Investment Objectives and Strategies

Transcription

1 Supplementary Report: Pension category A division of the PPS Corporate Superannuation Fund This Supplementary Report should be read in conjunction with your Annual Member Statement (Part 1) and the Annual Report (Part 2) for the year ended and provides information which is specific to the pension members of the PPS Corporate Superannuation Fund. Investment Objectives and Strategies The Pension category of the PPS Corporate Superannuation Fund has been developed recognising its participants will have a diverse preference as to which investment strategy best suits their needs. While many investment strategies are available, rarely will one strategy suit the needs of all participants. Underlying fund managers used over the 2014/2015 year AMP Capital Investors Limited (Summit Select Trust) Westpac Banking Corporation (Westpac Business One Account) The Trust Company Limited* (Trust Cash Management Account) * The Trust Company Limited managed the Fund s cash assets up to 31 March The Trust Company Limited is the Trustee s parent company. Any arrangements between the Trustee and The Trust Company Limited were conducted on an arm s length and commercial basis. The Fund s cash assets were subsequently transferred to the Westpac Business One Account effective 1 April Information surrounding the investment returns earned by all of the underlying investments/fund managers for periods to is provided below. Historical returns are shown for the period up to having regard to the performance of the underlying investments/fund managers up to that date. Additionally, information surrounding the asset allocation of the Fund s investments/underlying fund managers as at is provided on pages 3-5 of this Supplementary Report. The dollar allocation to underlying investments/fund managers relevant to each individual category of membership of the Fund is provided on page 2 of this Supplementary Report. Note: Past performance may not be a reliable indicator of future performance. The objectives are not a promise or guarantee of any particular benefit or return. The objectives are used by the Trustee to measure the performance of the Fund s investments. The achievement of the objectives is subject to market conditions which may inhibit success at certain times. 1

2 Investment Performance The pension category of the Fund is a unitised superannuation fund, whereby members purchase units with distributions received and units are redeemed into cash to meet pension payments, fees and charges during the year. The calculation of unit prices is based upon the unit prices declared by the underlying fund managers. Please refer to the table below for details of the investment returns for each of the underlying investment / fund managers used within the Fund for the year ended. Allocation of assets to underlying investment/fund managers at Fund Manager Holding Summit Select Active Balanced $2,494,641 Summit Select Active Defensive $3,053,307 Westpac Business One Account $1,161,189 Total $6,709,137 Allocation of assets to underlying investment/fund managers at 30 June 2014 Fund Manager Holding Summit Select Active Balanced $2,743,167 Summit Select Active Defensive $3,420,857 Trust Company Cash Fund $1,049,231 Total $7,213,255 Fund Manager Returns to Underlying investment funds Net return * Summit Select (Active) Balanced 9.4% Summit Select (Active) Moderately Defensive 7.5% Summit Select (Active) Defensive 5.8% Westpac Business One Account 1.8% * Fund manager returns are in respect of a one-year period and are net of investment management fees. Tax and other fees may apply. See the summary of fees and costs in this Supplementary Report for further information. 2

3 Investment Strategy Asset allocation of each option at Summit Select (Active) Defensive Option Investment Objective: To provide some growth in your investment over the short to medium term with smaller fluctuations in value than the other Summit Select Active investment options. Investment Strategy: To invest in a diversified mix of predominantly defensive assets such as cash and fixed interest. Defensive assets will have a benchmark of 70% with the balance in growth assets such as equities and property. To invest using a range of specialist investment managers. Asset Class Summit Select (Active) - Defensive 30 June 2014 Benchmark Australian Cash 29.2% 23.7% 20.0% Fixed Interest 39.8% 43.4% 47.0% Defensive Assets 69.0% 67.1% 67.0% Property 4.0% 3.7% 4.0% Alternatives 4.6% 7.0% 7.0% Australian Equity 10.3% 11.5% 12.0% International Equity 12.1% 10.7% 10.0% Growth Assets 31.0% 32.9% 33.0% 3

