SIL Employer Scheme. A registered superannuation scheme established under the SIL Mutual Fund

Transcription

1 SIL Employer Scheme A registered superannuation scheme established under the SIL Mutual Fund Investment Statement 31 March 2016

2 Important information (The information in this section is required under the Securities Act 1978.) Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. Choosing an investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: What sort of investment is this? 5 Who is involved in providing it for me? 7 How much do I pay? 8 What are the charges? 10 What returns will I get? 12 What are my risks? 15 Can the investment be altered? 18 How do I cash in my investment? 19 Who do I contact with inquiries about my investment? 33 Is there anyone to whom I can complain if I have problems with the investment? 33 What other information can I obtain about this investment? 20 In addition to the information in this document, important information can be found in the current registered prospectus for the investment. You are entitled to a copy of that prospectus on request. The Financial Markets Authority regulates conduct in financial markets The Financial Markets Authority regulates conduct in New Zealand s financial markets. The Financial Markets Authority s main objective is to promote and facilitate the development of fair, efficient, and transparent financial markets. Financial advisers can help you make investment decisions Using a financial adviser cannot prevent you from losing money, but it should be able to help you make better investment decisions. Financial advisers are regulated by the Financial Markets Authority to varying levels, depending on the type of adviser and the nature of the services they provide. Some financial advisers are only allowed to provide advice on a limited range of products. When seeking or receiving financial advice, you should check: the type of adviser you are dealing with the services the adviser can provide you with the products the adviser can advise you on. A financial adviser who provides you with personalised financial adviser services may be required to give you a disclosure statement covering these and other matters. You should ask your adviser about how he or she is paid and any conflicts of interest he or she may have. Financial advisers must have a complaints process in place and they, or the financial services provider they work for, must belong to a dispute resolution scheme if they provide services to retail clients. So if there is a dispute over an investment, you can ask someone independent to resolve it. Most financial advisers, or the financial services provider they work for, must also be registered on the financial service providers register. You can search for information about registered financial service providers at You can also complain to the Financial Markets Authority if you have concerns about the behaviour of a financial adviser. For more information about investing, go to This document is an investment statement for the SIL Mutual Fund Employer Lump Sum Scheme, for the purposes of the Securities Act The information in this investment statement was correct as at 31 March 2016, the date on which this investment statement was issued. This investment statement consists of two sections. This is the first section, which sets out general information about the SIL Mutual Fund Employer Lump Sum Scheme. The second section is the Supplement, which sets out information specific to your employer s Plan. It is essential that you read both sections together. B

3 Introducing the SIL Employer Scheme The SIL Mutual Fund (SIL) is a superannuation trust that was established in 1959 as a convenient way to help investors save for their retirement. SIL offers two schemes to investors, the SIL Mutual Fund Personal Lump Sum Scheme (the SIL Mutual Scheme) and the SIL Mutual Fund Employer Lump Sum Scheme (the SIL Employer Scheme). This investment statement offers you the opportunity to invest in the SIL Employer Scheme through your employer s superannuation plan (Plan). The SIL Employer Scheme is a long-term savings vehicle providing you the opportunity to save for your retirement, with the help of additional contributions from your employer. The amount of your employer s contributions is described in the Supplement to this investment statement (the Supplement). Because the SIL Employer Scheme is designed to help you save for your retirement, your investment will generally be locked in to the SIL Employer Scheme until you: leave the service of your employer, or reach the retirement age for your Plan set out in the Supplement. The Trustee Superannuation Investments Limited (the Trustee) is the Trustee and issuer of SIL. The Trustee is responsible for supervising the manager so that your investment is managed and administered in accordance with SIL s Trust Deed and all applicable legal requirements. For more information on the Trustee, see Superannuation Investments Limited is the Trustee and issuer on page 7. The manager The SIL Employer Scheme is managed by ANZ New Zealand Investments Limited (ANZ Investments) (the Manager), a subsidiary of ANZ Bank New Zealand Limited (ANZ). The Trustee reappointed ANZ Investments under the Management Agreement on 31 March 2016 following a review of the previous management agreement. The terms of ANZ Investments reappointment are set out in the Management Agreement. The Funds When you join the SIL Employer Scheme, you can choose to invest in one of the five multi-asset-class Funds, or the singleasset-class SIL Employer Cash Fund. Any employer s contributions to the SIL Employer Scheme will usually be invested in the same Fund or Funds as you have chosen. If this is not the case, it will be set out in the Supplement. You can also choose the Lifetimes option (see About the Lifetimes option on page 4 for more information about the Lifetimes option). If you don t choose a Fund or Funds to invest in, your contributions and any employer contributions will be invested in the Fund or Funds specified in the Supplement. The Funds do not distribute income. Any income the Funds receive from investments is reinvested. For more information, see What returns will I get? on page 12. Key risks of the Funds Like any investment, an investment in the SIL Employer Scheme involves taking some risk. Your investment in the SIL Employer Scheme might not do as well as expected and you may not receive back the full amount you contributed. For more information, see What are my risks? on pages 15 and 16. The level of risk will vary depending on the Fund or Funds your savings are invested in. You need to decide how these risks apply to your personal circumstances and if they are consistent with your investment objectives and investment timeframe. The Trustee and ANZ Investments recommend that you talk to an authorised financial adviser about the investment options available to you. The SIL Mutual Fund (SIL) will be closed to new members on 16 September 2016 The Financial Markets Conduct Act (FMCA) is the new law that will govern how financial products are created, promoted and sold. It also sets out the responsibilities of those who offer, deal in and trade financial products. The FMCA will have significant implications for SIL. The Trustee has determined that SIL will be registered as a restricted scheme following its transition into to the FMCA regime. As a restricted scheme SIL will be closed to new members and will focus solely on meeting the needs of existing members. SIL will be closed to new members on 16 September Existing members will still be able to make further contributions after this date. 1

