Defined Benefit Indexed Pension

Transcription

1 Your guide to pensions Defined Benefit Indexed Pension Product Disclosure Statement issued 1 July 2017 by UniSuper Limited ABN , AFSL No Rob and Tara Coppa

2 ABOUT THIS PRODUCT DISCLOSURE STATEMENT This product disclosure statement (PDS) has been prepared and issued by UniSuper Limited as Trustee of UniSuper. This PDS is for current eligible UniSuper Defined Benefit Division (DBD) members who are considering a Defined Benefit Indexed Pension. If you re a current DBD member who joined the DBD before 1 July 1998 and have maintained continuous DBD membership since then, you re able to access a Defined Benefit Indexed Pension. If you don t meet this criterion, refer to our Flexi Pension and Commercial Rate Indexed Pension PDSs for information about our other pension products. The information provided in this PDS is of a general nature only and does not take into account your personal financial situation or needs. You should therefore consider whether it is appropriate for your circumstances before relying on it. If you would like advice you should obtain financial advice tailored to your personal circumstances before making a decision about this product. Applications from outside Australia may not be accepted. This PDS describes the important features of membership, including the benefits and risks and how fees, costs and taxes may apply. The information in this PDS will help you make important choices about your pension. If you d like a paper copy free of charge please order a copy from unisuper.com.au/pds or call us on To the extent that this PDS contains any information which is inconsistent with the UniSuper Trust Deed and Regulations, (together, the Trust Deed), the Trust Deed will prevail. Information in this PDS is current as at the date of issue. IN THIS PDS UniSuper, ABN , MySuper Authorisation No , is referred to as UniSuper or the Fund. UniSuper Limited, ABN , AFSL No , is referred to as USL or the Trustee. UniSuper Management Pty Ltd, ABN , AFSL No , is referred to as UniSuper Management or USM. USL has delegated administration of UniSuper to USM, which is wholly owned by USL in its capacity as UniSuper s Trustee. UniSuper Advice is operated by USM, which is licensed to deal in financial products and provide financial product advice. UniSuper Limited 2017

3 Your guide to pensions Defined Benefit Indexed Pension CONTENTS 1 Contents Planning your retirement with us 2 Your pension options with us 4 About UniSuper s Defined Benefit Indexed Pension 12 Risks of Defined Benefit Indexed Pensions 18 Fees and other costs 20 How pensions are taxed 24 Accessing your super benefit 26 Other things you need to know 28 Complaints handling 30 Form Defined Benefit Indexed Pension application form CHANGES TO THIS PDS If changes (which aren t materially adverse) are made in this PDS, updated information will be available at unisuper.com.au or by calling You can request a paper or electronic copy of updated information without charge.

4 2 Planning your retirement with us Congratulations. After years of saving and hard work, you re finally ready to retire or start winding back your working hours. Whatever your plans for retirement, you ll need a regular income to help you achieve your goals for the years ahead. Pensions, also known as retirement income streams, can help you make your superannuation money last longer.

5 Your guide to pensions Defined Benefit Indexed Pension PLANNING YOUR RETIREMENT WITH US 3 PROPOSED CHANGES TO SUPER: FEDERAL BUDGET 2017 The 2017 Federal Budget included several announcements related to super. At the time of preparation, none of these proposals have been legislated. You can read more about Budget proposals affecting super at unisuper.com.au/budget If you re thinking about making a change to your super, we encourage you to consider the proposed changes and to seek advice from a qualified financial adviser. You can contact UniSuper Advice on 1800 UADVICE ( ). What is a pension? A pension is basically a regular income stream. For many, super forms a large part of their retirement income. You can use your super savings to purchase a pension when you retire or are transitioning to retirement. Super funds may offer two types of pensions: accountbased pensions (also known as allocated pensions or market-linked pensions) and lifetime pensions (also known as annuities or indexed pensions). With an account-based pension (e.g. our Flexi Pension), you can choose the amount of pension you receive each year within minimum (and in some cases maximum) levels set by law. You can also make lump-sum withdrawals and choose how your account is invested. Your super money is progressively drawn down until the account balance runs out. Lifetime pensions (like our indexed pensions) provide you with a regular income indexed in line with increases to the consumer price index (CPI) for the rest of your life, but without the flexibility to vary your pension payments, make lump-sum withdrawals, or make investment choices. Why purchase a pension? Purchasing a pension from your super fund allows you to keep your money within the super system, so you may continue to enjoy the system s concessional tax benefits. If you re aged 60 or over, pension income you receive from a defined benefit pension (such as a UniSuper Defined Benefit Indexed Pension) or lifetime pension (such as Commercial Rate Indexed Pension) is tax free up to $100,000 per annum combined from all such pensions. For more information, refer to page 24. The income paid from your pension may also be considered by Centrelink when assessing your Age Pension eligibility, so you may still be entitled to a Government benefit while receiving your accountbased or indexed pension. Investment earnings on the assets of a Flexi Pension are tax free unless: you use up all of your personal transfer balance cap ($1.6 million transfers to a retirement pension during the financial year), or you use a transition to retirement (TTR) strategy. For more information, refer to our Flexi Pension Product Disclosure Statement available at unisuper.com.au.

6 4 Your pension options with us If you have a super account with UniSuper, then you may have exclusive access to a choice of up to three different income streams when you re ready to retire or wind back your working hours.

7 Your guide to pensions Defined Benefit Indexed Pension YOUR PENSION OPTIONS WITH US 5 Your pension options with us We offer the following pension options for eligible members: Defined Benefit Indexed Pension (for eligible DBD members) Flexi Pension Commercial Rate Indexed Pension. In this section we compare the features of our pension products to help you decide which pension(s) may best suit your needs. Each pension option has different key features and benefits so before making a decision about which pension is right for you, you should read the PDS dedicated to that particular pension product. What s common to all three options? Competitive fees (see how our Accumulation and Flexi Pension measures up against other funds using Chant West s Pension AppleCheck tool at unisuper.com.au/compare) No establishment fees No withdrawal fees We re one of Australia s most awarded super funds Experienced in-house investment team Access to UniSuper Advice, seminars (face-to-face and online), online tools and calculators, to help you make smart decisions about your financial future. INCOME STREAM OPTION 2 Flexi Pension Our Flexi Pension gives you flexibility to tailor your income stream payments within prescribed limits, make lump-sum withdrawals 1 and select from a suite of investment options. It also gives you three options for nominating who you want to receive your pension balance after your death. While you re still working, you can also transition to retirement (TTR) with a Flexi Pension (depending on your age) and continue to contribute to your super account in a way that may be tax effective for you. Investment earnings on pensions taken under TTR rules are subject to tax of up to 15%. Investment earnings on all other Flexi Pensions are free of Australian taxes up to the $1.6 million transfer balance cap for the year. Before deciding whether a TTR strategy is right for you, read the Flexi Pension PDS and think about getting financial advice from a qualified financial adviser. 1 If you take a Flexi Pension under the transition to retirement (TTR) rules you can only make lump-sum withdrawals in very limited circumstances. INCOME STREAM OPTION 1 (FOR ELIGIBLE DBD MEMBERS) Defined Benefit Indexed Pension You re eligible to open a Defined Benefit Indexed Pension if you joined the Defined Benefit Division (DBD) before 1 July 1998 and have maintained continuous DBD membership since then. Like a Commercial Rate Indexed Pension, a Defined Benefit Indexed Pension offers you monthly payments for the rest of your life and is indexed in line with increases to CPI on 1 July each year. INCOME STREAM OPTION 3 Commercial Rate Indexed Pension If you prefer a lifetime pension, we offer two types of Commercial Rate Indexed Pensions a Joint Life option and a Single Life option. Both options offer monthly payments for the rest of your life and are indexed in line with increases to the Consumer Price Index (CPI) on 1 July each year. The key difference between our Joint Life and Single Life options is what happens to your pension in the event of your death. For more information refer to the Commercial Rate Indexed Pension PDS.

