your money Be a pro money-manager in the spotlight

Transcription

1 Spring 2014 your money Be a pro money-manager in the spotlight The truth about common super myths lifestyle Meet CareSuper member Cara Davey

2 Plus Minus Guide to fi nd out more. OR Member magazine help your finances. But consolidating your super will. Watch another Consolidate Make your choice at pointless video your super caresuper.com.au/parisandny Expiry date 07/04/2014 $32,678 $29,015 $24,501 $21,234 $18,000 Total and Permanent Disablement (TPD) Income protection (per month) 4 $252, Apply to increase your insurance cover online Did you know you can apply to increase your insurance cover online? Calculate the type and level of cover you can apply for. Simply log on to MemberOnline, go to the insurance section and select InsuranceOnline. Page 1 CEO s message Welcome to the Spring 2014 edition of On the Money, your member magazine See how we ve performed to 30 June 2014 Our Balanced (MySuper) option returned 12.84% after fees and taxes for the 2013/14 financial year a great result, and one that proves the continued strength of CareSuper s investment strategy. While this return is well above expected annual returns for the Balanced option, it s important to remember that it s not all about one number. At CareSuper, we aim to smooth out the ride for members by delivering consistently strong returns and protecting your super during volatile periods. This ensures strong long-term performance, as shown by the impressive 10-year average performance from the Balanced option of 7.73% p.a. to 30 June Why is it important to look to the long term? Long-term performance can offer a more realistic guide as to how your super performs under different market conditions. While it s good to pay attention to short-term performance, a 1-year return may have been produced over a relatively stable period, whereas a 7-year or 10 year average return could have experienced a variety of market conditions. Super guarantee hits 9.5% The superannuation guarantee rose to 9.5% on 1 July While it is pleasing to see this increase, saving at this rate is unlikely to provide sufficient income through the duration of your post-work life, inside your pack Your annual statement pack contains useful information about your super investment with CareSuper, including: 2013/14 Annual Statement Quick reference guide to your statement On the Money member magazine Transfer your super form. your super statement for the year ending 30 June 2014 Your 2014 annual member statement pack consists of: Your super statement Quick reference guide Annual Report (available at caresuper.com.au) Mrs Mandy Sheep 123 Black Street MELBOURNE VIC 3000 Your account summary Your account balance history Opening balance at 1 July 2013 $29, Earnings from your investments $ Employer contributions $ Personal contributions $ Transfers in $ Government co-contributions $ No TFN tax rebate $50.00 Federal Government contributions tax -$ Account-keeping fee -$ Administration fee -$52.45 Insurance premiums -$ Transfers out -$xx.xx Net withdrawals -$xx.xx Closing balance 30 June 2014* $32, * Effective 30 June 2014, your account balance is regarded as part of CareSuper s MySuper option. Read the enclosed Quick Reference Most of the things you do online won t Member number: Membership type: Employee Plan Member since: 01/01/12007 Date of birth: Provided Tax fi le number: Not provided abcdefghijk@gmail.com.au Benefi ciaries: Merryl Sheep 100% Binding BPAY biller code: BPAY Reference number: This shows your account balance over the past 5 years. 30/06/10 30/06/11 30/06/12 30/06/13 30/06/14 Take the guesswork out of retirement. Use our online calculators to start planning your fi nancial future. Visit caresuper.com.au/supercalculators to get started. Your insurance cover Type of cover Number of units Amount of cover Death 4 $252, How past TPD claims affect your cover If you have previously been paid a TPD benefi t, you will be eligible for death only cover with CareSuper not TPD or income protection cover. If this applies to you, call the CareSuperLine on to change your cover to death only, which reduces your premiums. You will be refunded any TPD premiums that have been deducted from your account. especially when factoring in any time out of the workforce for study, travel or family responsibilities. Fortunately, you re young, which means you have time on your side to build your super balance. Just visit caresuper.com.au/maximisesuper to find out how. Super on the go We re always looking for ways to help you keep in touch with your super, which is why we ve optimised our website for mobile devices such as your smartphone. Even better, MemberOnline will soon have a mobile version, so you ll be able to access and update your account information wherever you are. You re part of a top-rated fund At CareSuper we work hard to deliver you the best quality products and services, so we re thrilled to announce that we were named the winner of Industry Fund of the Year for the second consecutive year at the Smart Investor Blue Ribbon Awards We hope this highly regarded award helps you feel more confident than ever that your super is in safe hands. Find out more on page 3. On behalf of the CareSuper team, I hope you enjoy this On the Money update. Julie Lander CEO CareSuper stay connected! on Twitter Like CareSuper on Facebook Follow CareSuper on LinkedIn Follow CareSuper on Google+ 02 caresuper.com.au Note: Please refer to the Quick reference guide included with your statement for an explanation of the benefi ts reported above. The insured benefi ts (if any) that we have recorded for you are not guaranteed and are subject to you meeting the policy conditions and our records being correct. call visit caresuper.com.au admin@caresuper.com.au CARE Super Pty Ltd (Trustee) ABN AFSL CARE Super (Fund) ABN Please turn over >