4 Summit Select (Active) Moderately Defensive Option Investment Objective: To provide modest growth in your investment over the medium term with some fluctuations in value likely. Investment Strategy: To invest in a diversified mix of growth and defensive assets. Growth assets such as equities and property will have an average allocation over time of 50%, with the balance in defensive assets such as cash and fixed interest. To invest using a range of complementary specialist investment managers. Asset Class Summit Select (Active) - Moderately Defensive 30 June 2014 Benchmark Australian Cash 15.7% 13.4% 11.0% Fixed Interest 31.8% 34.1% 38.0% Defensive Assets 47.5% 47.5% 49.0% Property 4.3% 4.7% 6.0% Alternatives 8.2% 8.1% 6.0% Australian Equity 20.4% 20.5% 22.0% International Equity 19.6% 19.2% 17.0% Growth Assets 52.5% 52.5% 51.0% 4

5 Summit Select (Active) Balanced Option Investment Objective: To provide moderate growth in your investment over the medium to long term with moderate fluctuations in value likely. Investment Strategy: To invest in a diversified mix of growth and defensive assets. Growth assets such as equities and property will have a target allocation of 70%, with the balance in defensive assets such as cash and fixed interest. To invest using a range of specialist investment managers. Asset Class Summit Select (Active) - Balanced Option 30 June 2014 Benchmark Australian Cash 4.2% 2.5% 5.0% Fixed Interest 22.4% 23.5% 24.0% Defensive Assets 26.6% 26.0% 29.0% Property 4.3% 5.6% 6.0% Alternatives 9.4% 9.4% 7.0% Australian Equity 29.4% 29.2% 30.0% International Equity 30.3% 29.8% 28.0% Growth Assets 73.4% 74.0% 71.0% Westpac Business One Account Investment Objective: To provide low to modest growth in your investment over the medium to long term, with very few fluctuations in value likely. Investment Strategy: To invest in a low-risk defensive assets with a benchmark asset allocation of 100% to defensive assets such as cash. Asset Class Westpac Business One Account 30 June 2014 Benchmark Australian Cash Sector 100.0% 100.0% 100.0% Defensive Assets 100.0% 100.0% 100.0% 5

6 How long can you leave benefits in superannuation? You can leave your benefits in the superannuation system indefinitely. There is no requirement to remove benefits from superannuation once you reach a certain age or retire, however benefits must be paid (or commence to be paid) as soon as practicable after the death of a member of the Fund. Policy Committee As the pension category consists of a range of individual pensions, there is no requirement for this category to have a Policy Committee. Insurance Members of the pension category are not entitled to insurance through the Fund. Fund Reserves Please refer to the Operational Risk Financial Requirement section in the PPS Corporate Superannuation Fund Annual Report. Superannuation Surcharge Tax Whilst the superannuation surcharge was abolished with effect from 1 July 2005, the ATO may still issue assessments in relation to previous years. Any assessments received in relation to individual members of the Fund, will be reflected in their Surcharge Tax account balance and deducted from their benefit upon leaving the Fund. Any amount deducted in relation to the superannuation surcharge tax during the year is reflected in the account details shown on your Member Statement (if applicable). Your Surcharge Tax account will continue to accrue earnings until you leave the Fund. The earnings applied to your Surcharge Tax account is the Fund s earning rate. 6

7 Fees and Costs A summary of the fees and costs applicable to your account is outlined below. For further information contact the Fund contact. Type of fee or cost Amount How and when paid Fees when your money moves in or out of the Fund Establishment fee The fee to open your investment Contribution fee The fee on each amount contributed to your investment either by You or your Employer. Management Costs The fees and costs for managing your investment Investment management fee The investment fees for managing your investment Nil Nil Member fee of $61.80 per member per annum PLUS an asset fee based on your funds under management. The sliding scale is shown below: Assets Fee p.a. $0 - $206, % $206,323 to $687, % $687,744 to $1,375, % $1,375,489 to $4,126, % More than $4,126, % % of Option assets p.a. Balanced 0.85% Moderately Defensive 0.75% Defensive 0.65% Cash 0.0% Not applicable Not applicable The member fee is deducted from your account in the Fund. This amount is deducted from your account balance on a monthly basis. The investment management fee is paid to the fund managers used by the Fund and is deducted from the returns declared by the managers prior to the calculation of unit prices. This amount is not deducted from your account in the Fund. Investment switching Nil No direct fee is charged by the fee Administrator for switching The fee for changing investment options. However investment options transaction costs (incorporated into the calculation of unit prices) may apply. Note: For further information in relation to the fees noted above, please refer to your annual Member Statement or contact the Fund Contact. 7

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