8 6 Your guide to pensions Defined Benefit Indexed Pension YOUR PENSION OPTIONS WITH US What happens in the event of your death? We strongly recommend you read the What happens to your pension on your death section on page 7 for all the details about what happens to any remaining pension after you die. Each pension has different rules that apply in the event of your death and this may affect which income stream(s) you decide to commence with us. PENSION RISKS Both Defined Benefit Indexed Pensions and Commercial Rate Indexed Pensions are subject to insolvency risk. It s also possible UniSuper could decide to cease to adjust Defined Benefit Indexed Pensions in line with increases to CPI for a period of time or adjust by less than CPI. These risks are explained in more detail in the relevant PDS. Things to consider It helps to think about the following things before deciding which UniSuper pension is right for you. ACCESS TO YOUR FUNDS You can t make any lump-sum withdrawals from a Defined Benefit Indexed Pension or a Commercial Rate Indexed Pension, except in very limited circumstances. You can make lump-sum withdrawals of $2,000 or more at any time from a Flexi Pension. However, if a Flexi Pension is taken as part of a transition to retirement (TTR) strategy, lumpsum withdrawals can only be made in very limited circumstances. See the Flexi Pension PDS for more details available at unisuper.com.au/pds. PAYMENT AMOUNTS, FREQUENCY AND INVESTMENT CHOICE You can t vary the amount or frequency of your pension payments with a Defined Benefit Indexed Pension or a Commercial Rate Indexed Pension. Instead, with the two indexed pensions, your annual pension is paid monthly and indexed in line with increases to the Consumer Price Index (CPI) on 1 July each year. You don t have investment choice with either type of indexed pension. With a Flexi Pension, you can choose how much pension income you receive each financial year, subject to government prescribed age-based minimum limits (and maximum limits for TTR pensions) and whether you receive it fortnightly, monthly, quarterly, half-yearly or annually. You can also choose and switch the investment options(s) your Flexi Pension is invested in. MARKET FLUCTUATIONS Pension payments from a Defined Benefit Indexed Pension or Commercial Rate Indexed Pension are indexed in line with increases to CPI. They re not affected by movements in the investment market. In contrast, with a Flexi Pension, the value of your account balance is directly affected by the returns positive or negative of your chosen investment options. HOW LONG YOU LL NEED YOUR INCOME TO LAST Defined Benefit Indexed Pensions and Commercial Rate Indexed Pensions offer monthly payments for the rest of your life. They may also pay a pension to an eligible spouse or, in the case of Defined Benefit Indexed Pensions, to a child/ children on your death. If you choose a Flexi Pension, your pension payments stop when you no longer have any funds left in your account. This means that your pension may not last your lifetime.

9 Your guide to pensions Defined Benefit Indexed Pension YOUR PENSION OPTIONS WITH US 7 WHAT HAPPENS TO YOUR PENSION ON YOUR DEATH Ask yourself: Do you want to leave a lump-sum benefit when you die? If you have a Defined Benefit Indexed Pension, a 62.5% reversionary pension will be paid to your surviving spouse at the date of your death for the rest of their life, and any dependent or disabled children you have may also be eligible to receive a pension in the event of your death. If you have a Flexi Pension, the remaining balance of your pension account (if any) will be paid to your eligible dependant as a reversionary pension, or as a lump sum to one or more of your dependants and/or legal personal representative. With the Commercial Rate Indexed Pension Single Life option your pension ends on your death unless you die within the guarantee period, which is the lesser of 10 years or your life expectancy when you started the pension, rounded up to the nearest whole number. 2 If you die within the guarantee period, a residual amount will be paid as a lump sum to your legal personal representative. If you die after the guarantee period, no amount will be payable as a death benefit to your estate. THE TYPES OF DEATH BENEFIT NOMINATIONS YOU CAN MAKE Ask yourself: Is it important for you to have certainty about who will receive the balance of your pension account on your death? With a Flexi Pension you can nominate a reversionary, binding or non-binding beneficiary to provide greater certainty about who receives the balance of your Flexi Pension account (if any) after your death. On the other hand, with a Joint Life Commercial Rate Indexed Pension, you must nominate your spouse to receive a reversionary pension after your death. This nomination is binding on the Trustee. With a Defined Benefit Indexed Pension, your surviving spouse will receive a reversionary pension after your death. A benefit may also be paid to your dependent or disabled children. You can t make any type of death benefit nomination for a Single Life Commercial Rate Indexed Pension. Instead, your pension ends on your death, unless you die within the guarantee period (see What happens to your pension on your death opposite for more information). With the Commercial Rate Indexed Pension Joint Life option, on your death your nominated spouse will receive a reversionary pension for the rest of their life, unless they die before you or are no longer your spouse at the date of your death (in this case, no reversionary pension is payable). If your nominated spouse is receiving the reversionary pension and dies within the guarantee period, a residual amount will be paid as a lump-sum benefit to your spouse s legal personal representative. If you die in the guarantee period and your spouse has predeceased you, or is not your spouse at the date of your death, the value of the remainder of the pension that would have been paid up to the end of the minimum payment period, will be paid as a lump sum to your legal personal representative. 2 For example, if your life expectancy when you start your pension is 4.36 years, your guarantee period will be five years i.e rounded up to 5.

10 8 Your guide to pensions Defined Benefit Indexed Pension YOUR PENSION OPTIONS WITH US Your pension options at a glance DEFINED BENEFIT INDEXED PENSION Tax implications Under age 60: Taxable component of your pension payments is included in your assessable income and taxed at your marginal tax rate, less a 15% tax offset. The tax-free component is not included in your assessable income. Over age 60: Tax will apply on net income in excess of $100,000 per annum of all of your defined benefit and lifetime pensions. Note that the value of your defined benefit or lifetime pension (which is calculated by multiplying the annual income by a factor of 16) will be counted towards your transfer balance cap. 1 Flexibility to change income level each year Flexibility to change payment frequency Monthly Lump-sum withdrawals (must be $2,000 or more) Pension payable for life Investment choice CPI indexation 2 Establishment fee Minimum initial investment No minimum applies. Centrelink or Department of Veterans Affairs assets test exempt Binding death benefit nomination (lapsing and non-lapsing) Reversionary beneficiary Death benefit The pension is automatically a Joint Life pension and payable to your spouse in the event of your death. Your surviving spouse will receive a 62.5% reversionary pension for the rest of their life. Before the reversionary pension commences, your spouse may partially or fully commute this pension into a lump sum in accordance with superannuation law. A benefit may also be paid to your dependent or disabled children. 1 For more information refer to pages 24 to It s possible that UniSuper could decide to cease to adjust Defined Benefit Indexed Pensions in line with CPI for a period of time or adjust by less than CPI. Refer to page 18 to 19 of this PDS for more detail on the risks of this product.

11 Your guide to pensions Defined Benefit Indexed Pension YOUR PENSION OPTIONS WITH US 9 FLEXI PENSION Under age 60: Taxable component of your pension payments is included in your assessable income and taxed at your marginal tax rate, less a 15% tax offset. The taxfree component is not included in your assessable income. Over age 60: Pension payments are tax free. Note, if you exceed your transfer balance cap, tax will apply to the notional earnings on your excess. 3 COMMERCIAL RATE INDEXED PENSION Under age 60: Taxable component of your pension payments is included in your assessable income and taxed at your marginal tax rate, less a 15% tax offset. The tax-free component is not included in your assessable income. Over age 60: Tax will apply on net income in excess of $100,000 per annum of all of your defined benefit and lifetime pensions. Note that the value of your defined benefit or lifetime pension (which is calculated by multiplying the annual income by a factor of 16) will be counted towards your transfer balance cap. 5 Subject to government-specified age-based minimum. An annual maximum applies to Flexi Pensions taken under TTR rules. 4 Monthly If you take a Flexi Pension under TTR rules, this can only be done in limited circumstances. Pension payments continue until your account balance is zero. $25,000 $25,000 Yes, for the Joint Life option, but this can t be varied during the life of the pension. (Not available for the Single Life option.) If you have a valid reversionary beneficiary nomination, any remaining balance will be paid to your reversionary beneficiary as a pension. Otherwise, your pension will stop and your dependants and/or legal personal representative will receive any remaining balance as a lump sum. Single Life Indexed Pension: your pension ends on your death unless you die within the guarantee period. If this occurs, the residual amount will be paid to your legal personal representative as a lump sum. Joint Life Indexed Pension: a reversionary pension will be paid to your nominated spouse for the remainder of their life. 3 For more information refer to the Flexi Pension PDS. 4 Eligibility conditions and restrictions apply to Flexi Pensions taken under TTR rules. 5 For more information refer to the Commercial Rate Indexed Pension PDS.

12 10 Your guide to pensions Defined Benefit Indexed Pension YOUR PENSION OPTIONS WITH US So which pension option best suits your needs? You should think about each pension s features in light of your own circumstances and those of your family. This includes looking at what happens to your pension in the event of your death. For details on each option, you should refer to the Your pension options with us section (pages 4 to 9) and the relevant PDS for each product you re thinking about before making a decision. Also, if you need additional help to make a decision about your retirement options, we recommend you see a qualified financial adviser. Once you have chosen your pension options, remember to let us know if your circumstances change so we can keep you informed. It s also a good idea to let a loved one know you have a UniSuper pension(s) so they communicate with us in the event you are unable to. BEFORE YOU RETIRE You can request a benefit estimate before retiring by calling us on If you re a DBD member, the defined benefit component is calculated using a formula that takes a number of factors into account, including how long you ve been a DBD member. To provide you with an estimate, certain assumptions have been made relating to the formula. This means the final balance you receive at retirement may differ from the estimate. How to apply Here s what you need to do: If you re employed by a university when you retire, you ll automatically receive a Planning your retirement kit. This kit outlines your benefit options and includes a Benefit entitlement statement, which shows your total estimated benefit entitlement as at your retirement date. If you re not employed by a university when you retire, you ll need to contact us to request your kit and Benefit entitlement statement. Decide which pension or combination of pensions may suit your needs by consulting the Your pension options at a glance table on pages 8 and 9, considering the relevant PDS, and speaking to a qualified financial adviser if you need to. Complete the application form at the back of the PDS of your chosen pension option. Complete the Australian Taxation Office s (ATO) Tax file number declaration form if you re: aged less than 60 or, over 60 and receiving total annual income exceeding $100,000 per annum from defined benefit pensions (such as Defined Benefit Indexed Pensions) and lifetime pensions (such as Commercial Rate Indexed Pensions). Note, you need to let us know if you want to claim the tax-free threshold as we may be required to withhold some tax from your pension payments. You can find this form which is different from our Tax file number collection form in your Planning your retirement kit, and on the ATO website ( Provide correctly-certified proof of identity. If you re combining any super from other funds into your UniSuper account before you start your Flexi Pension or Commercial Rate Indexed Pension, use MemberOnline, or complete a Combine my super (rollover) form and return it to us. We ll process your application and open your pension as soon as we receive your correctly completed documents and, if required, have confirmed your employment details with your employer and processed any super transfers you ve requested. You ll receive a confirmation letter once your pension account has been opened. This letter will include details of the date your pension payments will start, your gross annual pension income and, if applicable, the payment period you have chosen.

