Product Disclosure Statement Accumulation Division for Rio Tinto Employee and Personal Members

Transcription

1 Product Disclosure Statement Accumulation Division for Rio Tinto Employee and Personal Members Issued 1 May 2013 Contacting the Rio Tinto Fund If you would like more information, please contact: Fund Member Helpline: in Australia If calling from outside Australia: Rio Tinto Fund website: then select Contact us Your Regional Total Rewards Specialist Call the Fund Member Helpline for contact details

2 Product Disclosure Statement Accumulation Division for Rio Tinto Employee and Personal Members About this Statement This Product Disclosure Statement (PDS or Statement) is a summary of significant information about the Accumulation Division of the (Rio Tinto Fund) for Rio Tinto Employee and Personal Members. It contains a number of references to important information (each of which forms part of this PDS). You should consider this information before making a decision about joining the Rio Tinto Fund. The references to important information are contained in the following guides: 1. About the Rio Tinto Fund (Rio Tinto) 2. How super works (Rio Tinto) 3. Your investments (Rio Tinto and QAL) 4. Fees and costs (Rio Tinto and QAL) 5. Tax and suer (Rio Tinto and QAL) 6. Your death and disability benefits (Rio Tinto). This PDS and these guides are available from the Rio Tinto Fund website at just go to Documents and forms>product Disclosure Statements. You can request hard copies of this PDS and these guides, free of charge, by calling the Fund Member Helpline on (or for international callers ). The information provided in this PDS is general information only and does not take account of your personal financial situation or needs. You should obtain financial advice tailored to your personal circumstances. Information in this PDS may change. Changes that are not materially adverse are available on the Fund website or on request, free of charge, by contacting the Fund Member Helpline. 2 CONTENTS 1. About the Rio Tinto Fund 2 2. How super works 2 3. Benefits of investing with the Rio Tinto Fund 3 4. Risks of super 4 5. How we invest your money 4 6. Fees and costs 6 7. How super is taxed 6 8. Insurance in your super 7 9. How to open an account 8 1. About the Rio Tinto Fund The Rio Tinto Fund is a not-for-profit fund run exclusively for Rio Tinto group employees and their families. It is one of the largest corporate super funds in Australia, with more than 33,000 members and over $3.8 billion in assets. The Fund provides benefits on leaving employment, retirement, death, total and permanent disablement and ill-health. As a member, you currently don t pay an administration fee and, if you are an eligible Employee Member, you currently don t pay for the cost of Basic insurance cover. Being able to join the Rio Tinto Fund is one of the benefits of working, or having worked for, a Rio Tinto Employer or being a Spouse of a Rio Tinto Fund member. The Fund provides for two classes of membership through its Accumulation Division: 1. Employee Members Current employees of a Rio Tinto Employer; and 2. Personal Members Former Employee Members who have maintained their membership in the Rio Tinto Fund as well as Spouses and ex-spouses of Rio Tinto Fund members. The Rio Tinto Fund is managed by a separate trustee company charged with protecting the interests of members. The Trustee Board is comprised of Directors nominated by the Rio Tinto group and those elected by members employed by Employers who participate in the Rio Tinto Fund. The Trustee also works closely with a team of professional advisers who assist the Trustee in performing its duties for the Rio Tinto Fund. Future plans The Trustee intends to apply for a MySuper licence so that by 1 January 2014 it is able to offer a MySuper product to members. Contact the Fund Member Helpline for more information. 2. How super works Super is a convenient and tax-effective way to save for retirement. It s worth investing some time in understanding how it works and how it could work best for you. Compulsory super Federal legislation generally requires employers to make superannuation contributions for employees. This is known as the Superannuation Guarantee (SG). In addition, you can make voluntary contributions to your super to boost your retirement savings. The Government provides tax concessions to super funds like the Rio Tinto Fund making super an attractive way to save for retirement. Choosing a fund Most employees have the right to choose the super fund into which their compulsory employer contributions will be paid. This Statement has been designed to help you consider the benefits and features of the Rio Tinto Fund and the advantages it offers, to easily compare the Rio Tinto Fund with other super funds. When you commence employment with a Rio Tinto Employer you automatically become a member of the Rio Tinto Fund unless you choose otherwise. Your Rio Tinto Fund account Your Rio Tinto Fund account is an accumulation-style account. Such accounts work much like any regular savings account. As with a savings account, money goes into your Rio Tinto Fund account and the investment earnings (which may be positive or negative) of your chosen investment option are allocated. Meanwhile, any applicable expenses (e.g. for additional insurance cover) and taxes come out of the account. Your Account Balance is recorded as a unit holding(s) in your chosen investment option(s). Each unit has a value that is calculated daily and is based on the value of the underlying investments in the investment option. The investment value or Account Balance of your account at any given time is calculated as: Number of units x sell unit price = current investment value

