pension and the selection, retention or realisation of investments of the Pension. However, the investment managers which manage the underlying investments of the Pension may or may not take labour standards or environmental, social or ethical considerations into account when selecting, retaining or realising investments of the Pension. Bendigo SmartStart Pension 25

26 5. Risks It is important to understand that there are inherent risks in any investment. The purpose of this section is to inform you of the types of risks that may apply to an investment in the Pension. This section is a summary of what we consider to be the significant risks that should be considered before deciding to invest in the Pension. This section does not purport to be a comprehensive list of all of the risks. Whilst we are not able to remove all the risks associated with an investment in the Pension, we employ a range of investment and risk management strategies to identify, evaluate and manage these risks. All investments are subject to varying degrees of risk and generally go up as well as go down in value. Asset classes perform differently at different times and have different risk characteristics and volatility. Generally the higher the expected return of an investment, the higher the risk. When you consider an investment in the Pension, you should take into account your personal risk tolerance. There are risks in choosing to invest in the Pension, referred to here as Pension risks. Pension risks The risk What is this risk about How this risk is managed Changes to the trustee and administration of the Plan Changes to superannuation and taxation laws Specific risks in relation to the administration of the Pension include that: the Pension could terminate; Sandhurst could change the Pension s governing rules, including fees, expenses, notice periods or withdrawal features relating to the Pensions; Sandhurst could be replaced as the trustee of the Plan; the service providers could fail to comply with its obligations under the administration agreement and need to be replaced; and/or the service providers could alter its fees Changes are often made to superannuation and taxation rules and laws, which may impact on your eligibility to rollover funds to the Pension, the management of the Pension, costs of investing in the Pensions, the types of contributions you may make and your ability to access your benefits. Sandhurst is obliged to always act in accordance with the Trust Deed and in the best interests of members. At the date of this PDS, Sandhurst is unaware of any intention to change the current arrangements relating to the Pension. Subject to the terms of the Trust Deed, Sandhurst will notify members and may issue a replacement PDS, a supplementary PDS or website update if material changes in the administration of the Pension occur. Sandhurst has entered into agreements with its key service providers to the Plan that allow Sandhurst to monitor their performance and solvency, and to be notified in advance of any changes in their fees. Sandhurst monitors superannuation and tax related changes and provides updated information to members in the Plan s annual report and/or on our website. 26 Bendigo Wealth Retirement Solutions

27 The risk What is this risk about How this risk is managed fund risk Liquidity Risk Specific risks in relation to the investment options offered for the Pension include that Sandhurst could: add or remove certain investment options available to members investing in the Pension; and/or change the overall investment strategy of the Pension. In the event of market disruptions, some investments may not be easily converted to cash, which may affect our ability to satisfy pension payments or withdrawals. Sandhurst monitors the investment performance of the available investment options against any stated objectives and market benchmarks, and may add or remove investment options and/or their underlying investment managers as a result. Sandhurst will notify members (via the website or in writing) and may issue a replacement PDS a supplementary PDS, a website update, or write to members directly if it adds or removes investment options available to members investing in the Pension, or adds or removes investment managers, or materially alters the Pension s overall investment strategy. Sandhurst monitors closely the liquidity status of each investment option. Any investment that Sandhurst deems to be a significant liquidity risk is closed to new members. Longevity Risk This is the risk that you will outlive your retirement savings. Neither the amount of your Pension account balance or the pension payments you receive are guaranteed, and can go up and down as a result of many factors, including investment and market performance. The amount of income you receive from your Pension may not always be sufficient to meet your needs. Sandhurst provides an Annual Statement to all members as well as daily access to their account balance information via the website login. We also provide various calculation tools through our education centre online that aims to assist members to identify if there is a gap between their retirement savings and how much they actually need in order to maintain the lifestyle they want in retirement. Bendigo SmartStart Pension 27

