More than just super • Investing your money • Superchanges · Actuary, and QIC. The Board also...

SUPERSCOOPQSuper 2002 Annual report to members

Financing your future

• More than just super • Investing your money • Superchanges

Weathering the storm

This year has been a challenging one, characterised by global unrest and a difficult investment climate. Earnings of superannuation funds throughout Australia have been affected, and QSuper is no exception.

In this period of uncertainty, it’s good to know you’re with a fund large enough to ‘weather the storm’ of the investment markets. The QSuper Board of Trustees, in its management of the Fund, has been closely monitoring the performance of our products, in relation to global markets and local competitors. Against both of these benchmarks, our investment manager, Queensland Investment Corporation (QIC), has performed well, giving the Trustees confidence that QSuper is well placed for the future.

QSuper’s products are designed to produce an optimal long-term rate of return with an acceptable level of risk. The emphasis here is on the ‘long term’ and, within that timeframe, it must be

remembered short-term returns can be volatile and at times negative. This situation is one QSuper has educated members on for a number of years, through past issues of Super Scoop and other Fund material.

To ensure the investment of the Fund continues to meet future demands, the Trustees have undertaken a major investment review of the QSuper Fund. This review has resulted in minor adjustments to the asset allocation in some areas (see page 14). The Trustees have also decided to increase diversification within the Australian shares asset class, requesting QIC to appoint additional managers to complement its investment style (see page 26).

More choices for you

One of the focuses this year was the enhancement of financial planning services and products to provide members with improved advice and more savings options.

Year in review by Gerard Bradley


Gerard Bradley is the Under Treasurer and Under Secretary of Queensland Treasury. He has been Chairman of the QSuper Board of Trustees since 1998.

QSuper 2002 Annual report to membersSUPERSCOOP2

Weathering the stormTop row (left to right): Gerard Bradley (Chairman), Terri Hamilton, Karen Peut, Chris Barrett, and Merv Bainbridge. Bottom row (left to right): Tony Hawkins, Linda Apelt, Garry Ryan, Helen Ringrose, Steve Ryan, and Rosemary Vilgan (Executive Offi cer).

The QSuper Board of Trustees

In March, Qs Invest Limited, the f inancial planning organisation jointly owned by QSuper and QIC, began offering QSuper members the opportunity to invest in a managed fund, through their new Investment Access Funds. These Funds are designed to complement the superannuation products offered by QSuper.

Financing your future

QSuper will continue to expand the products and services offered to members, while ensuring the Fund remains strong and secure to assist you in fi nancing your future.

Acknowledgements


This year saw the departure of three Trustees from the QSuper Board of Trustees. Bob Scheuber and Mary Montgomery retired on 30 November 2001, having been Board members since 1996 a nd 1997, re spec t ive ly. On behalf of the QSuper Board, I wou ld l i ke to t ha nk Bob and Mary for their va luable contribut ion to QSuper and wish them all the best for the future. I would like to welcome Linda Apelt, Director-General, Depa r tment of Housing , a nd Tony Hawk ins , Ch ie f Executive Off icer, WorkCover Queensland, to the Board.

On an extremely sad note, Merv Vining passed away in February this year. Merv was appointed to the QSuper Board on 1 June 1994, and held a number of prominent positions in the community and superannuation industry. His friendship and expertise will be sadly missed. Garry Ryan, from

the Australian Workers’ Union, has replaced Merv from 28 June 2002 and we welcome Garry to the Board.

The QSuper Board would also like to thank the organisations providing expertise, service and support to the Fund throughout the year. In particular, the Board is grateful for the commendable work provided by the Government Superannuation Offi ce, QsInvest Limited, the State Actuary, and QIC.

The Board also appreciates the valuable assistance provided by the Auditor-General of Queensland (Auditor) and KPMG (Internal Auditor).

Finally, the QSuper Board wish to congratulate Rosemary Vilgan, Executive Director, Government Superannuation Office, who was recently recognised by Super Review magazine as one of the top ten most infl uential Trustee and Fund Executives in the industry.