13 Your guide to pensions Defined Benefit Indexed Pension YOUR PENSION OPTIONS WITH US 11 Need help choosing the best pension option for you? UniSuper offers the opportunity to access financial advice as part of its services to members. UniSuper Advice is operated by UniSuper Management Pty Ltd, which is licensed to deal in financial products and provide financial product advice. This means you can get financial advice from someone who understands the Fund and the higher education and research sector. UniSuper Advice offers personal scaled advice on a few topics, or comprehensive personal advice. Personal scaled advice can cover topics like super contributions, investment options and insurance as they relate to your UniSuper account, as well as Flexi Pension set up and simple non-super savings. Comprehensive advice can help in areas including retirement planning, insurance, non-super investments and accumulating wealth. If you ve already received advice, a review service is also available to help you stay on track with your goals. Our advisers are required to achieve a high standard of relevant education. Nearly all our advisers have tertiary qualifications, many in financial planning or related disciplines, and almost all of our comprehensive advisers have the internationallyrecognised CERTIFIED FINANCIAL PLANNER (CFP )* certification delivered by the Financial Planning Association of Australia (FPA) and each of our offices is an FPA Professional Practice. UniSuper Advice operates on a fee-for-service basis. If you request personal advice services, UniSuper Advice will provide you with a quote before you proceed there s no obligation. UniSuper advisers are salaried employees and don t receive any commissions. IT S NOT TOO LATE No matter your stage of life, it s never too late or early to plan your financial future. Contact UniSuper Advice on 1800 UADVICE ( ) or advice@unisuper.com.au. * CFP, CERTIFIED FINANCIAL PLANNER are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd (FPSB). Financial Planning Association of Australia Limited is the marks licensing authority for the CFP Marks in Australia, through agreement with FPSB. ADVICE

14 12 About UniSuper s Defined Benefit Indexed Pension A Defined Benefit Indexed Pension gives you a regular income, indexed in line with increases to the Consumer Price Index (CPI) for the rest of your life, without the concern of having to manage your own investment. The payment of Defined Benefit Indexed Pensions is subject to the risk that the DBD won t have sufficient assets to meet all obligations to DBD members. This risk and others are explained on pages 18 and 19. We could also decide to no longer adjust Defined Benefit Indexed Pensions in line with increases to CPI for a period of time, or adjust by less than CPI increases. Eligibility If you re a current DBD member who joined the DBD before 1 July 1998 and have maintained continuous DBD membership since then, you can access a Defined Benefit Indexed Pension. Defined Benefit Indexed Pensions are not available to any other members. You can choose to receive all or part of your defined benefit component as a Defined Benefit Indexed Pension. If you elect to receive only part of your defined benefit component as a Defined Benefit Indexed Pension, the remaining amount will be paid to you as a lump sum (along with any accumulation component you may have) and transferred to an Accumulation 1 account. The Defined Benefit Indexed Pension can t be taken under transition to retirement (TTR) rules. DBD members may be eligible to purchase a Flexi Pension under TTR rules. Refer to Your guide to pensions Flexi Pension for further information. Types of Defined Benefit Indexed Pensions UniSuper provides two types of Defined Benefit Indexed Pensions: Division A and Division B. Your entitlement to these benefits is determined by when you joined the DBD. If you joined before 1 January 1990, and have maintained continuous DBD membership since then, you re eligible for either a Division A or Division B pension. If you joined on or after 1 January 1990 and before 1 July 1998, and have maintained continuous DBD membership since then, you re eligible for a Division B pension only. Choosing between Division A and B Upon retirement, DBD members receive a personalised Benefit entitlement statement, which outlines the differences in choosing between a benefit under Division A or B (if they re eligible for Division A). You can also request one by calling us. Both options are calculated differently, so they may also deliver a different monetary value. One significant difference between the two options relates to the reversionary benefit your surviving spouse would be entitled to in the event of your death. We recommend you speak to a qualified financial adviser before making this decision.

15 Your guide to pensions Defined Benefit Indexed Pension ABOUT UNISUPER S DEFINED BENEFIT INDEXED PENSION 13

16 14 Your guide to pensions Defined Benefit Indexed Pension ABOUT UNISUPER S DEFINED BENEFIT INDEXED PENSION DIVISION A BENEFIT ENTITLEMENT If you choose to take your benefit entitlement under Division A, upon your death, your spouse is entitled to a reversionary benefit of 62.5% of your original Defined Benefit Indexed Pension entitlement regardless of whether you ve chosen to take the benefit as a Defined Benefit Indexed Pension, lump sum or combination of the two. DIVISION B BENEFIT ENTITLEMENT If you choose to take your benefit entitlement under Division B, on your death, your spouse is entitled to a reversionary benefit of 62.5% of the Defined Benefit Indexed Pension payment at the time of your death. EXAMPLE A member entitled to Division A and Division B benefit has a Defined Benefit Indexed Pension Trust Deed entitlement of $25,000 p.a., but decides to take a Defined Benefit Indexed Pension of only $5,000 p.a. and the remainder of their benefit as a lump sum. In the event of the member s death, their surviving spouse is entitled to: Division A Surviving Spouse Pension Division B Surviving Spouse Pension $15,625 p.a. (indexed in line with CPI annually) (62.5% of $25,000 p.a. entitlement) * $3,125 p.a. (indexed in line with CPI annually) (62.5% of $5,000 p.a. being paid)* * Any reversionary benefit will also include any CPI indexation applied to the member s pension since its commencement. Regular income for the rest of your life With a Defined Benefit Indexed Pension you ll receive a regular income based on a formula, indexed in line with increases to CPI for the rest of your life. The formula is outlined in the Fund s Trust Deed, which you can access at unisuper.com.au. It s important to be aware that UniSuper could decide to no longer adjust Defined Benefit Indexed Pensions in line with increases to CPI for a period of time, or adjust by less than CPI increases. Start date of your indexed pension Provided you inform us of your decision (in writing) within 90 days of ceasing to be a contributing DBD member, you can choose to have your pension start date calculated as either: the date your pension election was processed, or the date you ceased contributing service. Having your pension calculated as at the date of processing may result in an increase to your pension due to additional accrual in the period from your cessation date to the date of processing. However, if you choose this option, you won t be entitled to pension payments for the period from ceasing to be a contributing DBD member to the date of processing. If you would like the date your pension is calculated to be the same as the date your pension is processed, you will need to select your preferred option in Section 5 on the pension application form. If no request is noted on your form, the default position will calculate your pension from the date you ceased to be a contributing DBD member. See Details of additional benefits on page 16. ADDITIONAL BENEFITS Reversionary beneficiary payments apply for Division A and Division B members in certain circumstances to an eligible surviving spouse, dependent children, or disabled children. Read more about additional benefits on page 16.

17 Your guide to pensions Defined Benefit Indexed Pension ABOUT UNISUPER S DEFINED BENEFIT INDEXED PENSION 15 What happens to your Defined Benefit Division (DBD) account? If you use any part of your defined benefit (DB) component to purchase a Defined Benefit Indexed Pension, your DBD account will be closed and you ll become an Accumulation 1 member. You can t use your accumulation super towards your Defined Benefit Indexed Pension. All future employer and member contributions will be made to your Accumulation account. If you have any remaining DB component, it will be converted into accumulation super and transferred in line with the future contributions strategy of your new accumulation account, which you can check on MemberOnline. This is our Balanced investment option if you haven t made a choice. Any remaining accumulation component of your DB account will be transferred and maintain its existing investment option. If you re a DBD member and only use your accumulation component to start your pension, you will remain a DBD member and retain your DB entitlements. How your pension is indexed Your annual pension income will be indexed on 1 July each year in line with increases to the CPI for the preceding 12 months ending 31 March. Where you commence your pension part way through the financial year (i.e. on any other day than 1 July), CPI indexation will be pro-rated based on the number of days as a proportion of the year, multiplied by the rate of indexation. Each July, we ll advise you of your new annual pension income. We could decide to cease to adjust Defined Benefit Indexed Pensions in line with CPI for a period of time, or adjust by less than CPI increases. Commuting your pension You can t commute (change) your Defined Benefit Indexed Pension into a lump sum unless it s: within six months of starting the pension, to pay a surcharge tax liability, to give effect to a Family Law payment split, or to give effect to an ATO release authority under income tax legislation. Government benefits Defined Benefit Indexed Pensions are generally exempt from Centrelink and Department of Veterans Affairs assets tests. The annual pension income less an exempt amount is counted towards the income test. We recommend you speak to a qualified financial adviser for more information. Potential advantages and disadvantages of a Defined Benefit Indexed Pension ADVANTAGES A Defined Benefit Indexed Pension doesn t fluctuate according to investment market performance, since investment returns do not directly change the formula used to calculate these benefits. However the DBD assets are still subject to the investment market risks as outlined on pages 18 and 19. There s no minimum initial investment required. In the event of your death, your surviving spouse will receive a reversionary pension for the remainder of their life. Your spouse may choose to commute their surviving spouse pension to a lump sum before starting a surviving spouse pension in accordance with superannuation law. The annual pension income less an exempt amount is counted towards the income test. DISADVANTAGES There is no ongoing access to your capital beyond the regular pension payments and no lump-sum withdrawals can be made. As pension payments are made from the pooled investments of the DBD, if the experience in relation to factors including investment returns, inflation and/or longevity is worse than expected, the Trustee may be required to reduce pension payments, reduce the indexation of pension payments, or a combination of these measures. Refer to the information on pages 18 and 19: Risks of Defined Benefit Indexed Pensions. We strongly recommend you speak to a qualified financial adviser about your situation and explore options for setting up your pension and broader finances if you think you may need to access a lump sum.

