Pension division PRODUCT DISCLOSURE STATEMENT. Issued 1 October An application to join is at the back of this booklet.

Transcription

1 Pension division PRODUCT DISCLOSURE STATEMENT Issued 1 October 2017 An application to join is at the back of this booklet.

2 This Product Disclosure Statement (PDS) for the Club Plus Pension has been issued by Club Plus Superannuation Pty Limited ABN AFSL No: RSE Licence No: L RSE Registration No: R the Trustee of Club Plus Superannuation Scheme (Club Plus Super) ABN Any advice in this document is of a general nature only and does not take into account your personal objectives, fi nancial situation or needs. Prior to acting on any information in this document, you need to take into account your own fi nancial circumstances, consider the PDS for any product you are considering and seek independent fi nancial advice if you are unsure of what action to take. The material contained in this PDS was up to date when it was prepared. However, this information may be subject to change from time to time. If the change is not materially adverse, we will keep members informed via our website. You may request a copy of any updated material free of charge by contacting us. In the case of any inconsistency with this PDS and the Club Plus Super trust deed, the trust deed will prevail. To request a copy of the PDS, phone us on

3 CONTENTS Section 1. About the Club Plus Pension 1. About us 4 2. An overview 6 3. How to start 8 4. How we keep you informed 9 5. Choosing your pension amount and frequency Taking additional payments withdrawals Taxation What happens to your pension when you die 14 Section 2. Investments information 1. Overview Investment choice How we invest your money Glossary of investment terms 22 Section 3. Direct Investment Option Self Manage your pension 1. Overview Fees and charges Getting started Term Deposits Shares and exchange traded funds (ETFs) Tax 33 Section 4. More information 1. Understanding risk Fees and other costs Privacy policy Contact details 44

4 Section 1 About the Club Plus Pension 1 ABOUT US You've worked hard to build your retirement savings. Let Club Plus Super help you turn the fruits of your labour into a regular, tax-effective income stream. Club Plus Super was established in 1987 to provide superannuation for the club industry. Today we have more than 80,000 members and over 13,000 employers across Australia in a growing variety of businesses. As a public offer industry fund, we are open to all investors and provide retirement solutions to members from all industries. Club Plus Super holds the highest ratings with independent ratings agencies SuperRatings and Canstar.1 According to SuperRatings, Club Plus Super is a best value for money super fund that is well balanced across all key assessment criteria in a robust, secure and proven risk framework. 2 1 As at March SuperRatings Benchmark Report 2017 Club Plus Pension contact details Phone Fax Address Locked Bag 5042 Parramatta NSW 2124 Web clubplussuper.com.au Pension Division Product Disclosure Statement - October

5 Your fund $ Run for members No dividends or commissions are paid Best value Choice of investment options Quality and affordable fi nancial advice available Manage your account online through MemberAccess Pension Division Product Disclosure Statement - October

6 Section 1 About the Club Plus Pension 2 AN OVERVIEW What is the Club Plus Pension? Club Plus Pension is a product in which you can invest your superannuation monies for the purpose of receiving tax-effective regular income in retirement. Members aged over their preservation age can access their super as a Transition to Retirement (TTR) while continuing to work. For more information about when you can access your super and your preservation age, go to ato.gov/individuals/super/accessing-your-super. For more information about a Transition to Retirement (TTR) Pension, please refer to the TTR Pension Product Disclosure Statement available at clubplussuper.com.au/tools-resources Money is invested in your choice of investment options, with a pension paid to you as long as there is enough money in your Club Plus Pension account. A superannuation pension gives you the fl exibility to choose how much pension you receive each year (subject to Commonwealth Government minimums). You may also take part of your pension account balance as a lump sum. Lump sum payments may impact on your ability to sustain your pension over the long-term. Upon your death, the balance of your account is payable to your dependants or legal personal representative, or you can elect for your pension to continue to be paid as a reversionary pension. Transferring money into your Club Plus Pension The minimum investment in the Club Plus Pension is $20,000. You can only invest superannuation money into your pension. For example, you can t invest in a Club Plus Pension with money directly from your bank account. You can however, transfer that money to your superannuation account and from there transfer it to a Club Plus Pension. From 1 July 2017, the maximum that can be transferred or maintained in a pension is $1.6 million. If your balance exceeds $1.6 million because of investment returns and we are unable to contact you, we may transfer the excess balance back into your accumulation account. If you do not hold an accumulation account with Club Plus Super, one will be created on your behalf. You cannot top up your pension once it has commenced. If at a later date you want to put more money in a pension, you can start another one (keeping your existing pension) and receive payments from two (or more) pensions. Alternatively, you may be able to add money to your superannuation account and then combine your super and pension into a new pension. However, the $1.6 million cap applies to your combined pension balance. Please consult Club Plus Super or a qualifi ed fi nancial adviser before transferring lump sum amounts to super in order to establish a pension or combining your superannuation and pension. Important: The Federal Government sets caps on how much you or your employer can contribute to your super each fi nancial year. There are tax consequences if you go over these caps. For more information, call our Pension Hotline on What fees are payable? Fees include an Administration Fee of $1.80 per week plus 0.20% per annum calculated on your account balance. There are no fees for regular pension payments. If you request a lump sum payment from your pension account, the fi rst withdrawal each fi nancial year is free. However, a fee of $55 will be payable for each additional withdrawal. The investment managers who invest the assets of Club Plus Pension on your behalf charge management fees. There is no deduction of these fees directly from your pension account. Pension Division Product Disclosure Statement - October

7 What investment options are available? You are able to select one or a combination of different investment options. You are also able to take a more hands on approach and invest directly in term deposits, listed shares and exchange traded funds (ETFs) through our Direct Investment Option (DIO). See the section on the DIO for details of the investment options. If you do not select an investment option, your money will be invested in the same investment option(s) that your superannuation account was invested in prior to the transfer. You may transfer (switch) part or all of your account balance between investment options provided certain conditions are met. Daily unit pricing Unit pricing applies to each of the fi ve investment options available in the Club Plus Pension and this methodology is used to calculate and report on your account balance. Unit pricing does not apply to the Direct Investment Option. Important: When your Club Plus Pension is opened, we will invest your funds in the same investment options that your superannuation account was invested in. The transfer will be completed using the unit 'sell' price into your pension account, so as to avoid any buy-sell spread being applied. If you would like to make a switch to another investment option(s) and/or nominate other investment options for your pension payments, please indicate these on the Pension Application form enclosed in this PDS. In this instance, a buy-sell spread will apply. How are unit prices calculated? Unit prices will be determined by close of business each day and are calculated after an estimate of investment costs and taxes are taken out. Unit prices will vary according to investment performance and the unit price of an investment option will fl uctuate to refl ect investment earnings (which can be positive and/or negative). These movements are ultimately refl ected in your account balance. Club Plus Super reserves the right to publish unit prices more or less often in the event of adverse market fl uctuation or other circumstances at the Trustee s discretion, such as where there is insuffi cient information available to determine applicable unit prices. If we are unable to calculate unit prices for an investment option, that option will be temporarily suspended meaning you would be unable to buy or sell units from it. If this situation arises, we will communicate the relevant information via the website. Unit pricing information Daily unit prices are included on the website at clubplussuper.com.au/investments. You can also check your account balance, the number of units and the unit price for each of your selected investment options online via MemberAccess. Pension Division Product Disclosure Statement - October

8 Section 1 About the Club Plus Pension 3 HOW TO START Before completing the Pension Application and Tax File Number Declaration contained in this document, you should carefully read the information in this PDS. We also suggest that you consult a qualifi ed fi nancial adviser.* If you have any questions about the Club Plus Pension, please contact our Pension Hotline on Pension Application To start a Club Plus Pension account, please provide the following details in the forms at the end of this document: Your personal details, including name, address, date of birth and contact telephone numbers; Confi rmation of the amount that you will be investing in your pension; Confi rmation of the amount and frequency of payments you wish to receive as a pension. The amount must be within the limits set by the Commonwealth Government; Details of the bank, building society or credit union account that you wish your pension to be paid into; Review the Tax File Number Declaration; Sign the Pension Application; Provide evidence of your date of birth. Important: Your pension cannot commence until all the above details are provided. Investment choice Please also advise how you want your pension invested. You have the choice of fi ve investment options and the ability to invest directly in shares, selected exchange traded funds (ETFs) and term deposits. Your account will still commence if you do not advise how you want your funds invested as they will automatically default to the option that your Club Plus Super accumulation account was invested in. What if you change your mind? You can withdraw your Club Plus Pension application by requesting to do so in writing to the Trustee within 14 days of the date on your Welcome Letter. * Financial advice is available through Club Plus Financial Planning Pty Ltd (Club Plus Financial Planning), ABN , who is a Corporate Authorised Representative # of Adviser Network Pty Ltd, ABN ( Licensee ). The Licensee holds a current Australian Financial Services Licence # and is responsible for the fi nancial services provided to you. All Club Plus Financial Planning s fi nancial advisers are sub authorised representatives of the Licensee. Pension Division Product Disclosure Statement - October

