Significant Event Notice - Combined Super to merge with Prime Super

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1 25 th September 2018 Dear Member, Significant Event Notice - Combined Super to merge with Prime Super Combined Super is very pleased to announce that it will be merging on 31 December 2018 with Prime Super. The merged entity will be ideally positioned to provide Combined Super members with better service and an improved range of investment, insurance and superannuation products. This document will explain benefits of the merger and provide important information about the transfer arrangements and structure of the merged Fund. Two become one The merger between Combined Super and Prime Super will be undertaken by a Successor Fund Transfer (SFT) agreement, signed by the Trustees of the two funds, as permitted under the Superannuation Industry (Supervision) Act The SFT agreement sets out the remaining steps that have to be undertaken by both parties between now and 31 December 2018 to complete the SFT. Under the SFT agreement, Combined Super members will be automatically transferred to Prime Super on 31 December 2018 and, from 1 January 2019, will become members of Prime Super. The appropriate amendments to the Prime Super Trust Deed will be made by the Prime Super Trustee to protect the rights of Combined Super members to ensure that no member will be worse off because of the merger. Combined Super 9,600 members 150 employers $1 billion in assets Prime Super 116,000 members 33,000 employers $4 billion in assets A stronger super fund for members! 125,600 members! 33,150 employers! $5 billion in assets! Why merge? Combined Super continues to be a strong, well performing fund. However, in the changing landscape in which super funds are facing increasing challenges, the Combined Super Trustee Board has been seeking opportunities to ensure the Fund remains strong and sustainable into the future. Through this merger with Prime Super, the Board is confident it has found a merger opportunity with a strong and complementary partner. The merged fund will deliver an improved, long-term benefit that is in the best interests of all Combined Super members, while also ensuring the sustainability of members retirement benefits into the future.

2 Here are some benefits that you will see after the merger: More flexibility in investment choice options Improved online access for members Improved member and employer services Public offer fund available to family and friends The same great insurance benefits Improved economies-of-scale that lower both administration and investment costs. Who is Prime Super? Like Combined Super, Prime Super is a profit-to-members super fund where the members interests come first. Prime Super Pty Ltd, the Trustee of Prime Super, has more than 25 years experience in the superannuation industry and services members and employers across a broad range of industries throughout Australia. Prime Super Pty Ltd manages assets of $4 billion for more than 116,000 members. The merger will provide you with greater regional support and access to superannuation education and services, regardless of whether you live in capital cities or regional centers. What does the merger mean for Combined Super accumulation members? When the merger is finalised, you will become members of Prime Super s Education division. This specialist division has been set up specifically for employees working in the education sector and related industries and demonstrates Prime Super s commitment to our vibrant industry moving forward. What does the merger mean for Combined Super defined benefits members? Defined benefit members will also be transferred into a separate Defined Benefit division of Prime Super as part of the merger and will continue to enjoy the same rights and benefits that they currently receive. What does the merger mean for Combined Super pension members? Combined Super Transition to Retirement Pension members will be transferred into Prime Super s Transition to Retirement Income Stream. Retired Person s Pension members will be transferred into Prime Super s Retirement Income Stream. Trustee Board of Prime Super Pty Ltd after the merger Prime Super has a Board of seven directors, five of whom are independent directors (including the Chairman). As a result of the merger, five Directors currently appointed to the Board of Combined Super will, from 1 January 2019, be appointed to the Board of Prime Super. These new Prime Super directors will, through the agreed merger arrangements, ensure continuity for the members of Combined Super after the merger is complete.

3 Investment options from 1 January 2019 When Combined Super merges with Prime Super on 31 December 2018, you will be transferred into the Prime Super investment option(s) that most closely align(s) with the option(s) you are currently invested in. Combined Super option will be transferred to Prime Super option Balanced (MySuper) MySuper Growth Sustainable Responsible Investment Conservative Australian Shares International Shares Property Interest Managed Growth Sustainable Responsible Investment* Conservative Australian Shares International Shares Property Fixed Interest * Prime Super is adopting the Combined Super SRI option and will offer this option to all Prime Super members from 1 January In some cases, the names of the Prime Super investment options may be different. However, the broad investment mix in the above Prime Super investment options remain the same as their corresponding Combined Super investment options. These transfers will be made automatically, and you do not need to do anything unless you want to change your investment choice. More investment choice options from 1 January 2019 From 1 January 2019, you will be able to choose from a total of 11 investment options. Full details of Prime Super s range of investment options are available on its website: primesuper.com.au/investments/options/ The three new investment choice options that will be available to Combined Super members following the merger are: Cash a sector option that is allocated 100% to cash investments; Alternatives a diversified option that invests in a range of assets, including property, infrastructure and direct credit; and Income Focused a diversified option that focuses on delivering a real income yield from the underlying investments. Your insurance cover Your existing insurance arrangements will remain the same. Combined Super exit statement You will receive a statement from Combined Super ending 31 December 2018 to inform you of your account balance and insurance entitlements at that date so that you can see the amount and insurance entitlements that will be transferred to Prime Super. In addition, you will receive a welcome kit from Prime Super which will set out your new account balance and insurance entitlements commencing on 1 January 2019 in Prime Super.