18 16 Your guide to pensions Defined Benefit Indexed Pension ABOUT UNISUPER S DEFINED BENEFIT INDEXED PENSION Q&A HOW MUCH DO YOU NEED TO START A DEFINED BENEFIT INDEX PENSION? No minimum initial investment is required. CAN YOU PUT EXTRA FUNDS INTO YOUR DEFINED BENEFIT INDEXED PENSION? No. Once your pension is established, you can t top it up. WHEN ARE PAYMENTS MADE? Your pension payments are made on a monthly basis. Payments are made into your nominated financial institution account by the 28th day of the month. You may not be able to access your pension payment from credit unions on the 28th day as some credit unions take longer to clear funds. CAN YOU CLOSE YOUR DEFINED BENEFIT INDEXED PENSION? Generally, your pension can only be closed within the first six months. After this time, it will continue for your lifetime, and/or your spouse s. Details of additional benefits Additional benefits may be payable in the event of your death while you re receiving a Defined Benefit Indexed Pension and you re survived by your spouse, and or any dependent or disabled children. These additional benefits outlined on page 14 are explained in more detail here. SURVIVING SPOUSE PENSION If you die while in receipt of a Defined Benefit Indexed Pension, your surviving spouse will automatically receive a pension payable for his or her life. DEPENDENT CHILD PENSION If you have a dependent child they may be entitled to receive a Dependent Child Pension from the Fund. The amount of this pension will depend on the number of dependent children you have on your death and whether your spouse survives you. For example: If you have a surviving spouse and one dependent child, the Dependent Child Pension will be 17.5% of your pension prior to death. If you have two dependent children 27.5% of your pension will be divided between them; and for three or more dependent children 37.5% of your pension will be divided between them. If you don t have a surviving spouse but have one dependent child, the Dependent Child Pension will be 62.5% of your pension prior to death. If you have two dependent children 80% of your pension will be divided between them; if you have three dependent children 90% of your pension will be divided between them; and if you have four or more dependent children 100% of your pension will be divided between them. If a child no longer meets the definition of Dependent Child, or dies after the date the Dependent Child Pension becomes payable, the pension will cease in respect of that child, and be adjusted in respect of the remaining dependent children (if any). A Dependent Child Pension will otherwise cease when: the dependent child reaches age 18 (unless engaged in an approved course of study on a full-time attendance basis); or the dependent child reaches age 25, unless the dependent child is disabled within the meaning of the Disability Services Act 1986 (Cth).

19 Your guide to pensions Defined Benefit Indexed Pension ABOUT UNISUPER S DEFINED BENEFIT INDEXED PENSION 17 DISABLED CHILD PENSION If you have a disabled child at the time of your death, that child may be entitled to receive a Disabled Child Pension from the Fund. This pension would generally be calculated as 20% of the pension you were receiving at the time of your death. Disabled Child Pension payments to a disabled child will stop on the earlier date of the death of the child or when the child no longer meets the definition of a disabled child. For more information about the Dependent or Disabled Child Pensions, call us on Definitions SPOUSE A a person to whom you re legally married, A A a person, whether of the same or opposite sex, with whom you re in a relationship that is registered under a prescribed Australian State or Territory law, and a person, whether of the same or opposite sex, to whom you re not legally married but who lives with you on a genuine domestic basis as a couple. DEPENDENT CHILD Under the UniSuper Trust Deed, a dependent child is defined as a child who, in the opinion of the Trustee, is substantially dependent upon a deceased member at the date of the member s death and is: under school age, or a disabled child (see the definition below), or genuinely pursuing a regular course of school, college or university education on a full-time day attendance basis, such course being approved for this purpose by the Trustee. DISABLED CHILD Under the UniSuper Trust Deed, a disabled child is a child of a member who, in the opinion of the Trustee, is substantially dependent on the member and is handicapped or disabled either mentally or physically to such an extent that they are unable to adequately maintain themselves, and who was dependent and handicapped or disabled at the date of the member s death.

20 18 Risks of Defined Benefit Indexed Pensions There are some important risks to be aware of when considering a Defined Benefit Indexed Pension. Legislative risk This is the risk that legislation governing the way pensions (and superannuation) operate may change. For example, how and when you can take your benefit, the tax payable and treatment for means testing by Centrelink. Cyber risk This is the risk of financial or data loss, business disruption, or damage to the reputation of UniSuper as a result of a threat or failure to protect the information or personal data stored within its information technology systems and networks. Operational risks This is the risk that factors beyond the Trustee s reasonable control may prevent it from administering and managing the Fund, your account and the Fund s investments in the manner in which we usually would. For example, system failure, market closures, significant market movements, significant illiquidity, significant redemption or switching activity actions taken by our external investment managers and other service providers, industrial disputes, terrorist acts, wars, actual or potential epidemics and pandemics, earthquakes, fires and civil disturbances. The Trustee has measures in place that are intended to manage the consequences of these occurrences. However, the Trustee can t guarantee that these kinds of occurrences will not interrupt normal operations. There is also a risk that UniSuper s Trust Deed or fees and costs may change. Product risk A Defined Benefit Indexed Pension is a noncommutable, reversionary, indexed lifetime income stream. There is a risk that if you change your mind once you start your pension, you generally can t close or rollover the account after the first six months. You will receive pension payments for your lifetime with no ability to make lump sum withdrawals. Risks associated with managing funding of UniSuper s Defined Benefit Division If you choose a Defined Benefit Indexed Pension, your pension entitlements are pooled together with that of other Defined Benefit Indexed Pension members, Commercial Rate Indexed Pension members and DBD members.

21 Your guide to pensions Defined Benefit Indexed Pension RISKS OF DEFINED BENEFIT INDEXED PENSIONS 19 The asset pool supporting these entitlements is invested by UniSuper in a diverse portfolio of shares, property, bonds and cash. The value of these investments will vary and may go up and down. The DBD is designed on the basis that, in the long term, the investment returns are expected to be sufficient for the DBD to provide UniSuper s defined benefits, although this isn t guaranteed, and even though, over short periods, the funding position may vary with investment volatility. However, it s possible that contributions received, together with investment returns (which may be positive or negative), may prove inadequate to fund DBD benefits including Defined Benefit Indexed Pensions. Factors that might contribute to investment returns being inadequate include: investment-related risks such as the risk of negative returns from a specific investment (or security), risk of underperformance by an investment manager, market risks, risks associated with poor performance by investments in particular markets or countries, currency risk (the Trustee has discretion to determine the extent to which different currencies are hedged, if at all), credit risk, inflation risk, liquidity risk and risks associated with the use of derivatives. It s also possible that, if the experience of the DBD in relation to factors including inflation and/or pensioner longevity is worse than expected, the DBD may be inadequate to fund benefits even if investment returns are as expected. Risks associated with defined benefits In the event of a shortfall of assets caused by a prolonged market downturn or other factors, the Trustee, under Clause 34 of the Trust Deed, may reduce defined benefits. Therefore members must consider this risk. Clause 34 of the Trust Deed provides a process to manage the DBD s financial position, including a mechanism to reduce benefits if necessary. The Trustee uses two key actuarial measures to track the financial position of the DBD; the Vested Benefits Index (VBI) and the Accrued Benefits Index (ABI). Four years after receiving this advice, if the Actuary s subsequent report advises that the Fund s position has not improved sufficiently, the Trustee must consider whether it is in the interests of all DBD members to reduce benefits payable. The four-year monitoring periods mean that the Trustee can make decisions in DBD members best interests. If benefit reductions are required, the Trustee must do this on a fair and equitable basis for all DBD members. There is currently one Clause 34 monitoring period in place it will end when the first Actuarial Report has been presented to the Trustee after 30 June The Trustee may then consider if defined benefit reductions are required. If benefit reductions are required, the approach would depend on the circumstances after the monitoring period concludes. However, it could include changes to the rate at which your defined benefits accrue, reductions to the accrued value of your defined benefit, or a combination of both. For more information, go to unisuper.com.au/dbdupdate. Insolvency risk UniSuper s Indexed Pensions are paid from a defined benefit fund for legislative purposes. A defined benefit fund is subject to special funding and solvency rules under superannuation law. If the Fund s actuary discovers that they are unable to certify solvency in respect of minimum Superannuation Guarantee (SG) benefits, they re required to make a declaration of insolvency. If this occurs, UniSuper must initiate a program designed to restore solvency within five years or wind up the defined benefit fund. If UniSuper were to be wound up, there s a risk that any monies payable to you or on your behalf would be less than the capital value of your pension. You need to be aware that if UniSuper were declared to be insolvent that pension payments could be reduced or pensions may not be indexed. Under Clause 34, if the Actuary s report of its annual investigation and valuation of the DBD advises that those measures have fallen below particular levels (or the level of contributions is such that those measures are likely to fall below those levels), we must notify members and employers.