3 Superior returns inside Compare CareSuper s Balanced (MySuper) option returns to 30 June 2014 with those of the median Balanced super fund and master trust (retail) median and you ll see that we ve been consistently ahead of other super funds: years 5 years 1 year 7.73% 6.78% 5.47% 9.93% 9.21% 8.76% 12.84% 12.66% 11.74% CareSuper Balanced option Median Balanced option* Master trust (retail) median* Please note: CareSuper s 10- and 5-year returns are compound average annual returns. CareSuper returns are net of fees and taxes. Past performance is not a guarantee of future performance. Returns have been rounded to two decimal places. * Source: SuperRatings Fund Crediting Rate Survey SR50 Balanced (60 76) Index, June This survey includes Balanced options for industry funds and master trusts. CareSuper wins Industry Fund of the Year again in the Smart Investor Blue Ribbon Awards 2014 For the second year running, the Smart Investor judges recognised our excellent long-term investment performance, flexible investment options, value for money insurance and, most importantly, our passion and commitment to servicing members needs. Visit caresuper.com.au/awards to find out more. Contents Spring 14 Your money How to be a pro money-manager 04 In the spotlight Uncover the truth about some common super myths 06 Investments Check in with our 2013/14 investment performance 08 Super news Get the latest information about super 10 Lifestyle Meet CareSuper member Cara Davey 11 CareSuperLine

4 How to be a pro money- If you re wondering where your last dollar went or where the next one s coming from there are a few practical things you can do to make sure you re managing your hard-earned money well. Spend less than you earn We know it sounds simple, but it s very easy to ignore this rule. A couple of spontaneous or emergency purchases could see you in the red. Know what s coming in, how much you need for necessities, and what s left over for discretionary spending. Pocket your pay Saving even a small amount from each pay packet will provide funds to achieve your shorter term goals, as well as give you a buffer against unplanned expenses. This cushion could save you from having to borrow money and potentially pay interest. Protect yourself You might be in excellent health now, but it s smart to prepare for the unexpected. Health insurance is about making sure you have affordable access to medical care in case you need it later on. And remember, if you re over 30 and have hospital cover, you avoid paying an extra 2% loading on your premiums each year. (By the way, with CareSuper you have access to discounted health insurance through your membership see caresuper.com.au/healthinsurance.*) 04 caresuper.com.au

5 money super to-do s manager Protect yourself more Wandering feet? Before you jump on a plane, think about travel insurance. The Government s smarttraveller website calls travel insurance essential, because not only are you covered once you re overseas, many policies kick in if you re forced to cancel too. Obviously we re crossing our fingers that nothing spoils your adventure, but if it does, at least you can have peace of mind knowing you re protected financially. * CARE Super Pty Ltd does not in any way recommend or endorse that these products or services are suitable for you, so you may wish to seek independent advice before deciding to access any of these products or services. Please obtain a Product Disclosure Statement from the service provider. ** This is a representative example only and should not be relied upon as a true representation of any actual superannuation entitlements or benefits. Find any lost super If you ve worked a few jobs, but you can t name the super fund you with were with every time, chances are you ve got some lost super out there. Track it down using our simple tool at caresuper.com.au/lostsuper. Consolidate your super Now that you ve found your super, pop it all in the one place to better keep track of your money and avoid paying unnecessary fees and costs. We can help with that too. Log in to MemberOnline and go to Consolidate online, or, if you re not yet registered, go to caresuper.com.au/consolidate. Make the most of being young Your super + compounding returns = hard-working money. If you re not across the benefits of compound interest, here s a quick how-it-works. Say you invest $5000 and it earns 8% per year. The following year you re earning interest on $5400. In 10 years you re earning interest on $10,794 plus change.** So making extra contributions while you re young really adds up, because the longer your money has to work, the better the potential results. When you get your next pay increase, why not put some towards your future lifestyle? To get a more personalised idea of what your situation could look like, visit caresuper.com.au/supercalculators. It s an easy way to see the difference making extra contributions could make to your super balance. CareSuperLine