4 Key features of the Funds An investment in the SIL Employer Scheme helps you to save for your retirement. Your employer helps you to do so by: contributing to your Member Account or Employer Account at the rate specified in the Supplement (see You have a Member Account and may have an Employer Account on page 5 for more information about the Member Account and Employer Account) taking the hassle out of making minimum contributions, by deducting your minimum contributions automatically from your pay, and establishing a Reserve Fund, which can be used as described under the heading Each employer has a Reserve Fund on page 5. The SIL Employer Scheme also offers you the flexibility to: make additional lump sum or regular contributions switch between any of the Funds (subject to the restrictions described under the heading You can switch between the Funds on page 18), and withdraw your investment on the retirement age for your Plan (which is set out in the Supplement) or when you stop being employed by your employer. Your investment might not be locked-in until age 65. You may be required to make minimum contributions from your pay. See How much do I pay? on page 8 for more information. The amount of your return from your investment will vary depending on the circumstances in which you leave employment with your employer. See What returns will I get? on page 12 for more information. The Funds asset class mix The table below shows the investment objective, benchmark asset class mix and permitted ranges for each Fund. The benchmark asset class mix is the asset class mix used as a starting point for how much a Fund invests in each asset class. The actual asset class mix will vary from the benchmark asset class mix. ANZ Investments might vary the asset class mix to manage risk, increase potential investment performance, or manage cash flow. The ranges state how far from the benchmark asset class mix the actual asset class mix can be. The Funds gain exposure to the asset classes by investing in underlying funds. See The SIL Employer Scheme invests in underlying funds on page 6 for more information. Because the underlying funds also hold cash assets, the Funds may, in certain circumstances, have cash assets that exceed these ranges. SIL Employer Growth Fund Asset Class Mix Benchmarks Ranges Shares and property securities Cash assets and fixed interest assets 80% 20% % 0-45% The investment objective is to deliver investment returns ahead of inflation rates over the long term by investing in a range of asset classes and markets. SIL Employer Balanced Growth Fund Asset Class Mix Benchmarks Ranges Shares and property securities Cash assets and fixed interest assets 65% 35% 45-85% 15-55% The investment objective is to deliver investment returns ahead of inflation rates over the long term by investing in a range of asset classes and markets. 2

5 SIL Employer Balanced Fund Asset Class Mix Benchmarks Ranges Shares and property securities Cash assets and fixed interest assets 50% 50% 35-65% 35-65% The investment objective is to deliver investment returns ahead of inflation rates over the long term by investing in a range of asset classes and markets. SIL Employer Conservative Balanced Fund Asset Class Mix Benchmarks Ranges Shares and property securities Cash assets and fixed interest assets 35% 65% 20-50% 50-80% The investment objective is to deliver investment returns ahead of inflation rates over the long term by investing in a range of asset classes and markets. SIL Employer Conservative Fund Asset Class Mix Benchmarks Ranges Shares and property securities Cash assets and fixed interest assets 20% 80% 10-30% 70-90% The investment objective is to deliver investment returns ahead of inflation rates over the long term by investing in a range of asset classes and markets. SIL Employer Cash Fund Asset Class Mix Benchmarks Ranges Cash assets 100% 0-100% The investment objective is to protect the value of investments and provide competitive returns by investing in one or more interest-bearing bank deposits with a New Zealand-registered bank. All of our Funds, other than the SIL Employer Cash Fund, may invest in alternative assets. At the date of this investment statement, no Funds invest in alternative assets. ANZ Investments and the Trustee can agree to change the objectives and policies of each Fund (including the benchmark asset class mix and ranges) from time to time. You can find out the actual asset class allocation mix of each Fund, the current benchmarks and the current ranges, at any time, by calling the ANZ Investments Customer Services team at the telephone number shown on page 33. 3

