CSL DB transfer Frequently asked questions 1 March 2016
GENERAL and BACKGROUND INFORMATION 1. Why is AustralianSuper transferring my DB plan to Equip? AustralianSuper and Equip established a strategic alliance in 2014. For AustralianSuper, their defined benefit division had become relatively small and increasingly expensive to service. Equip is the specialist defined benefit partner of AustralianSuper, which means that all of AustralianSuper s defined benefit plans and members are transferred to Equip during 2016. 2. Who is Equip? Equip currently manages assets of over $7 billion for 50,000 members and their employers. The fund is multisector, servicing employers and members from a wide range of industries. With more than 85 years of superannuation expertise, Equip has a long history of managing defined benefit plans. Equip is an industry fund, which means that all profits flow back to members. 3. Will anything change for me? A transfer like this requires that the conditions of the defined benefit remain the same (or equivalent), so your benefits, the formulas for calculations of your DB entitlements will not change. Equip will be administering them in the same way. If you have an accumulation account or an account for which you can choose the investment mix, the investment options you can choose from after the transfer will be Equip s 12 investment options. On transfer, your investment options at AustralianSuper will be mapped to the most similar investment option(s) offered by Equip. Naturally, some administrative processes Equip has in place are different to those of AustralianSuper. Equip will send you a welcome letter in mid-april providing you with important information about your new account. 4. Can I stay with AustralianSuper? AustralianSuper will no longer be supporting your, or any other, defined benefit plans. So if you want to retain this plan, you will need to have your superannuation with Equip. If you are happy to have a second account, you can have an accumulation account with AustralianSuper. 5. What happens if I leave my employer? If you leave your employer before 22 nd March 2016, your defined benefit will be finalised and rolled into AustralianSuper s industry division. If you leave after this date, your finalised defined benefit will be rolled to Equip s Personal division. 2 P age
6. Will there be any education sessions so that I can learn more about the transfer and Equip? Yes. Two sessions are booked in March 2016 as follows: Date Time Location Wednesday 9 March 2016 12pm (noon) CSL Parkville John Button Auditorium Friday 11 March 2016 12pm (noon) CSL Broadmeadows Main CR1 Training L2 Room INSURANCE 7. Will my insurance cover change on 1 April? Any death, total and permanent disablement or salary continuance/income protection cover you have with AustralianSuper as at 31 March will transfer to Equip. Future increases in cover may be subject to underwriting if your cover exceeds certain limits. 8. What if I have an ongoing insurance claim? AustralianSuper and Equip will work together to ensure a smooth transfer of any claims in progress on the transfer date. Both super funds are committed to providing you continuity of service to make this transition as easy as possible. ABOUT YOUR ACCOUNT 9. Can I still log on to my AustralianSuper account online? You will be able to log in to your AustralianSuper account until end of business on Monday 22 March 2016. Copies of your recent AustralianSuper member statements will continue to be made available within your Equip account online. 10. How do I access my Equip account online? Your log in credentials will be changing. You will receive instructions on how to log in to your Equip account. As in the past, you will need your employer number, your member number and your PIN to log in. Your PIN will arrive in a separate mailing after your welcome letter and your account should be accessible from late April onward. 3 P age
11. Are there any account restrictions during the transfer? The table below outlines other account restrictions that apply during the transfer. These restrictions ensure that AustralianSuper can calculate and transfer your benefits and Equip can establish your new account. Benefit payments, including lump sum payments, financial hardship, etc. Employment termination Voluntary contributions and roll ins Your investments (additional accumulation account) Investment switching (additional accumulation account) AustralianSuper Until 31 March 2016 From 22 March, AustralianSuper will stop processing your benefit payment requests. In urgent cases, please contact AustralianSuper. If you are planning on finishing up your job with your employer, talk to you employer so they can process your final contributions by 15 March and send a termination advice. Your benefit payment can then be processed before the limited service period starts. You can make voluntary contributions and roll ins until 22 March. Any contributions and roll ins received after that date will be refunded. Your additional accumulation account will remain invested until 31 March in your choice options. You can make online switches until 22 March, 4 PM Equip From 1 April 2016 From 1 April, all requests will need to be sent to Equip for processing, using the appropriate Equip forms. Urgent applications from 1 April will be processed, but we may not be able to pay your full balance until the transfer has been completed in late April. Benefit payments will resume from late April. If your termination advice is received after 1 April, your request will only be processed once full administration services resume towards the end of April. Contributions and roll ins can be accepted from 1 April. Your new Equip BPAY details will be provided as part of our welcome package that you will receive in mid April. From 1 April, each of your investments will be switched into its mapped Equip investment option. Daily unit prices for each option are published on the Equip website. You can initiate a paper-based investment switch from 1 April, however, these will only become effective in late April once your account balance has been transferred. If you submit several requests, only the most recently dated request will be implemented. The form can be found on the website in the forms section. Online switching will be available from the end of April. 4 Page