9 4 HOW WE KEEP YOU INFORMED When you start a Club Plus Pension A membership account is set up with your personal and fi nancial details. You will receive a Welcome Letter confi rming: your membership of the Club Plus Pension; your personal details (e.g. name, address, date of birth); the minimum amount you must receive in the fi nancial year you started your pension; the initial investment amount used to commence your pension; details of any deductions or rebates that may reduce tax; any tax that will be deducted from your pension payments each month; your nominated pension amount and frequency; the bank, building society or credit union details you provided us; the investment option(s) your Club Plus Pension is invested in; details of reversionary or binding benefi ciaries (if applicable). The Welcome Letter will also contain your member number and details of any lump sum benefi ciaries. Please quote this member number whenever you contact us. Online MemberAccess You can access your pension account whenever it suits you by registering for MemberAccess. You can update your details, check your balance, see the number of units you own and most recent unit price, change your benefi ciaries and more. Register at clubplussuper.com.au/memberaccess. Member statements Each year, you will receive an Annual Member Statement that will confi rm: your account balance at 30 June; investment performance; pension payments made during the year; tax deducted (if appplicable); details of any lump sum payments; details of fees deducted from your account; and, minimum pension available to you for the following year. If you are under age 60, you will also receive a PAYG Payment Summary. A copy of this document must be submitted with your tax return. As there is no tax payable on pensions after your 60th birthday, you will not receive a Payment Summary unless tax was deducted during the year. Fund Annual Report Our Annual Report is published on our website in late October. This report contains information about Club Plus Super, including its fi nancial position, performance, product changes and changes to superannuation in general. To request a printed copy of the report, please call When you receive your Annual Member Statement, please advise us how much you wish to receive as a pension in the following twelve months (within Commonwealth Government limits). Pension Division Product Disclosure Statement - October

10 Section 1 About the Club Plus Pension 5 CHOOSING YOUR PENSION AMOUNT AND FREQUENCY You must nominate the pension amount you want to receive from your Club Plus Pension and provide details of the bank, building society or credit union account into which the payment should be made. Club Plus Pension payments can only be made by direct credit to your nominated account which must be held (solely or jointly) in your name. Pension payments are not made by cheque. Pension payment frequency and payment dates are shown in the table below: Minimum payments The Commonwealth Government sets limits on the minimum amount that you must receive as a pension in any twelve-month period to 30 June based on your age as at 1 July each year. The following table outlines those age-based minimum percentages. AGE LEGISLATED MINIMUM PERCENTAGE FREQUENCY Twice-monthly Monthly Quarterly Half-yearly Yearly PAYMENT DATE 5th and 20th of each month 20th of each month 20 March, June, September and December 20 June and December 20 June Under 65 4% % % % % % If the 5th or the 20th is a weekend or public holiday in New South Wales, the pension payment will occur on the preceding business day. Changing your bank details Should you need to change your nominated bank, building society or credit union account, you will need to advise Club Plus Super by completing the Pension Change of Details form. If a change request is received at least fi ve business days prior to a pension payment, the change will take effect from that pension payment. If not, the change may not be processed in time for that scheduled payment. Maximum payments For most Club Plus Super pensioners there is no limit on the amount of pension that you can take in a twelve-month period you could take your entire pension account balance in one year if you wished. 95 or older 14% The limits are calculated on your initial deposit and then recalculated on your balance at 1 July each year thereafter. You will be advised of the limits for each year and will receive a form to nominate your new pension amount annually. If you do not advise a new amount, your pension will generally continue at the previous level. However, if that amount is less than the minimum limit for that year, the pension payment will be increased to the minimum. Your account balance will vary each year depending on factors such as: the amount of pension payments paid to you during the year; the investment performance (either positive or negative) of the investment option(s) in which you are invested; any lump sum withdrawals made by you from the Club Plus Pension, and; any fees and costs deducted. Pension Division Product Disclosure Statement - October

11 Can you change your nominated amount? You have the option to change your nominated pension amount at any time throughout the year, provided you receive at least the minimum amount. A change in annual pension amount must be provided to Club Plus Super fi ve business days prior to the date of the pension payment to be processed in time for your next pension payment. If you tell us of the change after this time, your election may not be effective until the next pension payment. How long will pension payments continue? Club Plus Super makes pension payments from your account until your account balance is nil. The length of time your pension payments continue depends on the value of your investment, the amount of pension income you take each year, and the investment performance of the investment option(s) you choose. There is no guarantee that your pension payments will continue for life. If your minimum pension amount has not been reached by the date the last payment is due to be made to you in the fi nancial year, an additional payment will be made to ensure the minimum amount is paid. Pension Division Product Disclosure Statement - October

12 Section 1 About the Club Plus Pension 6 TAKING ADDITIONAL PAYMENTS - WITHDRAWALS How are withdrawals treated? When requesting a withdrawal (other than your regular pension income), the additional payment(s) may be treated as: An irregular pension payment, on which you may pay income tax. However, you may be eligible for a 15% tax offset. A lump sum withdrawal, which is treated as a Superannuation Lump Sum Payment may be subject to lump sum tax if you are under age 60. Whenever you request payment of a lump sum from your pension account, the fi rst withdrawal each year is free. Thereafter, a fee of $55 applies for additional withdrawals: or A combination of both an irregular pension payment and a lump sum withdrawal. If you do not specify whether you would like your additional withdrawals as an irregular pension payment or a lump sum withdrawal, we will treat it as a lump sum withdrawal. Other conditions The minimum amount that can be withdrawn is $1,000. If your account balance is less than $1,000 then you must withdraw the entire balance. Effect of withdrawals on investment options You are able to nominate the investment option(s) from which payments are to be taken. For example, if you have invested 50 per cent of your pension account in the Balanced option and 50 per cent in the Cash option, you may want pension payments or a withdrawal to be made from the amount in the Cash option. This will continue until the amount available in that option has been reduced to zero. For lump sum withdrawals, please indicate your preference on the withdrawal form at the time of submitting your request. If you make a lump sum withdrawal from your Club Plus Pension we are legally required to fi rst pay you a minimum pension amount for the relevant portion of that fi nancial year. If you have already received more than this amount, no additional pension payment is required. If you are making a full withdrawal and would like us to pay a specifi c amount as an irregular pension payment up to the maximum limit and the balance as a lump sum, please inform us when requesting the full withdrawal. Depending on your account balance, a withdrawal may not affect pension payments for the current year, however, it will affect the amount of pension that you can take the following year when the minimum amounts are recalculated. Any withdrawal will also affect the ability of the pension to continue to provide a reasonable income for the remainder of your life. Pension Division Product Disclosure Statement - October

13 7 TAXATION If you are aged 60 or over there is no tax payable on the income from your Club Plus Pension. If you are aged less than 60, then Club Plus Super deducts tax at the relevant Pay As You Go (PAYG) rate that applies to the amount paid and the income from your Club Plus Pension is included as part of your total income when you prepare your tax return. Club Plus Super will deduct tax from your pension based on the amount of pension being paid, taking into account any deductions and rebates that are applicable according to the information that you have supplied to us. Providing your tax fi le number (TFN) By completing the Tax File Number Declaration form, you are supplying details which will allow Club Plus Super to determine the amount of tax to be deducted from your pension income. Club Plus Super is allowed to collect your TFN under the Superannuation Industry (Supervision) Act Providing your TFN to Club Plus Super is voluntary and it is not an offence if you choose not to quote it. The main advantage of providing your TFN is that no additional tax will be deducted when you start withdrawing your super benefi ts, other than the tax usually deducted. If we do not have your TFN, then tax will be withheld from the taxable component of your pension income and lump sum withdrawals at the highest marginal tax rate plus Medicare Levy. Centrelink treatment of pensions Receiving a Club Plus Pension does not necessarily prevent you from receiving an Age Pension or other Social Security benefi ts. You may still be able to receive a partial Age Pension whilst you are receiving your Club Plus Pension. Centrelink will assess a person s entitlement to an Age Pension based on an Income and an Assets test. Whichever test results in the lower pension is the one applicable. Due to the fl exible nature of pensions, Centrelink will include the balance of your pension account for the Assets Test. They will also include some of your income from your pension for the purposes of the Income Test. Lump sum withdrawals Lump sum withdrawals from your pension account may be treated in one of two ways: 1. As a return of capital; or 2. As a pension payment. Each option will be treated differently by Centrelink and will affect any payments made under the Income Test. Important: The rules for age pension entitlement are fairly complex. It is recommended that you consult Centrelink or speak to an independent qualifi ed fi nancial adviser to ensure you maximise your entitlements. If you do provide it to us, we will use it only for legal purposes and it will be treated as confi dential. This includes fi nding or identifying your superannuation benefi ts where other information is insuffi cient, calculating tax on any eligible termination payment you may be entitled to, and providing information to the Commissioner of Taxation. We may provide it to another superannuation provider if your benefi ts are transferred to them, unless you advise us in writing not to provide it to them. These purposes may change in the future. Pension Division Product Disclosure Statement - October