6 About the Lifetimes option The Lifetimes option is not a separate Fund. When you select the Lifetimes option, at any one time your savings are invested in one of the five multi-asset-class Funds or in the SIL Employer Cash Fund, based on your age as set out in the table below. As you get older and reach the next age range, we move your savings to a different Fund. For example, during the month you turn 46 we will switch you from the SIL Employer Balanced Growth Fund to the SIL Employer Balanced Fund. We keep doing this until you turn 65, when your savings will be invested in the Cash Fund until you withdraw them. The idea behind the Lifetimes option is that you re always invested in a Fund that has levels of risk and expected returns that are considered appropriate for an average person of your age. This reflects that, if you re young, you have a reasonably long time until retirement age. You can invest in riskier assets in the hope of receiving higher investment performance, and years of negative investment performance should be outweighed by years of positive investment performance. This changes as you approach retirement when you re better to accept lower investment performance but take less risk (because you have a shorter time until retirement and less time to recover any losses). Age SIL Employer Fund 0 35 SIL Employer Growth Fund SIL Employer Balanced Growth Fund SIL Employer Balanced Fund SIL Employer Conservative Balanced Fund SIL Employer Conservative Fund 65+ SIL Employer Cash Fund You can opt in or out of the Lifetimes option at any time by completing a Switch Request Form, at the back of this investment statement. The Lifetimes option doesn t take your personal circumstances into account, and it might not be right for you. For example, you might want a different level of risk than the average person of your age. The Trustee and ANZ Investments recommend you seek personalised advice from an authorised financial adviser before deciding to choose the Lifetimes option. What are the fees and charges? Six types of fees or charges might apply to your investment: a management fee charged to each Fund per year a Trustee fee, also charged to each Fund per year expenses incurred on behalf of the Funds by ANZ Investments and the Trustee (which can include fees charged by ANZ Investments related companies) expenses of underlying funds (that is, other funds in which the Funds invest) an administration fee entry, exit or switching fees (although none of these fees are currently charged). These charges will affect your returns. For more information see What are the charges? on page 10. Keep informed with our online information You can find up-to-date information about the Funds at silfunds.co.nz. How do I join? If you are not currently a member, please fill out the Application Form at the back of this investment statement and send it to the ANZ Investments Customer Services team at the address shown on page 33. How do I transfer into the SIL Employer Scheme? You may be able to transfer your investment from another superannuation scheme to the SIL Employer Scheme. Your ability to do so will be subject to your current scheme s transfer out criteria. Contact your existing provider if you are considering a transfer. Before you can transfer into the SIL Employer Scheme, you will need to become a member of the Plan. If you are not currently a member, please fill out the Application Form at the back of this investment statement, and send this to the ANZ Investments Customer Services team at the address shown on page 33. Glossary The glossary on pages 21 and 22 of this investment statement explains the meaning of some of the legal and financial terms used in this investment statement. The current Prospectus for SIL includes a fuller glossary of legal and financial terms. See What other information can I obtain about this investment? on page 20 to find out how to get a copy of the Prospectus. Tell us your choice Once you ve made your choice between one or more of the Funds or the Lifetimes option, let ANZ Investments know your selection by filling out the relevant application form at the back of this investment statement. ANZ Investments and the Trustee recommend that you get advice from an authorised financial adviser about which Fund or combination of Funds is right for you. You can change your choice at any time by completing a Switch Request Form at the back of this investment statement or at silfunds.co.nz. For more information, see Can the investment be altered? on page 18. 4

7 What sort of investment is this? SIL Employer Scheme SIL is a superannuation trust that was established in There are two registered superannuation schemes established under SIL the SIL Mutual Scheme and the SIL Employer Scheme. This investment statement offers you the opportunity to invest in the SIL Employer Scheme only, through your employer s Plan, which is part of the SIL Employer Scheme. The SIL Employer Scheme offers you the opportunity to invest into a suite of six Funds. The Funds include five multi-asset-class Funds, and one single-asset-class Fund. Your employer s Plan Your employer has established the Plan to help its employees save for their retirement. The Plan is not a separate superannuation scheme, but an arrangement through which eligible employees can become members of the SIL Employer Scheme. The Plan is governed by special rules agreed between the Trustee of the SIL Employer Scheme and your employer. These special rules are set out in the Employer Participation Agreement. The Supplement, which forms part of this investment statement, sets out the information specific to the Plan. Your interest in the SIL Employer Scheme will be represented by units You receive units each time you invest into the SIL Employer Scheme, or money is paid into the SIL Employer Scheme on your behalf. The price of each unit you receive depends on the value of the Fund at the time you invest. The number of units you have, when multiplied by the unit price, represents the value of your investment in the SIL Employer Scheme, not including unpaid tax or refunds. The price of each unit is calculated by taking the market value of each relevant Fund s investments, adding any accrued income and deducting all liabilities. This amount is then divided by the total number of units on issue in the applicable Fund to give the unit price. The unit price does not include Portfolio Investment Entity (PIE) tax. The unit prices for the Funds are available online at silfunds.co.nz. Alternatively, they may be obtained by contacting the ANZ Investments Customer Services team at the address shown on page 33. You have a Member Account and may have an Employer Account When you join the SIL Employer Scheme, a Member Account is established for you. The Member Account records the value of any units received in respect of your contributions to the SIL Employer Scheme. In some cases, any employer contributions will also be credited to your Member Account. In some cases, two accounts will be established for you a Member Account and an Employer Account. See the Supplement to find out which applies to you. If you have an Employer Account, it will record the value of any units received in respect of your employer s contributions to the SIL Employer Scheme. Whether and when you are entitled to the investment in your Employer Account (if you have one) will depend on the circumstances in which you stop being employed by your employer and, in some cases, the number of years for which you have been a member of the SIL Employer Scheme, or the number of years you have been employed by your employer. See What returns will I get? on page 12 for more information. Each employer has a Reserve Fund A Reserve Fund is established for each employer. The Reserve Fund is made up of any amounts that are not required to pay benefits for a member. For example, when members leave the SIL Employer Scheme and are not entitled to all the savings held in their Employer Account, the balance of the Employer Account is paid into the relevant employer s Reserve Fund. The Reserve Fund can be used in a variety of different ways by the Trustee, taking into account the recommendations of your employer. For example, it can be used: to meet your or your employer s required contributions to the SIL Employer Scheme to increase the value of your investment in the SIL Employer Scheme to provide additional benefits for employees to pay administration fees which would otherwise be payable by you, or to provide extra benefits if employees are suffering from hardship. 5