22 20 Fees and other costs This section shows fees and other costs that you may be charged in relation to a Defined Benefit Indexed Pension, where relevant. These fees and costs are deducted from the assets supporting the defined benefit pool. 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 final return by up to 20% over a 30-year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You or your employer, as applicable, may be able to negotiate to pay lower fees. Ask the fund or your financial adviser. 1 TO FIND OUT MORE If you would like to find 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. Other fees, such as advice fees for personal advice may also be charged, but this will depend on the nature of the advice chosen by you. Tax costs are set out on pages 24 and 25 of this PDS. You should read all the information about fees and costs as it is important to understand their impact on your pension. The table on page 8 sets out the fees and other costs for the Pension. Defined Benefit Indexed Pension fees Unlike other pension and super options, the Defined Benefit Indexed Pension only charges an administration fee which is allowed for in the formula used to calculate your pension. CHANGES TO THIS PDS If changes (which aren t materially adverse) are made in this PDS, updated information will be available at unisuper.com.au or by calling You can request a paper or electronic copy of updated information without charge. 1 This text is required by law to be included in all PDSs. Note, however, that UniSuper s fees are set at a competitive level that is consistent with effective management and are not negotiable by members.

23 Your guide to pensions Defined Benefit Indexed Pension FEES AND OTHER COSTS 21 DEFINED BENEFIT INDEXED PENSION TYPE OF FEE AMOUNT HOW AND WHEN PAID Investment fee Nil Not applicable Administration fee $301 per year This fee is deducted from the defined benefit pool of assets. No charge is deducted directly from your account. Buy-sell spread Nil Not applicable Switching fee Nil Not applicable Exit fee Nil Not applicable Advice fees 1 Nil Not applicable OTHER FEES AND COSTS 1 Indirect cost ratio Nil Not applicable 1 Further fees and costs such as fees for personal advice may apply. For further information, refer to Additional Explanation of Fees and Costs section on the next page.

24 22 Your guide to pensions Defined Benefit Indexed Pension FEES AND OTHER COSTS Competitive fees and no commissions UniSuper members benefit from the savings we achieve as one of the largest super funds in the country savings we pass on to you through competitive fees. We don t pay commissions to advisers or dividends to shareholders and therefore there are no margins, which permit the negotiation of lower fees. Additional explanation of fees and costs FEES FOR UNISUPER ADVICE Factual information and general advice is provided at no additional charge to UniSuper members. The cost of that service is included in the administration fees you pay. UniSuper Advice is a financial planning service available to UniSuper members and their spouses through UniSuper Management Pty Ltd ABN Australian Financial Services Licence No which is licensed to provide financial advice services. Members will receive a quote before UniSuper Advice proceeds with personal advice services. These fees are additional to the fees stated in this document. The cost of the service provided varies depending on a number of factors including the complexity of the advice sought. You can learn more about the services we provide, and the fees charged by referring to our Financial Services Guides (FSGs) at unisuper.com.au or, if you have obtained advice, the Statement of Advice. Where agreed with you, some or all of the cost of advice may be able to be deducted from your Accumulation or Flexi Pension account as an Advice fee to the extent the advice provided relates to your account in UniSuper or superannuation-related retirement planning. ALTERATION TO FEES Fees are generally calculated effective 1 July each year. Fees may change without your consent. UniSuper reserves the right to introduce a new fee or change any fees. We will give you 30 days written notice (except in the case of annual indexation of fees) before a new or increased fee takes effect. DEFINED FEES This section defines the different fees and costs that can be legally charged on your UniSuper account. Not all charges apply to your UniSuper pension. Activity fees Activity fees relate to costs incurred by UniSuper s Trustee if they are directly related to a Trustee activity that is engaged in at the request, or with the consent, of a member; or that relates to a member and is required by law; or that relates to a member and is required by law; and those costs are not otherwise charged as an administration fee, any investment fee, a buy-sell spread, a switching fee, an exit fee or an advice fee. UniSuper does not currently charge any activity fees on your Defined Benefit Indexed Pension. Administration fees An administration fee is a fee that relates to UniSuper s administration or operation and includes costs that relate to that administration or operation, other than 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. UniSuper s administration fee of $301 per annum is deducted from the defined benefit pool of assets. No charge is deducted directly from your Defined Benefit Indexed Pension. If you re a Defined Benefit Division member, we can only deduct advice fees from your accumulation component of your super account.

25 Your guide to pensions Defined Benefit Indexed Pension FEES AND OTHER COSTS 23 Advice fees fee is an advice fee if: the fee relates directly to costs incurred by the Trustee of UniSuper because of the provision of financial product advice to a member by: the Trustee of UniSuper; or another person acting as an employee of, or under an arrangement with, the Trustee of UniSuper; and 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. You will only be charged an Advice fee if you agree to receive personal financial advice from UniSuper Advice. This fee will be discussed and agreed with you at this time. The fees cannot be deducted from your Defined Benefit Indexed Pension. Buy-sell spreads A buy-sell spread is a fee to recover transaction costs incurred by UniSuper s Trustee in relation to the sale and purchase of UniSuper assets. No Buy-sell spreads currently apply to your Defined Benefit Indexed Pension. 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. No Exit fees currently apply to your Defined Benefit Indexed Pension. Investment fees An investment fee is a fee that relates to the investment of UniSuper s assets and includes: fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and costs that relate to the investment of UniSuper s assets, other than: indirect costs that are not paid out of UniSuper that the Trustee has elected in writing will be treated as indirect costs and not fees, incurred by UniSuper s Trustee or in an interposed vehicle or derivative financial product; and costs that are 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. Investment fees do not apply to your Defined Benefit Indexed Pension. Switching fees A switching fee for a MySuper product is a fee to recover the costs of switching all or part of a member s interest in the superannuation entity from one class of beneficial interest in the entity to another. A switching fee for a superannuation product, other than a MySuper 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. Switching fees do not apply to your Defined Benefit Indexed Pension. Indirect cost ratio The indirect cost ratio (ICR) for a MySuper (Balanced) investment option or another investment option offered by UniSuper is the ratio of the total of the indirect costs for the MySuper product or investment option, to UniSuper s total average net assets attributed to the MySuper or investment option. Note: A fee deducted from a member s account or paid out of the superannuation entity is not an indirect cost. No ICR applies to your Defined Benefit Indexed Pension.

26 24 How pensions are taxed It s important to understand how tax can affect your pension income, death benefits and rollovers. The tax information in this PDS assumes that benefits are paid from a taxed source. Tax and pensions can be complex for some members so we recommend you obtain advice from a taxation specialist. Definitions SPOUSE a person to whom you are legally married, a person, whether of the same sex or opposite sex, with whom you are in a relationship that is registered under an Australian State or Territory law, and a person, whether of the same sex or opposite sex, with whom you are not legally married but who lives with you on a genuine domestic basis as a couple. LEGAL PERSONAL REPRESENTATIVE Your legal personal representative is the executor of your Will, or the administrator of your estate if you die without a Will. If your benefit is paid to your legal personal representative, your death benefit will form part of your estate and will be distributed in accordance with your Will (if you have one), or in accordance with the laws that govern people who die without a Will. Tax on pension income The amount of tax you pay on your pension income can depend on your age and the components of your pension. However, the value of a Defined Benefit Indexed Pension or Commercial Rate Indexed Pension will count towards your transfer balance cap (see page 25 for more details). AGE 60 AND OVER Fifty per cent of the total income exceeding $100,000 per annum from defined benefit pensions (such as Defined Benefit Indexed Pension) and lifetime pensions (such as Commercial Rate Indexed Pensions) will be: included in your assessable income, and potentially subject to income tax. For example, if your total annual income from all defined benefit and lifetime pension sources is $120,000, half of the $20,000 excess amount (i.e. $10,000) will be included in your assessable income and we may be required to withhold some tax from your pension payment. We strongly recommend you speak to a qualified financial adviser about your situation before setting up your pension if you expect your total annual pension to exceed $100,000 per annum.