14 Section 1 About the Club Plus Pension 8 WHAT HAPPENS TO YOUR PENSION WHEN YOU DIE? On your death, the remaining balance of your pension account will be paid in one of three ways: 1. As a reversionary pension 2. As a binding death nomination to your benefi ciary(ies) 3. Other lump sum death benefi t payments 1. What is a reversionary pension A reversionary pension is paid if you elect a reversionary benefi ciary on commencement of your pension. This means the pension you were receiving prior to your death will become immediately payable to your reversionary benefi ciary. A reversionary benefi ciary is someone you nominate to receive your pension on your death. Who can I nominate? You may nominate your spouse, or in limited circumstances, your child, as your reversionary benefi ciary. If you nominate a reversionary benefi ciary for your Club Plus Pension: you cannot nominate any other benefi ciary; and this nomination cannot be changed or revoked. If you want to nominate a reversionary benefi ciary, you will also need to provide evidence of their date of birth. You can send in a certifi ed copy of a Birth Certifi cate, Driver s Licence, or Citizenship Certifi cate to confi rm this. A certifi ed copy is a copy signed by a Justice of the Peace or someone capable of witnessing statutory declarations (for example, at Australia Post, or a Police Offi cer) certifying that it is a true copy of the original. If you send original documents, these will be returned following copying and certifi cation by us. What information should be provided for a reversionary pension? In order to claim a reversionary pension, the following information will be required: Your membership details; Date of death; A certifi ed copy of the death certifi cate; A certifi ed copy of your birth certifi cate; and A certifi ed copy of a marriage certifi cate (if applicable). Such other information as required by the Trustee that establishes the claimant as a spouse or child of the deceased member at the time of death. 2. What is a Binding Death Benefi t Nomination If there is no reversionary benefi ciary, you can make a Binding Death Benefi t Nomination, which is a written direction you make to the Trustee of Club Plus Super nominating who you want to receive your benefi t in the event of your death. If your nomination is valid and in effect at the date of your death, the Trustee must pay your benefi t to the named benefi ciary(ies) set out in your binding death nomination direction. Who can I nominate? You may nominate one or more of your dependants and/or legal personal representatives. However, please ensure the percentage allocations of the total sum to 100 per cent. How long is your nomination valid for? A Binding Death Benefi t Nomination remains in effect for three years from the date it is fi rst signed, last amended or confi rmed. Can I cancel or amend my nomination? You may cancel or alter your nomination any time by providing written notice to the Trustee, signed and dated by you in the presence of two witnesses (both must be over 18 years of age, neither of whom are a nominated benefi ciary). Pension Division Product Disclosure Statement - October

15 3. Other lump sum death benefi t payments Upon your death, if there is no reversionary benefi ciary and there is no binding death benefi t nomination, the remaining balance of your Club Plus Pension account is payable in accordance with the Trust Deed to your dependants or Legal Personal Representative as a lump sum. Nominating a non binding benefi ciary You may advise the Trustee as to whom you wish to receive your death benefi t. If you wish to nominate one or more benefi ciaries, they must be a dependant or your Legal Personal Representative. The Trustee will take your nomination into consideration, but ultimately the Trustee has the discretion to decide who will receive your death benefi t. Who can receive death benefi t payments? The Trustee must take into account all potential dependants when assessing a claim, not just your nominated preferred benefi ciaries. This and other legal requirements often complicate the payment process so it may be some time before your death benefi t is paid. Every effort is made to process benefi ts as quickly as possible. The Trustee is limited to paying your death benefi t to the following people: A dependant; or Your legal representative (i.e. executor or administrator of your estate); or If none of the above apply, then to any person or party that the Trustee deems appropriate. Your spouse means your husband or wife or another person (whether of the same sex or a different sex) with whom you are in a relationship with that is registered under a law of a State or Territory; or another person who, although you are not legally married to, lives with you on a genuine domestic basis as a couple. Your children includes step, adopted and ex-nuptial children, a child of your spouse and someone who is a child of the person within the meaning of the Family Law Act This includes a child who was born of a woman as the result of an artifi cial conception procedure while the woman was married to, or in a de-facto relationship with, another person (whether of the opposite or same sex), or a child who was conceived via a surrogacy agreement but is deemed to be the child of a person under a state or territory court order. What is an interdependency relationship? An interdependency relationship is defi ned as: a close personal relationship between two people who live together; and where one or both provides for the fi nancial, domestic and personal support of the other. However, the term is not intended to extend to those who share accommodation for convenience (e.g. fl atmates). Further, it is not intended to include those who provide care as part of an employment relationship (e.g. a live-in nanny or housekeeper) or on behalf of a charity. To nominate a benefi ciary, complete Section 9 on the Pension Application. To update your benefi ciary nominations at a later date, simply complete a Pension Change of Details form, or log in to your account at clubplussuper.com.au/memberaccess. A dependant is: your spouse and children; or those in an interdependency relationship with you; or any other individuals who are fi nancially dependent on you. Pension Division Product Disclosure Statement - October

16 Section 2 Investments Information 1 OVERVIEW Your investment options Club Plus Pension offers you the choice of fi ve investment options, as well as the ability to invest directly via the Direct Investment Option (DIO) in Shares, a selection of exchange traded funds (ETFs) nominated by the Trustee, and Term Deposits. Each investment option has a varying level of risk and potential return. When choosing which option(s) to invest in, you should consider the likely investment return, the risk and your investment timeframe. For all investment options, other than the DIO, returns are passed on through unit prices. You can invest your money in one or more of these options. The fi ve investment options are: Cash Conservative Balanced Balanced Growth Australian Shares Direct Investment Option: Shares listed on the S&P/ASX 300 A selection of exchange traded funds (ETFs) Term Deposits For more information about our DIO, please refer to the Direct Investment Option' section. Switching investments You can request to change (switch) investment options as often as you like. You can request to switch your investment options via MemberAccess at clubplussuper.com.au/memberaccess or you can download the Member Investment Choice form from clubplussuper.com.au/tools-resources. Switches will be processed two business days after the request is received using the most recent price(s) available as at the date of processing. Making a switch To switch, simply visit MemberAccess at clubplussuper.com.au/memberaccess or download a Member Investment Choice form from the Tools and Forms section of our website. You may invest in one or more investment options, provided: Percentages allocated to investment options are whole numbers (e.g. 10%, 27% - not 10.3%, 27.8%). The total percentage of your chosen investment options amounts to 100%. If the option allocations nominated on your Member Application or Member Investment Choice forms don t amount to 100%, we must return them to you. Investment Choice information The Strategic Asset Allocation (SAA) for each specifi c investment option is assumed to remain unchanged throughout the year, however the actual asset allocation will vary over time and will be maintained within the benchmark ranges. The investment risk (referred to as the Standard Risk Measure) is based on industry guidelines to allow members to compare investment options that are expected to deliver a similar number of negative annual returns over any 20 year period. Important information about investment returns Past performance is not a reliable indication of future performance. The 30 June annualised returns represent the annual crediting rates that were determined in August each year and allocated to member accounts after the deduction of operating expenses. From 20 March 2017, after the conversion to unit prices, investment returns are refl ected in the daily unit price of each investment option. Daily unit prices are available at clubplussuper.com.au/ investments. Please note: Buy/sell spreads may apply to switches. A business day does not include a NSW public holiday or bank holiday. Pension Division Product Disclosure Statement - October

17 2 INVESTMENT CHOICE CASH Investment objective Suggested investment timeframe Suitable for Level of investment risk Strategic asset allocation Investment returns To outperform Bloomberg AusBond Bank Bill Index on an annual basis. Any The Cash option is designed for members with a short investment horizon (three years or less), who are seeking cash-like returns with virtually no chance of capital loss. Very low. A negative return is expected less than 0.5 out of every 20 years. 12 month return as at 30 June % 3.60% 3.20% 3.20% 4.25% 5 year annualised returns to 30 June 2017: 3.31% Australian Shares 0% (0%) International Shares 0% (0%) Direct Property 0% (0%) Infrastructure 0% (0%) Growth Alternatives 0% (0%) Total growth assets 0% (0%) Defensive Alternative 0% (0%) Australian Bonds 0% (0%) International Bonds 0% (0%) Cash 100% (100%) Total defensive assets 100% (100%) CONSERVATIVE BALANCED Investment objective Suggested investment timeframe Suitable for Level of investment risk Strategic asset allocation CPI + 1.5% over 10 rolling year periods. Minimum 3 years The Conservative Balanced option is designed for members with a short to medium investment horizon (three years plus) who are seeking medium to low levels of consistent return and are sensitive to volatility. Medium. A negative return is expected between 2 and 3 out of every 20 years. Australian Shares 5% (0-25%) International Shares 5% (0-20%) Direct Property 10% (0-15%) Infrastructure 5% (0-10%) Growth Alternatives 10% (0-15%) Total growth assets 35% (25-45%) Defensive Alternative 18% (0-25%) Australian Bonds 9% (0-30%) International Bonds 8% (0-20%) Cash 30% (0-40%) Total defensive assets 65% (55-75%) Investment returns 12 month return as at 30 June % 5.65% 6.50% 7.72% 8.50% 5 year annualised returns to 30 June 2017: 7.11% Pension Division Product Disclosure Statement - October