8 The SIL Employer Scheme invests in underlying funds The Funds primarily gain exposure to each of the asset classes by investing in other managed funds (called underlying funds). The underlying funds include: funds that are managed by ANZ Investments, and funds that are not managed by ANZ Investments. These other funds may: be managed differently to how the SIL Employer Scheme is managed by ANZ Investments borrow, enter into derivative contracts, or other transactions, or hold additional cash to manage risks, increase potential returns, or manage cash flow requirements. As investment manager of the SIL Employer Scheme, ANZ Investments carefully selects and monitors any underlying funds in which the SIL Employer Scheme invests. You can find out more information about underlying funds, and the investment managers for those underlying funds, in the Prospectus. ANZ Investments and the Trustee can agree to change any (or all) of the underlying funds into which the Funds invest. ANZ Investments can also change the investment managers for the underlying funds. In either case, notice of the change doesn t need to be given to you. If any changes are made, ANZ Investments will still ensure that each Fund is invested in accordance with the benchmark asset class mix and ranges for the Fund (as amended from time to time). SIL will be closed to new members on 16 September 2016 The Trustee has determined that SIL will be registered as a restricted scheme following its transition into the FMCA regime. As a restricted scheme SIL will be closed to new members and will focus solely on meeting the needs of existing members. SIL will be closed to new members on 16 September Existing members will still be able to make further contributions after this date. 6

9 Who is involved in providing it for me? The full name of the SIL Employer Scheme is the SIL Mutual Fund Employer Lump Sum Scheme. The SIL Employer Scheme is a registered superannuation scheme established under the SIL Mutual Fund, a superannuation trust that was established in The SIL Employer Scheme was established as a registered superannuation scheme on 11 June Superannuation Investments Limited is the Trustee and issuer Superannuation Investments Limited is the Trustee of the SIL Employer Scheme. The Trustee is also the issuer of the SIL Employer Scheme under the Securities Act Under SIL s Trust Deed, the Trustee is required to delegate the day-to-day management and administration of the SIL Employer Scheme to a management company. The Trustee has currently delegated day-to-day administration and management of the SIL Employer Scheme to ANZ Investments. The Trustee is responsible for supervising the ANZ Investments performance of its duties as manager so that your investment is managed and administered in accordance with SIL s Trust Deed and all applicable legal requirements. The directors of the Trustee are: Andrew Mark Cross (Chairman) of Auckland The Right Honourable Sir William Francis Birch of Drury Paul David Fyfe of Lower Hutt Dr Edward Schuck of Auckland Glennis Kay Webber of Auckland. The Trustee and each of the Trustee s directors may be contacted at the address shown on page 33. The directors of the Trustee and the Trustee s address may change from time to time. Up-to-date information is available online at business.govt.nz/companies or by calling the ANZ Investments Customer Services team at the telephone number shown on page 33. Further information about the directors of the Trustee is available in the Prospectus. ANZ Investments and its directors are the promoters of the SIL Employer Scheme ANZ Investments and its directors are promoters of the SIL Employer Scheme. The directors of ANZ Investments are: Ronald Bruce Macintyre (Chairman) of Wellington John Robert Body of Auckland Stewart Creswell Brentnall of Warrawee, NSW, Australia Penelope Jane Ford of Auckland Gavin Murray Pearce of Beecroft, NSW, Australia. ANZ Investments and each of ANZ Investments directors may be contacted at the address shown on page 33. The directors and ANZ Investments address may change from time to time. You can find the current list of directors and ANZ Investments current address at business.govt.nz/companies or by calling the ANZ Investments Customer Services team at the telephone number shown on page 33. Further information about the directors of ANZ Investments is available in the Prospectus. Your investment is not guaranteed None of the Trustee, ANZ Investments, ANZ Bank New Zealand Limited, Australia and New Zealand Banking Group Limited, their respective directors, any member of their respective groups of companies or any other person stands behind or guarantees the capital value or performance of any investments in the SIL Employer Scheme. From time to time the Funds within the SIL Employer Scheme may invest in deposits with ANZ. However, investments in the SIL Employer Scheme are not deposits in ANZ Bank New Zealand Limited or Australia and New Zealand Banking Group Limited (together ANZ Group ), nor are they liabilities of ANZ Group. ANZ Group does not stand behind or guarantee ANZ Investments. Investments are subject to investment risk, including possible delays in repayment, and loss of income and principal invested. ANZ Group will not be liable to you for the capital value or performance of your investment. ANZ New Zealand Investments Limited is the manager ANZ Investments is responsible for selecting and managing the SIL Employer Scheme s assets. ANZ Investments may appoint underlying managers to manage assets of the underlying funds in which the Funds invest. ANZ Investments can change these underlying managers from time to time without letting you know. ANZ Investments is also responsible for the administration and marketing of the SIL Employer Scheme. For more information on ANZ Investments, see silfunds.co.nz. 7