Website services online secure account All times are AEST. Your usual online services will be available until the end of business on 22 March. Access to your secure account information resumes from late April. Your log in will require a plan number, as well as your member number and PIN. You will receive these details by letter just prior to secure account site becoming available. 12. Can I withdraw any money during the transfer? The limited service period starts on 22 March. If you have an urgent request between 23 and 31 March, please contact AustralianSuper at 1300 309 466. Urgent requests from 1 April will be processed by Equip, but we may not be able to pay your full balance until the transfer has been completed in late April. If you have an urgent request on or after 1 April, please contact Equip on 1800 682 626. Normal benefit payments are expected to resume from late April. 13. Can I still make regular contributions via BPAY? Yes. After the transfer, in about mid-april, Equip will send you a welcome letter that will contain your BPAY information. If you need to make a BPAY contribution before mid-april, please contact Equip on 1800 682 626. 5 P age
INVESTMENTS 14. What Equip investment options are my AustralianSuper investments options going into? Your current AustralianSuper investment options will be mapped to Equip s options as follows: AustralianSuper PreMixed options Equip Diversified options Significant investment differences High Growth Growth None Indexed Diversified Growth Equip does not run any indexed (or passive) investment options; the Equip Growth option is actively managed and hence the associated fees are higher. Balanced Balanced Growth None Sustainable Balanced Balanced Growth The Equip option does not apply a strict focus on environmental, social and corporate governance standards. Conservative Balanced Balanced None Stable Conservative None Capital Guaranteed Cash Equip does not offer a capital guaranteed option. Monies will be transferred into the Cash option. Note that Equip also has another Diversified option, Growth Plus, which is not mapped to any of the AustralianSuper options. It invests 95% of assets in Australian and overseas shares. AustralianSuper DIY Mix options Equip Sector Specific options Significant differences Australian Shares Australian Shares None International Shares Overseas Shares None International Sustainable Shares Australian Sustainable Shares Overseas Shares Sustainable Responsible Investments The Equip option does not apply a strict focus on environmental, social and corporate governance standards. None Property Property The AustralianSuper option consists entirely of direct property investments, while the Equip option includes a 30% allocation to listed property and invests the rest in unlisted property trusts. Diversified Fixed Income Fixed Interest None Cash Cash None 6 P age
15. Are the investment fees the same? z Equip is lower cost AustralianSuper is lower cost AustralianSuper Equip PreMixed options Diversified options difference High Growth 0.77 Growth 0.61-0.16 Indexed Diversified 0.20 Growth 0.61 +0.41 Balanced 0.57 Balanced Growth 0.58 +0.01 Sustainable Balanced 0.66 Balanced Growth 0.58-0.08 Conservative Balanced 0.47 Balanced 0.50 +0.03 Stable 0.43 Conservative 0.38-0.05 Capital Guaranteed 0.25 Cash 0.06-0.19 AustralianSuper Equip DIY Mix options Sector Specific options difference Australian Shares 0.31% Australian Shares 0.56% 0.25% International Shares 0.31% Overseas Shares 0.59% 0.28% International Sustainable Shares 0.47% Overseas Shares 0.59% 0.12% Australian Sustainable Shares 0.41% Sustainable Responsible Investments 0.53% 0.12% Property 0.69% Property 0.72% 0.03% Diversified Fixed Income 0.37% Fixed Interest 0.36% -0.01% Cash 0.08 Cash 0.06% -0.02% 16. Which fund performs better? Past performance is no guarantee of future performance and each option will have different objectives, asset allocations and investment timeframes which will limit the comparability of the returns. The returns for each fund can be found on their website; as an example, AustralianSuper s Balanced option and Equip s Balanced Growth option are similar in construction and the returns to 30 June 2015 compare as follows: Fund Option 10 Year 5 Year 3 Year 1 Year Equip Balanced Growth 7.07 10.11 13.28 10.52 AustralianSuper Balanced 7.30 10.20 13.44 10.86 7 P age