3 Contributions There are different types of super contributions that can be made to your Rio Tinto Fund account and these are shown in Table 1. Table 1: Contribution types Contribution type Employer (concessional) Accepted for Employee Members only Before tax voluntary (concessional) Accepted for Employee Members only After tax voluntary (non concessional) Accepted for all members Government co contributions Accepted for all members Spouse** Accepted for all members Explanation Employer contributions are usually paid as a percentage of your role remuneration* and will be at least 9% of ordinary time earnings (OTE), as required by Superannuation Guarantee (SG) legislation.^ Voluntary contributions from before-tax salary are known as salary sacrifice contributions. Salary sacrificing means that your Rio Tinto Employer will direct some of your before-tax salary to your Rio Tinto Fund account instead of paying it to you as salary. Voluntary after-tax contributions can be made from regular payroll deductions if you are an employee of a Rio Tinto group Employer and/or from your own savings via BPAY, cheque or Electronic Funds Transfer (EFT). The Government may make co-contributions to your Rio Tinto Fund account provided you have made an after-tax contribution and you meet the eligibility criteria including the income threshold. You can make an after-tax contribution to your Spouse s account from regular payroll deductions if you are an employee of a Rio Tinto Employer and/or (for all members) from your own savings via BPAY, cheque or Electronic Funds Transfer (EFT). * Your role remuneration is specified on your employment contract and is your Base Salary plus all work-related allowances and incentive payments (if any) as determined by your Employer. Please contact your payroll office if you are unsure about which allowances form part of your role remuneration. ^ From 1 July 2013, the required SG contribution percentage will increase incrementally from 9% to 12% of ordinary time earnings (OTE) starting with an increase to 9.25% in the financial year and resulting in a 12% rate for the financial year. ** In order to make contributions for your Spouse, they must meet the Fund s definition of Spouse and the age-related requirements. Annual contributions limits There are annual limits on contributions to your super, which, if exceeded, may result in you paying significant additional tax. Information about contribution limits is outlined in Section 7 How super is taxed. Transfers from other super funds If you have superannuation savings in other funds, you may want to consider transferring these accounts into the Rio Tinto Fund. This may offer advantages such as saving on investmentrelated costs and administration fees. Accessing your super Under Preservation laws, you generally cannot receive the preserved part of your benefit until you retire from the workforce on reaching your preservation age (which depends on your date of birth). There are some exceptions to this rule, for example in cases of extreme financial hardship. You should read the important information about your Rio Tinto Fund account and how super works generally in Guide 2: How super works (Rio Tinto) and fees in Guide 4: Fees and costs (Rio Tinto and QAL) before making a decision. Go to the Rio Tinto Fund website Documents and forms> Product Disclosure Statements to read Guide 2: How super works (Rio Tinto) and Guide 4: Fees and costs (Rio Tinto and QAL). The material relating to how super works may change between the time you read this Statement and the day you acquire the product. 3. Benefits of investing with the Rio Tinto Fund The Rio Tinto Fund offers you valuable features, benefits and services. Low cost The Rio Tinto Fund is a not-for-profit fund run solely for the benefit of members and, unlike most Australian super funds, currently no fees are deducted from your Rio Tinto Fund account for day-to-day administration costs. This is a great reason to consider transferring any other super accounts you have into the Rio Tinto Fund. Investment-related costs are also kept low because of the Rio Tinto Fund s significant size. Insurance for Employee Members For people employed in the mining industry, insurance cover can be difficult to obtain. The Rio Tinto Fund provides eligible Employee Members with an insurance benefit for death, total and permanent disablement and ill-health and gives you access to three levels of cover Basic, Medium and Top. Most Rio Tinto Employee Members of the Accumulation Division automatically have Basic cover* provided without any deduction from their Rio Tinto Fund account for the cost of this cover. You can apply for higher cover when you join the Rio Tinto Fund or at any time thereafter. While the costs for higher cover are deducted from your Rio Tinto Fund account, these can be more favourable than the cost of insurance cover provided under a retail insurance policy. * Rio Tinto Employee Members who have been transferred by their Rio Tinto Employer to Australia on assignment from overseas may be provided different insurance cover. 3

4 Product Disclosure Statement Accumulation Division for Rio Tinto Employee and Personal Members Investment choice The Rio Tinto Fund offers members a choice of nine investment options, covering all the major asset classes, to suit the conservative through to the ambitious investor. You can choose to invest in more than one option and you can change your investment option(s) at any time. Service and advice Keeping you up to date with accurate information about your super is a priority. The Rio Tinto Fund does this through: Rio Tinto s Total Rewards Specialists who can provide information and general financial product advice to Employee Members about super. When they visit Rio Tinto work sites, they deliver education sessions and answer members questions face-to-face. the Fund Member Helpline, , where the consultants can answer your general queries and provide free limited financial advice. (International callers: ). the Rio Tinto Fund website, where you can access and manage your Rio Tinto Fund account information at any time. The website offers educational webinars and financial planning tools, and a range of regularly updated super information. regular newsletters, annual report, benefit statements and various other publications, all of which are available on the website or by calling the Fund Member Helpline. Stay connected Employee Members who leave their Rio Tinto Employer before retirement can retain their membership in the Rio Tinto Fund by becoming a Personal Member. Members who remain in the Rio Tinto Fund until retirement can choose to take their final benefit as a lump sum or as an income stream through an Account Based Pension. The Rio Tinto Fund also caters for members phasing into retirement through the option of a Transition to Retirement Pension. Different investment strategies carry different levels of risk, depending on the assets that make up the strategy and generally higher long term returns carry the highest short term risks. However, be aware that your super investment needs to grow at a greater rate than inflation or there is the risk that the real value (buying power) of your savings will decrease. Other risks to consider There are some other important risks that are relevant to investing. These are: your