27 Your guide to pensions Defined Benefit Indexed Pension HOW PENSIONS ARE TAXED 25 UNDER AGE 60 The way your pension income is taxed will depend on the two components making up your pension: the taxable component, and the tax-free component. Each pension payment is made proportionally from your tax-free and taxable components. The taxable component of your pension payments is included in your assessable income and taxed at your marginal rate. The tax-free component is not included in your assessable income. 15% tax offset If you re aged under 60 a 15% offset is available to reduce the tax payable on the taxable component of your pension if you ve reached your preservation age (see page 26 for a definition of preservation age). We ll deduct the required rate of tax from your regular pension payment and send you a PAYG Payment Summary each year to lodge with your annual income tax return. If we don t have your tax file number (TFN), we may be required to deduct tax at a higher rate. Tax on death benefits When you die, the annual pension income your surviving spouse will receive from the reversionary pension will be tax free up to $100,000 per annum unless both you and your surviving spouse are aged under 60 at the date of your death, in which case the income from the reversionary pension will be subject to tax at marginal rates, and your surviving spouse will be entitled to a 15% tax offset. If you re aged 60 or older at the date of your death, the Dependent or Disabled Child Pension will be received tax free. If you re aged under 60 at the date of your death, the Dependent or Disabled Child Pension will be subject to tax at marginal rates and the recipient may be entitled to a 15% tax offset. Transfer balance cap It s important to remember that once a Defined Benefit Indexed Pension or Commercial Rate Indexed Pension is commenced, the total value will count towards your transfer balance cap. Generally these pensions are valued by multiplying the annual entitlement by a factor of 16. This means that a Defined Benefit Indexed Pension or Commercial Rate Indexed Pension that pays $100,000 per annum will fully exhaust your transfer balance cap in the financial year. TAXATION ADVICE Tax and pensions can be complex for some members. We recommend you obtain advice from a taxation specialist if you have questions or need help. Providing your tax file number The Trustee is authorised and required to ask you for your TFN by tax law and in accordance with the Superannuation Industry (Supervision) Act Your TFN will only be used for lawful purposes, which include: finding and combining your super benefits with your consent, as required verifying you re the person the benefit belongs to before transferring your super benefit to another fund, unless you don t provide consent for your TFN to be used for this purpose providing information, including your TFN, to the ATO, e.g. when you receive a benefit, are a lost member or have unclaimed benefits, and providing information, including your TFN, to the trustee of another super fund when your benefits are being transferred, unless you advise us in writing that you don t wish your TFN to be passed on. The lawful purposes for which your TFN can be used and the consequences of not providing us with your TFN may change in future as a result of legislative change. ADVANTAGES OF PROVIDING YOUR TFN You should provide your TFN as part of acquiring a UniSuper product. It s not an offence to withhold your TFN, but providing your TFN will have the following advantages (which may not otherwise apply): other than the tax that may ordinarily apply, no additional tax will be deducted when you start drawing down your super benefits it will make it much easier to trace different super accounts in your name and identify you as the person the super benefits belong to so you receive all your benefits when you retire. You can provide your TFN by completing the Tax file number collection form available on our website. For more information on the transfer balance cap refer to the Flexi Pension PDS or the ATO website.

28 26 Accessing your super benefit In this section we provide information about when you can take your super benefit as a pension and the proof of identity you re required to provide. When you can access your super benefit Super is a long-term investment. That s why the government has placed restrictions on when you can access your benefit. Generally, your super must be preserved in the superannuation system until you permanently retire from the workforce on or after reaching your preservation age (refer to the table opposite). Exactly when you can access your benefit depends on its preservation status under the government s preservation rules. Additional restrictions may apply under the Trust Deed for Defined Benefit Division members. These are explained below. Under the preservation rules, your benefit may be divided into three parts preserved, restricted non-preserved or unrestricted non-preserved. PRESERVED BENEFITS From 1 July 1999, all member and employer contributions made into super and all investment earnings must be preserved. Generally, you can t access preserved benefits until you ve satisfied a condition of release. Your preservation age varies depending on when you were born. YOUR DATE OF BIRTH PRESERVATION AGE Before 1 July July June July June July June July June July 1964 or after 60 WHAT ARE CONDITIONS OF RELEASE? Under the preservation rules, you must meet a condition of release before your preserved benefits can be withdrawn from a super fund. The conditions of release include: permanent retirement from the workforce on or after reaching your preservation age, termination of employment after you reach age 60, attaining age 65, permanent incapacity, terminating employment with an employer who contributed to UniSuper on your behalf and your benefit is less than $200, or death.

29 Your guide to pensions Defined Benefit Indexed Pension ACCESSING YOUR SUPER BENEFIT 27 ACCESSING YOUR PRESERVED BENEFITS BEFORE YOU RETIRE Under the preservation rules, you may be able to access part or all of your preserved benefits early in certain limited circumstances, provided that you satisfy the eligibility criteria, as follows: Specified compassionate grounds: you must apply directly to the Department of Human Services (DHS). Severe financial hardship grounds: you must apply to the Trustee. You must be receiving eligible Commonwealth Government income support. Terminal medical condition: you must apply to the Trustee. ACCESSING PRESERVED BENEFITS To access your preserved benefits before you retire, you need to contact the Department of Human Services directly (for release on specified compassionate grounds) or call us on (if you re eligible to apply for release due to severe financial hardship or terminal medical condition). RESTRICTED NON-PRESERVED BENEFITS Generally, you can access restricted non-preserved benefits when you terminate employment with an employer who had contributed to UniSuper on your behalf. Restricted non-preserved benefits can also be accessed if you meet a condition of release, as set out on page 26. UNRESTRICTED NON-PRESERVED BENEFITS Unrestricted non-preserved benefits can generally be accessed at any time, regardless of your age, employment situation or financial position, and are usually made up of benefits you ve already become entitled to, but have voluntarily decided to keep within the super system (for example, you ve reached age 65 but are still working). Additional restrictions for Defined Benefit Division members As well as the preservation rules described, DBD members may not be able to access their defined benefit component due to additional restrictions. However, where the defined benefit component consists entirely of unrestricted nonpreserved benefits, these additional restrictions do not apply and the benefit is able to be accessed. If you withdraw part or your entire defined benefit component, you ll automatically cease to be a member of the DBD unless the withdrawal is the result of severe financial hardship, a family law split or compassionate grounds approved by DHS. If you cease to be a DBD member you will no longer be eligible to purchase a Defined Benefit Indexed Pension. Any remaining defined benefit component (together with your accumulation component) will be transferred into an Accumulation 1 or Accumulation 2 account, and any future employer contributions will be made into this account. Providing proof of identity In line with the anti-money laundering and counterterrorism financing legislation, super funds are required to identify, monitor and have measures in place to reduce the risk that the super fund may be used as a vehicle to launder money or to finance terrorism. As a result, you ll be required to provide proof of your identity before starting a pension. For more information, read the Your guide to proof of identity fact sheet available on our website for more information about the documents we can accept and how to get them certified. Refer to page 10 to check whether you ll need to complete the Australian Tax Office s (ATO) Tax file number declaration form.

30 28 Other things you need to know This section contains important information about transfers, privacy and more. Temporary residents Government legislation places restrictions on temporary residents commencing a pension. An eligible temporary resident whose visa has expired or been cancelled can claim his or her super benefit directly from UniSuper within six months of departing Australia, or from the ATO at any time. The taxable component of benefits claimed by temporary residents upon departing Australia may be subject to up to 65% withholding tax. The amount of tax withheld will depend on the class of visa you have and when the benefit is paid. For more details, refer to our Departing Australia superannuation payment fact sheet available on our website or by calling us on The ATO website will also provide up-to-date tax information for temporary residents. Rollovers (transfers) into UniSuper If you have any super in other funds you may roll over (transfer) these amounts into your UniSuper account to help you boost your account balance before you purchase your pension. However, any additional money rolled into your accumulation component can t be used to purchase a Defined Benefit Indexed Pension. We don t charge for transfers into UniSuper, but some funds may charge an exit fee when you leave them. You should also check whether exiting those funds could impact any other entitlements (like cessation of insurance cover). To transfer other super, use our online rollover tool available at unisuper.com.au or on MemberOnline, or complete the Combine my super (rollover) form available from our website and return it to us. Family Law and your pension Pension entitlements form part of the property of a marriage or de facto (same-sex or opposite sex) relationship under the Family Law legislation and, in the event of marriage or relationship breakdown, can be split between the parties by agreement or court order. For more information, refer to the Super and Family law fact sheet, which is available at unisuper.com.au or by calling us on

