SUPER ENTERPRISE PRODUCT DISCLOSURE STATEMENT

Transcription

1 ENTERPRISE SUPER SUPER MANAGERS ENTERPRISE SUPER PRODUCT DISCLOSURE STATEMENT ALLOCATED PENSION Issue Date: 4 July 2011 This document is the Product Disclosure Statement for the Allocated Pension, a sub-fund of Enterprise Super (a division of the General Retirement Plan ABN ). The Trustee and Issuer of the General Retirement Plan is Equity Trustees Limited (ABN , AFSL No ). The Fund Administrator, Promoter and Investment Manager of the General Retirement Plan is SMA Super Pty Ltd (ABN , AFSL No ). Customer Service: Tel (03) or Fax (03) Level 16, 114 William Street Melbourne VIC

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3 ENTERPRISE SUPER Contents Directory Service Providers 2 Enterprise Super 3 About this Product Disclosure Statement 3 Introduction 3 Accessing Up-to-Date Information 4 Anti-Money Laundering and Counter-Terrorism Financing 4 Who We Are 4 What is Enterprise Super 5 Allocated Pension 6 What is an Allocated Pension 6 Starting an Allocated Pension 6 Pension Payments 6 Payment Frequency 7 How Long will my Allocated Pension Last 7 Accessing Your Benefits 8 Lump Sum Withdrawals 8 Temporary Resident Members 8 Death Benefits 8 Reversionary Pensioners 8 Binding Nomination 9 Non-Binding Nomination 9 No Valid Nomination 9 Investments 10 Investment Background 10 Risk Profile 10 Diversification 10 The Fund s Underlying Investments - The Pooled Investment Fund 11 Investment Options 11 Switching 11 Socially Responsible Investments 12 Investment Option Profiles 12 Risks of Membership 16 Taxation 18 Taxation of Earnings 18 Taxation of Pensions 18 Taxation of Death Benefits 18 Taxation of Other Lump Sum Benefits 19 Effect of Goods and Services Tax (GST) 19 Further Information 19 Fees and Other Costs 20 Additional Explanation of Fees and Costs 21 - Transaction Costs 21 - Investment Management Fee and Indirect Cost Ratio 21 - Family Law Fees and Expenses 22 - Tax Costs 22 - Other Fees 22 - Member Benefit Protection 22 - Maximum Fees 22 - Administrator s Fee 22 - Trustee s Fee 22 - Expense Recovery 22 - Other 23 Example of Annual Fees and Costs for an Assertive Exempt Investment Option 23 General Information 24 Trust Deed 24 Online Access 24 Reports on Your Investments and Other Available Information 24 Privacy 25 Proof of Identity 25 Collection of Tax File Numbers 25 Why your Tax File Number is important 26 Cooling Off Period 26 Keeping in Touch 26 Lost Members 26 Eligible Rollover Fund 27 Unclaimed Money 27 Family Law and Superannuation 27 Enquiries and Complaints - what to do if you have a complaint 28 Glossary 29 Membership Form 31 Certificate of Compliance 35 1

4 SUPER MANAGERS Directory Enterprise Super Website: Customer Service: The Trustee of Enterprise Super is Equity Trustees Limited (refer to contact details immediately below). Trustee and Issuer Equity Trustees Limited (ABN , AFSL No ) GPO Box 2307, Melbourne, Vic 3001 Telephone Facsimile (03) Website: Fund Administrator, Promoter and Investment Manager SMA Super Pty Ltd (ABN , AFSL No ) Level 16, 114 William Street, Melbourne, VIC 3000 Telephone (03) Facsimile (03) Website: Auditor PKF Melbourne Office Level 14, 140 William Street, Melbourne VIC 3000 Eligible Rollover Fund Colonial Mutual Superannuation Pty Ltd SuperTrace Eligible Rollover Fund Locked Bag 5429 Parramatta NSW 2124 Website: The organisations listed above have given their consent to the inclusion of information about them and their products in this PDS. Glossary An explanation of capitalised terms used in this Product Disclosure Statement can be found in the Glossary on page 29. 2