superannuation savings may not adequately provide for the retirement lifestyle you desire, and the laws that govern super may change in the future and this may affect your investment. How risk affects you When choosing an investment strategy for your super, the level of risk that s appropriate for you will usually depend on your age, investment time frame, other investments and individual risk tolerance. Seeking financial advice from a licensed financial adviser can help you to choose the most suitable investment strategy for you. You can call the Fund Member Helpline to speak to a financial adviser about your investment choice in the Rio Tinto Fund. You should read the important information about the risks associated with investing in super generally in Guide 2: How super works (Rio Tinto) and the investment risks in Guide 3: Your investments (Rio Tinto and QAL) before making a decision. Go to the Rio Tinto Fund website and forms>product Disclosure Statements to read Guide 2: How super works (Rio Tinto) and Guide 3: Your investments (Rio Tinto and QAL). The material relating to risk may change between the time you read this Statement and the day you acquire the product. 4 You should read the important information about the benefits of investing in the Rio Tinto Fund in Guide 1: About the Rio Tinto Fund (Rio Tinto) and your benefits and accessing them in Guide 2: How super works (Rio Tinto) before making a decision. Go to the Rio Tinto Fund website Documents and forms> Product Disclosure Statements to read Guide 1: About the Rio Tinto Fund (Rio Tinto) and Guide 2: How super works (Rio Tinto). The material relating to the Rio Tinto Fund and your benefits may change between the time you read this Statement and the day you acquire the product. 4. Risks of super It is important to note that the amount of your super benefit at retirement may not meet your retirement expectations due to the possible impact of risk factors. Investment risk All investments carry risk of some type. When investing in super, you should be aware that the value of your super and the level of returns may vary (up and down). Your investment is not guaranteed and you may lose some of the money you have invested due to negative returns. While past performance can show how an investment has performed, it is not a guarantee of future performance. 5. How we invest your money The rate at which your super grows depends to a large extent on the way it is invested. How you choose to invest it depends on factors such as your risk tolerance, investment time frame and your financial goals. In recognition of this, the Rio Tinto Fund allows members to choose from nine investment options. A range of investment options Each of the Rio Tinto Fund s nine investment options offers a different risk/return profile, allowing you to implement an investment strategy that best suits your personal situation. The Rio Tinto Fund s four diversified options use strategies that range from growth (holding mainly shares and property) to defensive (holding mainly fixed interest and cash). The Trustee has selected the mix of assets for each of these options. The remaining five options are sector-specific and are based on the underlying asset classes in which the Rio Tinto Fund mainly invests, allowing you to take a more active role in choosing which asset classes your super is invested in. Table 2 shows the Rio Tinto Fund s nine investment options and the mix of growth and defensive assets for each.

5 Table 2: Investment options Investment option Diversified options High Growth Growth (default) Conservative Growth Conservative Sector specific options Australian Equity International Equity Property Diversified Fixed Interest Cash Flexibility Asset mix 100% growth 75% growth / 25% defensive 50% growth / 50% defensive 30% growth / 70% defensive 100% growth 100% growth 100% growth 100% defensive 100% defensive You can choose one or more investment options, giving you more control over your desired asset mix and level of risk and return. In addition, you can select a different investment strategy for your existing Account Balance and your future cash flows (e.g. contributions and any amounts transferred into your account). You can switch investment options at any time by either making your change via the Fund website or by completing a Change of investment option form available from the Fund website or by contacting the Fund Member Helpline. There is currently no switching (or other administration) fee charged for changing investment options, however, buy/sell costs may apply. Want to know more? The What type of investor are you? tool on the Fund website may help you to better understand your attitude to risk and return and identify the types of investments that might be appropriate for someone like you. Go to Education and planning tools. When choosing an investment option in which to invest, you should consider the likely investment return, the risk and your investment time frame. Before choosing one or a combination of investment options for your super, or later changing your choice, it is recommended that you seek advice from a licenced or appropriately authorised financial adviser. Default investment option If you do not choose which investment option to invest your super in, it will be invested in the Growth option, the details of which are shown in Table 3. Table 3: Growth investment option Investment To earn a return after fees and tax, over a rolling objective three-year period, above the notional after tax and fees return of the benchmark compiled from the Fund s benchmark indices and weighted according to the option s asset mix. Target outcome An earning rate that exceeds the annual percentage change in the Australian Consumer Price Index by at least 4.0% p.a. after tax and fees over a rolling five-year period. Asset mix Asset class Benchmark % Who might invest in this option? Risk label based on probability of negative return Minimum suggested investment time frame Allocation range % Growth assets Australian equities International equities Property Infrastructure Alternative growth Defensive assets Diversified fixed interest Alternative fixed interest Term deposits Cash This option is designed for members who seek moderate to high returns over the long term, and who have tolerance for a high risk of negative returns in the short term. High (Risk Band 6 on the Standard Risk Measure) Estimated to have four to less than six years of negative annual returns over any 20 year period. Five years You should read the important information about the Fund s investment options and making an investment choice, including the extent to which labour standards or environmental, social or ethical considerations are taken into account in the Rio Tinto Fund s investment activity and information about the Standard Risk Measure and Risk Band of each option in Guide 3: Your investments (Rio Tinto and QAL), before making a decision. Go to the Rio Tinto Fund website Documents and forms> Product Disclosure Statements to read Guide 3: Your investments (Rio Tinto and QAL). The material relating to the Rio Tinto Fund s investment options and making an investment choice may change between the time you read this Statement and the day you acquire the product. 5