18 Section 2 Investments Information 2 INVESTMENT CHOICE (CONT.) BALANCED Investment objective Suggested investment timeframe Suitable for Level of investment risk Strategic asset allocation GROWTH Investment returns Investment objective Suggested investment timeframe Suitable for Level of investment risk Strategic asset allocation Investment returns CPI + 3% on rolling 10 year periods. Minimum 5 years This option is designed for members with a medium to long term investment horizon (fi ve years or more) who are seeking a steady rate of returns and can tolerate moderate to high levels of volatility. High. A negative return is expected between 4 and 6 out of every 20 years. 12 month return as at 30 June % 3.55% 9.80% 13.95% 14.40% 5 year annualised returns to 30 June 2017: 11.01% CPI + 3.5% on rolling 10 year periods. Minimum 7 years Australian Shares 25% (17-37%) International Shares 25% (17-37%) Direct Property 11% (0-15%) Infrastructure 6% (0-15%) Growth Alternatives 9% (0-15%) Total growth assets 76% (60-80%) Defensive Alternative 7% (0-20%) Australian Bonds 6% (0-15%) International Bonds 6% (0-20%) Cash 5% (0-20%) Total defensive assets 24% (20-40%) The Growth option is designed for members with a long term investment horizon (seven years or more) who are seeking high levels of return and can tolerate high levels of volatility. High. A negative return is expected between 4 and 6 out of every 20 years. 12 month return as at 30 June % 3.63% 11.05% 15.23% 16.00% 5 year annualised returns to 30 June 2017: 12.13% Australian Shares 28% (18-38%) International Shares 28% (18-38%) Direct Property 12% (0-15%) Infrastructure 7% (0-15%) Growth Alternatives 11% (0-15%) Total growth assets 86% (75-95%) Defensive Alternative 6% (0-20%) Australian Bonds 3% (0-15%) International Bonds 2% (0-15%) Cash 3% (0-15%) Total defensive assets 14% (5-25%) Pension Division Product Disclosure Statement - October

19 AUSTRALIAN SHARES Investment objective Suggested investment timeframe Suitable for Level of investment risk Strategic asset allocation Investment returns Outperform the return of the S&P/ASX 300 Index, after tax and investment manager fees over rolling three year periods. Minimum 10 years The Australian Shares option is designed for members with a long term investment horizon (ten years or more) who are seeking Australian equity returns and can tolerate very high levels of volatility. Very high. A negative return is expected 6 or greater out of every 20 years. 12 month return as at 30 June % 5.49% 5.00% 20.11% 18.50% 5 year annualised returns to 30 June 2017: 12.68% Australian Shares 100% (100%) International Shares 0% (0%) Direct Property 0% (0%) Infrastructure 0% (0%) Growth Alternatives 0% (0%) Total growth assets 100% (100%) Defensive Alternative 0% (0%) Australian Bonds 0% (0%) International Bonds 0% (0%) Cash 0% (0%) Total defensive assets 0% (0%) Pension Division Product Disclosure Statement - October

20 Section 2 Investments Information 3 HOW WE INVEST YOUR MONEY Review and appointment of investment managers The Trustee and investment consultant (Jana Investment Advisers) monitor the performance of our investment managers. Each asset class contains a mix of investment managers that are designed to complement each other to provide adequate diversifi cation while aiming to deliver on investment return objectives within that asset class. In circumstances where a new investment manager is added or an existing manager is replaced, the Trustee will shortlist suitable managers in consultation with our investment consultant. Thorough due diligence will be completed prior to the appointment or change of investment managers. Derivatives Investment managers employed by Club Plus Super are permitted to use derivatives for hedging purposes, but not to engage in speculative activity. All investment managers must submit copies of their risk management statements to us to ensure they comply with that requirement. No manager employed by Club Plus Super will use derivatives as a core investment asset apart from the Fund s currency manager. Socially responsible investments Socially responsible investments refer to investments that take into account environmental, labour standards and other social issues within portfolios. Under such investments, the investments will only be with companies and sectors that have socially responsible policies in place. The Trustee in the development of its investment objectives engages with our appointed investment managers to consider environmental, social and corporate governance factors and give them the fl exibility to determine the extent of these considerations in their investment decisions. The Trustee regularly monitors the performance of each of the Investment Managers, with the assistance of the Fund s Investment Consultant. Pension Division Product Disclosure Statement - October

21 Pension Division Product Disclosure Statement - October

22 Section 2 Investments Information 4 GLOSSARY OF INVESTMENT TERMS Active manager An active manager reviews their investments on a regular basis and will vary their strategy accordingly to suit the current position of the market. The alternative strategy is a passive manager who invests according to a set strategy on the basis that over time that strategy will achieve the best return. Alternative investments Traditionally, superannuation funds have invested members assets in mainstream asset classes such as listed shares, property, bonds and cash. As the amount of money being invested has increased, funds are looking at other vehicles for gaining a return for their members with an appropriate level of risk. Alternative investments are investments such as venture capital and unlisted companies. These can either be direct investments by the fund, or through a pooled syndicate. Alternative investments may include allocations to private equity and long/short market neutral funds. Asset class Investments are categorised by asset classes. Examples of asset classes are Australian Shares, International Shares, Property and Cash. All asset classes have different risk and return characteristics. Australian Shares managers These managers invest assets in Australian companies. This can be through the purchase and sale of shares of companies listed on the Australian Stock Exchange, or unlisted companies, or a combination of both. Balanced fund/option The common name given to products that invest in each of the major asset classes. It would usually include shares, property, fi xed interest and cash, but be weighted towards equity and property assets. A balanced fund aims to produce high rates of return over the medium to long term. In terms of risk levels, a balanced fund will usually occupy a middle position more volatile than a fund with primarily cash and fi xed interest investments but less volatile than a fund which invests only in shares and property. Consumer Price Index (CPI) The Consumer Price Index is a fi gure published by the Australian Bureau of Statistics each quarter to refl ect fl uctuations in the cost of living for all capital cities of Australia. It is primarily used for the purpose of adjusting income streams such as pensions to ensure that the amount being paid changes in line with changes in the cost of living. Direct property This can be either the outright ownership of property, or participation in an unlisted property trust. Income is derived from both the rental of properties and the sale of properties. The properties can either be commercial or residential. Direct property is more of a long-term investment, as there may be delays in selling off property if money is required in a short time-frame. There is however, less fl uctuation on the value, as the property value would only increase or decrease if someone is engaged to perform a valuation. Diversifi cation The simple explanation for diversifi cation is don t put all of your eggs in the one basket. The different asset classes generally perform differently at different times. For example, whilst shares may be performing well, property may be performing poorly, and vice-versa. In that case, a consistent return could be achieved by investing part of the money in shares and part in property. Exchange Traded Funds (ETFs) Exchange Traded Funds, or ETFs, are pooled funds made up of a number of shares in various companies and usually aim to refl ect the performance of the index or benchmark of the shares in which they invest. ETFs offer a low cost option to access a wide range of shares and industry sectors in Australian and international markets, without the need to select stocks yourself. Pension Division Product Disclosure Statement - October

23 Hedging Hedging is a process whereby action is taken to protect the value of an asset against fl uctuations in value caused by factors other than the value of the asset. The value of an asset held overseas will automatically fl uctuate as the Australian Dollar moves up or down. If the value of the Australian Dollar increases by 5 per cent over a six-month period, then an asset held overseas would need to increase in value by 5 per cent to be worth the same amount as it was six-months ago. Currency risk can be hedged by contracting to sell foreign currency in the future, at the current exchange rate. International Shares managers These managers invest in shares in international companies that are listed on global stock exchanges. Retail Cash Management Trusts Retail cash management trusts are investment products which hold short term securities such as 90 day bank bills and short term government securities. The average returns on these trusts are published monthly in the Reserve Bank Statistical Bulletin in table F04 under Cash Management Trusts. Risk Risk is a term used in many different ways. Generally, risk is described in this PDS in relative terms as a measure of the probability of a fall in value of your account balance. This fall in value could be because of the failure of an individual company or security which forms part of the portfolio. However given the wide range of investments selected by managers within the scheme, it is more likely to occur because of valuation changes in investments in response to market trading and economic cycles. If the investments are held for longer time periods, like those indicated under suggested investment time frames in the Investment Choice section, it is likely that the income payments and longer term trends in market values will overcome short term drops in value (but there is no guarantee this will be the case). Term deposit A savings account or certifi cate of deposit which pays a fi xed rate of interest for a fi xed investment term. Volatility The extent of fl uctuation in share prices, exchange rates, and interest rates. The higher the volatility of an investment, the less certain an investor is of return, and therefore volatility is one aspect of risk. Pension Division Product Disclosure Statement - October

