Annual report. For the financial year ending ₃₀ June ₂₀₁₇ National Mutual Pro-Super Fund. Welcome. We're here to help. Contents

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1 Annual report For the financial year ending ₃₀ June ₂₀₁₇ National Mutual Pro-Super Fund Contents Super fund information Introduction to the fund Super news Product news Other information We're here to help If you'd like to explore your super or investments, check you have the right insurance cover or would like some help achieving your goals, speak to your financial adviser or call us on Keep track of your finances Welcome Thank you for investing with us. This annual report for the financial year ending 30 June 2017 will help you understand more about your super and investments. You ll find information on fund performance and management, recent developments in superannuation and an outlook on local and international markets. Keep track of your super We've made it easy to find your forgotten super by offering AMP customers a free super search which includes details of where they hold super monies. If you're interested in securing a free super report, go to amp.com.au/supersearch. Manage your finances The My AMP app is an easy way to keep track of your finances and manage your money anytime and anywhere. You can view your AMP portfolio and add other providers for a complete view of your banking and wealth all in one place. Download the app from the itunes App Store or go to Google Play for Android. This annual report is issued by the trustee N.M. Superannuation Proprietary Limited ABN , AFS Licence No for the National Mutual Pro-Super Fund ABN

2 Super fund information The trustee N.M. Superannuation Proprietary Limited ABN , AFS Licence No (the trustee) is a wholly owned subsidiary of AMP Life Limited (AMP Life) effective from 1 January Prior to this time the trustee was a wholly owned subsidiary of The National Mutual Life Association of Australasia Limited (NMLA). AMP Life and NMLA are part of the AMP group. The trustee is a registrable superannuation entity (RSE) Licensee under the Superannuation Industry (Supervision) Act 1993 (SIS Act), which means that it has satisfied licensing conditions required by the Australian Prudential Regulation Authority (APRA). The trustee is responsible for the monitoring and management of the National Mutual Pro-Super fund (the fund) for the benefit of all members in accordance with the governing rules of the fund and relevant legislation. The trustee also maintains an appropriate level of indemnity insurance for protection against losses that may occur as a result of a claim against it for breach of professional duty. The relationships between the trustee and other service providers From time to time, the trustee may engage companies within and outside of the AMP group to provide services in relation to the funds. The trustee may change these service providers at any time without notifying you. The board of directors The directors of N.M. Superannuation Proprietary Limited are also directors of AMP Superannuation Limited, which is another superannuation trustee and also part of the AMP group. The boards of each trustee maintain a framework for the management of conflicts of interest and conflicts of duties, which is documented in the Conflicts Management Policy. The framework provides for the identification, recording, management and monitoring of conflicts in accordance with applicable laws and regulations. Rick Allert (AO), Independent Non-Executive Chairman FCA Michele Dolin, Independent Non-Executive Director BA, MA, MBA, FCPA, FAICD, FASFA, SF Fin. Louise Dudley, Independent Non-Executive Director BCom, CA, GAICD Darryl Mackay, Non-Executive Director BSc, FIAA, MAICD Brian Salter, Executive Director BA, LLB (Hons), LLM (Hons), MAICD, F.ASF More information on the trustee, including profiles of the directors and governing policies, is available at amp.com.au/trusteedetails. N.M. Superannuation Propietary Limited Board meeting attendance 12 months to 30 June 2017 Rick Allert Michelle Dolin Louise Dudley Darryl Mackay Brian Salter Held while member Attended while member 4 2