5 ENTERPRISE SUPER Enterprise Super (a division of General Retirement Plan ABN ) About this Product Disclosure Statement (PDS) This PDS is issued by Equity Trustees Limited (EQT) who is the Trustee of the Fund (refer to page 2). The Fund is administered by SMA Super Pty Ltd (SMA or Fund Administrator). In this PDS, we/us/eqt means the Trustee of the Fund and you/your means a member or potential member of the Fund. This PDS is an important document. It provides you with information about the Fund to help you to: decide whether this product will meet your needs; and compare this product with other superannuation funds. You should read this entire document carefully before making an investment decision. To join the Allocated Pension you will be required to complete the membership form on page 31 of this PDS. Enterprise Super (Fund) Consists of the Following: Employer-Sponsored Superannuation This sub-fund is only open to an employee whose employer has joined Enterprise Super. A copy of the PDS for the Employer- Sponsored Superannuation can be obtained by contacting the Fund Administrator (refer to page 2). Personal Superannuation This option is available to any individual eligible to contribute to a Complying Superannuation Fund, including employees who nominate the Fund under Choice of Fund Legislation. A copy of the PDS for the Personal Superannuation can be obtained by contacting the Fund Administrator (refer to page 2). Allocated Pension This is for individuals who commence an Allocated Pension by transferring from either the Employer-Sponsored Superannuation or Personal Superannuation, or by transferring benefits from another superannuation fund. All investments have inherent risk. There are also risks in choosing to invest in superannuation. Information about the significant risks of investing in the Fund is set out in the section titled Risks of Membership commencing on page 16. It is important to note that the repayment of capital invested, the payment of income or the investment performance of any of the investment options or the payment of any particular rate of return is not guaranteed by any person including EQT, SMA (which is not part of EQT) or any of their related bodies corporate, or any of the officers, employees or agents of any member of EQT or of SMA. An investment in the Fund does not represent a deposit with or other liability of EQT or of SMA. Past performance should not be taken as an indication of future performance. The information contained in this PDS is general information only. It is not advice or a recommendation to invest in the Fund. This PDS has not been prepared taking into account the particular objectives, financial situation or needs of any member. Accordingly, you should seek professional advice before making an investment decision. The Australian Securities & Investments Commission (ASIC) can tell you if an adviser is licensed. If you don t have an adviser, you may wish to contact the Financial Planning Association of Australia on or at who can provide you with details of their members in your area. This PDS has been prepared to explain the benefits, risks, conditions and key features of membership of the Allocated Pension which is a sub-fund of Enterprise Super. It should not be seen as a replacement for the Trust Deed, the legal document governing the Fund (refer to page 24). In the event of any differences between this PDS and the Trust Deed, the Trust Deed will take precedence. This PDS can only be used by investors receiving it (electronically or otherwise) in Australia. This PDS does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. Applications from outside Australia will not be accepted. 3

6 SUPER MANAGERS Accessing Up-to-Date Information Information in this PDS may change from time to time. Unless changed information is materially adverse to members, we may not always update and replace this PDS immediately to reflect the changed information. To find out about any upto-date information you can access the Fund s website at or contact the Fund Administrator during business hours (refer to page 2). A paper copy of any updated information will be given to you without charge on request. A glossary of some superannuation terms is provided on page 29. If you have any queries about this PDS or the Fund you may contact your adviser or the Fund Administrator (refer to page 2). Anti-Money Laundering and Counter-Terrorism Financing The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 ( AML/CTF Act ) requires the Trustee to adopt and maintain an anti-money laundering and counter-terrorism financing ( AML/CTF ) program. An integral part of the AML/CTF program is the legal requirement for the Trustee to know its customers. To meet this legal requirement certain identification information, including in some cases documentation, will need to be collected from members making applications. Applications made without providing this information can not be processed until all the necessary information has been provided. The AML/CTF program will also include ongoing customer due diligence, which may require the Trustee to collect further information. Who We Are Equity Trustees Limited (Trustee) Equity Trustees Limited (ABN , AFSL No ) was established in 1888 by its own special act of Parliament to provide trustee services to the people of Victoria. EQT holds Registrable Superannuation Entity (RSE) Licence Number L , issued by the Australian Prudential Regulation Authority (APRA), the regulator of superannuation funds in Australia. The Trustee is responsible for the PDS and issues interests in the Fund. In addition, the Trustee is responsible for ensuring that the Fund is managed in accordance with the Trust Deed and relevant Government legislation. The Trustee is bound by law to act in the best interests of all members of the Fund. SMA Super Pty Ltd (Fund Administrator, Promoter & Investment Manager) The Fund Administrator is SMA Super Pty Ltd (ABN , AFSL No ), a firm of professional superannuation administrators, whose responsibility is to attend to the day to day operations of the Fund such as processing member applications and investment requests, paying benefits and responding to member queries. SMA was established in 1987 and is one of the largest privately owned superannuation service providers in Australia. As the Promoter of Enterprise Super, SMA s role is to promote and market the Fund to prospective members and participating employers and to help ensure proper and efficient management as well as the Fund s ongoing development. SMA s role as the Investment Manager of the Fund is to manage the investment of the Fund s assets in accordance with the Fund s Investment Strategy (Refer to pages 11-12). 4

7 ENTERPRISE SUPER What is Enterprise Super Enterprise Super is a division of the General Retirement Plan, a regulated Complying Superannuation Fund. Enterprise Super operates in the form of a Master Fund (refer to Glossary) and is divided into a number of sub-funds established for each participating employer (or group of related employers) within the Employer-Sponsored Superannuation as well as a separate sub-fund for both the Personal Superannuation and the Allocated Pension. Allocated Pension Allocated Pensions provide a means to access an income stream in a flexible and tax efficient manner. The Enterprise Super Allocated Pension provides members with the opportunity to commence 2 types of Allocated Pension: 1. A standard or traditional type of Allocated Pension which enables individuals to convert their retirement savings into an income stream when they reach Preservation Age and have retired or are age 65 or over; and 2. A transition to retirement Allocated Pension that enables individuals who are between aged 55 and 64 (depending on their Preservation Age) to commence a non-commutable income stream, even though they may still be working. Additional features of the Enterprise Super Allocated Pension include: a range of tax exempt investment options designed to suit different investors (refer to pages 13-15) the ability to transfer between tax exempt investment options flexible pension payment options tax concessions associated with assets supporting pensions low tax on draw downs (nil tax on or after age 60) and access to your personal account information via the internet or from the Fund Administrator (refer to page 2). 5