17. How does Equip invest differently from AustralianSuper? Every fund has its own proprietary investment philosophy, and we can t provide you details on how AustralianSuper manage the underlying assets of their portfolio. Equip s investment philosophy incorporates a belief in active management and a long-term investment horizon. Our investment philosophy is distinguished by: belief in the importance of internal portfolio management and a commitment to the active management of a number of internal capabilities; belief that independent, consistent and rigorous research and analysis should primarily be conducted internally, complemented by external sources of advice and insight that are provided in a collaborative framework; performance of investment functions by experienced professionals with investment backgrounds, where all internal investment staff manage both internal and externally managed investments; and organisation of the investment team and all investment and research activities in a multi-disciplined manner that emphasises collaboration and a holistic view of investing. This approach ensures consistency, rigour and accountability. It promotes collaboration and maximises the application of investment skill and expertise for the ultimate benefit of members. 18. When can I change my investments? You can switch investment options in AustralianSuper until 22 March 2016. You can request to switch investment options in Equip from 1 April, however, these will only become effective in late April once your AustralianSuper account balance has been fully transferred. If you submit several requests, only the most recently dated request will be implemented. Equip s Make an investment switch form can be found on the Equip website in the Member forms section. Online switching in Equip will be available from the end of April. 19. What s the difference between crediting rates and unit prices? Both are systems that show investment returns: Crediting rates are percentage changes to the value of underlying assets. Unit prices are dollar values that change. If a unit price goes from $1 to $1.10, then the corresponding crediting rate would be 10%. If a unit price went from $1 to 0.90, the corresponding crediting rate would be -10%. Whether a fund uses unit prices or crediting rates, there should be no difference in outcomes to a member. Both Equip and AustralianSuper publish daily unit prices and daily crediting rates, respectively, which facilitates daily switching in and out of investment options. In Equip, transactions received by the cut-off time on a business day will be processed using unit prices determined by reference to the market value of the underlying assets at the end of that business day. Our latest unit prices are usually updated on our website by 10am on the second business day after the business day on which they are calculated. For example, the unit prices published for Monday 29 February 2016 applied 8 P age
to transactions processed and units issued on 29 February 2016 will be published by close of business on Wednesday 2 March 2016. 20. What are buy/sell spreads? Will they apply when my accumulation is moved to Equip? Equip applies buy-sell spreads to unit prices, which factor in the investment transaction costs that apply to transactions into and out of your account. Buy costs will be incurred every time units are purchased as a result of: contributions, transfers in and rollovers; or you deciding to change the investment of your accumulation account from your current option to an alternative option. Sell costs may be incurred every time units are redeemed as a result of: benefit payments, transfers out, contribution splits; and you deciding to change the investment of your accumulation account balance from your current investment option to an alternative option. Upon transfer from AustralianSuper, your account balance on 1 April will come in at the sell price, which means you won t incur a charge when your assets are transferred. All Equip account balances are calculated and displayed based on the sell price. MISCELLANEOUS 21. What other information will I receive from Equip? After 1 April, Equip will issue a number of important communications including: Your Equip welcome letter in mid-april, including details on how to make contributions by BPAY Your PIN and other information to access your online account in late-april Notification of when the Product Disclosure Statement for your plan is available on the Equip website. 22. If I made a binding death benefit nomination in AustralianSuper, will it still be valid in Equip? No, by law your binding nomination made to the AustralianSuper trustee cannot be passed to Equip. You will need to complete a new nomination for your account using our Binding death benefit nomination form. If you had a binding nomination with AustralianSuper, your transfer pack included the form for you to fill in and send back to us. You can lodge a new form at any time and we don t charge a fee for a binding nomination. Equip s Binding death benefit nomination form can be found on our website in the Member forms section. 23. Where can I get financial advice? Equip has a dedicated team of in-house financial advisors. Our planners have in-depth experience with defined benefit members, helping you with all aspects of your defined benefit. They can explain your defined benefit to 9 P age
you in detail and assist you with projections for your retirement income, maximise your defined benefit while you re still working, or put a retirement plan into action. Appointments can be booked by calling 1800 065 753. 24. What if I have my own advisor? If you are already using a financial planner who has access to your account details, and you would like them to continue to do so, please complete and lodge the Establish authority to obtain information form which we can send to you. 10 P age