6 Super myths Whether you know a little or a lot about super, there are some common misconceptions about what it s for and what it can do for you. We help you discover the truth. 1 Super s for old people OK, unless you ve got some sort of magic formula, you re going to get older too. And when you stop working, you re going to need an income so you can live comfortably. Super builds up over your working life to provide that income once you re no longer earning a salary. It s no secret that the more super you have, the more income you will enjoy in retirement. 2 Even if you work for years, there s no guarantee that the super guarantee (SG) will be enough to live on not comfortably, anyway. People are living longer than ever, and it s possible you may need to support yourself (and other family members) for 20 or 30 years post-work! My employer pays my super I don t have to 5.5% more 7.5% more Men Women According to a recent study by Deloitte, * even with an SG level of 12% both men and women would need to contribute more to ensure they had enough money to see them through. 3 I don t benefit from my super now You might not be able to touch your money just yet, but as a CareSuper member you have access to a range of benefits, like tailored rates on health and general insurance. Plus, if you ve reached that time in your life where you re looking to buy a home or investment property, ME Bank offers CareSuper members access to low cost banking products, including discounted home loans. Find out more about how your super can help you at caresuper.com.au/benefits. 12% SG * Deloitte Actuaries & Consultants June 2014 report Adequacy and the Australian Superannuation System. 06 caresuper.com.au

7 4 I can make it up later Let s talk about Julia. She started contributing an extra $20 a week to her super when she was just 25. At 67 (her planned quit-work-and-travel-around-theworld age) she has $572,052 in her super account. ** Angus, on the other hand, was a little carefree about the whole thing and only checked on his super when he turned 67. His balance is based solely on super For tips on building your super, visit caresuper.com.au/growmysuper. in the spotlight guarantee contributions and is more than $80,000 less than Julia s (as shown below). ** This difference means that in retirement Julia will receive over $6000 more per year in super income than Angus. Angus can still improve his situation but, as you can see, the benefits of engaging with your super while you re young could be enormous. $600,000 $450,000 Super with extra contributions Super with no extra contributions Julia s balance: $572,052 $300,000 $150,000 Angus s balance: $488,936 $ Age 5 I have no control over my super Actually, you have a lot. In addition to making extra contributions, here s just a few ways you can take control: CareSuper offers 13 investment options figure out what s best for you according to your risk profile and needs (caresuper.com.au/investmentoptions) Consider your insurance. Eligible members receive default death and TPD insurance, but it s worth making sure you have the right amount of cover for your situation. Calculate your cover at whyshouldyoucare.com.au/insurancecalculator Plan for your future by going to caresuper.com.au/advice and getting in touch with a financial planner. # Basic super-related advice is at no extra cost! Want to know more? Bust the myths and get the facts about your super. For more details about getting the most out of your super visit caresuper.com.au. ** Figures based on projections generated using the Visualise your super calculator available at caresuper.com.au/supercalculators. Figures assume a super guarantee rate of 9.5%, an aggressive investment risk profile, a starting balance of $5000 and a yearly salary of $50,000. Estimated income per year projected to age 90. The Age Pension has not been included in these calculations. This calculator is provided by Industry Fund Services Limited (IFS) and is provided by an authorisation under the Australian financial services licence of IFS, ABN , AFSL # Financial advice is offered through CareSuper s relationship with Industry Fund Services Limited (IFS), and is provided by an authorisation under the Australian financial services licence of IFS, ABN , AFSL CareSuperLine