8 SUPER MANAGERS Allocated Pension What is an Allocated Pension An Allocated Pension is a facility that is designed to allow you access to a regular tax effective income stream on or after age 55 or in retirement. It is an account in which you exchange your superannuation for a regular flexible income stream. The Fund s Allocated Pension offers a range of tax exempt investment options (refer to pages for more information on these options). Starting an Allocated Pension Any person who has superannuation sourced monies, including where a Condition of Release has been satisfied or the person has reached Preservation Age and is still working but wishes to commence a non-commutable income stream (refer to pages 29-30), is eligible to commence an Allocated Pension. A minimum investment amount of $50,000 is required to start an Allocated Pension. You can meet the minimum amount of $50,000 to commence your Allocated Pension account in one or more of the following ways: by transferring an amount/s from another superannuation entity; transferring your member account balance from your Employer-Sponsored Superannuation or Personal Superannuation; and/or using the Personal Superannuation to consolidate rollovers and transfers from a number of sources, or to make lump sum personal or spouse investment. When completed you may transfer your member account balance to the Allocated Pension. Once commenced, you cannot make ongoing contributions or transfer other amounts to your Allocated Pension. However, if permitted by law, you can continue to contribute to an accumulation account in your Personal Superannuation, Employer- Sponsored Superannuation or to another complying superannuation entity of your choice. Pension Payments You will receive pension payments from the Allocated Pension until your member account balance (determined in the manner outlined above) is exhausted, or until the date of your death (refer below). Your member account balance is deposited in the investment option of your choice. Government legislation requires that you must receive at least a minimum payment from your pension each year. This minimum is determined as a percentage of your account balance at 1 July each year according to your age as follows: (Minimum) percentage of your pension account balance Age as at 1 July Regular Percentage Factors 2010/2011 (50% reduction applies) 2011/2012 (25% reduction applies) Under 65 4% 2% 3% 65 to 74 5% 2.5% 3.75% 75 to 79 6% 3% 4.5% 80 to 84 7% 3.5% 5.25% 85 to 89 9% 4.5% 6.75% 90 to 94 11% 5.5% 8.25% 95 & over 14% 7% 10.5% 6

9 ENTERPRISE SUPER In the first year, if you start your pension other than at 1 July, the minimum payment is pro-rated based on the number of days remaining in the financial year. If you start your pension on or after 1 June in a financial year, there is no minimum payment for that year. The actual minimum pension is rounded to the nearest $10. You cannot withdraw more than your account balance. In addition, a maximum annual payment limit of 10% of your account balance applies in the case of a Transition to Retirement Pension (refer to page 5). Your pension can be automatically indexed at each 1 July by completing the relevant section of the membership form on page 31 of this PDS. Payment Frequency You can nominate the frequency of your pension payments when you complete the application form. Payments will be deposited into your nominated bank account. The following pension payment periods are available: Monthly Quarterly Half-yearly or Annually. Can I Change My Pension Amounts or Frequency Your nominated payment amounts, or payment frequency, can be changed at any time (within legislated limits) by advising the Fund Administrator in writing. How Long Will My Allocated Pension Last This will depend on a number of factors including: the amount of your initial contribution or rollover the earnings of your chosen investment options payment amounts you receive and payment frequency whether you make lump sum withdrawals and the term of your life. There may not be sufficient funds in your member account to provide you with an adequate regular income for the term of your life. Pension payments will only continue until your member account balance is exhausted. 7

10 SUPER MANAGERS Accessing Your Benefits Lump Sum Withdrawals Other than in limited circumstances, you cannot generally make lump sum withdrawals from a Transition to Retirement Pension. In all other circumstances, you can make lump sum withdrawals at any time, subject to the Preservation rules and payment of any applicable tax. If you are eligible to make a lump sum withdrawal, and choose to do so, this may significantly alter your minimum and maximum annual pension amounts for the following years, as your account balance will be reduced. There is no minimum lump sum withdrawal amount from the Allocated Pension, however, legislation requires that you must have been paid a minimum pro-rata pension for the year before a partial or full lump sum withdrawal. Temporary Resident Members If you accrued your superannuation whilst in Australia on a temporary resident visa (excluding New Zealand citizens and excluding sub-class 405 and 410 visas), you are permitted to commence an Allocated Pension under the law. However, if you do not withdraw your benefit within 6 months of permanently departing from Australia and your visa being cancelled, the Fund may be required to commute your pension and transfer your account balance to the ATO without your consent. You can recover your benefit from the ATO at any time (subject to payment of taxes due) by contacting them on Your funds may not earn any interest once transferred to the ATO. You should seek professional advice as to whether commencing an Allocated Pension is appropriate for you. Death Benefits As a member of the Allocated Pension, your Death benefit is equal to your member account balance (if any) at the date of your death. There is no insurance cover provided in the Allocated Pension. You can make either a binding or a non-binding nomination in relation to the payment of your Death benefit or nominate a Reversionary Pensioner. A binding or a nonbinding nomination can be made before commencing your pension or, thereafter, a Reversionary Pensioner nomination can only be made at the time you commence your pension. There are no fees for making a nomination. A nomination enables you to indicate your preference as to whom, and how much, of your Death benefit is to be paid on your death. There may be tax and estate planning implications with nominating a Reversionary Pensioner or making a binding or a nonbinding nomination. Nominations may be affected by family law orders (refer to page 22 for more information on Family Law Fees and Expenses). You should consider obtaining professional advice prior to making a decision. Reversionary Pensioners Before commencing your pension, you can elect to nominate your married or de facto spouse (being same or opposite sex) to continue receiving your pension in the event of your death (this is called a Reversionary Pension). To make a nomination you must complete the Reversionary Nomination section of the Application Form on page 31. The nomination of Reversionary Pensioner does not bind the Trustee to continue to pay your pension to your Reversionary Pensioner after your death. Your Reversionary Pensioner may instead request to receive your Death benefit as a lump sum, which the Trustee may agree to pay at its discretion. If the person you nominate as a Reversionary Pensioner dies prior to your Death benefit becoming payable, or if they are no longer your spouse at the date of your death, then the Reversionary Pension nomination will cease to apply. Any Death benefit payable in the event of your subsequent death will then be paid as set out under the section No Valid Nomination below. If you wish to change your Reversionary Pensioner nomination at any time please contact the Fund Administrator (refer to page 2). 8