24 Section 3 Direct investment option - self-manage your pension 1 OVERVIEW A bit like a self-managed super fund (SMSF), Club Plus Super s Direct Investment Option gives you more control over your pension - without the hassle of endless paperwork or potentially hefty accounting and legal expenses. It offers online trading, expert market information and independent information and tools to help manage your portfolio. What is the Direct Investment Option? Our Direct Investment Option gives you access to a range of direct investment options, including: Shares listed on the S&P/ASX 300 A selection of exchange traded funds (ETFs) Term Deposits Features Easy to use online investment facility Low administration and brokerage fees Greater investment control Access to market information and analysis Online trading Who is the Direct Investment Option suitable for? Our Direct Investment Option provides investors with greater fl exibility and choice when managing their pension, but it is not suitable for everyone. Club Plus Super s Direct Investment Option is designed for members who have the skill, time and inclination to take control of their pension s investment strategy and portfolio make up a role similar to that of a professional fund manager. If you are unsure if the Direct Investment Option is for you, it s important to seek professional fi nancial advice. A fi nancial adviser is qualifi ed to help you establish if the Direct Investment Option is appropriate for you and your long-term investment strategy. The Direct Investment Option may be for you if you: are comfortable taking an active role in managing a portion of your pension investment have a thorough understanding of investing have clear, long-term investment objectives and are not tempted to speculate by chasing short term gains understand the importance of a diversifi ed investment portfolio understand the importance of appropriate lifecycle investing understand the consequences of trading too often and in response to emotion. Pension Division Product Disclosure Statement - October

25 Understanding risk The level of risk differs for shares, ETFs and Term Deposits. This risk also varies between individual ETFs, shares and your overall investment mix. As a general rule, these are the risk levels for each direct investment option: Term Deposits: Very low risk Risk Band 1 Shares in S&P/ASX 300 Index: Very high risk Risk Band 7 ETFs: Very high risk Risk Band 7 Minimum investment timeframe As a guide the minimum suggested timeframes to invest in the Direct Investment Option are: Term Deposits: 12 months or less Shares in S&P/ASX 300 Index: Minimum 10 years ETFs: Minimum 10 years Online reporting You can track your investments within your Direct Investment Option account online. The online service provides an up to date summary of your investments and a number of online reports are also available. These reports are generally updated each weekday (with data as at the close of the previous business day) and include details of: your Direct Investment Option account balance, the latest available market value of your investments all transactions on your account details of income you have received from your investments, including your DIO Cash Account ASX listed company, ETF and market information. Eligibility To invest in Club Plus Super s Direct Investment Option you must: be an eligible Club Plus Super member with at least $12,500 in your Club Plus Pension maintain a minimum balance of $5,000 in one or more of the standard investment options (i.e. Cash, Conservative Balanced, Balanced, Growth, Australian Shares) not invest more than 80 per cent of your total Club Plus Pension in the Direct Investment Option have access to the internet and provide a current address read, understand and accept the terms and conditions upon application provide a tax fi le number. Pension Division Product Disclosure Statement - October

26 Section 3 Direct investment option - self-manage your pension 2 3 FEES AND CHARGES GETTING STARTED There is no set up fee to participate in the Club Plus Super Direct Investment Option. There is a portfolio administration fee of $15 per month for members who invest in shares and ETFs. Any brokerage fees incurred due to equity transactions will be added to their purchase cost or taken from the proceeds of their sale. If you have no shareholdings, no fees will be charged on your account while you are invested in Term Deposits. Details of the other fees that apply to the Direct Investment Option are provided below: Brokerage fees TRADE AMOUNT BROKERAGE FEES^ (INCLUDING GST) $0 $4,167 $13.75 $4,168 $10, % $10,001 $30, % $30,001 $50, % $50,001 $100, % $100,001 $10,000, % ^ Brokerage fees in the above table have been rounded up to three decimal places. Service fees TYPE OF FEE OR COST AMOUNT AND FREQUENCY 1. Log on to MemberAccess Log on to MemberAccess at clubplussuper.com.au/ memberaccess and go to the Investments Tab. If you haven t yet registered for MemberAccess, simply visit clubplussuper.com.au/memberaccess, click on Register and follow the prompts. Important: Applications for the Direct Investment Option can only be made via MemberAccess. We cannot accept written applications. 2. Register Once logged on to MemberAccess, go to the Investments Tab and follow the prompts to register. Read the terms and conditions and complete the online application. 3. Activate your account You may transfer money to your Direct Investment Option account after you have completed the registration process. There must be a minimum of $500 in your DIO Cash Account at all times plus the amount you wish to invest. 4. Start investing Once you have transferred your money and it is showing as being available for trade, you re free to start trading. The minimum trade for shares is $500. For Term Deposits the minimum investment is $5,000 and the maximum is $1,000,000 (or 80 per cent of your total account balance with Club Plus Super). Term Deposit break fee ETF investment fees A fee of 25% of any interest earned currently applies if your request to break your term deposit before maturity is approved. This will be taken from the interest earned on your Term Deposit before it is deposited in your DIO Cash Account. Investment fees relating to ETFs vary from 0.09% to 0.67% depending on the ETFs you chose to invest in. These fees are built in to the value of ETFs or in their returns and not taken directly from your account. Pension Division Product Disclosure Statement - October

27 Member Warning Club Plus Super s Direct Investment Option Online Service gives you the ability to invest up to 80 per cent of your pension holdings in a range of direct investment options including S&P/ASX 300 shares, a selection of exchange traded funds (ETFs), and Term Deposits. In that respect, you take control of the day-to-day investment decisions of your investment in the Direct Investment Option. The Trustee reminds you that taking control of these decisions is a signifi cant responsibility and you should be conscious of the impact your decisions may have on the immediate and long-term positions of your pension account balance. There are a number of risks that arise from investing in S&P/ASX 300 shares, ETFs and Term Deposits that you should be mindful of prior to and while investing. We strongly recommend that you read this Pension Product Disclosure Statement to understand the risks of investments, and in particular that both the S&P/ASX 300 shares and ETFs have a Standard Risk Measure Band rating of seven (very high), meaning that in every 20 years, six or more years may produce a negative return. You should also be mindful that while you may invest a maximum of 20 per cent of your total pension balance in a single ETF or share (i.e. 80 per cent of your total pension balance in as few as four securities), please remember that failure to adequately diversify increases the risk of a negative return. Tax Implications Also be aware that a number of tax issues relating to investing in ETFs and S&P/ASX 300 shares through the Direct Investment Option may arise, including, but not limited to: In the event that you wish to transfer from holding a Direct Investment Option from your superannuation account into a Club Plus Pension, you will be required to liquidate the assets in your superannuation account and transfer the proceeds of its sale to the pension account, resulting in capital gains and losses. Financial year tax adjustments (including franking credits and capital tax) may not be allocated for up to fi ve months after the end of the fi nancial year. In the event that you leave the Direct Investment Option prior to these being allocated, you must understand that you may forgo any benefi cial tax adjustment. When investing in S&P/ASX 300 shares and ETFs within the Direct Investment Option, you must be aware of the additional monthly fee and brokerage that will be incurred from investing in these securities. These fees are disclosed in this Product Disclosure Statement. You should always consult a professional fi nancial adviser before making investment decisions. The Direct Investment Option is designed to meet the needs of a specialised group of investors. A fi nancial adviser can help you establish whether the Direct Investment Option is appropriate for your individual needs and investment strategy. Pension Division Product Disclosure Statement - October