28 There are also risks associated with choosing particular investment options offered in the Pension, referred to here as risks. These investment risks can be different depending on whether you invest in one of the Passive Funds, the Active Funds the Sandhurst Strategic Income Fund or the Cash investment. risks The risk What this risk is about type to which this applies Individual investment risk manager risk fund risk Market, country and political risk Individual investments made through your investment options will fluctuate in value, meaning that they can, and do, fall in value for many reasons. This is an inherent risk associated with all investment options such as the managed funds offered to investors in the Pension. However, there tends to be greater risks associated with growth assets (i.e. growth assets are shares and property). The risks may decrease with more defensive assets (i.e. defensive assets are fixed interest securities and cash). Where this is considered a material risk it is addressed through the use of diversification. The investment strategy may not be successful resulting in underperformance of the investment option, either in absolute terms or when considered with respect to the market, or relative to its peers. The Responsible Entity monitors the managers of each investment option with the exception of the Sandhurst Strategic Income Fund, to ensure each manager continues to be appropriate. If a manager persistently underperforms an action plan will be formulated to improve the performance (this may include replacing a manager). Sandhurst as Responsible Entity of the Strategic Income Fund will monitor its own performance as an investment manager through internal committees that review historical performance against market benchmarks and risk management practices. The investment fund(s) held could be terminated, the fees and expenses could change, the applicable responsible entity could be replaced, any of the fund investment managers could be replaced, and other key personnel could change. There is also a risk that investing in an investment fund may give different results than investing directly in securities because of income or capital gains accrued in the investment fund, and the consequences of investments and withdrawals by other investors. Sandhurst aims to minimise fund risk by monitoring how these risks may impact the investment options and by acting in the best interests of investors as a whole. The investment options may be impacted either directly or indirectly by market, country and/or political risk. Market risk relates to the performance of the market as a whole impacting on investment returns. Factors that may influence the market include economic, technological, political, taxation, country and legal conditions, and even market sentiment. These issues are monitored by the Responsible Entity and taken into consideration when making investment decisions. Active Funds Passive Funds Sandhurst Strategic Income Fund Active Funds Passive Funds Sandhurst Strategic Income Fund Active Funds Passive Funds Sandhurst Strategic Income Fund Active Funds Passive Funds Sandhurst Strategic Income Fund 28 Bendigo Wealth Retirement Solutions

29 The risk What this risk is about type to which this applies Credit risk Concentration risk Interest rate risk Currency risk Counterparty risk The risk that the credit quality of underlying investments deteriorates unexpectedly leading to less than expected income and possible loss of capital. The degree of risk varies between investment options. Within the diversified funds this risk is managed via diversification, by underlying investment managers and through the Asset Allocation processes. Cash is considered low risk but the credit quality is monitored by the Trustee. The Responsible Entity manages credit risk in the Sandhurst Strategic Income Fund by investing in an approved list of debt securities. Credit risk is monitored, in an effort to identify any potential defaults before they occur. The risk that poor performance in a group of investments common to a particular section of the market will significantly affect the performance of the fund. For the Sandhurst Strategic Income Fund the Responsible Entity will manage concentration risk by diversifying the portfolio as deemed appropriate. However they may at times choose to concentrate the portfolio if they believe this will provide strong risk adjusted returns. Changes in interest rates will have a positive or negative impact directly or indirectly on investment values or returns. The degree of risk varies between investment options. Interest rate risk is monitored and considered in the Responsible Entity s management of Asset Allocations for the Active Funds and Index Funds, and it considers it in the management of the Sandhurst Strategic Income Fund. Interest rate risk also affects the returns from the cash option. The 10 diversified funds may have exposure to overseas countries, and if their