11 ENTERPRISE SUPER Binding Nomination If you make a binding nomination and it is valid at the time of your death, then the Trustee will be required to pay your Death benefit in accordance with the nomination. A binding nomination must be witnessed by 2 people who are at least 18 years old and who are not nominated beneficiaries. They must sign and date the form at the same time as you do, or the nomination will not be valid. In addition, the nomination will not be valid if you nominate someone other than your Dependants and/or legal personal representative, or if the percentages of your benefit that you allocate to each nominated beneficiary do not add up to 100%. Binding nominations expire after 3 years, and it is your responsibility to update your nomination prior to the expiry date. Also, it is important to note that if your nomination is valid at the time of your death, then the Trustee must pay your benefit in accordance with your nomination, even if your personal circumstances have changed since you made it. You should, therefore, ensure you update your nomination if your personal circumstances change. To make a binding nomination, you are required to complete the Nomination of Beneficiary form which can be obtained by contacting the Fund Administrator (refer to page 2). The Nomination of Beneficiary Form can also be used to update, re-confirm or revoke your binding nomination at any time. Non-Binding Nomination If you choose to make a non-binding nomination, then the Trustee will consider your nomination in determining to whom your benefit will be paid. However, the Trustee will have ultimate discretion as to which of your Dependants and/or legal personal representative receive the benefits and in what proportions, and may override your nomination. To make or update a non-binding nomination, you will be required to complete the Nomination of Beneficiary form which can be obtained by contacting the Fund Administrator (refer to page 2). No Valid Nomination If you do not nominate a Reversionary Pensioner, or you revoke your nomination or your nomination is invalid (whether for a Reversionary Pensioner or Binding Nomination), your Death benefit will be paid, at the Trustee s discretion, to one or more of your Dependants and/or your legal personal representative as a lump sum payment. If you have no Dependants and the Trustee forms the view that you do not have a legal personal representative and none is likely to be appointed, then the Trustee may pay your Death benefit to another person as permitted by superannuation law. 9

12 SUPER MANAGERS Investments You can choose the way your money is invested in the Fund by selecting one of the 5 investment options available. Each investment option has a different degree of investment risk (refer below), together with a different expected level of earnings on your investment. This is because each option is made up of different proportions of Growth Assets and Defensive Assets (these are discussed further below). You should choose the investment option that best meets your personal investment objectives and strategies. These should be considered with the help of a financial adviser. Some of the factors which you may wish to consider based on your personal circumstances include the: amount of time your money will be invested level of investment earnings (which may be positive or negative) you are hoping for and level of risk you are comfortable with for your retirement savings. Investment Background Growth Assets Growth Assets include Australian and International Shares and Property. Growth Assets generally provide relatively higher investment earnings over the longer term, with a corresponding higher level of risk and increased volatility (i.e. increased chance of loss of capital or a negative investment earning). Defensive Assets Defensive Assets include Australian and International Fixed Interest, Short Term Fixed Interest Securities and Cash. Defensive Assets generally have a lower level of risk and provide lower returns over the long term. Growth versus Defensive Assets If you are investing over the longer term then an investment option with exposure to Growth Assets might be more suitable for you. Generally the longer you hold Growth Assets, the more likely they are to provide you with a better investment earning. If you are investing for a short time, then Defensive Assets may be more important in your investment portfolio. However your decision needs to be made having regard to your own needs, objectives and circumstances. Risk Profile Investment risk can mean many things. An investment may be considered as carrying more risk if it has a higher likelihood of negative investment earnings, or if the earnings from that investment are more volatile (refer to Glossary) over time. Risk can also mean the possibility of your investment not keeping pace with inflation, or whether you are likely to have enough to meet your needs in retirement. It is important to remember that your investments may need to continue to be invested even after you retire. Your individual risk profile will depend on a number of factors including how long you have to invest or how comfortable you are with a higher level of investment risk. Diversification Diversification is one method that is used to reduce investment risk. Diversification is achieved by: investing through different fund managers and other investment providers who have different investment styles and/or investing in different asset classes (Australian and International Equities, Australian and International Fixed Interest, Cash and Short Term Securities). All the investment options (with the exception of Cash) that are currently offered to members are diversified. That is, they are all multi manager and multi asset class options. To ensure both strong and stable long term results, only reputable fund managers with a proven track record in their area of expertise are used for these investment options. 10