6 Product Disclosure Statement Accumulation Division for Rio Tinto Employee and Personal Members 6. Fees and costs 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 balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the Fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( has a superannuation calculator to help you check out different fee options. A low cost arrangement Rio Tinto Fund members do not currently pay an administration fee (that is, no deduction is made from their Rio Tinto Fund account for the cost of administration) and investment fees are kept low because of the Rio Tinto Fund s significant size. The Rio Tinto Fund does not pay fees to financial advisers. Main fees and costs Table 4 summaries the Rio Tinto Fund s main fees and costs that may be charged to Rio Tinto Fund members. The fees and costs may be deducted from your Rio Tinto Fund Account Balance, investment returns or from Rio Tinto Fund assets as a whole (as applicable). Information in Table 4 can be used to compare costs between different superannuation products. You can use the Superanuation calculator on the ASIC MoneySmart website to show the effect of fees and costs on your Account Balance. Go to Changes to fees and costs The Trustee has the right to introduce or vary fees at any time without your consent. You will receive at least 30 days notice, or other notice as required by legislation, of any increase in fees or of any new fee. Table 4: Fees and costs TYPE OF FEE OR COST Fees when your money moves in or out of the Fund Establishment fee Contribution fee Withdrawal fee Termination fee Management costs The fees and costs for managing your investment AMOUNT Nil Nil Nil for Employee Members $40.85 for each partial withdrawal for Personal Members Nil Administration costs of 0.20% of the Fund s assets* (for the year to 30 June 2012) plus Investment related costs of 0.52% of Fund assets** for the Growth option (for the year to 30 June 2012) * Currently paid by your Rio Tinto Employer. The administration costs relate to the expenses incurred by the Rio Tinto Fund and cannot be calculated precisely in advance, so costs for the last Rio Tinto Fund year are shown as an estimate of costs for the current year. ** Deducted from the assets of the Growth option before the daily unit price is determined. Management costs cannot be calculated precisely in advance, so costs for the last Rio Tinto Fund year are shown as an estimate of costs for the current year. Where relevant, Family Law fees may also apply as set out in Guide 4: Fees and costs (Rio Tinto and QAL). Example of annual fees and costs for the Growth option Table 5 gives an example of how the fees and costs in the Growth option for this product can affect your super investment over a one year period. You should use this table to compare this product with other superannuation products. Table 5: Fees and costs example EXAMPLE the Growth option Contribution Fees PLUS Management Costs EQUALS Cost of Fund Nil 0.52% of the Fund s assets a year (for year to 30 June 2012) BALANCE OF $50,000 WITH TOTAL CONTRIBUTIONS OF $5,000 DURING YEAR For every $5,000 you put in, you will be charged $0. And, for every $50,000 you have in the Fund you will be charged $260 each year. $260 If you put in $5,000 during a year and your balance was $50,000, then for that year you will be charged fees of $260. What it costs you will depend on the investment option you choose and the fees you negotiate with your fund or financial adviser. * * This information is required to be included by law. You should read the important information about fees and costs in Guide 4: Fees and costs (Rio Tinto and QAL) before making a decision. Go to the Rio Tinto Fund website Documents and forms>product Disclosure Statements to read Guide 4: Fees and costs (Rio Tinto and QAL). The material relating to fees and costs may change between the time you read this Statement and the day you acquire the product. 7. How super is taxed Super is a tax-effective way to save for retirement. Tax on contributions Before-tax (concessional) contributions to your super, which include employer and salary sacrifice contributions, are taxed at 15% unless the annual concessional contribution limit is exceeded. Contributions tax is deducted from your Rio Tinto Fund account. Contributions that exceed the annual limit may attract additional tax of 31.5% on top of the 15% contributions tax. 6

7 The Government has proposed that, from 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their concessional contributions reduced from 30% (that is, the concession for individuals on the top marginal tax rate (excluding Medicare)) to 15%. A member s concessional contributions are proposed to be counted as income in determining whether the $300,000 threshold is exceeded. While the detail of the proposal is yet to be announced, it is likely that the change will result in an effective tax rate of 30% on concessional contributions which exceed the threshold for affected individuals. Non-concessional contributions to your super, which are made from your after-tax salary or from your own savings, are not taxed unless the annual non-concessional limit is exceeded. Contributions that exceed the annual limit may attract additional tax of 46.5%. Excess concessional contributions count towards the nonconcessional contributions limit and, in some circumstances, exceeding both limits can result in tax of 93% on some or all of the excess. The annual concessional and non-concessional contribution limits applicable to super contributions are shown in Table 6. Table 6: Annual contribution limits Contributions Annual limit Before tax (concessional) $25,000 p.a. regardless Includes Employer and salary of age. sacrifice contributions After tax (non concessional) Includes personal and Spouse contributions 150,000 