QSuper 2002 Annual report to members

Weathering the storm 2

A tough year for returns 4

You get more than just super 6

Helping you grow 10

Missing some money? 13

Investing your money (2001/2002 returns) 14

Superchanges 19

Super answers for super questions 20

A day in the life of a QSuper Trustee 22

Should I stay or should I go? 24

In brief... 26

Financial highlights 27

Trustee details 27

QSuper is proud to support 2002 Year of the outback. This year, QSuper has travelled to more places in Queensland than ever before. More of our members who live in areas of outback Queensland, like those featured in this year’s Super Scoop, have been able to attend a QSuper seminar, allowing us to help in fi nancing their future.

SUPERSCOOPCONTENTS

Even before September 11, the US was seeing a downturn in the economy. Economic indicators at the time were suggesting the US sharemarket was overvalued and was entering a recession. The devastation and ensuing global unrest caused when passenger planes crashed into the World Trade Centre and the Pentagon, merely served to exacerbate this downturn.

This act of terror was enough to cause the US Government to act quickly to restore confidence by working to inject almost US$80 billion back into the economy. The markets, to a large degree, have since recovered from this atrocity.

Those investors who were brave enough to leave their funds where

they were, have now all but regained their funds. Those daring enough to invest immediately after the fall in the markets were rewarded with a return of 4.32% in the Balanced option for the period from 13 September 2001 to 30 June 2002. Those who had their funds invested since the beginning of the financial year, however, can take some heart in the knowledge that markets should recover, though the timing and extent of that recovery is impossible to predict.

History indicates recovery of the sharemarket is very likely. This may be the f irst time you’ve had an investment a f fected by the downturn in markets, but you may recall previous times when markets were severely affected, such as the

A tough year for returnsAn unprecedented act of terror experienced on September 11 last year rocked the entire world. Investment markets globally closed for a number of days and the US sharemarket was badly affected once it re-opened. This was an event no one could have predicted, however, a downturn in markets had been expected for some time.

Developed world sharemarket index

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OIL CRISIS

RECESSION

RECESSION

GULF WAR

RUSSIA CRISIS

TECH BUBBLE'87 CRASH


Fund 1 year 2 year 3 year

Cash

Cash option crediting rate 3.65% 4.25% –

Average of retail competitors 2.52% 3.18% –

Balanced

Balanced option crediting rate -4.15% 0.38% 4.38%

Average of retail competitors -5.13% -0.74% 3.10%

High Growth

High Growth option crediting rate -11.98% -9.81% –

Average of retail competitors -21.11% -13.39% –

The QSuper Board of Trustees constantly measures QIC’s performance against other funds. The following table shows QSuper’s returns in comparison to funds with similar investment profiles over the last 12 months, 2 years, and 3 years.

Current position against major competitors and peers as at 30 June 2002.

QSuper’s low fee of 0.35% of your account balance looks particularly attractive in this year of low returns. Depending on your investment option, other charges, such as brokerage, are deducted before QSuper receives its earnings. If you find a fund that has earned more than QSuper, you should also check their fees. For each percent extra charged in fees, that fund will need to have earned an extra percent in investment returns to equal QSuper’s.

To obtain more information on how QSuper calculates fees, call 1300 360 750, select option ‘1’, follow the prompts and then request document number 304.

Wall Street crash of Black Monday in October 1987, the recession of 1981, and the oil crisis in 1973. In all cases, markets plummeted, but recovered afterwards. Indeed, those who saw the tough times of the sharemarket through, were rewarded with higher returns in the end, as shown in the graph on page 4. One of the main principles illustrated by this graph

is although there may be volatility in the short term, the long-term trend of the sharemarket is most certa inly up. So, even though things aren’t looking as rosy at the moment as they have in the recent past, the message is clear, don’t despair. Taking a long-term view, investment in the sharemarket is still worthwhile.

Of course, if you have a Defined Benefit account you don’t need to worry about disappointing investment returns on your super. As a member with this type of account, you have predefined benefits that are not dependent on investment earnings. You can take comfort in your QSuper investment, as this year your Defined Benefit account has shielded you from these difficult times.

The QSuper Fund recently made the BRW list of the top 1,000 businesses in Australia, based on revenue. QSuper ranked 11th in terms of increasing revenue, and 58th overall in terms of size. Several superannuation funds were included in the list, with QSuper featuring as one of the largest.

All funds felt the downturn in markets, and in general, most funds were hit hard by the sharemarket, as can be seen in the above table.

Information on competitors derived from information supplied by ASSIRT and is net of all ongoing fees (entry/exit fees are ignored). Crediting rates are also net of fees and tax.