28 Section 3 Direct investment option - self-manage your pension 3 GETTING STARTED (CONT.) Provider The Direct Investment Option is provided through Macquarie Investment Management Limited (MIML), ABN , AFSL Other than as expressly described in relation to the Cash Account and Macquarie Bank Term Deposits which are deposits with Macquarie Bank Limited ABN , AFSL , neither Macquarie Bank Limited, Macquarie Investment Management Limited nor any member of the Macquarie Group (Macquarie) of companies guarantees the performance, the repayment of capital or any other particular rate of return of the investments purchased through the Direct Investment Option. DIO Cash Account Your Direct Investment Option account operates with a central cash fl ow account, or DIO Cash Account. The DIO Cash Account serves as a fl exible transactional facility. All transactions in or out of your Direct Investment Option account, including dividends and associated taxes, are processed through this DIO Cash Account. The DIO Cash Account is held through the Fund s custodian with Macquarie Bank Limited (MBL) ABN AFSL Please contact the Fund if you would like information on how the Federal Government s Financial Claims Scheme may apply to the DIO Cash Account. The interest you earn on the DIO Cash Account will be calculated daily and paid monthly in arrears on or around the last business day of the month. Accrued interest will not be reported on your account until it is paid. The DIO Cash Account will be used to: buy and sell investments receive income from investments, and pay any fees taxes and charges related to your DIO account Before transacting on your account, you must have suffi cient available cash in your DIO Cash Account. If you sell assets within your account, the proceeds cannot be used for another transaction or withdrawal until settlement occurs and your proceeds are cleared in your DIO Cash Account. Important: Please note that the DIO Cash Account is a transactional holding account and does not provide the same return as the Club Plus Super 'Cash' investment option. Please note: A switch request from an investment option to the DIO will be processed two business days after the completed request is received. For example, a request received on Friday will be processed the following Tuesday (assuming no public holidays). Electronic rollover requests If a request is received to rollover your investment in the DIO to another superannuation fund, then the transfer of your funds will only commence: after your DIO account is closed and the balance of your funds are transferred to your pension account and 3 days after the funds are received in your pension account. The interest rate is set by Macquarie Bank Limited and varies on a daily basis. Accordingly, there is no guarantee of a particular rate of interest being earned. Pension Division Product Disclosure Statement - October

29 4 TERM DEPOSITS Term Deposits provide a rate of return advised in advance, for an agreed period of time. The following table outlines key features of investing in Term Deposits. TERMS Minimum / Maximum deposit 1 MONTH, 3 MONTHS, 6 MONTHS OR 12 MONTHS The minimum investment in each Term Deposit is $5,000, up to a maximum of 80% of your Club Plus Super account balance and is subject to a maximum investment of $1,000,000. The reason for a maximum deposit amount is so any fees or premiums can be deducted from your balance without breaking your investment in the Term Deposit option. When are earnings paid? Earnings payable from the Term Deposits are payable at maturity. It is at this point in time that any tax on earnings will be deducted from your DIO Cash Account. If 30 June occurs during the term, the Annual Member Statement will not refl ect any accrued earnings or tax applicable to the Term Deposit. How do I invest? How can I check my account? What happens at maturity? Investments in Term Deposits can be made by logging on to your Direct Investment Option. You must have cash available in your Direct Investment Option account before you can purchase a Term Deposit. You can track your Term Deposits online through MemberAccess at clubplussuper.com.au/memberaccess and by clicking through to the Direct Investment Option area. When investing in Term Deposits, you will see on-screen confi rmation that your Term Deposit application has been received. For Term Deposits invested online through the DIO, you will receive an approximately two weeks prior to maturity. If you have not selected a rollover option, your Term Deposit proceeds return to your DIO Cash Account. Your selection must be requested online via the Direct Investment Option website no later than 1 business day before maturity. It is not possible to provide your selection by . Breaking your Term Deposit There are two grounds for breaking a Term Deposit: (a) Compulsory break There may be an occasion where we are required to break an investment in the Term Deposit to comply with legislative requirements. If you have insuffi cient funds to cover administration fees or insurance premiums, we will provide fi ve days advance written warning to avoid a compulsory break. If no payment or instruction is received, we must break the full value of that Term Deposit and transfer proceeds to the Cash investment option. (b) Voluntary break You can request to break a Term Deposit if you need to withdraw funds or change your super s investment strategy. To do so, please complete a Term Deposit Voluntary Break form at clubplussuper.com.au/toolsresources. Pension Division Product Disclosure Statement - October

30 Section 3 Direct investment option - self-manage your pension 4 TERM DEPOSITS (CONT.) What happens to my earnings if my Term Deposit is broken? You will be entitled to 75 per cent of the accrued earnings from your investment in the Term Deposit from commencement date up until the date of the break. Please note: An early withdrawal request may take up to six weeks to be processed. The Term Deposits are held through the Fund s custodian for DIO assets with Macquarie Bank Limited (ABN ). Please contact the Fund if you would like information on how the Federal Government s Financial Claim Scheme may apply to Term Deposits. All purchases of Term Deposits will be made from your DIO Cash Account. At maturity, the amount invested (your principal) and interest earned will be paid into your DIO Cash Account. (The time it takes for these funds to be available in your DIO Cash Account will depend on when we receive the funds from the Term Deposit issuer and the time it takes for the proceeds to be cleared in your DIO Cash Account.) Any associated fees and taxes will also be processed through your DIO Cash Account. Term Deposit interest rates The interest earned on Term Deposits will be fi xed for the term of the investment. Interest is calculated daily and paid on maturity. The interest rate applicable will be the advertised rate on the day the Term Deposit closes to applications. The advertised rate is available at clubplussuper.com.au Interest on Term Deposits can be: paid to your DIO Cash Account upon maturity; or reinvested, along with the principal, into another Term Deposit by making a maturity election via the Direct Investment Option website. Processing your instructions Applications for term deposits received by midnight (Sydney time) on a business day will be invested the following business day, provided you have suffi cient funds in your DIO Cash Account. The funds will be deducted from your DIO Cash Account on the day the application is made to the issuer of the term deposit. You must have suffi cient funds in your DIO Cash Account at the time of making your application and at the time your application is processed. Your investment will be pooled with other investors funds who wish to invest for the same term. Rolling over a Term Deposit (maturity election) You may elect to roll over your Term Deposit to a new Term Deposit for the same term from the same issuer. You can roll over the principal or the principal plus any interest earned on your maturing Term Deposit. The applicable interest rate will be the prevailing rate at the time of processing your new Term Deposit application. Rollover elections must be made (or cancelled) one business day prior to the maturity election (up until 5pm Sydney time). The proceeds from your maturing Term Deposit will be fi rst credited to your DIO Cash Account and then invested in the next available Term Deposit. At the time of processing the rollover into your next Term Deposit, you must ensure you have suffi cient funds in your DIO Cash Account. If your DIO Cash Account balance falls below the minimum level, or if processing your rollover will bring your available DIO Cash Account balance below the required minimum, the rollover may not proceed and your funds will remain in your DIO Cash Account. Please note: Partial rollovers are not available. Reporting The interest will be reported on your portfolio when it is paid into your DIO Cash Account. We will not report the accrued interest prior to maturity. Pension Division Product Disclosure Statement - October

31 SHARES AND EXCHANGE 5 TRADED FUNDS (ETFS) When you invest in shares or ETFs through the Direct Investment Option you get access to capital gains, dividend payments and franking credits from companies listed on the S&P/ASX 300 Index. These companies span a wide selection of sectors, including: Materials Financials Information technology Consumer staples Energy Industrials Telecommunications Health care Consumer discretionary Utilities Share trading To buy and sell (trade) shares and ETFs you must log on to the Direct Investment Option. Instructions for trading are available once you have logged on and you can call for further assistance. Trading in S&P/ASX 300 listed securities is subject to the rules, regulations, customs and practices of ASIC and the ASX (the Rules ), and that the operation of the service is subject to those Rules. When you invest in S&P/ASX 300 listed securities through the Direct Investment Option, you will not receive contract notes as the securities are legally owned by the Fund. Listed securities are valued at their last available closing price on the ASX. If no trades have occurred for a security during the day, the last traded price will be used. DIO Cash Account Available funds in your DIO Cash Account will be used to settle any purchases of approved ASX listed securities. You must have suffi cient funds in your DIO Cash Account to settle any purchases of approved ASX listed securities. Cash for settlement will generally be reserved at the time of placing the trade and withdrawn to pay for the purchase on the day of settlement. Brokerage Brokerage fees will be charged for purchases and sales of listed securities. These brokerage fees vary depending on the value of each trade. Brokerage will either be added to the cost or deducted from the proceeds of each transaction. What is an ETF? Exchange Traded Funds, or ETFs, are pooled funds made up of a number of shares in various companies and usually aim to refl ect the performance of the index or benchmark of the shares in which they invest. ETFs offer a low cost option to access a wide range of shares and industry sectors in Australian and international markets, without the need to select stocks yourself. Trading and settlement Execution of orders through Macquarie is subject to a best execution policy, which is in place to ensure Macquarie takes all reasonable steps to deliver the best outcome for each member in relation to the execution and allocation of client orders. This policy is available at macquarie.com.au/melbestexecution. All online orders placed to buy or sell approved ASX listed securities will be placed at market or at limit subject to orderly market considerations. At market orders are placed at the prevailing best bid (for sales) or best offer (for purchases) price. Where those orders are only partially fi lled, the remainder will be placed at limit, at the partially executed price, and members will be responsible for amending/cancelling the remainder of the order. Members will be liable to settle the fi lled portion, whether fi lled in whole or in part. At Limit orders may be fi lled at the prevailing bid price (for sales) when that price is equal to, or greater than the limit price, or the order may be fi lled at the prevailing offer price (for purchases) when that price is equal to, or less than the limit price. Pension Division Product Disclosure Statement - October