p.a. or Up to $450,000 over a three year period under the bring forward option if under age 65. Tax on investment income Investment income is generally taxed at 15%, but offsets (tax credits and rebates) apply which may lessen the effective rate of tax. The benefit of any tax deductions is taken into account as part of determining the investment earnings used to calculate daily unit prices. Tax on your super benefits Withdrawals from your Rio Tinto Fund account may be taxed if you are aged less than 60 and the tax will be withheld from your benefit payment. Once you turn 60, generally no tax applies to lump sum withdrawals. You should provide your Tax File Number when you join the Rio Tinto Fund. If the Trustee does not have your Tax File Number, you may pay extra tax on your contributions or when you access your benefit later, or you may not be able to make some types of contributions. It will also be more difficult to trace different super amounts in your name, so you can receive all your super benefits when you retire. You should read the important information about how tax may apply to your super including tax on contributions, tax on investment income and the surcharge in Guide 5: Tax and super (Rio Tinto and QAL) before making a decision. Go to the Rio Tinto Fund website and forms> Product Disclosure Statements to read Guide 5: Tax and super (Rio Tinto and QAL). The material relating to tax may change between the time you read this Statement and the day you acquire the product. 8. Insurance in your super Eligible Employee Members automatically receive Basic insurance cover for death, total and permanent disablement (TPD) and ill-health without any deduction from their Rio Tinto Fund account for the cost of this cover. Types and levels of insurance If you are an Employee Member of the Rio Tinto Fund employed by a Rio Tinto Employer and are under age 65, you are entitled to insurance benefits in the following circumstances: if you die; or if the Trustee deems you are TPD; or if the Trustee determines that you cannot work due to ill-health. The ill-health benefit is a unique and valuable benefit, providing financial security if you are not able to perform duties for your Rio Tinto Employer but you are not TPD. Note that where the term insurance is used throughout this PDS, the cover provided for death, TPD and ill-health, is provided to Employee Members by the Rio Tinto Fund on a self-insured basis. The Rio Tinto Fund gives you access to three levels of insurance cover for death, TPD and ill-health: Basic, Medium and Top. Personal Members do not have access to insurance cover through the Rio Tinto Fund. Also, Employee Members who have transferred to work in Australia from overseas may have different insurance arrangements if they have a continuation of pension benefits in their home country while on assignment. Minimum level of insurance As a minimum, all eligible Employee Members who are employed by the Rio Tinto group receive Basic cover. Basic cover is compulsory (that is, it cannot be declined or cancelled) but is provided without any deduction from members Rio Tinto Fund accounts. The insured amount for the Basic level of death and TPD cover is calculated by multiplying your Base Salary at time of death/tpd by an insurance multiple. The insurance multiple is calculated as: 10% x the number of years and complete months until you turn age 65. The ill-health cover is 50% of the insured amount for death and TPD. An example of how Basic cover is calculated is shown in Table 7. The current value of the annual insurance premiums for Basic cover (which are currently not deducted from your Rio Tinto Fund account) range between $1.13 and $48.20 per $1,000 of cover, depending on your age. Additional insurance You can apply for Medium or Top cover if you require a higher level of cover. Medium cover provides 1.5 times your insured amount for Basic cover (15% multiple for death and TPD) and Top cover provides 2 times your Basic cover insured amount (20% multiple for death and TPD). An example of how Medium and Top cover are calculated is shown in Table 7. The ill-health cover is 50% of the insured amount for death and TPD. If you are approved for higher cover, you will need to pay the difference in the premium between Basic cover (which is currently not deducted from your Rio Tinto Fund account) and your chosen higher level of cover from your Rio Tinto Fund account. The annual insurance premiums payable by you for additional insurance range between $1.13 and $48.20 per $1,000 of cover, depending on your age. Calculating levels of cover: an example Tim is a 32 year old Employee Member with a Base Salary of $50,000. Time to age 65 for Tim is 33 years. Table 7 shows how each level of cover is calculated and the insured benefit for each level for each type of cover. 7

8 Product Disclosure Statement Accumulation Division for Rio Tinto Employee and Personal Members Table 7: Insurance cover levels Cover level Basic Salary multiple 10% x 33 yrs = 3.30 Medium 15% x 33 yrs = 4.95 Top 20% x 33 yrs = 6.60 Changing your cover Death or TPD insured amount 3.30 x $50,000 = $165, x $50,000 = $247, x $50,000 = $330,000 Ill health insured amount (50% of death or TPD amount) $82,500 $123,750 $165,000 You can request to increase or decrease your level of insurance cover at any time by completing a Change of insurance cover form. If you are applying for higher cover you will also need to complete a Medical Questionnaire. You may also need to provide additional medical information before the assessment (known as underwriting) of your increased cover can be finalised. Your increased cover will only be provided once the assessment process has been completed and the higher cover has been approved. The Change of insurance cover form and Medical Questionnaire are available from the Fund Member Helpline or the Rio Tinto Fund website. Insurance restrictions If you request higher cover, there may be exclusions and/or restrictions placed on your insured benefit following the assessment of your health evidence. If you decide to join the Rio Tinto Fund after previously exercising Choice of Fund, you will be automatically provided with cover equal to 80% of the Basic level. To receive full Basic or higher cover, you must complete a Medical Questionnaire and provide any other requested medical information before the assessment can be finalised. When your cover ceases Your insurance cover ceases from the date you cease employment with your Rio Tinto group Employer. If you exercise Choice of Fund, any