13 ENTERPRISE SUPER The Fund s Underlying Investments The Pooled Investment Fund The Trustee currently invests all of the assets of the Fund in a pooled superannuation trust (PST) known as the Pooled Investment Fund (PIF). Equity Trustees Limited is the Trustee of the PIF and SMA Super Pty Ltd is the Administrator. A PST is a superannuation entity that only accepts investments from eligible superannuation funds under superannuation law. The PIF does not accept investments from individuals. The PIF provides Enterprise Super with access to wholesale investments. The investment manager of the PIF has selected a number of wholesale investments, in various proportions, to construct the 5 investment options the PIF has made available to Enterprise Super (refer to pages 13-15). A Product Disclosure Statement for the PIF, which provides further detail about these underlying wholesale investments and their managers, is available free of charge to investors. Please contact the Administrator (refer to page 2) if you would like a copy. The Trustee has appointed SMA Super Pty Ltd as the Investment Manager of Enterprise Super to assist it in the selection of investments for Enterprise Super. As a result of this process the underlying investments and fund managers may change from time to time without prior notice to, or consent from, members. The fees associated with these investments include the wholesale charges of the fund s underlying managers and administration costs charged by the Administrator. These fees are incorporated in the Indirect Cost Ratio (ICR) for each of the investment options. The ICR is discussed in more detail on page 12. Investment Options Members are able to choose one of the 5 available investment options. As noted previously, the investment option that suits each member will depend on various factors based on your personal circumstances. Your financial adviser can assist you in assessing which investment option is most suited to your personal needs. The 5 investment options available to members of the Fund are listed below, based on their target allocation to Growth and Defensive Assets. The actual allocation of each option will vary over time, usually within ranges set by the Trustee. Each option also has its own investment objectives and strategy. More details of the investment options, including the objectives, strategy and asset allocation ranges, are set out later in this PDS. Investment Option % Target for Growth Assets % Target for Defensive Assets Cash Exempt 0% 100% Defensive Exempt 25% 75% Moderate Exempt 45% 55% Assertive Exempt 65% 35% Aggressive Exempt 85% 15% You are able to select the investment option you want to invest in by completing the membership form on page 31 of this PDS. Until you select an investment option, your money will be invested in the Assertive Exempt investment option, which is the default option. Switching Only one investment option can be selected at any particular time. However, you may switch investment options at any time. Currently, there is no administration or investment switching fee for switching between options. To change your investment option, you need to complete an Investment Portfolio Update form which you can download from the Fund s website (www. supermanagers.com.au) or obtain by contacting the Fund Administrator (refer to page 2). Your new investment option will be effective from the end of the month in which the Fund Administrator receives your completed form and the investment earnings of the new option will apply from that time. 11

14 SUPER MANAGERS Socially Responsible Investments The Trustee does not take into account any labour standards or environmental, social or ethical considerations in the selection, retention or realisation of investments comprising any investment option. Similarly the Trustee of PIF (refer to page 11 for more details on the Trustee of PIF) does not consider such factors when making a decision. Investment Option Profiles Important terms and information used in the description of Investment Options (refer to pages 13-15) are explained below. Investment Objective This is the goal of each investment option. None of the objectives described below are an indication of the possible future performance of the relevant investment option, or of the Fund in the future. There is no guarantee that the investment objectives will be achieved over any or all time periods. Investment Strategy The strategy for a particular investment option is the means by which the investment option seeks to achieve its investment objective. Target asset allocations may vary within the range. Asset Allocation The asset allocation is the percentage of the investment option s assets that are invested in each asset class. Each option s actual asset allocation will move around the target or benchmark allocation over time, usually within ranges set by the Trustee. The information on pages includes the latest available asset allocation for each investment option as at the date of this PDS. Annual Rates of Investment Earnings All investment earnings quoted in this PDS are net of investment taxes and investment management fees. They do not include management fees in relation to the administration of the Fund. The Trustee and Fund Administrator do not guarantee any of the investment earnings of the investment options. The value of your investment in the Fund may therefore rise or fall. Past performance should not be taken as an indication of future performance. Indirect Cost Ratio (ICR) The Indirect Cost Ratio represents the ratio of the Fund s investment management costs that are not deducted directly from members accounts to the total average net asset value taking into account any tax rebates available in relation to those expenses. The ICR includes an allowance for fees and costs payable to SMA Super Pty Ltd, the current administrator of PIF (refer to Additional Explanation of Fees and Costs on page 21). The ICR for each investment option is detailed on pages The ICR for each investment option may vary over time. Updates to Investment Information The information provided on pages in relation to the investment options is current as at the date of this PDS. Updated information can be obtained from the Fund s website or from the Fund Administrator (refer to page 2) or your financial adviser. 12