10 How much do I pay? You may have to make minimum contributions You may have to make minimum contributions to the SIL Employer Scheme. The Supplement will state the minimum contributions (if any) which apply to you. These contributions will be deducted from your pay automatically each payday, and credited to your Member Account. If your employer suspends or reduces its contributions to the SIL Employer Scheme, you can choose to reduce or suspend your minimum contributions. You can also choose to continue your minimum contributions. You may also be able to change your required minimum contributions in other ways. If this is the case, it will be set out in the Supplement. You may also be able to make salary sacrifice contributions to the SIL Employer Scheme. This means you can give up some of your salary in return for additional contributions to the SIL Employer Scheme from your employer. If this is the case, it will be set out in the Supplement. Your employer s contribution rates Your employer will contribute to the SIL Employer Scheme on your behalf at the minimum rate specified in the Supplement. The minimum contribution rates in the Supplement are shown before tax. These contributions will be credited to your Member Account or your Employer Account (if you have one), as set out in the Supplement. Your employer can choose to reduce or suspend its contributions, as long as it does this for all of its employees. If your employer suspends its contributions for more than two years, its Plan will be wound up (if the Trustee decides to do so). Your employer may reduce the contributions it makes to the SIL Employer Scheme for you by any amount that it contributes on your behalf to a KiwiSaver scheme. Tax on your employer s contributions Your employer s contributions will be subject to employer s superannuation contribution tax (ESCT). It is your employer s responsibility to deduct and pay ESCT from their contributions. The Tax and your returns section on page 13 explains ESCT further, and shows the current ESCT rates. Temporary absence If you have been granted a leave of absence (for example, parental leave) and you have received approval from your employer and the Trustee, you will remain a member of the SIL Employer Scheme during your leave. You remaining in the SIL Employer Scheme during this time will be subject to any terms and conditions agreed by you, your employer and the Trustee, including regarding your contributions and your employer s contributions. You can make additional voluntary contributions You can make regular additional voluntary contributions You can make regular additional voluntary contributions by completing the Direct Debit Form at the back of this investment statement. Regular contributions can be: for any amount made weekly, fortnightly, monthly, quarterly, or annually by direct debit from your nominated bank account, and altered, in writing, by contacting the ANZ Investments Customer Services team at the address shown on page 33. Regular additional voluntary contributions will be credited to your Member Account. If you wish to set up or vary your regular additional voluntary contributions, please do so in writing, or by completing the Direct Debit Form at the back of this investment statement. Contact the ANZ Investments Customer Services team who can help you arrange this. You can make additional lump sum contributions You can make additional lump sum contributions to the SIL Employer Scheme at any time by completing the Additional Lump Sum Contribution Form at the back of this investment statement or at silfunds.co.nz. Additional lump sum contributions can be for any amount, and will be credited to your Member Account. You can make additional lump sum contributions by: making a direct credit through internet banking, or sending ANZ Investments a cheque, made payable to Superannuation Investments Limited. If you make additional contributions by cheque or direct credit, please include the following information to help ANZ Investments process your payment: your surname your date of birth in the following format DDMMYYYY one of either: your IRD number, or your investor number. If you don t provide ANZ Investments with the correct details, ANZ Investments will be unable to credit your account with the amount you pay. The Trustee and ANZ Investments recommend you seek personalised advice from an authorised financial adviser before deciding to make additional contributions. You will need to complete the relevant forms at the back of this investment statement for initial investments, additional lump sum investments and to set up your direct debit for regular contributions. You can also find these forms on our website silfunds.co.nz. Once you have completed the appropriate forms, please send them to the ANZ Investments Customer Services team at the address shown on page 33. 8