3 Introduction to the fund The purpose of this annual report is to provide information about the operation of the fund as a whole, including: management financial position compliance with relevant statutory requirements, and any changes or developments that may affect members' benefits. Your annual statement provides information relating to your benefit entitlements including: contributions made by you or your employer, and expenses deducted. You will receive your annual statement soon after 30 September each year. It is recommended that you read this report in conjunction with your latest annual statement. Compliance status of the fund The fund is regulated under Superannuation Industry Supervision Act No penalties have been imposed on the fund and the trustee has not received any notices of non-compliance during the reporting period. The trustee has formally resolved that the fund will be administered in strict compliance with all applicable acts and regulations. Financial condition of the fund The assets of the fund are life insurance policies issued by AMP Life and therefore under superannuation legislation we are not required to provide the financial reporting in this annual report. If you require a copy of the financial report for a fund, please contact us and a copy will be provided free of charge. Trust deed amendment The trustee may amend the trust deed of the fund following changes to the law or to introduce new features. There were no trust deed amendments during this year. Should you require a copy of the trust deed please contact us. Benefits provided under the fund As trustee of the fund, it is our responsibility to ensure that all benefits arising from the fund are paid to members, or to members dependants or their legal personal representative (in the event of death) in strict conformity with the trust deed of the applicable fund and the requirements of all applicable laws. The benefit that will ultimately be paid to a member (or to their dependant(s) or legal personal representative) will equal the value of the applicable life insurance policy at the time the benefit is payable, less any government tax, outstanding contributions or charges. The precise value of a member s benefit is dependant upon factors such as the policy and the type of event (eg retirement, death, or transfer to another fund). To determine what amounts are payable to you and under which circumstances these amounts will become payable, we recommend that you refer to your last annual statement and speak to your financial adviser or contact our Customer Service Centre on Compensation There may be circumstances in which the trustee needs to pay compensation to members. There are four key principles that guide the trustee s payment of compensation to current and former members: the trustee should not benefit other members do not bear the cost of compensation compensation is paid to members in a manner that minimises the cost and inconvenience to those members receiving the compensation, and communication should be provided to affected members in all circumstances where the member would reasonably expect to be notified. The trustee may decide not to pay compensation to current or former members where it considers the individual compensation amounts small. Overview of the fund The fund commenced on 21 September 1988 for the purpose of providing members and their dependants with financial benefits upon death or total and permanent disablement. All benefits under the fund are provided by means of individual life insurance policies. One or more of any of these policies is held under a Pro-Super Agreement to which you, the trustee and, in applicable circumstances, appropriate third parties such as your employer is a party. Each policy is a permanent Whole of Life or Endowment insurance policy which is split into its insurance cover and investment component under the terms of the agreement. The trustee is entitled to the proceeds (including any disability benefits where these are covered) of the insurance component of the policy in the event of your death or total and permanent disablement. The trustee will then distribute the proceeds according to the agreement. The cash value of the policy includes any bonuses that have accrued and is owned by you or one of the other parties (excluding the trustee), as set out in the particular agreement referred to above. The investment component is not a superannuation arrangement and is not held within the fund. You are recorded as the life insured. As such, you are also regarded as being a member of the fund. Being the life insured, you are the person whose life is protected by insurance according to the circumstances detailed in the policy. It is the trustee s responsibility to ensure that all benefits arising from the insurance cover component of the policy are paid to you in the event of a disability claim (where disability is covered), or to your dependants in the event of your death in accordance with the governing rules of the fund and requirements under superannuation law. A copy of each policy on your life has previously been issued to the legal owner of the policy. We suggest you take time to read the terms and conditions detailed by the insurer in this policy as they affect issues such as the continuation of the policy and the amount payable under it. 3

4 Who is the benefit paid to if you die or become disabled? The fund is a death or death and total and permanent disablement style superannuation arrangement. In broad terms, this means that you are insured up to the extent of the insurance component of your policy against death, or death and total and permanent disablement, if applicable. To determine the amounts payable to you, and under what circumstances these amounts will become payable, we recommend that you refer to your last member statement or ask your financial adviser. In accordance with the trust deed, the trustee will decide who will receive any death benefits from the fund. Members can indicate their preference to the trustee, but the trust deed requires the trustee to make the final decision. To indicate your preference, please contact your financial adviser or call the Customer Service Centre on The trustee will pay your death benefits to one or more of your dependants or to your legal personal representative at the trustee s sole discretion. It is essential that you keep the trustee fully informed of your current preference for the payment of your benefits in the event of your death. Contributions to the fund All contributions made to the fund by you or your employer within the last fund year have been credited to your account, as shown on your member statement, and used to maintain your insurance cover under the policy. You and your employer may be eligible for a tax deduction on contributions that have been made to the fund. This will depend on your personal and employment circumstances. More information can be obtained from your financial adviser or tax adviser. Super news Update on government legislation Please be advised that whilst the following updates are provided by the government, not all are available or applicable to the Pro-Super Fund. For more information, please contact your financial adviser or AMP Federal Budget measures The 2016 Federal Budget contained a number of superannuation reforms with a start date of 1 July The reforms were covered in the 2016 Annual report. The reforms are summarised as follows: Reforms commencing on 1 July 2017: Non-concessional contributions: the non-concessional contributions cap is reduced to $100,000 per annum and no cap is available in a year where your total superannuation balance, on 30 June in the immediate prior financial year, is $1.6 million or more. This reform replaces the proposed lifetime cap on non-concessional contributions that was initially announced in the 2016 Federal Budget. Concessional contributions: the concessional contributions cap is reduced to $2,000 per annum. : earnings on assets backing income streams will now be taxable, in the same way that earnings from investments in the super accumulation phase are. Tax deductions for personal contributions: providing you meet the work test in relation to personal contributions, you will now be able to claim a tax deduction for them. The test requiring that an individual has to earn less than 10% of their income from employment related activities to qualify to claim a tax deduction for a personal super contribution has been removed. Transfer balance cap: Introduction of the Transfer Balance cap which limits the total amount of superannuation benefits (both accumulation and transition to retirement) that you can transfer into a retirement phase pension or income stream, where investment earnings are tax exempt. The cap is $1.6 million for the 2017/18 financial year and is indexed. Spouse contributions: Extension of eligibility for the spouse contribution tax offset, whereby the maximum spouse contribution tax offset, of up to $40, is available to the contributor when the receiving spouse s income is less than $37,000 (up from $10,800). Division 293 tax: The threshold for when Division 293 applies (the additional 1% contributions tax on high income earners) has been reduced to $20,000. Death benefits: The anti-detriment benefit deduction on death benefit payments has been removed. Death benefits: For eligible beneficiaries, their superannuation death benefit income stream will now be able to be rolled-over to another product provider. Low Income Super Tax Offset: A Low Income Super Tax Offset has been introduced, which will provide a payment of up to $00 to your superannuation account based on the tax paid on your concessional contributions if your adjusted taxable income is less than $37,000. Reforms commencing on 1 July 2018: Concessional contributions: Ability to carry forward the portion of the concessional contributions cap not used in a year, for up to five years. In the year you make a concessional contribution that contains a carry forward unused cap portion, your total superannuation balance, on 30 June of the previous financial year, must be less than $00,000. Reforms from the 2016 Federal Budget that did not progress: The following reforms were announced in the 2016 Federal budget and included in the 2016 Annual report but have subsequently not been proceeded with: Lifetime cap for non-concessional superannuation contributions Removal of work test to contribute to superannuation. 4