15 ENTERPRISE SUPER Cash Exempt Investment Objective To provide a low risk investment option that earns a secure rate of interest. To achieve a rate of return after fees that meets the Australian Bank Bill Index. Investment Strategy To achieve this objective, the Trustee invests 100% in Cash. Cash is a Defensive Asset class with low volatility and low risk but which yields lower returns than Growth Assets over the long term. Asset Allocation: Asset Class Target Allocation % Range Cash 100% 100% Fund Performance These figures represent net rates of return after fees as published by the investment manager. Your individual rate of return may vary, depending on the timing of the purchase and redemption of the investment. Annual Returns Year Ended Net Annual Return 30 June % 30 June % 30 June % *past performance is not an indicator of future performance. Current Indirect Cost Ratio (ICR): 0.53% Defensive Exempt Investment Objective To provide a rate of return that, over the long term, has a low degree of volatility but some opportunity for growth. To earn a rate of return after fees that exceeds the increase in the Consumer Price Index (CPI) by at least 1.0% p.a. over rolling 3 year periods. Investment Strategy To achieve this objective, the Trustee invests in a mixture of Cash and Fixed Interest Assets with exposure to Australian and International Equities to achieve a degree of security with potential for long term growth. Asset Allocation: Asset Class Target Allocation % Range Australian Equities 11% 0-25% International Equities 7% 0-20% Property 4% 0-15% Fixed Interest 37% 25-45% Alternatives 3% 0-10% Cash 38% 30-50% Fund Performance These figures represent net rates of return after fees as published by the investment manager. Your individual rate of return may vary, depending on the timing of the purchase and redemption of the investment. Annual Returns Year Ended Net Annual Return 30 June % 30 June % 30 June % *past performance is not an indicator of future performance Current Indirect Cost Ratio (ICR): 1.01% 13

16 SUPER MANAGERS Moderate Exempt Investment Objective To provide a rate of return that, over the long term, is higher than the Defensive Exempt option and is rarely negative over any 2 consecutive financial years. To achieve a rate of return after fees that exceeds the increase in the Consumer Price Index (CPI) by at least 2.0% p.a. over rolling 3 year periods. Investment Strategy To achieve this objective, the Trustee maintains a higher exposure to Defensive Assets such as Fixed Interest and Cash investments. Asset Allocation: Asset Class Target Allocation % Range Australian Equities 20% 10-30% International Equities 17% 10-30% Property 5% 0-15% Fixed Interest 37% 25-50% Alternatives 3% 0-10% Cash 18% 5-30% Fund Performance These figures represent net rates of return after fees as published by the investment manager. Your individual rate of return may vary, depending on the timing of the purchase and redemption of the investment. Annual Returns Year Ended Net Annual Return 30 June % 30 June % 30 June % *past performance is not an indicator of future performance Current Indirect Cost Ratio (ICR): 1.17% Assertive Exempt Investment Objective To provide a rate of return higher than the Moderate Exempt option over the long term and is rarely negative over any period of 3 consecutive financial years. To earn a rate of return after fees that exceeds the increase in the Consumer Price Index (CPI) by at least 3.0% p.a. over rolling 5 year periods. Investment Strategy The asset allocation of this option increases the risk of negative returns in the short term but also provides the potential for higher returns than the Moderate Exempt option in the long term. Asset Allocation: Asset Class Target Allocation % Range Australian Equities 28% 20-40% International Equities 26% 15-40% Property 4% 0-20% Fixed Interest 28% 20-40% Alternatives 7% 0-15% Cash 7% 0-15% Fund Performance These figures represent net rates of return after fees as published by the investment manager. Your individual rate of return may vary, depending on the timing of the purchase and redemption of the investment. Annual Returns Year Ended Net Annual Return 30 June % 30 June % 30 June % *past performance is not an indicator of future performance Current Indirect Cost Ratio (ICR): 1.20% 14

17 ENTERPRISE SUPER Aggressive Exempt Investment Objective To achieve a long term rate of return that is higher than the Assertive Exempt option and is rarely negative over periods in excess of 5 financial years. To achieve a rate of return after fees that exceeds the increase in the Consumer Price Index (CPI) by at least 3.5% p.a. over rolling 5 year periods. Investment Strategy The exposure to growth assets is higher than the Assertive Exempt option to achieve higher returns over the long term. Asset Allocation: Asset Class Target Allocation % Range Australian Equities 36% 25-50% International Equities 35% 25-50% Property 6% 0-20% Fixed Interest 13% 5-25% Alternatives 8% 0-15% Cash 2% 0-15% Fund Performance These figures represent net rates of return after fees as published by the investment manager. Your individual rate of return may vary, depending on the timing of the purchase and redemption of the investment. Annual Returns Year Ended Net Annual Return 30 June % 30 June % 30 June % *past performance is not an indicator of future performance Current Indirect Cost Ratio (ICR): 1.23% 15