8 Investment update Our 10-year return is in the top 5 funds.* How did your super perform? If you re one of the many members who have some or all of their super invested in the Balanced (MySuper) option, you ll be happy to hear that it has once again outperformed the SuperRatings median Balanced option, delivering a double-digit return of 12.84% for the 2013/14 financial year.* What does this return mean for you? A 12.84% annual return is definitely good news, but it s even better news when you consider the long-term average performance of the Balanced option. After all, you want to be sure you re with a super fund that can last Tom Stewart Manager, Investments the distance and keep producing good returns while you re working, right? That s why it s important to focus on how your super fund has performed over 5 and 10 years. So, what are the Balanced option s long-term returns? The Balanced option continues to be a top performer, with its 10-year average return of 7.73% p.a. placing CareSuper in the top 5 of similar Balanced options according to SuperRatings. Equally impressive is the option s 20-year average return of 8.43% p.a., and its 5-year average return of 9.93%, which ranks in the top 10.** Investment returns (after fees and taxes) to 30 June 2014 Investment options 2013/14 (%) Managed options 08 caresuper.com.au 2012/13 (%) Annual returns 2011/12 (%) 2010/11 (%) 2009/10 (%) Compound average annual returns 10 years (% p.a.) 7 years (% p.a.) 5 years (% p.a.) 3 years (% p.a.) Capital Guaranteed Capital Stable Conservative Balanced Balanced Sustainable Balanced Alternative Growth Growth Asset Class options Capital Secure Fixed Interest Direct Property Australian Shares Overseas Shares The long-term returns shown above may differ from your actual returns. Where a 10-year average is not reported, it s because the option has existed for less than 10 years. The returns shown above are after fees and tax, and have been rounded to two decimal places. All net investment returns are reflected in the sell price of each investment option. Past performance is not a guarantee of future performance.

9 investing What about all of CareSuper s other investment options? Thanks to continued growth in all asset classes, our other Managed and Asset Class options delivered good returns for the 2013/14 financial year, translating into excellent long-term returns too. Over 10 years, SuperRatings ranks all CareSuper options with a 10-year record in the top 10 when compared against similar options.** This is a great outcome for our members and highlights our ability to manage financial market volatility. Looking ahead While it s pleasing to see the usually strong performance of all our investment options, expectations for the coming 12 months remain subdued. Investments Manager Tom Stewart explains: In the event of a market downturn, our members are less likely to suffer big losses. Our overall goal is to reduce volatility in investment returns and give our members a smoother ride over the long term. You can count on CareSuper to continue to help you grow your savings and minimise the downside risks which come with investing, so you stand the best chance of meeting your retirement goals. * As measured by the SuperRatings Fund Crediting Rate Survey SR50 Balanced (60-76) Index, June ** As measured by the SuperRatings Fund Crediting Rate Survey, June how does CareSuper invest? While the actual assets that make up each of our options differ depending on the option you re invested in, all of our investments are made with the same philosophy in mind. And it s this philosophy that sets us apart from other super funds. CareSuper aims to smooth out the ride for members by minimising losses in negative markets (like during the GFC) and capturing most of the upside when markets are strong. To do this we make sure we re invested in a wide range of assets, including those less directly linked to share and fixed interest markets, such as direct property and infrastructure. We also select investment managers who actively manage assets, rather than just replicate indices. We believe that these characteristics improve our ability to protect capital when markets are suffering a downturn. Over the long term, we consider this approach more likely to deliver better outcomes for our members in the form of superior returns (after fees), versus a strategy which focuses on minimising fees and passive management. The 10-year average return of 7.73% per annum for the Balanced option demonstrates the success of our approach. CareSuperLine