cover you have in excess of the Basic level will reduce to the Basic level from the first day of the month in which Employer contributions are paid to your chosen fund. Your Basic cover will then cease two months after the choice calculation date or at the time you cease employment if earlier. Your choice calculation date is the first day of the month in which Employer contributions are paid to your chosen fund. Benefit on death or disablement In the event of your death or disablement (TPD or ill-health) the benefit payable is your Account Balance plus your insured amount. You should read the important information about insurance cover, including benefits, restrictions, eligibility, costs for higher cover, exclusions and definitions and who you can nominate to receive your death benefit in Guide 6: Your death and disability benefits (Rio Tinto) before making a decision. Go to the Rio Tinto Fund website: and forms>product Disclosure Statements to read Guide 6: Your death and disability benefits (Rio Tinto). The material relating to insurance may change between the time you read this Statement and the day you acquire the product. 9. How to open an account Joining the Rio Tinto Fund is easy. Employee Members You automatically become a member of the Rio Tinto Fund on your first day of employment with an Employer in the Rio Tinto group which has offered you membership, unless you choose another super fund under Choice of Fund legislation. However, you should complete the application form attached to this PDS to make sure the Rio Tinto Fund has all your personal details and to advise your choices in relation to investments, insurance and beneficiaries. Personal Members If you are a current Employee Member of the Accumulation Division and have recently ceased employment or have exercised Choice of Fund and your account balance is at least $5,000, your benefit, in most circumstances, will be automatically maintained in the Accumulation Division and you will become a Personal Member. You don t need to complete an application form. If you are a member of the Defined Benefit Division and your benefit is at least $5,000 when you cease employment, you can choose to become a Personal Member of the Accumulation Division. If you don t make this choice within 90 days of the Rio Tinto Fund being advised you have ceased employment, you will automatically be transferred into the Accumulation Division as a Personal Member. If you are the Spouse of a current Rio Tinto Fund member and the Rio Tinto Fund member wishes to make a Spouse contribution or split their contributions into an account in your name, you can become an Accumulation Division member. You can also join the Rio Tinto Fund if you are a former Spouse of a Rio Tinto Fund member and you are entitled to a portion of your former spouse s super interest in the Rio Tinto Fund under Family Law legislation. To become a Rio Tinto Fund member you will need to complete the attached application form. A Personal Member can, at any time, request the payment of their benefit in cash (subject to Preservation requirements), the transfer of their benefit to the Rio Tinto Fund s Retirement Division (if eligible) or the transfer of their benefit to another super fund. Making a complaint If you have any questions about the Fund or would like to make a complaint, please contact us at the Fund s contact details on the front cover of this Statement. You should read the important information about making an inquiry or complaint in Guide 1: About the Rio Tinto Fund (Rio Tinto) before making a decision. Go to the Rio Tinto Fund website: and forms> Product Disclosure Statements to read the Inquiries and Complaints sections in Guide 1: About the Rio Tinto Fund (Rio Tinto). The material about making an inquiry or complaint may change between the time when you read this Statement and the day when you acquire the product. Issued by Rio Tinto Staff Fund Pty Limited (ABN ), Australian Financial Services (AFS) Licence No , as Trustee of the (ABN ). 8 RT0379

9 Accumulation Division Application Form for Rio Tinto Employee and Personal Members Joining as an Employee Member? Here s what you need to do: Joining the Rio Tinto Fund is easy. You automatically become a member of the Rio Tinto Fund on your first day of employment with the company in the Rio Tinto group which has offered you membership, unless you have selected another fund under Choice of Fund legislation and provided this information to your Employer prior to commencing employment. In this case you will not become a member of the Rio Tinto Fund. As a Rio Tinto Fund Employee Member, there are some important decisions you can make, such as how your super is invested, how much insurance cover you d like and who ll receive your super benefit if you die. Make sure you read all the information in the Accumulation Division Product Disclosure Statment (PDS) for Rio Tinto Employee and Personal Members, then complete this form. Once you ve completed, signed and dated the application form, return it to the Fund using the contact details provided on this form. If you re unsure of what decisions to make, the Trustee recommends that you see a licensed or appropriately authorised financial adviser. You can also obtain help by contacting the Fund Member Helpline on If you don t fill out the application form If you don t fill out the application form, the default options will apply which may not be the most suitable choices for your particular circumstances. The Fund s default options are, for investments, the Growth option and for insurance, Basic cover. Like to roll in other super money? If you have other super you d like to roll in to the Fund, fill out the Transfer/Rollover Authority form attached after the application form. Joining as a Personal Member? Here s what you need to do: If you are a current Employee Member of the Accumulation Division and have recently ceased employment or exercised Choice of Fund and at that time your Account Balance is at least $5,000 then, in most circumstances, your benefit will be automatically maintained in the Accumulation Division and you will become a Personal Member. In this case, you will not need to complete an application form. The Fund Administrator will process your reassignment from an Employee to a Personal Member after the Trustee has been informed by your Employer that you have ceased employment or exercised Choice of Fund and after all Employer contributions due for you have been paid into the Fund. If you are a member of the Defined Benefit Division of the