32 Section 3 Direct investment option - self-manage your pension 5 SHARES AND EXCHANGE TRADED FUNDS (ETFS) (CONT.) Orders can remain on market: for today only, or until cancelled. Today only orders are valid for the business day on which they are placed and will expire before the market opens on the next business day. If your order is placed with the Authorised Broker aftermarket operating hours, it will go on market the next business day and will expire before the market opens again on the business day after the order went on market. Until cancelled orders will expire after 22 business days of the order being placed if it has not been executed on market or cancelled by you. If the security is suspended from trading, orders will not be placed on market until the suspension is lifted. However the above expiry timeframes will still apply regardless of whether or not the security is suspended. In certain circumstances, a trade that you have requested may be delayed or unable to be placed at all. In this event, the Authorised Broker must act in accordance with specifi c Rules that may not allow the trade to be placed either in part or in full. Orders may not complete, or may be purged from the market by the Relevant Exchange or by the Authorised Broker, subject to the Rules including, without limitation, where: the Rules prevent its completion there is no market for that security there has been a suspension or other trading halt on that security a Market-to-Limit order is going to cause a signifi cant change to the market price or trade volumes the price at which an order is placed is deemed to be too far from the prevailing market price by the Relevant Exchange or Macquarie a security is quoted Ex (as defi ned by the Relevant Exchange) for the purpose of determining an entitlement to shares, an offer to shareholders, a distribution payment or for any other reason if the basis upon which quotation on the Relevant Exchange is based has changed the security has been removed from offi cial quotation on the Relevant Exchange the trade is likely to result in a breach of the law or the Rules the order expires (if it has not been executed or cancelled within 22 Business Days of your request being processed) the order has been purged in accordance with the Rules a trading restriction is imposed on Macquarie there has been a disruption in the operation of the Relevant Exchange, or the Relevant Exchange determines the order should be purged for any reason whatsoever. Timing of orders Subject to the above conditions, at market trades must be placed within the normal trading hours of 10am to 4pm (Sydney time). Available securities You may only invest in securities which comprise the available selection of S&P/ASX 300 at the time of the order. Where a security falls out of the S&P/ASX 300, you may continue to hold that security (and receive dividends and act on corporate actions on it), but may not purchase more of that security. You can sell a security that has fallen outside the S&P/ASX 300 (subject to an available market). For more information on orders and trading, click on the Important Information link at the bottom of any page of the website to view Trading Terms and Conditions. Pension Division Product Disclosure Statement - October

33 6 TAX Annual taxation adjustments Individual tax processing within your Direct Investment Option account helps you benefi t from your individual investment decisions. Depending upon your circumstances, you may benefi t from certain capital gains tax (CGT) treatment and franking credits from your investments. You may receive franking credits, benefi ts from capital losses and other related tax adjustments as part of annual tax calculations. You will also receive an annual taxation adjustment for the tax year ending 30 June after the Fund s tax position has been determined. These adjustments typically will credit the value of tax credits, capital losses and other related tax adjustments referable to your income and trading activities. Capital losses As part of calculating your annual tax adjustment, capital losses on the disposal of your assets will be applied against capital gains that you may have derived. To the extent that you have a net capital loss situation (that is, the overall capital losses exceed the overall capital gains derived on your investments), as part of the end of fi nancial year tax adjustment we may either: Important As with any service that uses technology, there is some risk that the administration system s hardware and software may fail, causing a delay in the processing and reporting of your account. We do not accept responsibility if this was to happen and the failure was outside of our control. We have sought to address this risk and the risks associated with other unforeseen circumstances by implementing a disaster recovery plan and business continuity arrangements. This includes manual processes and nightly backups of our systems and data. Pay a capital loss benefi t for all or part of your net capital loss. If a capital loss benefi t is paid, the rate at which the benefi t is paid will be determined annually and vary between per cent of the portion of the net capital loss subject to the benefi t, or Carry forward the net capital loss (to the extent that a capital benefi t has not been paid to you on this loss) so that it can be utilised in future end of fi nancial year tax adjustments. The ability to pay you a capital loss benefi t will depend on the overall capital gain position of the Direct Investment Option and/or the Fund. Pension Division Product Disclosure Statement - October

34 Section 4 More information 1 UNDERSTANDING RISK Understanding risk The term risk takes on a wide variety of different meanings depending on your fi nancial requirements now and your future goals. While most of us would agree the biggest risk with investing is losing money measuring risk is not as simple as it sounds. Factors such as your investment time horizon, attitude to risk and your investment objectives play a big part in determining what market movements actually mean to you. While they are related issues, it s worth thinking about each of these in turn. Attitude to risk Most investment textbooks say there is a trade off between risk and return. In other words, higher risk investments have greater potential to generate higher returns over time than low risk investments. High risk investments generally have more exposure to share markets and assets with greater potential to generate growth. The fl ipside is their values can change rapidly over small timeframes. So, although a high risk, high return investment is likely to fl uctuate in value (both positively and negatively) more dramatically in the short term, over the long term it has the potential to deliver stronger returns. Investment objectives Your age and attitude to risk plays a big part in understanding your investment objectives. If you have a sizable amount of money invested and only a few years left until you retire, you might consider reducing your exposure to more volatile assets like equities in favour of more conservative ones like cash and term deposits. Importantly, investing too conservatively may also come with it s own risks. For example, investing everything in cash risks the possibility of not keeping up with infl ation. When investing in a pension there are a number of different types of risks to consider: As investment returns are not guaranteed (except Term Deposit rates within the Direct Investment Option which are known upfront), you may experience positive and negative investment returns. This means you may lose some of your money (if the Fund experiences negative performance). Investments are made within different types of asset classes such as cash, fi xed interest, property, shares and alternative assets. Each asset class carries a different level of risk. The investment options in the Club Plus Pension have different levels of risk, depending on how much that option is invested in each of the asset classes. Laws affecting superannuation and your pension may change. Investment options may be altered and investment managers may be changed. There is a risk that the rate of infl ation may exceed the return achieved by your investment. Certain investments, especially unlisted or alternative investments, may be diffi cult to sell quickly and may be realised at a loss. The value of international investments may be affected by movements in the Australian dollar relative to foreign currencies and may increase or decrease the value of your investment. The best way to ensure your investments continue to meet your needs is through regular consultations with a fi nancial adviser. Pension Division Product Disclosure Statement - October

35 Investment risks All investments carry some form of risk, the most common of which are highlighted below. Market risk: Economic impacts, regulatory conditions and political events Company risk: Changes to management, profi t/ loss announcements Credit risk: Borrowers not meeting loan obligations Infl ation risk: Erosion of the real value of investment Investment return risk: Investment movements affecting the value of certain assets Currency risk: International investments may be negatively affected by currency movements Liquidity risk: Not having the cash ready to meet benefi t payments, and/or not being able to convert assets to cash in a timely manner without impacting the market price. Standard Risk Measure The Standard Risk Measure is based on industry guidelines to allow members 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 whether any positive returns will be suffi cient to meet a member s investment objective. Further, it does not take into account the impact of administration fees and tax on the likelihood of a negative return. Members should still ensure they are comfortable with the risks and potential losses associated with their chosen investment option(s). RISK BAND RISK LABEL ESTIMATED NUMBER OF NEGATIVE 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 Pension Division Product Disclosure Statement - October

36 Section 4 More information 2 FEES AND OTHER COSTS CONSUMER ADVISORY WARNING 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 account balance rather than 1% could reduce your fi nal return by up to 20% over a 30 year period (for example, reduce it from $ 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. Your employer may be able to negotiate to pay lower administration fees. Ask the fund or your fi nancial adviser. TO FIND OUT MORE If you would like to fi nd out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( has a superannuation calculator to help you check out different fee options. Fees and other costs for the Balanced investment option Balanced option Type of fee Amount How and when paid Investment fee1, % p.a. Deducted before unit prices are determined Administration fee $93.60 p.a. ($1.80 per week) %p.a. of your account balance at the end of each month Buy/sell spread2 Buy spread: 0.15% Sell spread: 0.15% Switching fee Nil Not applicable Deducted monthly on the last Friday of each month Applied to daily unit prices to cover the cost of buying and selling units Exit fee $55 Deducted from your account when you leave the fund or when you make a withdrawal Advice fees relating to all members investing in a particular Balanced product or investment option Nil Not applicable Other fees and costs 0% Not applicable Indirect cost ratio (ICR)3 0% Not applicable 1 The investment fees shown are estimated by reference to investment related fees and costs, including underlying investment manager costs, incurred for the 12 month period to 30 June Accordingly, actual investment fees over the current period of the PDS will vary based on actual fees and costs incurred in that period. 2 Investment Fees and Buy/Sell Spreads for other investment options are shown in the Investment Fees table on page For further information please refer to the 'Additional Explanation of Fees and Costs' section on page 39. Pension Division Product Disclosure Statement - October