11 You may be able to transfer an investment from another superannuation scheme to the SIL Employer Scheme If you have previously been a member of another registered superannuation scheme, you may be able to transfer your investment held in that scheme to the SIL Employer Scheme. Generally, you will need to have agreement from your employer and the Trustee to do this. Any amounts which are transferred will be subject to such rules as are agreed by you, your employer and the Trustee. The transfer will also need to be permitted by the rules of your other superannuation scheme. There are two exceptions to this: if you are employed by a State Sector Employer, the Trustee must accept a transfer of your investment from another superannuation scheme, unless the Trustee reasonably considers that doing so would be unlawful or in breach of trust, and if your employer is an exempt employer as defined in the KiwiSaver Act 2006, you will be able to transfer your investment from another registered superannuation scheme to the SIL Employer Scheme, and the consent of your employer and the Trustee is not required. You can find out whether your employer is an exempt employer on the website of the Financial Markets Authority In either case the transfer will still need to be permitted by the rules of your other superannuation scheme. 9

12 What are the charges? Six types of fees or charges might apply to your investment: a management fee charged to each Fund per year a Trustee fee, also charged to each Fund per year expenses incurred on behalf of the Funds by ANZ Investments and the Trustee (which can include fees charged by ANZ Investments related companies) expenses of underlying funds (that is, other funds in which the Funds invest) an administration fee entry, exit or switching fees (although none of these fees are currently charged). Management fees and Trustee fees, together with the expenses of managing and administering the SIL Employer Scheme, are paid by each Fund within the SIL Employer Scheme and are reflected in the unit price of units held in your Member Account and your Employer Account. Therefore, these fees and expenses will affect the return on your investment. All of the fees and charges (except for the administration fees) are included in each Fund s total expense ratio (TER). The TER: is the ratio of a Fund s total operating costs to its average net assets across the year, and for the current financial year or any future period is not guaranteed. The table below shows the TER for each Fund of the SIL Employer Scheme for the last three completed financial years. Fund SIL Employer Cash Fund SIL Employer Conservative Fund TER (Year ended 31 March 2015) TER (Year ended 31 March 2014 ) TER (Year ended 31 March 2013 ) 0.59% 0.75% 0.75% 0.96% 1.13% 1.13% Management fee ANZ Investments charges a management fee to cover investment management, administration and marketing functions. The fee is different for each Fund, as some Funds need more management than others. The fee is calculated daily as a percentage of the net asset value of each Fund at each valuation day. The fee is paid monthly in arrears. This fee is subject to change from time to time by agreement between ANZ Investments and the Trustee. Please see the table below which lists the current management fee for each Fund. Out of its management fee, ANZ Investments may pay commission to distributors of the SIL Employer Scheme and pays for the services of underlying managers. Fund Management fee per year SIL Employer Cash Fund 0.50% SIL Employer Conservative Fund 0.85% SIL Employer Conservative Balanced Fund 0.85% SIL Employer Balanced Fund 0.90% SIL Employer Balanced Growth Fund 0.95% SIL Employer Growth Fund 1.00% Trustee fees The Trustee s directors charge a fee to cover part of their remuneration for acting as directors of the Trustee. Their fees are not capped and the amount charged to the scheme may change from year to year depending on the level of remuneration paid to the directors and changes in the size of the SIL Employer Scheme. GST will be added to these amounts if applicable. SIL Employer Conservative Balanced Fund SIL Employer Balanced Fund SIL Employer Balanced Growth Fund SIL Employer Growth Fund 0.96% 1.13% 1.13% 1.01% 1.17% 1.18% 1.06% 1.23% 1.23% 1.11% 1.28% 1.28% 10