5 2017 Federal Budget measures The 2017 Federal Budget also included some superannuation related measures. These are as follows: Housing Package - First home super saver scheme commencing 1 July 2017 From 1 July 2017, individuals may make voluntary contributions (including salary sacrifice, personal tax deductible and non-concessional contributions) of up to $1,000 per year and $30,000 in total, to their superannuation account to purchase a first home. These contributions, along with deemed earnings, can be withdrawn for a first home deposit from 1 July Withdrawals of concessional contributions and deemed earnings will be taxed at marginal tax rates less a 30% offset. Non-concessional contribution amounts will not be taxed when withdrawn. Voluntary contributions under this scheme must be made within existing superannuation caps. Housing Package - Contributing the proceeds of downsizing to superannuation commencing 1 July 2018 From 1 July 2018, people aged 6 and over may be able to make a non-concessional contribution into their superannuation of up to $300,000 from the proceeds of selling their home. The existing voluntary contribution rules for people aged 6 and older (work test for 6-74 year olds, no contributions for those aged 7 and over) and restrictions on non-concessional contributions for people with balances above $1.6 million will not apply to contributions made under this new special downsizing cap. This measure will apply to a principal place of residence held for a minimum of 10 years. Both members of a couple will be able to take advantage of this measure for the same home, meaning $600,000 per couple can be contributed to superannuation through the downsizing cap. These new contributions will be in addition to any other voluntary contributions that people are able to make under the existing contribution rules and concessional and non-concessional caps. Though once the contribution is made, only individuals with remaining transfer balance cap space available can convert their contributions into a retirement phase pension account (where earnings are tax-exempt). Increase in the Medicare levy and Medicare levy low income thresholds commencing 1 July 2019 The government will increase the Medicare levy by half a percentage point from 2.0 to 2.% of taxable income from 1 July Low income earners will continue to receive relief from the Medicare levy through the low income thresholds for singles, families, seniors and pensioners, however these will be increased from the 2016/17 income year. Other Government legislated changes Super thresholds for the 2017/18 financial year The following super and taxation threshold amounts apply during the 2017/18 financial year. Threshold Standard concessional contributions cap (per annum) From 1 July 2017 $2,000 Non-concessional contributions cap: Standard (per annum) (i) $100,000 Bring forward (over three years) before age 6 (ii) $300,000 SG maximum contribution base (per quarter) Government co-contribution (iii) (per annum) Lower income threshold Higher income threshold Tax free part of bona fide redundancy and approved early retirement scheme payments (per payment) Base limit Plus for each completed year of service Low rate cap amount (lifetime limit) (previously known as post June 1983 low tax threshold) Applies to the taxable component of taxed super fund benefits for members aged -9 Untaxed plan cap amount Applies to the taxable component of untaxed super fund benefits Employment termination payment cap (ETP) (per annum) Capital gains tax (CGT) cap amount (lifetime limit) Transfer balance caps Maximum adjusted taxable income for the full Government Low Income super tax offset $2,760 $36,813 $1,813 $10,1 $,078 $200,000 $1,44,000 $200,000 $1,44,000 $1,600,000 $37,000 (i) The cap is nil for members with a total superannuation balance of over $1.6 million (at 30 June of the year prior to making the contribution). (ii) Transitional rules apply for the 2017/18 and 2018/19 years. (iii) The maximum entitlement remains at $00 and applies where at least $1,000 non-concessional contributions have been made in the financial year and the person does not exceed the lower income threshold.