currencies change in value relative to the Australian dollar, there is a risk that the value of the investment can change. In the Passive Funds, the Responsible Entity reduces this uncertainty by choosing index funds that either fully or partly hedge their overseas exposures back to Australian dollars. In the Active Funds foreign currency exposures are actively managed by the Responsible Entity with an objective to add to returns. The Responsible Entity will monitor the overall level of exposure of the investment options to foreign currencies and can take action to limit the investment options exposure to adverse currency movements when it is considered appropriate. Counterparty risk represents the loss that would be recognised if counterparties (i.e. the other parties to the contract) failed to perform as contracted. The Responsible Entity of the funds aims to reduce this risk by investing in diversified portfolios, by selecting reputable and professional investment managers and/or by carefully selecting investments. Active Funds Passive Funds Sandhurst Strategic Income Fund Cash investment Sandhurst Strategic Income Fund Active Funds Passive Funds Sandhurst Strategic Income Fund Cash investment Active Funds Passive Funds Active Funds Passive Funds Sandhurst Strategic Income Fund Cash investment Bendigo SmartStart Pension 29

30 The risk What this risk is about type to which this applies Liquidity risk Derivatives risk Certain investments may not be easily and quickly convertible into cash when required, due to various market factors. For instance, from time to time (especially in falling markets), securities in small companies may become less liquid. Also, it may not be possible to withdraw investments in the investment options themselves if the fund is not liquid. The Responsible Entity of the funds aims to reduce this risk by investing in diversified portfolios and/or by monitoring portfolio liquidity to support a high degree of liquidity for each investment option. The investment options may give exposure to derivatives. Derivatives risk includes the value of derivative positions not moving in line with the movement in the underlying asset, potential illiquidity of the derivative, and being unable to meet payment obligations in relation to derivative contracts. None of the investment options use derivatives as a large part of their portfolio so this risk should be partly mitigated by the amount of derivatives use. The Responsible Entity of the funds manages this risk by selecting investment managers that have appropriate processes in place to manage derivatives. Active Funds Passive Funds Sandhurst Strategic Income Fund Active Funds Passive Funds Sandhurst Strategic Income Fund Sandhurst recommends that you seek personal financial advice in selecting the investment options that will make up your investment strategy, and when changing your investment strategy. 30 Bendigo Wealth Retirement Solutions

31 6. Fees and 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 may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of fees based on your own circumstances, the Australian Securities and s Commission (ASIC) website ( has a calculator to help you check out different fee options. The following table shows the fees and costs you may be charged when investing in the Pension. Fees and costs may be deducted directly from your account, the returns on your investment or the Plan assets as a whole. You can use the fees and costs information below to compare costs between different superannuation products. All the fees and costs shown in this section include stamp duty and GST, less any applicable reduced input tax credits, unless otherwise stated. Type of fee or cost Amount How and when paid Fees when your money moves in or out of the Pension: Establishment fee The fee to open your investment. Contribution fee The fee on each amount contributed to your investment. Withdrawal fee The fee on each amount you take out of your investment. Termination fee The fee to close your investment. Nil Nil Nil Nil Not applicable Not applicable Not applicable Not applicable Bendigo SmartStart Pension 31

32 Type of fee or cost Amount How and when paid Management costs* Management costs The fees and costs for managing your investment. Service fees: Switching fee: The fee for changing an investment option. You pay an Account Keeping Fee of $98 per annum, an Administration Fee of 0.20% per annum plus applicable investment costs depending on your chosen investment see below: Active investment options Bendigo Defensive Wholesale Fund: 0.60% p.a. Bendigo Conservative Wholesale Fund: 0.72% p.a. Bendigo Balanced Wholesale Fund: 0.82% p.a. Bendigo Growth Wholesale Fund: 0.92% p.a. Bendigo High Growth Wholesale Fund: 0.99% p.a. Passive investment options Bendigo Defensive Index Fund: 0.39% p.a. Bendigo Conservative Index Fund: 0.41% p.a. Bendigo Balanced Index Fund: 0.43% p.a. Bendigo Growth Index Fund: 0.45% p.a. Bendigo High Growth Index Fund: 0.46% p.a. Sandhurst Strategic Income Fund: 0.45% p.a. Cash : Up to 0.40% p.a. Nil** The Account Keeping Fee is withdrawn from your Member Account in advance