18 SUPER MANAGERS Risks of Membership Specific Investment Risks All investments carry some level of risk. The significant risks associated with investing in the Fund, and how the Trustee and its fund managers aim to manage these risks, are set out below. (1) Individual Investment Risk What is the risk? Individual investments (e.g. Shares, Property, Fixed Interest Securities) can, and do, fall in value for many reasons, including changes in operations and management of a company invested in and changes in the business environment. This is an inherent risk associated with all investments. However, there is greater risk with portfolios that contain a greater proportion of Growth Assets. The risks decrease with investment options that contain more Defensive Assets. Management of the risk The Investment Manager has an Investment Committee that meets regularly to review investments and to evaluate investment performance. The Trustee aims to reduce individual investment risks offering investment options which contain a diversified range of investments offered by different fund managers (refer to page 10 for more information on diversification). The managers of the selected funds also undertake careful analysis of research on current and potential investments. (2) Market Risk What is the risk? Markets are affected by a range of factors including economic, technological, political and legal conditions, and market sentiment. This can mean that changes in the value of investment markets can affect the value of investments in and of the Fund. This is an inherent risk associated with all investments. The degree of risk decreases the more that defensive assets are held within a portfolio compared to Growth Assets such as Shares and Property. Management of the risk The Investment Manager aims to reduce market risk by offering a range of investment options and monitoring their investment performance as a key performance indicator of a fund manager s ability to manage market risk. (3) Interest Rate Risk What is the risk? Changes in interest rates can have a positive or negative impact, either directly or indirectly, on investment values and returns. Interest rate risk is of greater significance to those funds that invest in Cash, Short Term and Fixed Interest Securities. However, the risk is evident in other asset classes such as Property Trusts. Management of the risk Hedging is a strategy undertaken with the goal of reducing the risk of loss but which might also reduce the potential gain from another investment. Some fund managers undertake some interest rate management strategies through hedging. (4) Fund Risk What is the risk? Specific fund risks include the risk that Enterprise Super could be terminated, the fees and charges could change and the fund managers could change. This risk also applies to the underlying investments. There is also a risk that investing in an underlying fund may give different results than investing directly in securities. This is an inherent risk associated with all funds. Management of the risk The Investment Manager aims to keep fund risk to a minimum by monitoring the selected underlying investment funds. Performance against stated objectives and market benchmarks are closely monitored. If Enterprise Super is wound up, the Fund s Trust Deed sets out the actions the Trustee must take. In addition, under superannuation law members are required to be given 30 days notice of increases in fees or charges. 16

19 ENTERPRISE SUPER (5) Currency Risk What is the risk? Currency risk exists where investments are made in International assets. If their currencies change in value relative to the Australian dollar, there may be a negative impact on the investment value or returns. This risk relates to those funds that invest in International Equities and International Fixed Interest. Management of the risk Some fund managers within the investment menu may undertake some currency hedging strategies with the goal of reducing the impact of adverse movements in the Australian dollar, compared to overseas currencies. (6) Credit Risk What is the risk? Credit risk represents the risk that a debtor or other party to a contract fails to perform as contracted. Certain investments are held indirectly in mortgages, mortgage backed securities, and bonds. Specific risks are associated with these types of investments, including the risk that a borrower may default on a loan, potentially leading to less than expected income and (should the security not be sufficient) possible loss of capital. Management of the risk The Fund s Investment Manager uses external research to select what it believes are fund managers who operate on a sound credit policy. The Trustee further minimises credit risk by holding diversified portfolios. (7) Changes to Superannuation Law and Taxation What is the risk? Changes are often made to superannuation law that may impact on eligibility to contribute, the management of superannuation, fund costs, types of contributions, and your ability to access your benefits. Changes can also occur to the taxation of superannuation that may affect the value of your investment. Management of the risk The Trustee monitors superannuation related changes and provides information in member reports, the Fund s Annual Report, and on the Fund website. Changes to administration are implemented as required by the Fund Administrator and monitored by the Trustee. 17

20 SUPER MANAGERS Taxation It is important to note that the following information regarding taxation is believed to be correct at the time of preparing this PDS. However, there may have been changes to the law or the interpretation of the law since that time. We recommend that all members seek the advice of a registered tax agent in relation to their own circumstances. Further information is available from the ATO by phoning , or via their website: Taxation of Earnings Whilst the Fund is a Complying Superannuation Fund, the investment earnings of the Fund are taxed at a maximum rate of 15%. In addition, where investment options invest in Australian shares, the tax payable may be partly offset by imputation credits. Tax on any capital gains is calculated on either 2/3 of the value of the gain or the whole of the gain with an indexed cost base, depending on the date on which the assets were acquired and how long they were held. Taxation of Pensions From 1 July 2007 pension benefits received by members aged 60 and over are generally tax free. Benefits paid to members under age 60 are subject to tax at your marginal rate less a 15% tax rebate on the proportion of your pension that is taxable. You will be advised of this taxable proportion at the commencement of your pension. Taxation of Death Benefits Special rules govern how a Death benefit is taxed. In general terms, a lump sum benefit will be tax-free if it is received by a person who is a Death benefit s Dependant under tax legislation. This is different to the definition of Dependant for other superannuation purposes (refer to Glossary). A Death benefits Dependant is: your Spouse (including a de facto or same sex Spouse) or former Spouse a child under age 18 any other person who was wholly or partially financially dependent on you and any other person who, in the opinion of the Trustee, was in an interdependency relationship (refer to Glossary) with you. Benefits paid to persons who are not Death benefit Dependants will generally be taxed at 15% to 30%, depending on whether the component is a taxed or untaxed element, plus the Medicare levy. Where your benefits are paid to your legal personal representative, the Fund does not withhold tax from the payment, but tax may be payable by your estate depending on how much (if any) of the benefit is likely to be received from your estate by non Death benefit Dependants. 18