6 Superannuation Guarantee (SG) rate no change As communicated in 2014, the SG rate increased from 9.2% to 9.% from 1 July The rate will remain at this level until 30 June 2021, and will then increase by 0.% each year until it reaches 12% from 1 July 202. Employer contributions SuperStream Under SuperStream employers must make super contributions electronically. The contribution data is sent electronically to the super fund and the contribution payment is sent electronically through the banking system. Your employer will require the unique superannuation identifier (USI) to make contributions on your behalf which comply with the standard. The specific USI information for your product is available on amp.com.au/usi. This is for your information only and does not require any action. Product news Members over age 6 In accordance with the terms of Pro-Super Agreement, the trustee will terminate the membership of members on turning age 6. Other information Transfer of NMLA life insurance business to AMP Life AMP transferred the Australian and New Zealand life insurance business of The National Mutual Life Association of Australasia Limited (NMLA) to AMP Life Limited (AMP Life) under an arrangement known as a Scheme. The date of the Scheme taking effect was 1st January From this date, the policy providing your insurance cover was simply treated as if it had been issued and administered by AMP Life rather than NMLA. Other than a change to the insurer of the policy, there have been no changes to the policy s terms and conditions, or how it s administered. Taxes All employer contributions paid into a fund and any personal contributions for which a member claims a tax deduction are taxed at a rate of 1%. Contributions in excess of the concessional contribution caps will automatically be included in a member s assessable income and an interest charge calculated by the Australian Taxation Office (ATO) will be payable. The member will also have the option to withdraw up to 8% of their excess contributions from their super. Contributions in excess of the non-concessional contribution caps, and associated earnings, will be allowed to be withdrawn from super. Where a member chooses this option, no excess contributions tax will be payable and associated earnings will be taxed at the member s marginal tax rate. It remains that excess non-concessional contributions tax (at the top marginal tax rate of 4% plus Medicare levy) will continue to be imposed on excess non-concessional contributions that are not released from super. If a member does not provide their tax file number (TFN), any concessional contributions (eg employer contributions) they receive may be taxed at a further no-tfn tax of 32% and non-concessional contributions will not be accepted. Insurance-only members will also need to provide their TFN. Pay as you go (PAYG) tax may be payable by members, or other beneficiaries, when a benefit is paid from a fund. 6

7 Enquiries and complaints If you need any additional information about the operation or management of your account, or if you have a concern or complaint, then please contact your financial adviser or contact us on Our customer service officers are available to answer your enquiries and respond to your complaints. We will try to resolve your enquiry or complaint as quickly as possible. To help us do this, please give us as much information as possible about your complaint. We have established procedures to deal with any complaints. If you make a complaint, we will: acknowledge its receipt and ensure an appropriate person properly considers the complaint, and respond to you as soon as we can. If your complaint cannot be resolved at first contact, then we will keep you advised at regular intervals of the status of your complaint. If we cannot resolve your complaint to your satisfaction or you have not had a response from us within 90 days, then you may have the right to lodge a complaint with the Superannuation Complaints Tribunal (SCT). The SCT is an independent tribunal set up by the Australian government to resolve most complaints that members, former members (or beneficiaries in relation to death benefits) have with their superannuation funds. The SCT reviews the decisions of superannuation trustees as they affect an individual member. It is independent from us. Even so, please try to resolve your complaint directly with us before contacting the SCT. Contact details for the SCT are: Phone: Mon to Fri 9am - pm AEST Web: info@sct.gov.au Mail: Locked Bag 3060, MELBOURNE VIC 3001 Time limits on making complaints to the SCT Time limits apply to certain complaints to the SCT. If you have a complaint, you should contact the SCT immediately to find out if a time limit applies. Contact us phone fax web mail amp.com.au askamp@amp.com.au AMP Customer Service PO Box MELBOURNE VIC 8001 N.M. Superannuation Proprietary Limited GPO Box 4134 Sydney NSW