QSuper 2002 Annual report to members SUPERSCOOP 5

You get more than just super!

Death and disability benefits

QSuper gives you death and disability insurance while you’re employed by the Queensland Government. In fact, you’re covered 24 hours a day, 7 days a week. Insurance levels vary from employer to employer, so check your annual benefit statement to find out the level of insurance you have. You can also purchase additional units of insurance.

Income protection

If you’re an employed, non-casual member, making standard member contributions, you are now provided with income protection insurance. This provides a regular payment equivalent to 75% of your salary, if you’re unable to work due to illness or injury. There is a 2 week waiting period to qualify for this benefit after you’ve used up all your sick leave. The benefit is payable for up to 2 years. Check your statement for your cover.

QSuper lets you choose how your retirement benefit will grow. If you are a permanent or temporary employee, you can have your benefit grow in either an account linked to investment earnings, known as an Accumulation account, or an account that provides your benefit as a guaranteed multiple of your salary, known as a Defined Benefit account. To help you decide what’s best for you, a range of information is conveniently available from our website.

In an Accumulation account, the growth of your benefit depends on how much you contribute, as well as the level of investment returns. QSuper offers five investment options to give you even greater flexibility in choosing an investment strategy you are comfortable with. You can select any combination of these options.

As a new appointee to the QSuper Board of Trustees, I have been pleased to see such a broad range of products and services offered to members. Membership of QSuper doesn’t just mean you have a solid retirement nest egg growing for retirement–you also get a whole lot more.

By Linda Apelt

Linda Apelt is Director-General of the Queensland Department of Housing and was appointed to this role in 1998. She has also been appointed to the Board of the Australian Institute of Health and Welfare, and the Board of the Australian Housing and Urban Research Institute.


QSuper recently participated in an international benchmarking study conducted by Canadian firm, Cost Effective Measurement Inc. The study, which included 41 of the largest superannuation funds from around the world, ranks funds in a number of areas. After being placed first in the website category in the study last year, QSuper has again recorded a brilliant result, gaining a place in the top five of all participating funds in the area of member communication. We are very proud of this achievement.

You can also open an account for your

spouse, where either of you can make

contributions to ensure you both have

a retirement nest egg developing. Your

spouse will then be able to access

other QSuper products, such as an

Allocated Pension account. You may

even be eligible for a tax offset of up

to $540 for some of the money you

contribute into your spouse’s account!

Thousands of members have done just

that because of QSuper’s reliability,

service, performance, and low fees.

You can keep your money with QSuper

even after you leave Government

employment. With QSuper, you

pay no entry or exit fees, and no

commissions. What’s more, QSuper

earnings are taxed at a lower rate

than many other non-superannuation

investments.

QSuper’s Allocated Pension account

allows you to keep your money with

QSuper, while drawing a regular pension

to fund your retirement years.

New for QSuper members are the Investment Access Funds. These managed funds are offered by QsInvest, our financial planning organisation.

The Funds give you the opportunity to access a broad range of investments in the areas of cash, fixed interest, property, and shares. But, unlike superannuation, you can access the money in your investment whenever you need to. You should remember though, as all of the Investment Access Funds contain some growth assets, they usually should be held for the medium to long term.

The Investment Access Funds provide you with a competitive investment alternative and a range of benefits, including:

• competitive ongoing fees – with no entry or exit fees and no commissions;

• professional management – the expertise of QIC, QSuper’s investment manager, with a proven track record;

• access to your money – as the Investment Access Funds are not superannuation funds, you can access your money at any time;

• a simple way to invest – particularly compared to direct investment in similar types of assets.

Obtaining a prospectus is easy. Call 1300 360 750, select option ‘1’, follow the prompts and then request document 817.

QsInvest Limited (ABN 35 063 511 580) (“QsInvest”) is a licenced dealer in securities, number 74070, and is the responsible entity for the Investment Access Funds. You should consider the prospectus in deciding whether to acquire units, or to continue to hold units, in the Investment Access Funds. To invest you must complete the Investment application form that accompanies the prospectus.

Providing education to help you in f inancing your future is a very important part of QSuper.

A wide range of books, fact sheets, and workbooks are available from QSuper on issues including taxation, investing, spouse contributions, and salary sacrificing your super.

QSuper covers a wide range of issues in free and informative seminars, including the Investor update, Superannuation surcharge, Retirement preparation, and the popular Financing your future seminars.