37 Example of annual fees and costs for our Balanced investment option This table gives an example of how the fees and costs of the Balanced option can affect your superannuation over a 1 year period. You should use this table to compare this superannuation product with other superannuation products. Club Plus Super Balanced option Balance of $50,000 Investment fees 1.03% p.a. For every $50,000 you have in the Balanced product you will be charged $516 each year PLUS Administration fees PLUS Indirect costs for the Balanced investment option EQUALS Cost of product $93.60 p.a. ($1.80 per week) plus 0.20% p.a. of your account balance at the end of each month Nil And, you will be charged administration fees of $93.60 regardless of your balance plus $100 Nil If your balance is $50,000, then that year you will be charged fees of $710 Note: Additional fees may apply. And, if you leave the superannuation entity, you will be charged an exit fee of $55 and a buy/ sell spread which also applies whenever you make a contribution, exit, rollover or investment switch. The buy/sell spread for exiting is 0.15% (this will equate to $75 for every $50,000 you withdraw). Fees and costs may be revised or adjusted by Club Plus Super from time to time without your consent. Where there is an increase in fees or charges, Club Plus Super will give prior notice of at least 30 days as required by law. Defi ned Fees The following are defi nitions of the different fees and costs that may apply to your superannuation: Activity fees A fee is an activity fee if: (a) the fee relates to costs incurred by the trustee of the superannuation entity that are directly related to an activity of the trustee: (i) that is engaged in at the request, or with the consent, of a member; or (ii) that relates to a member and is required by law; and (b) those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee. Administration fees An administration fee is a fee that relates to the administration or operation of the superannuation entity and includes costs that relate to that administration or operation, other than: (a) borrowing costs; and (b) indirect costs that are not paid out of the superannuation entity that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the entity or in an interposed vehicle or derivative fi nancial product; and (c) costs that are otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee. Pension Division Product Disclosure Statement - October

38 Section 4 More information FEES AND OTHER 2 COSTS (CONT.) Advice fees A fee is an advice fee if: (a) the fee relates directly to costs incurred by the trustee of the superannuation entity because of the provision of fi nancial product advice to a member by: (i) a trustee of the entity; or (ii) another person acting as an employee of, or under an arrangement with the trustee of the entity; and (b) those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee. Buy-sell spreads A buy-sell spread is a fee to recover transactional costs incurred by the trustee of the superannuation entity in relation to the sale and purchase of assets of the entity. Exit fees An exit fee is a fee to recover the costs of disposing of all or part of members interests in the superannuation entity. Indirect cost ratio The indirect cost ratio ( ICR ), for a Balanced product or an investment option offered by a superannuation entity, is the ratio of the total of the indirect costs for the Balanced product or investment option, to the total average net assets of the superannuation entity attributed to the Balanced product or investment option. Note: A fee deducted from a member s account or paid out of the superannuation entity is not an indirect cost. Insurance fee A fee is an insurance fee if: (a) the fee relates directly to either or both of the following: (i) insurance premiums paid by the trustee of a superannuation entity in relation to a member or members of the entity; (ii) costs incurred by the trustee of a superannuation entity in relation to the provision of insurance for a member or members of the entity; and (b) the fee does not relate to any part of a premium paid or cost incurred in relation to a life policy or a contract of insurance that relates to a benefi t to the member that is based on the performance of an investment rather than the realisation of a risk; and (c) the premiums and costs to which the fee relates are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an advice fee. Investment fees An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes: (a) fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and (b) costs that relate to the investment of assets of the entity, other than: (i) borrowing costs; and (ii) indirect costs that are not paid out of the superannuation entity that the trustee has elected in writing will be treated as indirect costs and not fees, incurred by the trustee of the entity or in an interposed vehicle or derivative fi nancial product; and (iii) costs that are not otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee; but does not include property operating costs. Switching fees A switching fee for a superannuation product, other than a Balanced product, is a fee to recover the costs of switching all or part of a member s interest in the superannuation entity from one investment option or product in the entity to another. Pension Division Product Disclosure Statement - October

39 ADDITIONAL EXPLANATION OF FEES AND COSTS Advice fees Additional fees may apply if a fi nancial adviser is consulted. If you require personal fi nancial advice, we can refer you to Club Plus Financial Planning who will advise you of any costs that could be incurred before you proceed based upon your individual needs. Also, if you are issued with a Statement of Advice from Club Plus Financial Planning, it will include details of these fees. Administration fees As a fund that is run for members, we do not pay commissions to service providers employed by the Trustee or any Director of the Company. All fees deducted from your account (along with the benefi ts of any tax deduction) are used to pay the operating costs of Club Plus Super. From time to time, fees may be changed by Club Plus Super without member consent. In the event of any material change, you will be advised a minimum of 30 days prior to the effective date. The current Administration Fee is $1.80 per week, which is deducted from your member account at the end of each month. The current Asset Based Fee is 0.20% p.a. of your account balance and is deducted at the end of each month. Activity fees Additional expenses incurred in attending to certain enquiries and administrative work in relation to Family Law and superannuation matters will apply. Service fees in relation to Family Law fees are set out in the below table: TYPE OF FEE OR COST AMOUNT WHEN DEDUCTED Enquiry Fee The fee charged for a Family Law request Family Law Split Fee Fee to split an account under Family Law Member enquiry $100 Non-member enquiry $110 $70 (generally split between member and non-member spouse) Deducted from the member s account if the enquiry is made by the member spouse. Payable by the non-member spouse when the request is made. When an account split is processed as part of a Family Law superannuation agreement. This fee will generally be deducted from both the member and spouse accounts at the time of the split. Pension Division Product Disclosure Statement - October

40 Section 4 More information FEES AND OTHER 2 COSTS (CONT.) Borrowing costs Borrowing costs refers to costs relating to any credit facility used within any underlying fund as part of implementing the investment strategy of each option. The estimated borrowing costs (if any) for each of the investment options for the year ending 30 June 2017 are: OPTION ESTIMATED BORROWING COSTS Cash 0.00% Conservative Balanced 0.09% Balanced 0.10% Growth 0.10% Australian Shares 0.00% Borrowing costs are an additional cost to investors. They are not included in costs disclosed in the Investment Fees shown for each investment option. The costs for the current period will vary from the above and may be greater than past experience. Buy-sell spreads With unitisation, buy-sell spreads are used to ensure transaction costs incurred in buying or selling assets (for example, brokerage fees) held in each investment option are fairly allocated to members as members enter or leave the fund. These costs are included as part of unit prices and paid for by those members who buy or sell units in a particular investment option. The cost is an additional cost to members. Buy/sell spreads are retained in pooled investments and are not paid directly to Club Plus Super or any external managers. Exit fees A fee of $55 will be deducted when you leave the fund. If you request a lump sum payment from your pension account, the fi rst withdrawal in the fi nancial year is free. A fee of $55 is charged for additional withdrawals. Separate fees relating to the Direct Investment Option are outlined as per page 26 of this PDS. Investment fees The investment fees shown for each investment option include investment related fees and costs, including Transactional and Operational Costs charged by investment managers and through underlying investment vehicles and incurred by the Fund. These fees and costs are estimated by reference to investment related fees and costs, including any performance related fees of underlying investment managers, incurred for the 12 months to 30 June Accordingly, actual investment related fees and costs incurred in the period from 1 July 2017 may vary and may be greater in that period. OPTION ESTIMATED BASE FEE PER ANNUM* FEE AMOUNT PER $50,000 PER ANNUM BUY/SELL SPREADS Cash 0.09% $ % / 0.00% Conservative Balanced 0.83% $ % / 0.10% Balanced 1.03% $ % / 0.15% Growth 1.13% $ % / 0.20% Australian Shares 0.73% $ % / 0.20% * Estimated fees for the investment options as at 30 June Investment Fees are estimates based on current manager structure and asset allocation. Where an investment manager has exceeded the agreed benchmark a performance fee may be payable. Pension Division Product Disclosure Statement - October

41 Performance related fees Where an underlying investment vehicle or manager is used to invest the assets of an investment option they may charge a performance related fee. These fees are refl ected in the unit price of the investment option and form part of the investment fees of each investment option. Underlying investment vehicles and managers that charge a performance related fee will generally only apply those fees when performance is greater than an agreed target. Accordingly performance related fees in each year will generally only arise when higher returns, relative to a specifi ed target for a particular manager, are achieved. Tax For information on tax, please refer to Page 13 of this PDS. Property operating costs Property operating costs refers to costs relating to the management of real property as part of implementing the investment strategy of each option. The estimated property operating costs (if any) for each of the investment options for the year ending 30 June 2017 are: OPTION PROPERTY OPERATING COST Cash 0.00% Conservative Balanced 0.10% Balanced 0.11% Growth 0.12% Australian Shares 0.00% Property operating costs are an additional cost to investors. They are not included in costs disclosed in the Investment Fees shown for each investment option. The costs for the current period will vary from the above and may be greater than past experience. Pension Division Product Disclosure Statement - October