31 Your guide to pensions Defined Benefit Indexed Pension OTHER THINGS YOU NEED TO KNOW 29 Confirming transactions and changes The Trustee is required to automatically confirm certain transactions and changes that occur during your membership, including investment switches, lump-sum withdrawals and changes to beneficiary nominations. If you d like to confirm a transaction or change, call us on , quoting your member number. You can also us at pensionsmailbox@unisuper.com.au or write to us at: UniSuper Level 1, 385 Bourke Street Melbourne VIC 3000 Cooling-off period You re entitled to a 14-day cooling-off period when you commence a UniSuper pension (this doesn t apply to Flexi Pensions taken under TTR rules). If you decide that your pension doesn t meet your needs within these 14 days, you can choose to cancel your pension and receive the total benefit as a lump sum. The cooling-off period starts from the earlier of: date you receive your pension confirmation letter, or A A end of the fifth business day after your pension account is opened. To withdraw your pension application, you must advise us in writing within the cooling-off period. You won t be charged a fee for withdrawing your pension application within the cooling-off period, but any taxes you owe will be deducted from your refund. Your balance may also be adjusted for any market movements in your chosen investment options or any payments made to you. This means that the amount you receive back may differ from the original amount used to open your pension. How we protect your privacy We recognise the importance of protecting your personal information and are committed to complying with our privacy law obligations. We collect your personal information to administer your account, ensure you re eligible for insurance cover, provide you with UniSuper membership benefits, services and products, verify your identity and improve our products and services. You consent to our collecting sensitive information about you, where collecting that information is reasonably necessary for us to perform one or more of our functions or activities. We usually collect personal and sensitive information directly from you, however, it may also be collected from third parties, such as your employer. We may also collect this information from you because we re required or authorised by or under an Australian law or a court/tribunal order to collect that information. If you don t provide this information, we may not be able to administer your account, provide you with a product or service or you may be disadvantaged in some other way. We may disclose your information to any service provider we engage (for example mail-houses, auditors, insurers, actuaries, lawyers and research consultants) to carry out or help us provide your membership benefits, services and products. This includes overseas entities. The countries we may disclose personal information to are Japan, Canada and the United States of America. Where information is transferred overseas, we ll seek to ensure the recipient of the data has security systems to prevent misuse, loss or unauthorised disclosure in line with Australian laws and standards. Our Privacy Policy contains information about how you can access any personal information we hold, how to correct your information and how to make a complaint about a breach of the Privacy Act. It s available at unisuper.com.au or by calling us on

32 30 Complaints handling We hope you don t have any complaints about your pension. If you do, please contact us and we ll investigate and respond to your complaint as quickly as possible. To make a complaint, contact our Member Care Manager on or write to: Member Care Manager UniSuper Level 1, 385 Bourke Street Melbourne Vic enquiry@unisuper.com.au If you aren t satisfied with our handling of your complaint or with the decision, you can contact the Superannuation Complaints Tribunal (SCT), an independent body set up by the government to help resolve certain complaints in relation to super and pensions. The SCT can t accept a complaint unless it has gone through the Trustee s internal complaints process first. If the SCT accepts your complaint, it will try to resolve the matter through conciliation. If this is unsuccessful, it will make a determination which is binding on the Trustee. If your complaint relates to a disablement claim or death benefit, there are time limits in which to make a complaint. You can contact the SCT on or write to: Superannuation Complaints Tribunal Locked Bag 3060 Melbourne Vic The SCT can t consider complaints relating to the general management of the Fund. UNISUPER You can contact a UniSuper Member Services Consultant at: Phone Fax (03) Web unisuper.com.au pensionsmailbox@unisuper.com.au Address UniSuper Level 1, 385 Bourke Street Melbourne VIC 3000

33 Fact sheet Your guide to proof of identity We take looking after your retirement savings very seriously which is why you need to prove your identity (ID) before making withdrawals or other important changes to your account. You can prove your ID: do it yourself via MemberOnline, or send us certified copies of your ID. Verify your identity online Electronic verification is usually the quickest and easiest way to prove your identity you ll know as soon as your identity gets verified and it s also free. Log in at unisuper.com.au/memberonline and go to Verify your identity under the Manage Account tab. You ll need to provide the details of two to four of the following valid government-issued IDs: Australian passport Australian visa Australian driver licence Medicare card your phone book details (e.g. White Pages) your details as stated on State or Federal electoral rolls. The documents you use must contain your date of birth, given name(s), surname and residential address. Please make sure you ve updated your current personal details with relevant government agencies before you begin the process of verifying your identity online. We use online government and public databases to securely and confidentially verify your identity. Send us certified copies of your ID You can also send us certified copies of your ID. The following guide explains the types of documents we can accept and how to ensure they re correctly certified. ALLOW US TO VERIFY YOUR IDENTITY In some cases and on some of our forms, we can verify your identity on your behalf if the document(s)you provide haven t been certified correctly or can t be read. All you need to do is give us consent by ticking the box on the applicable form and we ll try to verify your identity electronically using those documents. We ll let you know if the process wasn t successful. Why provide your TFN? Giving us your tax file number (TFN) means we can process rollover and transfer requests to another super fund without additional proof of identity. If your TFN can t be validated, or you want to transfer to a selfmanaged super fund or organise a benefit payment, you ll still need to give us certified copies of your ID. Visit unisuper.com.au/memberonline to provide your TFN online. STEP 1: COLLECT ACCEPTABLE DOCUMENTS We ll accept either one document from List A or two documents from List B. LIST A CERTIFIED COPY OF A: current driver licence current passport issued by the Commonwealth that has not expired within the past two years. LIST B CERTIFIED COPY OF A: birth certificate or birth extract issued by an Australian State or Territory Australian citizenship certificate a pension card issued by Centrelink that entitles the person to financial benefits. AND: Notice of Assessment from the Australian Taxation Office (less than 12 months old) containing your name and residential address letter from Centrelink regarding a government assistance payment rates notice from local council (less than 12 months old) containing your name and residential address electricity, gas or water bill dated within the past three months that contains your name and residential address. unisuper.com.au

34 STEP 2: CERTIFY YOUR DOCUMENTS Take your original document(s) and a clear photocopy of both sides of the original document to an authorised person. Your ID must be properly certified The authorised person will need to: 1. sight the original document, and the copy, to ensure both documents are identical, and 2. write or stamp this is a true and correct copy of the original document I have sighted or certified true copy, followed by their: signature printed name qualification (e.g. Justice of the Peace), and date. If you ve changed your name or are signing on behalf of another member please prove the link between you and the name change, or other person use a certified copy of one of the following documents as well as your other certified ID. PURPOSE Change of name Signing on behalf of another member SUITABLE LINKING DOCUMENT Marriage certificate Deed poll or change of name certificate from the Registry of Births, Deaths and Marriages Power of Attorney Guardianship papers When having your documents certified, remember: All pages must be certified. The copy of the document must be certified not on a separate page attached to the document. The certified copies of your documents must contain an original signature. Faxed or ed copies won t be accepted. Any documents written in a language other than English must be accompanied by an English translation prepared by an accredited translator. Documents certified more than a year ago won t be accepted. Who can certify your documents Some of the people authorised to certify IDs include: 1. A person who is currently licensed or registered under a law of a State or Territory to practise in one of the following occupations: Chiropractor Patent attorney Dentist Pharmacist Legal practitioner Physiotherapist Medical practitioner Psychologist Nurse Trade marks attorney Optometrist Veterinary surgeon. 2. One of the following persons: Teacher employed on a full-time basis at a school or tertiary education institution Agent of the Australian Postal Corporation who is in charge of, or a permanent employee with two or more years of continuous service with, an office supplying postal services to the public Bank, building society, credit union or finance company officer with two or more years of continuous service Clerk, Master, Registrar or Deputy Registrar of a court Judge of a court or a Magistrate Justice of the Peace Member of the Institute of Chartered Accountants in Australia, the Australian Society of Certified Practising Accountants, the Institute of Public Accountants or the Association of Taxation and Management Accountants, or a Fellow of the National Tax Accountants Association Notary public, and Police officer. Visit the Attorney General s website for a full list of who can certify documents. Members residing overseas If you live overseas, the following people are authorised to certify identification documents: Australian Consular Officer or Australian Diplomatic Officer (within the meaning of the Consular Fees Act 1955) Employee of the Commonwealth or the Australian Trade Commission who is: a. in a country or place outside Australia; and b. authorised under paragraph 3(c) or paragraph 3(d), respectively, of the Consular Fees Act 1955; and c. exercising his or her function in that place A person authorised as a notary public in a foreign country Any person who is in a country or place outside Australia and: a. is currently licensed or registered in Australia (under a State or Territory law) to practise in an occupation listed in part 1 - opposite; or b. holds a position in Australia listed in part 2 - above. You must have your documents certified by a person who has an Australian connection (as set out above). We won t accept documents certified by a person who s licensed or registered to practise in an occupation listed above in a foreign country (and not in Australia), or who holds a position in a foreign country (except for a foreign notary public). This information is of a general nature only and includes general advice. It has been prepared without taking into account your individual objectives, financial situation or needs. Before making any decision in relation to your UniSuper membership, you should consider your personal circumstances, the relevant product disclosure statement for your membership category and whether to consult a licensed financial adviser. This information is current as at May 2017 and is based on our understanding of legislation at that date. Information is subject to change. To the extent that this fact sheet contains information which is inconsistent with the UniSuper Trust Deed and Regulations (together the Trust Deed), the Trust Deed will prevail. Issued by: UniSuper Management Pty Ltd ABN , AFSL No on behalf of UniSuper Limited the trustee of UniSuper, Level 1, 385 Bourke Street, Melbourne Vic Fund: UniSuper, ABN Trustee: UniSuper Limited, ABN AFSL Date: May 2017 UNIS000F unisuper.com.au