You get more than just super!

Menu (list of all documents) 999 Comparison of Defined Benefit and Accumulation accounts 407 Voluntary contributions 103 Spouse contribution guide 409 Rolling over other super to QSuper 604 Additional death and disability insurance 509 Salary sacrifice – Defined Benefit account 008 Salary sacrifice – Accumulation account 014 Voluntary contributions after leaving work 102Allocated Pension account 303 Investment choice book 907 Superannuation surcharge guide 404 Reasonable benefit limit workbook 414

QSuper

Find out more on the following topics 24 hours a day, 7 days a week by calling 1300 360 750 and selecting option ‘1’.


Our award winning website at www.qsuper.qld.gov.au is full of information to assist you in making the most of your superannuation and in financing your future. Interactive calculators can help you with the choices available, as well as allow you to check if you’re on track for your retirement. You can book in for a seminar online, check the daily unit prices and much, much more.

Member Investment Service

QSuper has recently established a Member Investment Service (MIS) Unit. The MIS Unit provides specialist information on issues including

reasonable benef it limits, salary sacrif ice, and the superannuation surcharge. The MIS Unit can be contacted through the Information Centre on 1300 360 750.

Financial planning

Jointly owned by QSuper and QIC, QsInvest can give you advice on investment strategies for your retirement savings. QsInvest has provided financial planning advice to QSuper members since 1994.

More than just super! With all these products and services available through QSuper, you can see we offer you much more than just super to help you in financing your future!

HALF PAGE AD HERE SoMEWHERE - easy Transher

Save time, money and hassles by rolling over your super to QSuper. Call us today on 1300 360 750 or visit our award winning

website at www.qsuper.qld.gov.au .

Too many accounts?Too many different fees?

Finding it hard to keep track?

QSuper can give you:One accountOne low fee

One statement

What does your super look like?

In conjunction with students at Griff ith University, QSuper has developed an investment game. You can match your skills against virtual members to see who can accumulate more for retirement through the ups and downs of investing. By selecting any combination of the five investment options offered by QSuper, you can develop an investment mix you believe will outperform your competitor’s chosen investment mix. With each spin of the QSuper wheel, your investment will increase, decrease, or remain steady, as a range of investment scenarios take place on the way to retirement. Sharemarket booms, property slumps, worldwide recessions, oil price increases – they’re all part of the road to retirement in this educational game.


With the real possibility you will spend more years in retirement than you did in your working life, you need to make sure your retirement savings survive as long as you do!

QSuper has produced a 56 page guide to help you prepare for retirement. The QSuper Retirement preparation guide is a self-help tool enabling you to calculate:

• what your life expectancy is;

• how much Centrelink Age Pension you are entitled to;

• how much income you will need in retirement; and

• how much capital you will need.

To obtain this guide, call 1300 360 750, select option ‘1’, follow the prompts and then request document 819 (this document is available by post back only).

Annual income

Standard member contributions

0%* 2% 3% 4% 5%

You Employer You Employer You Employer You Employer You Employer

$20,000 $0 $1,800 $400 $1,950 $600 $2,150 $800 $2,350 $1,000 $2,550

$25,000 $0 $2,250 $500 $2,437 $750 $2,687 $1,000 $2,937 $1,250 $3,187

$30,000 $0 $2,700 $600 $2,925 $900 $3,225 $1,200 $3,525 $1,500 $3,825

$35,000 $0 $3,150 $700 $3,412 $1,050 $3,762 $1,400 $4,112 $1,750 $4,462

$40,000 $0 $3,600 $800 $3,900 $1,200 $4,300 $1,600 $4,700 $2,000 $5,100

If you’re employed, but not paying in contributions personally, are you aware by paying personal standard contributions, you may not only receive more money from your employer, but also enjoy the benefits of compounding interest on your account? Plus, you will have the extra peace of mind of knowing you have income protection insurance, as well as a higher cover of death and disability insurance (casuals excepted).

Quite simply, although paying contributions to your super may not suit everyone, the more money you can afford to pay into superannuation, the greater your benefit will be in your retirement.

The table below shows the total

contributions paid by both you and

your employer each year, depending

on your level of contributions, from

0% to 5%. This table covers most

standard QSuper employees.

Even if you’re already paying

in personal contributions, you

may wish to consider how much

superannuation you will need to

finance the future you have pictured

for yourself in retirement.