13 Expenses of the Manager and the Trustee ANZ Investments can recover expenses incurred on behalf of the SIL Employer Scheme. These may include audit, registry, custodian, postage, and legal fees. Related companies of ANZ Investments may provide services to the SIL Employer Scheme or manage assets for the SIL Employer Scheme. For example, the Funds may invest into deposits or enter forward foreign exchange contracts with ANZ. When this happens, any charges and expenses the SIL Employer Scheme pays are determined on standard commercial terms, and can be recovered by ANZ Investments as expenses incurred on behalf of the SIL Employer Scheme. The Trustee can recover expenses incurred by it or the Trustee s directors on behalf of the SIL Employer Scheme. These may include travel, food, accommodation, company secretarial services to the Trustee, insurance and legal fees. Neither ANZ Investments, nor the Trustee s expenses are capped or limited and will change from year to year depending on the level of expenses incurred during the year. GST will be added to these amounts if applicable. It s likely that the Trustee s expenses for the years ended 31 March 2016 and 31 March 2017 will be higher than previous years because of: the legal fees and other costs associated with the process of reviewing and reappointing an investment, administration and marketing manager, and negotiating the Management Agreement the legal fees and other costs involved to analyse the implications of the Financial Markets Conduct Act 2013 (FMCA) for the Trustee and the SIL Employer Scheme, and any changes required for the Trustee or SIL Employer Scheme to comply with the FMCA. For more information about the FMCA, see The SIL Mutual Fund (SIL) will be closed to new members on 16 September 2016 on page 1. Expenses of underlying funds The Funds invest by investing in underlying funds. Underlying funds may be managed by ANZ Investments, or ANZ Investments may appoint an underlying investment manager to manage the assets of the underlying fund. Where a Fund invests in an underlying fund managed by ANZ Investments, ANZ Investments doesn t charge a separate management fee for that underlying fund. The Fund will pay only the management fee set out in the table on page 10. Where a Fund invests in an underlying fund managed by an underlying investment manager, any management fee charged by the underlying investment manager is paid by ANZ Investments from its management fee. This means the Fund will pay only the management fee set out in the table on page 10. However the Funds may have to pay expenses when they invest in underlying funds. ANZ Investments can recover expenses in its role as manager of the underlying funds, and administration or other charges may be payable to ANZ Investments in respect of its roles in relation to the underlying funds. Expenses recoverable by ANZ Investments in its role as manager of any underlying funds, and administration or other charges payable to ANZ Investments in respect of its roles in relation to such underlying funds, are paid by the relevant underlying fund and are reflected in the unit price of the relevant underlying fund. They therefore reduce the value of a Fund s investments, and the unit price of your investments, and so affect the returns on your investment. Administration Fee ANZ Investments currently charges each member in the SIL Employer Scheme an administration fee. This fee is a fixed dollar amount and can be up to a maximum of $2.00 a month. The amount of the administration fee that applies to you will be described in the Supplement. The administration fee may be paid from your Member Account or Employer Account (if you have one), or may be paid from your employer s Reserve Fund or paid directly by your employer. How the administration fee is paid will be set out in the Supplement. If you invest into more than one Fund in the SIL Employer Scheme and the administration fee is deducted from your Member Account, you will only be charged the administration fee once. This fee will be deducted from the Fund that you hold the highest balance in. Entry, exit or switching fees Currently there are no entry, exit or switching fees for the SIL Employer Scheme. The Trustee may charge entry, exit or switching fees in the future. Other information about fees Fees and expenses may change in the future if the Trustee decides to change them. Any change in the management fee paid to ANZ Investments or in the expenses that can be recovered by ANZ Investments must also be agreed to by ANZ Investments. Changes in underlying fund fees may also be made by the trustee and/or manager of the relevant underlying fund, depending on the terms of the governing documents of those underlying funds. You can find out the current level of fees and expenses at any time by contacting the ANZ Investments Customer Services team at the address shown on page

14 What returns will I get? The return on your investment in the SIL Employer Scheme will be the amount you receive when you withdraw some, or all, of your investment. The SIL Employer Scheme will not pay you any income or other amounts before you withdraw your investment. There are restrictions on when you can withdraw your investment. See How do I cash in my investment? on page 19 for more information on when you can withdraw your investment. The amount of your returns will depend on: the amount of contributions you have made to the SIL Employer Scheme, or that have been made on your behalf (see How much do I pay? on page 8 for more information on contributions to the SIL Employer Scheme) the fees you pay, or that are paid from the Fund or Funds in which you have invested (See What are the charges? on page 10 for more information on charges. The taxes you pay are described on page 13 the investment performance of the Fund or Funds you have invested in the circumstances in which you stop being employed by your employer in some circumstances, the number of years you have been a member of the SIL Employer Scheme, or the number of years you have been employed by your employer (please refer to the Supplement to see if this applies to you), and how the Trustee has used the Reserve Fund for your employer, after taking into account the recommendations of your employer. Investment performance will affect the returns you get Your investment can go up or down because of the investment performance of the Fund or Funds you invested in. Investment performance reflects gains or losses made when assets the Funds invest in change in value or earn income. Past performance is not a guarantee of future performance. The circumstances in which you stop being employed by your employer will affect the returns you get The Employer Participation Agreement for your employer may modify the general rules described below. If this is the case, the rules are as described in the Supplement. The retirement age for your Plan is specified in the Supplement. The Trustee can, at its discretion, decide that a particular member will have an earlier retirement age than that set out in the relevant Supplement. In some circumstances your returns will be equal to the value of the units in your Member Account, plus a proportion of the value of the units in your Employer Account If your investment in the SIL Employer Scheme has ended because you have resigned from your employer or have been dismissed by your employer (and no other benefit as described below is payable), your returns will be equal to the value of the units in your Member Account, plus a proportion of the value of the units in your Employer Account (called the claimable share of your Employer Account in the Supplement). How this proportion is worked out is described in the Supplement. In some circumstances your returns will be equal to the total value of the units in your Member Account and the units in your Employer Account When you leave employment with your employer, your returns will always be at least equal to the value of the units in your Member Account. However, your returns will also include the value of the units in your Employer Account if you withdraw your investment: when you leave employment with your employer, at a time on or after the retirement age for your Plan while you are still employed by your employer (this is possible only if you have passed the retirement age for your Plan and your employer agrees) when you leave employment with your employer, at a time which is: before the retirement age for your Plan, but on or after age 50 (or any other early retirement age described in the Supplement), and your employer consents to you receiving the total value of the units in your Employer Account, or having left employment with your employer because you are suffering from ill health or permanent incapacity. Ill health or permanent incapacity withdrawals You will be treated as suffering from permanent incapacity if you satisfy the Trustee that you have become unable to follow your usual occupation because of an injury, illness, or disability that the Trustee considers means you will be unlikely to have significant earning capacity in the future. When considering this, the Trustee has to: take into account your previous employment and other characteristics, and consider the advice of a registered medical practitioner. You need to show evidence of your permanent incapacity. 12