10 news Super You can now put more into super The Federal Government limits or caps the amount that can be contributed to your super before extra tax applies. Recently, these contribution caps increased. The annual cap on employer and salary sacrifice contributions (known as concessional contributions) for the 2014/15 financial year is now $30,000, up from $25,000, for people under 50. The cap on non-concessional or after-tax contributions has increased to $180,000 per year. Under 65s who exceed the non-concessional contributions cap may be able to bring forward the next 2 years worth of contributions, up to $540,000 (conditions apply). Find out more at ato.gov.au. Inside CareSuper As a Fund, we pride ourselves on being transparent, and part of this means having details of how we operate available on our website. So if you re interested in reading about our processes and procedures, just go to the Policies section (under Governance ). Among other things, you can read our Tax Policy, as well as find out how we invest your money responsibly and appoint Board members. it s easy to be green! Staying up to date At times, we are required to let members know about important information or changes to your super, including sending you an Annual Statement. To do this we need to have your current contact details. We have occasionally used a third party service to ensure the integrity of our members information, which may involve address matching. This helps keep our operating costs down by reducing the number of communications being issued incorrectly, and also ensures we do not lose contact with you if you move. It has also helped many members be reunited with their super. It s easy to check your details are correct Just log in to MemberOnline (caresuper.com.au/login) or call the CareSuperLine on If you ve agreed to receive s from us, add membernews@caresuper.com.au to your address book to make sure s don t get lost in your spam folder. CareSuper recently conducted research that shows that over 90% of our members care about the environment and conservation. We do too. That s why we try to connect with you via instead of post, and promote a range of recycling and energy efficient practices in our offices. We re also moving our Annual Report completely online this year rather than printing copies. How you can do your bit If you re part of that environmentally friendly 90%, there s one very easy thing you can do to help: make sure we have your address. That way we can get in touch with you electronically it s faster, and you re saving trees! Go to MemberOnline at caresuper.com.au/login or call the CareSuperLine on caresuper.com.au

11 lifestyle Our members Meet CareSuper member Cara Davey I work at Breast Cancer Network Australia. We help inform and support Australians affected by breast cancer. As the Fundraising Events Manager I regularly meet breast cancer survivors their strength is inspiring and their positive attitudes motivate me every day. I love living in Melbourne. This city never sleeps! Some of my best times are spent with family and friends, exploring markets or walking along the beach or up in the mountains. I ve found that when I call CareSuper I always receive exceptional customer service, including quality financial advice. Plus, I love that so many forms are available on the website, and that I can log in to MemberOnline to update my details or change my investment choices. A big to do is to combine my super into one fund CareSuper! This way I will have a larger amount to invest and won t be paying unnecessary fees. I also need to make sure I m making the most of my super and investing in options that are right for me. At the moment I m interested in learning more about the Direct Investment option. I value a super fund that is upfront and transparent about its fee structure, like CareSuper. It s important to me that fees are fair and not too complex. Retirement is a long way off, but I think it s important to look at where you are now and where you want to be in the future, and then work with your super fund to achieve your financial goals. I want to make sure I m able to enjoy every moment of my golden years! I m a firm advocate of having insurance through my super. You never know what may happen in your life, and you ve got to be prepared. If you d like to share your story with us, please social@caresuper.com.au. Don t forget to tell us about yourself, and include a photo if you can. CareSuperLine

12 Consolidate your super now for a chance to WIN one of two trips for two to Paris or New York to the value of $5000.* Simply consolidate your super into CareSuper during September and October 2014 to go into the draw. *Visit caresuper.com.au/parisandny for full competition terms and conditions. You can consolidate your super online through MemberOnline (available at caresuper.com.au/login). Contact us call CareSuperLine visit admin@caresuper.com.au write CareSuper, Locked Bag 5087 Parramatta NSW t CO2-e Saved caresuper.com.au for the latest news and information, brochures and forms. By choosing to use Australian made ENVI Recycled carbon neutral paper for this newsletter, we have helped reduce global greenhouse gas emissions by more than 10.6 tonnes CO2-e. Disclaimer: This magazine has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this magazine does not take into account any particular person s objectives, financial situation or needs and you should read the applicable Product Disclosure Statement. You should consider the appropriateness of this advice, having regard to your own particular objectives, financial situation and needs before acting on any advice. You need to apply the concepts to your own situation before making an investment decision. CARE Super Pty Ltd (Trustee) ABN AFSL CARE Super (Fund) ABN CR/MAG/ONTHEMONEY /14 ISS4