Make a firm commitment to finance

your future now and don’t run

the risk of leaving this until it’s too

late. There may never be a better

time than now to start saving for

your retirement.

* This option applies only to members with an Accumulation account who are non-casual employees, employed before 1 May 2000, or casually employed.

If you have changed address, it is important you let your employer know, as they notify us of your new address details. If you are no longer employed by the Queensland Government, please let us know. To help you, we have included a change of address form with your annual benefit statement.


Many of you send us emails and letters

with suggestions on how we can better

provide for your needs. We appreciate

this feedback. In addition, the QSuper

Board of Trustees commissions regular

market research, to help us understand

your needs. Through this process, we

know you like to be able to access

information on your super in many

different ways. Because of this, we’ve

put a great deal of effort into making

sure we can be here for you, wherever

you might be.

QSuper’s seminar programme has been further expanded in 2002. With over 460 seminars held in the last year, we have seen more people in more areas of Queensland than ever before. This year, our staff have spoken to members in places such as Miles, Chinchilla, Winton, and Mossman! This means many more of you who live in areas of outback Queensland have been able to attend a QSuper seminar, allowing us to help in financing your future.

Our Information Centre remains popular. Our Information Officers took more than 208,000 calls last year. Our staff are highly trained in all our products and services and are available to provide you with information on your superannuation between 8.30 a.m. and 5.00 p.m. weekdays*.

To make sure we can answer your calls promptly, we have reviewed and updated our telephone system during the year. When you call QSuper on 1300 360 750, you can now choose from the following options:

Option 1 For mail/fax back, and unit prices.

Option 2 For information on the Investment Access Funds.

Option 3 For transfer books.

Option 4 For seminar bookings or to speak to an Information Officer.

Helping you grow by Steve Ryan

As a QSuper Trustee and senior officer of the Queensland Teachers’ Union, I talk to hundreds of QSuper members around Queensland every year and understand how important it is for you to access information when you need it. The QSuper Board of Trustees is committed to giving you information on your superannuation in many different ways. We believe you should have access to information, in order to make good decisions on your superannuation, regardless of whether you live in Brisbane, Bundaberg, or Barcaldine.

Steve Ryan has been a QSuper Trustee for nine years. Steve has been a senior officer of the Queensland Teachers’ Union since 1993, and is also a Director on the Board of QsInvest.


Attending a QSuper seminar is a good way to help in financing your future. QSuper’s seminar programme has been further expanded to reach more members.

The Member Investment Service Unit provides specialist information on taxation, retirement matters, and options.

Information Centre staff are available to help you with information on your account. You can call QSuper to speak to an Information Officer from anywhere in Queensland.


What it means for you!

QSuper has identified a growing need for specialised information on taxation, retirement matters, and options. In response to this need, we have developed the Member Investment Service (MIS) Unit to help you in considering your options.

The MIS Unit is available to assist you in identifying retirement options, and to help you understand the issues you should consider before seeking formal financial planning advice.

The MIS Unit has developed a wide range of self-help tools, workbooks, and seminars on topics to assist with your retirement planning needs.

Check out the QSuper website at www.qsuper.qld.gov.au , where you can find interactive calculators, an investment choice tour, unit prices, and the full range of QSuper’s workbooks and fact sheets to help you understand your superannuation entitlements. There’s even a QSuper game, to teach you the finer points of

investing for retirement!

I’m happy to report the Board has approved more enhancements to the QSuper website. A project is currently running to provide you with more services online. Rolling out progressively over upcoming months, you will be able to update your personal details, request personal quotes, and check your annual benefit statements online. This is an exciting step forward in being able to reach you wherever and whenever you need to access information.

* During September, QSuper will have Information Officers available to help you from 8.00 a.m. to 8.00 p.m.

Are you one of the many Australians

who own some of the $6.73 billion

of “lost” superannuation currently

registered with the Austra lian

Taxation Office (ATO)?

Each year, hundreds of Australians

lose touch with their superannuation

funds. As a result, the ATO now holds

a register of these accounts.

QSuper is planning to use the ATO’s

new Supermatch database facility to see

if any of our members are entitled to

some of this “lost” super. There will be

no cost to members for this service.

In order to use Supermatch, it will be

necessary for QSuper to provide the

ATO with some personal member

information. QSuper will conduct

the transfer of this information within

the strict privacy guidelines provided

by the ATO.