Fund and your benefit is at least $5,000 when you cease employment, then you can elect to join the Accumulation Division as a Personal Member. In order to do this, you need to instruct the Rio Tinto Fund to transfer the benefit payable, in full or in part (but at least $5,000), directly into the Accumulation Division. You may do this by completing a Receiving a payout from the Rio Tinto Staff Superannuation Fund form. Alternatively, if your benefit is at least $5,000 and you have not provided the Trustee with payment instructions within 90 days of your Employer advising the Trustee that you have ceased employment, then, in most circumstances, your benefit will be automatically transferred to the Accumulation Division. It is important to note that you cannot take your benefit out of the Fund and then subsequently invest it in the Accumulation Division. If you are a Spouse of a current Rio Tinto Fund Member and your spouse wishes to make a Spouse Contribution or allot a Contributions Splitting amount to an account in your name, you too can become a member of the Fund through its Accumulation Division. You can also join the Fund if you have ceased being the Spouse of a Rio Tinto Fund Member and have become entitled to a portion of that former spouse s superannuation interest in the Rio Tinto Fund under Family Law legislation. As a Rio Tinto Fund Pesonal Member, there are some important decisions you can make, such as how your super is invested and who ll receive your super benefit if you die. Make sure you read all the information in the Accumulation Division Product Disclosure Statment (PDS) for Rio Tinto Employee and Personal Members, then complete this form. Once you ve completed, signed and dated the application form, return it to the Fund using the contact details provided on this form. If you re unsure of your decisions, the Trustee recommends that you see a licensed or appropriately authorised financial adviser. You can also contact the Fund Member Helpline on Accumulation Division Application Form for Rio Tinto Employee and Personal Members Issued by Rio Tinto Staff Fund Pty Limited (ABN ), Australian Financial Services (AFS) Licence No , as Trustee of the (ABN ). May 2013 RT0078

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11 Accumulation Division Application Form for Rio Tinto Employee and Personal Members About this form We need you to fill out this form to let us know: your details if you d like extra death and disability cover (if applicable) which investment option(s) you d like your super invested in; and who you d prefer to receive your super if you die while you re a member of the Rio Tinto Staff Superannuation Fund. Once you have completed all relevant steps of the form, don t forget to sign it and then return it to the Fund at the following address: GPO Box 4303 Melbourne, Vic 3001 If you re unsure of what decisions to make, we recommend that you see a licensed or appropriately authorised financial adviser. Step 1 Complete your personal details I am applying to join the Fund s Accumulation Division as an Please print in black or blue pen, in uppercase, one character per box. A Employee Member Please complete Steps 1, 3, 4, 5 & 7 Personal Member Please complete Steps 1, 3, 5, 6 & 7 Title Mr Mrs Ms Miss Other Date of birth / / Given name(s) Surname Residential address (must be advised) Suburb State Postcode Postal address (if different from above) Suburb State Postcode Daytime telephone - Mobile Sign up for electronic communications By providing your address and mobile number not only will it be easier for the Fund to keep in touch with you but it allows you to receive information electronically if that s your preference. You can tell the Fund how you d like to receive various types of communications by signing into your account on the website and updating your preferences in the Personal details section. Continued over Accumulation Division Application Form for Rio Tinto Employee and Personal Members Issued by Rio Tinto Staff Fund Pty Limited (ABN ), Australian Financial Services (AFS) Licence No , as Trustee of the (ABN ). May 2013 *SA HI1* RT0078

12 Step 2 Make voluntary contributions You can elect to make contributions from before and/or after-tax salary if you are an Employee Member. Voluntary contributions from before-tax salary (Concessional Contributions) also known as Salary Sacrifice can only apply to future salary entitlements and are subject to Employer approval. Please contact your Payroll Officer to obtain the appropriate form if you wish to elect to make any voluntary contributions. If you are a Personal Member you can make voluntary after-tax (Non-concessional) contributions at any time. Please call the Fund Member Helpline for further information. Please note that if you do not provide your Tax File Number (TFN) to the Trustee, the Trustee cannot accept an after-tax contribution (Non-concessional Contribution) and that any before-tax contributions (Concessional Contributions) may be subject to additional tax. Please also note that there are limits on the amount of Concessional and Non-concessional Contributions that can be made without incurring additional tax. For more information refer to Guide 5: Tax and super (Rio Tinto and QAL) which forms part of the Accumulation Division Product Disclosure Statement (PDS) for Rio Tinto Employee and Personal Members. The guide is available on the Fund website or by calling the Fund Member Helpline on Step 3 Choose your investment option(s) Please complete this section to choose an investment option, or mix of options, for your super. For more information about the Fund s investment options refer to Guide 3: Your investments (Rio Tinto and QAL) which forms part of the of the Accumulation Division PDS for Rio Tinto Employee and Personal Members. The guide is available on the Fund website or by calling the Fund Member Helpline. If you are new to the Fund and you do not select an investment option, your account balance, including future contributions and rollovers, will be invested in the Fund s default investment option, until you make an investment choice. The Fund s default investment option is the Growth option. You have the opportunity to change your investment option(s) at any time. You can also choose to have a different investment strategy for your existing account balance and your future contributions and rollovers ( cash flows ). Any initial investment choice you make on the application form will apply to both your account balance at that time (if any) and all future cash