in quarterly instalments. If you join or leave the Pension during a quarter, the fee is pro-rated. The Administration Fee is calculated daily and charged monthly in arrears. The investment cost is calculated daily on the respective investment fund s net assets prior to the calculation of the unit price of each investment fund. Not applicable *Our management costs are based on the latest information as at the date of this PDS. Our management cost may increase or decrease over time depending on the fees of the trustee, responsible entity, investment managers, administrative expenses or other expense recoveries. ** Please note, you will incur a buy/sell spread when your money moves in or out of the investment options (excluding Cash investment). Sandhurst may make a payment from its own resources to a Bendigo Community Bank, joint venture, or franchise branch if your membership was processed by any one of these entities. Any amount is paid by Sandhurst and not by you. Example of annual fees and costs The table below gives an example of how fees and costs in the Bendigo Balanced Index Fund can affect your pension investment over a 1 year period. You should use this table to compare with other pension products. Example: Bendigo Balanced Index Fund Balance of $50,000 Contribution Fee Not applicable Nil. PLUS Management Costs Account Keeping Fee ($98) + Administration Fee (0.20%) + investment cost (0.43%) EQUALS Cost of Fund And, for every $50,000 you have in the Pension you will be charged $100 Administration Fee + $215 investment cost + $98 Account Keeping Fee* regardless of your balance. If your balance was $50,000, then for that year you will be charged $413.** What it costs you will depend on the investment options you choose and the fees (if any) you negotiate with your financial adviser. * The Account Keeping Fee is a set annual fee of $98 per member. **The actual amount you will be charged depends on a number of other factors, such as the timing of your investments and additional costs may apply, in the form of a buy/sell spread. Changes to fees Sandhurst may change the fees and costs at any time. You will be given at least 30 days notice for any increase in fees. 32 Bendigo Wealth Retirement Solutions

33 Additional explanation of fees and costs Management costs Management costs include: the Account Keeping Fee and Administration Fee payable to Sandhurst, and the investment costs (also referred to as the Indirect Cost Ratio (ICR)) that you pay with respect to each investment fund you invest in through the Pension. Transaction costs If you invest in, or withdraw from, one of the Pension s investment options, a buy/sell spread applies. The buy/ sell spread is the difference between the price at which you buy and sell units in an investment option. The buy/ sell spread is not paid to Sandhurst, it is retained by the investment fund to cover transaction costs (such as brokerage) that are incurred. The buy/sell spread for each of the Pension s investment options is outlined in the following table: option Buy spread Sell spread Cash nil nil Sandhurst Strategic Income Fund 0.10% 0.20% Active investment options Buy spread Sell spread Passive investment option Buy spread Sell spread Bendigo Defensive Wholesale Fund Bendigo Conservative Wholesale Fund Bendigo Balanced Wholesale Fund Bendigo Growth Wholesale Fund Bendigo High Growth Wholesale Fund 0.10% 0.10% 0.12% 0.12% 0.17% 0.17% Bendigo Defensive Index Fund Bendigo Conservative Index Fund Bendigo Balanced Index Fund 0.20% 0.20% 0.20% 0.20% 0.25% 0.20% 0.20% 0.20% Bendigo Growth Index Fund 0.25% 0.20% 0.25% 0.25% Bendigo High Growth Index Fund 0.25% 0.20% As an example of how the buy/sell spread operates, if you invest $50,000 in the Bendigo Balanced Index Fund, the cost to you (the buy spread) would be $125. The buy/sell spread is an estimate only and may change in the future. For the most up-to-date buy/sell spread for each investment option, please refer to our website. Member Advice Fee You can negotiate fees for advice in relation to your investment in the Pension. The following options are available: Member Advice Fee One-Off: This fee will be deducted from your Member Account when you sign an agreement to pay this fee to your adviser. The maximum fee per request is $5,500 inclusive of GST. Member Advice Fee Ongoing: This fee is paid monthly from your Member Account and calculated daily based on either a nominated monthly dollar amount (maximum $11,000 per year inclusive of GST) or percentage of account balance (maximum 2.2% p.a. of account balance inclusive of GST). Any member advice fee you have agreed to pay must be set out on your Application Form, or advised to us in writing by you or your financial adviser with your signed acknowledgement. If there is a change of adviser (or you no longer have an adviser), we will continue to pay the agreed member advice fee(s) to the dealer group you have nominated in the Application Form until you instruct us otherwise. Bendigo SmartStart Pension 33