35 Defined Benefit Indexed Pension application form Complete this form to apply for a Defined Benefit Indexed Pension. AVOID PROCESSING DELAYS We make important changes to our forms at times. Check you re using the latest version by comparing the issue date at the bottom of this page with the version at unisuper.com.au/pds. Important information To start a UniSuper Defined Benefit Indexed Pension, you must: A Abe a current Defined Benefit Division (DBD) member who joined UniSuper before 1 July 1998 and have maintained continuous DBD membership since then complete the Australian Taxation Office s (ATO) Tax file number declaration form if you re: aged less than 60 and/or over 60 and receiving total annual income exceeding $100,000 per annum from defined benefit pensions (such as Defined Benefit Indexed Pension) and lifetime pensions (such as Commercial Rate Indexed Pensions), and A Aprovide your financial institution account details in Section 6 of this form for the payment of your pension. Return your completed form to UniSuper by the 15th day of the month in which you would like your pension payments to start. If you wish to open more than one UniSuper pension, you need to complete a separate application form for each. You also need to provide an ATO Tax file number declaration form for each pension you open (if applicable, see above). If you are a temporary resident you can only open a pension in very limited circumstances. Contact us for more information. Understanding the risks The payment of Defined Benefit Indexed Pensions is subject to the risks that the DBD will not have sufficient assets to fund DBD benefits including Defined Benefit Indexed Pensions. These risks are explained on pages 18 and 19 of this PDS. Important insurance note If you transfer your entire super account balance to a pension, your existing insurance cover will cease, unless you remain eligible for cover and leave your super account open with enough money in that account to continue paying your premiums. Privacy information UniSuper recognises the importance of protecting your personal information and is committed to complying with its privacy law obligations. For more information on how we collect and manage your information please refer to the Privacy statement at the end of this form. SECTION 1 Member details Please use BLACK or BLUE BALL POINT PEN and print in CAPITAL LETTERS. Cross where required UniSuper member number If you re unsure of your member number, refer to your most recent UniSuper correspondence or call us on Title Mr Mrs Ms Dr Professor Other Surname Given name Date of birth (DDMMYY) Gender Male Female What phone number do you want us to call you on if there s a question we need to ask you regarding this form? Contact number (during business hours) ( ) Providing proof of identity In line with the Anti-Money Laundering and Counter Terrorism Financing Act 2006, you must provide certified proof of identity when submitting a Defined Benefit Indexed Pension application form. We re unable to process your application until we ve received acceptable documents. Turn to the back of this form for full details of what you ll need to provide. Fund: UniSuper ABN Trustee: UniSuper Limited ABN AFSL Administrator: UniSuper Management Pty Ltd ABN AFSL Address: Level 1, 385 Bourke Street, Melbourne Vic 3000 Issue date: July 2017 UNISF

36 SECTION 1 Continued Residential address, number and street (not PO Box)* Suburb/Town State Postcode Country (if not Australia) * Please ensure this is shown on one of your identification documents. Is your postal address different from your residential address? No. Go to SECTION 2 Yes. Please provide your postal address below. Postal address, number and street (or PO Box if applicable) Suburb/Town State Postcode Country (if not Australia) SECTION 2 Your eligibility Select any that apply. I ve reached my preservation age (between 55 and under 60) and have permanently retired from the workforce. I m age 60 or over and have ceased employment with an employer. I m age 65 or over. SECTION 3 Reversionary pension details A Defined Benefit Indexed Pension provides a 62.5% reversionary pension for your surviving spouse in the event of your death. Please provide details of your spouse (if applicable). See pages 12 to 14 of this PDS for more information. Upon death, we ll determine the qualified beneficiaries and any eligible pension payments. Please provide the following details about your spouse. Title Mr Mrs Ms Dr Professor Other Surname Given name Residential address, number and street (not PO box) Suburb/Town State Postcode Country (if not Australia) Date of birth (DDMMYY) Gender Male Female SECTION 4 Type of pension Refer to pages 12 to 14 for information about choosing a type of pension, between Divisions A and B, and eligibilty for each. Note: You must select either a Division A or a Division B pension. I select: Division A pension Division B pension Page 2 of 4

37 SECTION 5 Starting your pension You can only use your defined benefit component to start a Defined Benefit Indexed Pension. If you use only a portion of your defined benefit component to start this pension, you ll cease to be a DBD member and any remaining amount of your DB component will be converted into an accumulation benefit (along with any accumulation component you may have) and transferred to an Accumulation 1 account. Alternatively, you can choose to receive all or part of the remaining portion as a lump sum by completing a separate Lump sum withdrawal form. Please select from one of the two options to indicate when you d like to start your pension: the date my pension election is processed; or the date I ceased contributing service. How much of your defined benefit component do you want to use to commence your Defined Benefit Indexed Pension? (Select either box A or box B) Box A Box B My entire defined benefit component. Your entire defined benefit component will be used to commence your Defined Benefit Indexed Pension. OR A portion of my defined benefit component Note: You may nominate a dollar amount of your starting pension per year OR the percentage of your benefit you wish to use. $,,. p.a. OR. % SECTION 6 Financial institution details Please provide financial institution account details for the payment of your monthly pension. This information is required for payment of your pension. Name of financial institution Postal address, number and street (or PO Box if applicable) Suburb/Town State Postcode Name in which account is held BSB number (must have 6 digits) Account number UniSuper accepts no responsibilty for pension payments made to this account if the account details are incorrect. SECTION 7 Additional documentation Complete the Australian Taxation Office s (ATO) Tax file number declaration form if you re: aged less than 60 or over 60 and receiving total annual income exceeding $100,000 per annum from defined benefit pensions (such as Defined Benefit Indexed Pension) and lifetime pensions (such as Commercial Rate Indexed Pensions). Note, you need to let us know if you want to claim the tax-free threshold as we may be required to withhold some tax from your pension payments. You can find this form which is different from our Tax file number collection form in your Planning your retirement kit, and on the ATO website ( Page 3 of 4

38 SECTION 8 Member declaration and signature Please read this declaration before you sign and date your form. I declare that the information I have given on this form is true and correct. I have read the information in my Benefit entitlement statement (refer to page 10 of the PDS). I have read and understood the terms and conditions of UniSuper s Defined Benefit Indexed Pension as outlined in this PDS. I acknowledge that I will be bound by the provisions of the UniSuper Trust Deed and Regulations (together the Trust Deed ) as amended from time-to-time. I acknowledge that pension payments are made monthly and are subject to the Trust Deed and Regulations, and relevant government legislation. I understand that fees and costs will apply, and that taxes may apply. I understand that UniSuper intends to provide me with regulatory documents such as Product Disclosure Statements, Benefit Statements and Significant Event Notifications by making them available digitally (e.g. as a hyperlink in an ). I acknowledge that UniSuper will use the address provided in Section 1 of this form, and that I can opt out of this method of disclosure at any time by contacting UniSuper on I acknowledge that I have read and understood the privacy information on page 29 of this PDS and consent to my personal information being used in accordance with UniSuper s Privacy Policy. Signature Date (DDMMYYYY) NEED HELP? For more information: enquiry@unisuper.com.au call visit our website at unisuper.com.au. Privacy statement We recognise the importance of protecting your personal information and are committed to complying with our privacy law obligations. We collect your personal information to administer your account, ensure you re eligible for insurance cover, provide you with UniSuper membership benefits, services and products, verify your identity and improve our products and services. You consent to our collecting sensitive information about you, where collecting that information is reasonably necessary for us to perform one or more of our functions or activities. We usually collect personal and sensitive information directly from you, however, it may also be collected from third parties, such as your employer. We may also collect this information from you because we re required or authorised by or under an Australian law or a court/ tribunal order to collect that information. If you don t provide this information, we may not be able to administer your account, provide you with a product or service or you may be disadvantaged in some other way. We may disclose your information to any service provider we engage (for example mail-houses, auditors, insurers, actuaries, lawyers and research consultants) to carry out or help us provide your membership benefits, services and products. This includes overseas entities. The countries we may disclose personal information to are Japan, Canada and the United States of America. Where information is transferred overseas, we ll seek to ensure the recipient of the data has security systems to prevent misuse, loss or unauthorised disclosure in line with Australian laws and standards. Our Privacy Policy contains information about how you can access any personal information we hold, how to correct your information and how to make a complaint about a breach of the Privacy Act. It s available at unisuper.com.au or by calling us on RETURN YOUR FORM(S) AND CERTIFIED COPIES OF YOUR PROOF OF IDENTITY DOCUMENTS TO: UniSuper Level 1, 385 Bourke Street, Melbourne VIC 3000 Please note that certified copies of your proof of identity documents must contain an original signature. Faxed or ed copies can t be accepted. Page 4 of 4

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40 CONTACT US HELPLINE WEBSITE unisuper.com.au pensionsmailbox@unisuper.com.au FAX UNISUPER ADVICE 1800 UADVICE ( ) ADDRESS UniSuper Level 1, 385 Bourke Street Melbourne VIC 3000 Australia Printed on an environmentally responsible paper. UNIS