flows. However, if you subsequently change your investment choice, you will need to specify whether the change is to apply to your existing account balance or future cash flows into your account, or both. I would like to invest my total account balance, including future contributions and rollovers, in the option(s) indicated below: Percentage to be invested Diversified options Sector-specific options High Growth option (100% growth assets)* % Growth option (75% growth assets, 25% defensive assets)* % Conservative Growth option (50% growth assets, 50% defensive assets)* % Conservative option (30% growth assets, 70% defensive assets)* % Australian Equity option (100% growth assets)* % International Equity option (100% growth assets)* % Property option (100% growth assets)* % Diversified Fixed Interest option (100% defensive assets)* % Cash option (100% defensive assets)* % Total (must equal 100%) % Your investment selection will be effective from the date your validated application is processed by the Fund administrator. * The Trustee may vary the profile (i.e. between growth and defensive assets and the proportions invested in the various asset classes) of the Fund s diversified investment options. The stated percentages above refer to the Benchmark Exposure and the actual allocations may vary. More information is available in Guide 3: Your investments (Rio Tinto and QAL) which forms part of the Accumulation Division PDS for Rio Tinto Employee and Personal Members. The guide is available on the Fund website or by calling the Fund Member Helpline. Continued over Accumulation Division Application Form for Rio Tinto Employee and Personal Members

13 Step 4 Choose your level of death and disability cover (only available to Employee Members) Protect your family s financial wellbeing think about your death & disability cover You can choose between three levels of death, total and permanent disablement (TPD) and ill-health cover: Basic, Medium and Top. Basic cover is provided to all Employee Members without any deduction from their account for the cost of this cover. If you select Medium or Top cover, the difference in the insurance premium between the Basic and higher level cover selected will be deducted from your account. Information about the Fund s insurance cover options and the cost to you of Medium and Top cover is available in Guide 6: Your death and disability benefits (Rio Tinto) which forms part of the of the Accumulation Division PDS for Rio Tinto Employee and Personal Members. The guide is available on the Fund website or by calling the Fund Member Helpline. I wish to select the following level of death, TPD and ill-health insurance cover: (Select one option only) Basic Medium Top If you do not make a selection, your insurance cover will automatically be Basic. You have the opportunity to change your insurance cover at any time, subject to provision of satisfactory evidence of good health. If you are selecting Medium or Top insurance cover, please complete the accompanying Medical Questionnaire. You may also be required to complete a supplementary Medical Questionnaire and/or attend a medical examination (known as the underwriting procedures). Please note that if the Medical Questionnaire is not received by the Fund within 90 days of the date you joined the Fund, your insurance level will be restricted to the Basic cover. You will then need to reapply for Medium or Top cover. Even though you select Medium or Top cover, your insurance will be restricted to Basic cover until such time as all the underwriting procedures have been completed. Also as a result of the underwriting procedures, your Medium or Top cover may be restricted or have exclusions imposed. If you had previously exercised Choice of Fund and are rejoining the, you will be automatically provided with cover equal to 80% of the Basic level, with no deduction from your account for the cost of this cover. If you would like cover at the full Basic level or higher, you will be required to provide satisfactory evidence of good health and complete a Medical Questionnaire. The Trustee may impose special conditions and restrictions in respect of any cover over 80% of Basic cover where you have previously exercised Choice of Fund. Step 5 Nominate your beneficiaries Who ll get your super if you die while you re in the? It is important that before you complete this step you read the Beneficiaries section of Guide 6: Your death and disability benefits (Rio Tinto) which forms part of the of the Accumulation Division PDS for Rio Tinto Employee and Personal Members. The guide is available on the Fund website or by calling the Fund Member Helpline. Please note that this nomination will apply only to your Accumulation Division account and not any other account you have within the Fund. If you have money in your account when you die there are two choices as to how your benefit can be distributed. Option 1 Non-binding nomination You can nominate that your death benefit be paid as a lump-sum to your nominated beneficiaries. Your nominated beneficiaries must be your dependants and/or legal personal representative (generally the executor of your Estate). The Trustee takes into account your nominated beneficiary (or beneficiaries) but is not bound to follow this nomination. Please select Option 1 or Option 2 below. In the event of my death: (Select one option only) Option 2 Binding nomination You can specify one or more of your dependants or legal personal representative that you require the Trustee of the Rio Tinto Staff Superannuation Fund to pay your death benefit to by making a binding death benefit nomination. This type of nomination can be made by completing a Making a binding death benefit nomination form. You will have received this form with this Application Form. You can also obtain one by contacting the Fund Member Helpline or by downloading one from the Fund website. Option 1 Please pay my Fund benefit including any insured portion (if applicable) as a lump-sum to my nominated beneficiaries in the proportions I have specified (please provide your nominated beneficiaries details in the space overleaf). I understand that this nomination will not be binding on the Trustee. Option 2 I have completed and attached a Making a binding death benefit nomination form. You need to complete the section overleaf for Option 1. If you wish to nominate more than four dependants, please contact the Fund Member Helpline. Continued over Accumulation Division Application Form for Rio Tinto Employee and Personal Members *SA HI1*