34 Other costs and expenses The Trust Deed provides that certain costs and expenses of operating the Pension may be deducted from Plan income that does not belong to any individual member (i.e. unallocated revenue). These costs are in addition to the management costs set out in the table in this section of the PDS. Family Law fees Fees may also apply where you request information from us under the provisions of the Family Law Act Please contact us for further information. 7. Taxation Pension payments When you commence a Pension, the amount you invest may be divided between two components: tax-free; and taxable. How any pension payments and lump sums are taxed will depend on your age and how the amount you initially invest is divided between these two components. The tax-free component of any benefit paid from a pension will be in the same proportion as the percentage of the initial investment that is tax-free. No tax is payable on rollovers to another super fund. Prior to age 60 Pension payments from your Pension will be split between the tax-free and taxable components as described above. Prior to age 60 the taxable component of any income payment will be taxed at your marginal tax rate, plus the Medicare levy. Generally you can claim a 15% tax offset on this part of the payment, provided you have reached your Preservation Age. Sandhurst will deduct PAYG withholding tax from each pension payment and send you a PAYG Payment Summary each financial year. Further information is available from the Australian Taxation Office. We strongly recommend that you seek advice from a professional taxation adviser on these matters. Age 60 or over Pension payments or lump sum withdrawals (where eligible to be made) you receive after you turn 60 are tax-free; you do not need to include them in your taxable income. Taxation of earnings The investment earnings in your Pension are not taxed in the Pension. The Federal Government has, however, proposed to cap tax-free treatment of investment earnings in your Pension at $100,000 per annum per person. From 1 July 2014, earnings above that would generally be taxed in the Pension at the same concessional rate of 15% that applies to earnings in the accumulation phase. Please note that this is not yet law and subject to change. Taxation of lump sum withdrawals If you make a lump sum withdrawal and do not roll it over or transfer it to another complying superannuation or pension fund, then this amount will be treated as a Superannuation Lump Sum Payment (SLSP). How your SLSP is taxed will depend on its components and your age. Any lump sum withdrawals you make may also affect your social security entitlements. Component Tax-free Taxable Tax treatment Nil Under Preservation Age Taxed at 20% (plus Medicare levy) Between Preservation Age and 59 Tax-free up to your low-rate cap* and the balance is taxed at 15% (plus Medicare levy) Age 60 or over Tax-free * The low-rate cap is a lifetime cap up to which a member can be taxed on the taxable component of a lump sum benefit at a lower (including nil) rate of tax. The low rate cap amount is reduced by any amount previously applied to the low rate cap. The low-rate cap is indexed each financial year to the Average Weekly Ordinary Time Earnings (AWOTE) in $5,000 amounts. The low-rate cap is $175,000 (for the 2012/13 financial year) and $180,000 (for the 2013/14 financial year). 34 Bendigo Wealth Retirement Solutions

35 Taxation of death benefits The ways in which a death benefit may be paid under your Pension are set out below. If paid as a Lump Sum - A lump sum benefit can be paid to a tax dependant or a non-tax dependant: Tax dependants Currently your dependants for tax purposes are: a spouse (legally married, de facto or former spouse); a child under the age of 18 years; a person in an interdependency relationship with the member on the date of death (see the Glossary for the definition of an interdependency relationship ); or any other person who is wholly or partially financially dependent on you at the time of your death. If the lump sum benefit is paid to a tax dependant, it will be tax-free Non-tax dependants If the benefit is not paid to a tax dependant, then it will be taxed as an SLSP and no tax-free threshold will apply. This means that the benefit will be divided up into two components and taxed as follows: - Tax-free component paid tax-free; and - Taxable component the taxable component is taxed at 15% plus Medicare levy. For a lump sum benefit paid from the Pension to be taxed as a death benefit, it must generally be paid by the later of six months after the member s death or three months of the grant of probate or letters of administration of the deceased s estate. If paid as a reversionary pension If you have nominated an eligible reversionary beneficiary to receive a reversionary pension, then upon your death Sandhurst will allow your Pension to continue to be paid to that beneficiary. If a death benefit from your Pension is paid as a reversionary pension to an eligible pension beneficiary and: you are aged 60 or over when you die, then the income stream paid to the beneficiary will continue to be tax-free (regardless of the age of the beneficiary); or you are under 60 when you die and: - the beneficiary is 60 or older, then