15 If you have left employment with your employer because you are suffering from ill health or suffering from permanent incapacity, your investment will be paid in a single lump sum, or by several separate payments, as decided by the Trustee after consulting with your employer. The Trustee can also decide, after consulting with your employer, to: pay your investment to you, or pay your investment to any one or more of your dependants. Your dependants include any person who, in the Trustee s opinion, is: wholly or partially dependent on you, or has a legal right to look to you for support. If you die while you are a member of the SIL Employer Scheme, the total value of the units in your Member Account and the units in your Employer Account will be paid to those persons: responsible for administering your will, or dealing with your assets if you have not made a will. See How do I cash in my investment? on page 19 for more information about the circumstances in which you can withdraw your investment. How the Trustee has used the Reserve Fund for your employer will affect the returns you get As described under the heading Each employer has a Reserve Fund on page 5, the Trustee can use your employer s Reserve Fund to meet your employer s minimum contributions or your minimum contributions. However, the Trustee can also use your employer s Reserve Fund to: increase the value of your investment in the SIL Employer Scheme provide additional benefits for employees provide additional benefits if employees are suffering from hardship, or pay administration fees which would otherwise be payable by you. If the Trustee uses your employer s Reserve Fund in any of these ways, this may increase the amount of your returns from the SIL Employer Scheme. The Trustee has to take into account the recommendations of your employer when making decisions about how the Reserve Fund should be used. Tax and your returns This section discusses the tax consequences for a New Zealand tax resident who invests in the SIL Employer Scheme. Tax legislation and rates of tax may be subject to change and the impact of taxation may vary depending on your individual circumstances. ANZ Investments and the Trustee therefore recommend that you consult a tax adviser before making an investment in the SIL Employer Scheme through SIL. SIL is a Portfolio Investment Entity (PIE) SIL is a PIE. PIEs are eligible for certain tax concessions which are intended to ensure that they pay tax on their taxable income on behalf of their investors and at a rate that does not exceed the tax that would otherwise be payable if the investors had made the investments directly. This means that SIL s taxable income is shared by members based on the number of units a member holds. ANZ Investments then uses your prescribed investor rate (PIR) to calculate tax payable by SIL on such income. ANZ Investments pays this tax for you from your account by cancelling units in your Member Account and Employer Account (if you have one) equal to the value of the tax liability you need to pay. ANZ Investments will do this: at the end of the tax year (following 31 March) on a full withdrawal or switch from a Fund at any other time when the value of your units is insufficient to cover your accrued tax liability. In certain circumstances SIL receives tax refunds. When a refund is received, ANZ Investments will add units to your Member Account and Employer Account equal to the value of your share of the tax refund. You need to tell ANZ Investments your PIR In order for ANZ Investments to calculate tax payable on your behalf, you need to give ANZ Investments both your PIR and IRD number. If you do not do this, the taxable income attributed to you by SIL will be taxed at the default PIR of 28%. On page 14 there is a table that helps determine your PIR. If you give ANZ Investments the correct PIR, ANZ Investments will pay the correct amount of tax for you on your share of SIL s taxable income. You will not need to pay any further tax or fill out a tax return for this income. If you notify ANZ Investments during a tax year that your PIR has changed (for example because you cease to be a New Zealand tax resident part way through the tax year), you will be treated as having the latest notified PIR for the whole of the tax year unless tax has already been paid or recovered. If you give ANZ Investments a PIR that is too low, you may need to file a tax return and be personally liable for paying any additional tax, penalties and interest. If you give ANZ Investments a PIR that is too high, you will not be able to claim a refund of overpaid tax from either SIL, ANZ Investments or Inland Revenue. Inland Revenue can require ANZ Investments to use a different PIR if Inland Revenue consider that you have given ANZ Investments an incorrect PIR. 13