21 ENTERPRISE SUPER Taxation of Other Lump Sum Benefits Lump sum benefits received by members age 60 and over are tax free. Lump sum benefits paid to members under age 60 generally consist of a tax free component and a taxable component. The tax free component generally consists of after-tax member contributions and any Spouse contributions made for you by your Spouse. It may also include certain other amounts, for example, if you accrued part of your superannuation prior to 1 July 1983 or if you transferred an amount from an overseas fund into your account. If you make a partial withdrawal, it will be drawn proportionally from the taxable and tax free components of your Member Account. Tax payable on lump-sum withdrawals Component Maximum rate of tax including Medicare levy Tax free 0% Aged 60 and over 0% Taxable (Taxed in the Fund) Preservation Age** to age 59 Amount up to low rate threshold* Amount over low rate threshold* 0% 16.5% * The low rate threshold of $165,000 ( ) is indexed annually. ** Refer to Glossary for definition of Preservation Age. Effect of Goods and Services Tax (GST) Under Preservation Age** 21.5% The Fund is subject to GST and, therefore, registered for this purpose and is entitled to claim Reduced Input Tax Credits from the ATO in relation to any GST paid. This credit is currently equal to 75% of the GST paid on the services provided by the Trustee. The effect of this is that the GST borne by members is effectively only 2.5%. Further Information This tax information is a brief summary only and is based on taxation laws that were current as at the date of this PDS. Further information is available from the ATO by phoning , or via their website: 19

22 SUPER MANAGERS Fees and Other Costs CONSUMER ADVISORY WARNING Did you know? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your fund 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 investor services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the Fund or your financial advisor. 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 fee calculator to help you compare different fee options. You should read all the information about fees and costs as it is important to understand their impact on your investment. Any fees and costs incurred may be deducted from either your account balance, the returns on your investment or from the Fund assets as a whole. These fees and costs are inclusive of GST unless stated otherwise. Type of Fee or Cost Fees when your money moves into or out of the Fund Establishment Fee The fee to open your investment. Contribution Fee The fee on each amount contributed to your investment. Amount Nil Nil How and When Paid Not Applicable Not applicable Withdrawal Fee The fee on each amount you take out of your investment. $51.25 Deducted from your member account balance at the time a withdrawal is made, excluding any standard pension payments made on your behalf Termination Fee The fee to close your investment. Nil Not applicable 20

23 ENTERPRISE SUPER Management Costs The fees and costs for managing your investment. Amount How and When Paid Administration Fee Amount in Member Account: First $150, % p.a.* (i.e. $11.80 per $1,000) This fee is deducted from your account monthly in arrears. Over $150,000 up to $300, % p.a.* (i.e. $6.70 per $1,000 Over $300, % p.a.* (i.e. $4.60 per $1,000) Investment Management Fee The amount you pay for specific investment options is shown on pages Between 0.53% p.a. and 1.23% p.a. (i.e. $6.00 to $10.60 per $1,000) depending on the investment option you select (refer to pages 13-15) This fee is deducted from investment returns before they are applied to your account. Service Fees Investment Switching Fee The fee for changing investment options. Nil Not applicable * Includes allowance for a Trustee Fee of 0.15% p.a. and an estimated Expense Recovery of 0.10% p.a. (This item includes expenses such as APRA, legal, audit and bank fees). * These figures include GST after allowance for Reduced Input Tax Credits (refer to page 19). # note that additional contributions cannot be made to your account once your pension has commenced. Additional Explanation of Fees and Costs Transaction Costs As at the date of this PDS, all of the Fund s assets are invested in a Pooled Superannuation trust known as the Pooled Investment Fund (PIF). Some investment managers in PIF have different unit prices applying when investments are made and/or redeemed. This difference represents a transaction cost to members and is taken into account in establishing the rate of returns credited to member accounts. In summary, the same crediting rate is applied to both existing assets and new investments for each member within each investment option (refer to pages 13-15). Investment Management Fee and Indirect Cost Ratio The Investment Management Fee represents the Indirect Cost Ratio (ICR) for each investment option incurred in relation to a year (refer to pages 13-15). The ICR is determined by the investment management fees and costs incurred in investing in the underlying assets of the Fund and the remuneration paid to the investment manager for their services and is attributed to the net asset value of the investment option. The ICR also includes an allowance for fees and reimbursable expenses payable to SMA Super Pty Ltd, the Administrator of PIF, of 0.30% p.a. for the Cash Exempt option, 0.42% p.a. for the Defensive Exempt option and 0.48% p.a. for the other options. This is deducted from the investment income of each investment option, not from your member account balance, prior to receipt by the Fund. The Investment options section (pages 13-15) lists each option s ICR which range from 0.53% to 1.23% p.a. 21