the income stream will be tax-free - the beneficiary is less than age 60, then the amount of pension the beneficiary receives which is taxable must be included in their tax return. A 15% tax offset will apply to this taxable portion of the payment. Please note, the information above in the taxation section of the PDS assumes that no part of your benefit includes an element untaxed in the fund. If it does, then a higher rate of tax would apply. Further information is available from the Australian Taxation Office. We strongly recommend that you seek advice from a professional taxation adviser on these matters. Surcharge on previous contributions The Superannuation Contributions Surcharge was abolished with effect from 1 July However, the Australian Taxation Office may assess a liability to superannuation surcharge on contributions made on your behalf before 1 July 2005, and before the commencement of your Pension. In that case, you will have to pay the surcharge yourself: it cannot be deducted from your Member Account. Tax file numbers The Plan, under the Superannuation Industry (Supervision) Act is authorised to seek your tax file number (TFN) which will only be used for lawful purposes. These purposes may change in the future as a result of legislative change. The TFN may be disclosed to another superannuation provider, when your benefits are being transferred, unless you request in writing that your TFN is not to be disclosed to any other trustee. It is not an offence to not quote your TFN. However, if you do not quote your TFN, you cannot open a Bendigo SmartStart Pension account. If you are under 60 years of age, when you join Bendigo SmartStart Pension, you will need to complete a Tax File Number Declaration Form and return it with your Pension Member Application Form to open your Pension. Bendigo SmartStart Pension 35

36 8. Additional Information Cooling-off If after joining the Pension, you change your mind, you may write to Sandhurst and request cancellation of your application. The request must be received within 14 days from the earlier of: the time you receive written confirmation of the opening of your Member Account; and 5 days after the opening of your Member Account. The amount refunded will be adjusted to take account of any increases or decreases in the value of the investments you may have selected, any tax payable and any reasonable administration expenses. Please note, you cannot exercise your cooling-off rights if you make any transaction on your Member Account during the cooling-off period. Keeping in touch with us It is very important that you always let Sandhurst know when you change your address details so that you do not become lost, and we can contact you for instructions as necessary. Sandhurst will transfer benefits that are payable to lost members to the Australian Taxation Office as required by law. You can advise Sandhurst of your change of address by using the Change of Details form available via the website. Alternatively, you can update your address details directly online or by contacting our Customer Service Centre. Related party transactions and conflicts of interests Sandhurst offers investment in other funds of which Sandhurst, or a related entity, is trustee, responsible entity or manager. We may also appoint any of our related bodies corporate (including the Bank) to provide services (including banking services) or perform functions in relation to the Pension. We may also enter into financial or other transactions with related bodies corporate in relation to the assets of the Pension. These related bodies corporate may earn fees, commissions or other benefits in relation to any such appointment or transaction and to retain them for their own account. Sandhurst has policies and procedures in place to ensure that it manages any conflicts of interest that may arise in such arrangements. We will resolve such conflicts of interests fairly and reasonably between members and in accordance with the law, ASIC policy and our own policies. Any transaction we undertake with a related body corporate will be based on arm s length commercial terms. Consent to be named The Bank has given and has not, before the date of the PDS, withdrawn its written consent to be named in this PDS and to the statements in the PDS concerning their role and activities, in each case in the form and context in which they are included or named. Complaints resolution If you have a complaint about the operation or management of the Pension, you should call or write to: Superannuation Enquiries Officer Bendigo SmartStart Pension GPO Box 529 Hobart, TAS 7001 All complaints will be handled in a courteous and confidential manner and will be properly considered and dealt with within 90 days of receipt. Once we have investigated your complaint, you will receive a written reply explaining our decision. If you are not satisfied with this decision, or the complaint has not been resolved within 90 days, then you may take your complaint to the Superannuation Complaints Tribunal (Tribunal). You can contact the Tribunal by: phoning ; or writing to: The Superannuation Complaints Tribunal Locked Bag 3060 Melbourne, VIC 3001 The Tribunal is an independent body established by the Federal Government to review trustee decisions affecting individual members. If it accepts your complaint, it will attempt to resolve the matter through conciliation. This involves helping you and Sandhurst to come to a mutual agreement. If conciliation is unsuccessful, then the complaint is referred back to the Tribunal for a determination, which is binding. Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) To comply with Sandhurst s AML/CTF regulatory requirements, Sandhurst will need to obtain identification information to establish your identity (and the identity of other persons associated with your account). Sandhurst may also do the following: require you to provide us or otherwise obtain, any additional information documentation or other information; 36 Bendigo Wealth Retirement Solutions

37 suspend, block or delay transactions on your account or refuse to make payment or provide services to you. We will incur no liability to you if we do so; and/or report any, or any proposed transaction or activity to any body authorised to accept such reports relating to AML/CTF or any law. By making an application, you acknowledge and warrant to Sandhurst that: you have not knowingly done anything to put Sandhurst and the Bendigo and Adelaide Bank Group in breach of AML/CTF laws; you will notify Sandhurst if you become aware of anything that would put Sandhurst and the Bendigo and Adelaide Bank Group in breach of AML/CTF laws; if requested you will provide additional information and assistance and comply with all reasonable requests to facilitate Sandhurst and the Bendigo and Adelaide Bank Group s compliance with AML/CTF laws; and if you fail to provide Sandhurst or the Bendigo and Adelaide Bank Group with additional information and documentation requested of you, your application may be refused or any interest you hold may be compulsorily withdrawn, and/or a withdrawal request by you may be delayed or refused by Sandhurst. You agree that Sandhurst and the Bendigo and Adelaide Bank Group will not be liable for any losses arising as a result of those circumstances and you are not aware and have no reason to suspect that: the money used to fund the investment is derived from or related to money laundering, terrorism financing or similar illegal activities; and proceeds of investment made in connection with this product will fund illegal activities. Your right to privacy and what we do with your information Under the Privacy Act 1988 (Cth), privacy rules now cover almost all personal information held by organisations in Australia. Sandhurst may collect personal information from you in the course of administering your interest in the Pension. As part of the administration of the Pension, your personal information may be disclosed for purposes which include: complying with superannuation and taxation laws or other regulatory requirements; administering your Pension; and to enable your financial adviser, if applicable, to provide advice to you. The other organisations to which your personal information may be disclosed for these purposes include: your bank or other financial institution for any direct credits or debits other entities for the purpose of financial advice and rollover or transfer of benefits other service providers to the Plan such as the administrator, Plan advisers, auditors, consultants, legal or accounting firms your executor, trustee, guardian or attorney. If you do not provide the information we ask for on the Application Form and other relevant forms, then we may not be able to process or administer your application. Sandhurst may share your personal information with related entities in the Bendigo and Adelaide Bank Group and Associated Companies in order to manage your relationship with the Bendigo and Adelaide Bank Group and Associated Companies and so that you can be informed about products or services offered or distributed by them or us. If you do not wish to receive information about new products or services from the Bendigo and Adelaide Bank Group and Associated Companies, please notify us through our Customer Service Centre. If you do that, then we will only continue to make contact with you to provide information in relation to your superannuation benefits. By becoming a member of the Plan you consent to the collection, use and disclosure of your personal information as described above. You can access your personal information or obtain the full privacy policy by accessing our website, or by writing to, phoning or ing our Customer Service Centre. Family Law and superannuation Since 2002 amendments to the Family Law Act 1975 allow couples to divide their superannuation interests if their marriage breaks down. The interests: may be divided by a formal splitting agreement or by a Family Court Order. can be divided in the accumulation phase (pre-retirement) either as an agreed amount or percentage. can be divided in the payment phase (when the member is in receipt of a pension) as a percentage of the regular pension payments. Bendigo SmartStart Pension 37