4 New fee structure Effective from 1 January 2019, there will be new fees and costs for Combined Super members in Prime Super. This table gives an example of how fees and costs will be applied to your new Prime Super account. Please note that Investment fees and indirect costs have been aligned for ease of comparison, there is a minor difference in disclosure between the Funds. Current fees Combined Super 1 2 New fees Prime Super 3 Investment fee Balanced (MySuper) 0.74% MySuper 0.77% Growth 0.98% Managed Growth 0.90% Conservative 0.57% Conservative 0.58% SRI Balanced 1.47% SRI Balanced 1.47% Interest 0.06% Fixed Interest 0.37% Property 1.25% Property 3.00% Australian Shares 0.83% Australian Shares 0.61% International shares 0.88% International Shares 0.44% Alternatives 2.04% Income Focused 0.80% Cash 0.06% Administration fee this is a fee deducted directly from the assets of the Fund to cover the costs of administering the fund, including the provision of trustee, compliance, secretarial, and member communication services. $1.00 per week per member account ($52 p.a.) account keeping fee plus 0.355% p.a. 4 which is an indirect administrative cost allocation. Buy-sell spread Nil Nil Switching fee Nil Nil Exit fee $67.00 for Lump sum withdrawals Nil for Termination Nil Advice fee Nil Nil Other fees and costs Operational Risk Reserve contribution Nil Nil Indirect cost ratio N/A included in investment fees above. Nil $1.30 per week per member account ($67.60 p.a.) 5 account keeping fee plus 0.50% p.a. 6 of account balances up to $100,000; then Nil on amounts over $100, To assist comparison with Prime Super s fees, the current Combined Super Investment fees are expressed as the total of;( a) the underlying manager costs, being a fee paid direct to each investment manager, and (b) Indirect transaction/operating costs, which are investment-related costs incurred by the Fund for investing your super in each of the Fund s investment options, including via interposed vehicles. These investment fees, inclusive of the indirect costs, are factored into the calculation of the unit price for each investment option. Expressed as a percentage of your account balance. 2 The indirect cost component of Combined Super s investment fees is an estimate for the 2018/19 financial year, based on the investment related costs incurred for the 12 months ended 30 June Fees are the total of: (a) actual results for the year to 30 June 2017, and (b) the Performance Bonus fee, being an estimate based on the average performance fees paid over the last 5 years. Expressed as a percentage of your account balance. 4 This additional administration fee accrues monthly and is included in the calculation of the unit price for each investment option. It is not deducted directly from the member s account. 5 $1.53 per week (gross) less tax benefit of $ % p.a. (gross) less tax benefit of 0.088% p.a.

5 Independent PwC Report, dated 1 June 2018 The following excerpt has been taken out of an independent report which Combined Super commissioned PWC (PriceWaterhouseCoopers Australia) to undertake on the Merger Analysis. It takes into account all costs associated with running the Fund including; administration, investment and operations. The tables below clearly demonstrate the benefits of increased scale. Increased scale in Funds under Management (FUM) and increased total membership, combined with synergies that create cost savings between the two funds, significantly reduces the total average expense per Combined Super member. The following balances are taken from the 2017 financial statements of the two Funds (30 June 2017 for Prime Super and 31 December 2017 for Combined Super): Table 1 Table 2 Fees vs Net benefit When comparing superannuation funds, it is important to look at net benefit that is, how your investment has performed, less any fees and taxes you have paid. Lower fees don t necessarily translate to a better outcome. We re extremely proud of our investment performance and the important role that it plays in growing our members retirement balances. However, when we compare our return (minus fees) with Prime Super over time (using the MySuper investment option), Prime Super members have been better off in that period. This is one of the reasons we have chosen Prime Super as our merger partner. The graph overleaf shows the growth of an initial investment of $50,000 over a period of seven years invested in Prime Super s MySuper option and Combined Super s MySuper option after fees and costs. The crediting rates applied are net of any applicable fees and taxation and calculated for the calendar years ending 31 December. The balance shown is in today s dollars and is for illustrative purposes only. It assumes that the balance remained consistent over the period and that there were no deposits or withdrawals made during the period. Insurance premiums have not been applied in this calculation.

6 Please note - Past performance is not an indicator of future performance. We re here to help If you have any questions about the merger please feel free to contact us on or admin@combinedsuper.com.au to discuss any queries you may have. Reminders Keep your contact details up-to-date so you receive further updates from Combined Super during the transition phase. We will be sending out important communication materials during this process to keep you informed. Visit combinedsuper.com.au we will provide regular updates on the merger on our website. Kind regards, George Kogios Chairman of the Board Combined Super This Significant Event Notice (SEN) is issued by the Trustee of the Combined Super Fund ABN , Combined Fund Pty Ltd, ABN , MySuper authorisation number , RSE Licence Number L and USI Registered address: Level 9, 155 Queen Street, Melbourne VIC The information set out in this SEN is based on the current expectations of the Combined Super Trustee as at the date of this SEN. As work in connection with the SFT is ongoing, some of the details set out in this SEN may change Full details of the final transfer arrangements agreed will be communicated to members in a subsequent SEN sent closer to the date of the SFT. The merging entity is Prime Super ABN ; RN The trustee of Prime Super is Prime Super Pty Ltd ABN AFSL No RSE Licence No. L MySuper authorisation number Registered address: Level 10, 455 Bourke Street, Melbourne VIC 3000.