If we find you have funds registered

with the ATO, you’ll be contacted

and given the option of transferring

this money to your existing QSuper

account. You can also search the

ATO database individua l ly by

visiting www.findmysuper.com .

That way, you can regain control

of your superannuation and ensure

your funds are invested to finance

your future.

Missing some money?

From 1 July 2002, legislation has been introduced to enable members who have entered Australia on an eligible temporary resident visa to claim their Australian superannuation benefits once they have permanently departed Australia. As this payment is for temporary residents, it does not apply to Australian or New Zealand citizens.

A list of eligible visas is included in the QSuper Departing temporary resident claim fact sheet. To obtain a copy of the fact sheet and claim form, call the Information Centre on 1300 360 750, select option ‘1’, follow the prompts and then request document 022. Alternatively, these documents can be downloaded from our website at www.qsuper.qld.gov.au .

To ensure the privacy of member information, the QSuper Information Centre has a procedure in place to ensure we are giving personal information to the right person.

When you phone the Information Centre, you will be asked three or four questions to identify who you are. A similar process occurs when a member sends us an email. We aim to ensure it is the actual member we are communicating with before we provide any personal information.


Your annual benefit statement can help you estimate this and to make the task even easier, QSuper has produced a benefit calculator. The calculator is available via the QSuper website at www.qsuper.qld.gov.au . Many employers also have the calculator available on their intranets. Why not do the figures and see if you’re on track?

Choice of fund legislation, despite having been debated at length in the Commonwealth Parliament, has not been passed at this point. Under the proposed legislation, employers contributing to QSuper will be considered to comply with the choice of fund requirements.

Investing your money Investing your money

The performance of each individual asset class for this year is outlined on these pages.

International shares

International sharemarkets fell by 18.4% during 2001/2002 (MSCI World Index - ex Australia Hedged). A slowdown in the global economy, combined with the tragic events of September 11, had an extremely adverse effect on the performance of global sharemarkets.

Recent issues surrounding the fraudulent financial reporting in the US by corporations, such as Enron and WorldCom, have also led to further sell-offs in shares worldwide.

Australian shares

The Australian economy displayed remarkable resilience in the face of the global slowdown, however it was inevitably affected by the

negat ive s ent iment over se a s . During the f inancia l year, the Australian sharemarket fell 4.7% (S&P/ASX 200).

Fixed interest

Fixed interest markets attracted a flow of funds over the year as investors looked for an alternative to shares. Australian fixed interest markets returned 6.2% (UBSWA Composite Bond Index – All Maturities) over the year, with international markets returning 8.0% (Salomon Brothers World Bond Index - ex Australia Hedged).

Property

In Australia, the property market had a strong year, benefiting from the low interest rate environment, high occupancy rates in the retail and commercial sector, and increased investor demand. This, combined with a scarcity in available property,

led to an increase in prices.

During the financial year, property returned 9.1% (Rainmaker Wholesale Direct Property Index) and was the best performing asset class for the financial year.

Currency

The Australian dollar rose from 50.9 to 56.1 US cents over the year. This significant rise was related largely to the general weakness in the US dollar, due to concerns about the US economic outlook and the declining US sharemarket. The currency hedging policies of the Fund provided protection to members from the impact of this appreciation.

Summary

While the 2001/2002 financial year has been challenging, it should not be looked at in isolation. Negative returns are expected from time to time in all investment options except Cash. It is important to realise the investment objective of superannuation is to produce competitive returns over the long term, and short-term fluctuations are inevitable.

By Tony Hawkins

Investing your money

As the Chairman’s review explains, superannuation funds throughout Australia have recorded less than favourable returns this financial year – QSuper included. In particular, sharemarkets throughout the world suffered heavily and the returns of the individual member investment choice options have varied drastically this year, depending largely on the level of exposure to shares.

Tony Hawkins is the Chief Executive Officer at WorkCover Queensland. In his role as CEO, he brings 13 years insurance experience with the AXA Group and 14 years experience at CSR.

2001/2002 returns


Data on asset allocation and past returns is provided where the option has an investment history. Net returns are for a member who remained in the option for the entire year and made no transactions. It is net of fees and tax.

ASSETCLASSES

Cash 100% 100%

Australian fixed – –interest

International fixed – –interest

Property – –

Australian shares – –

International – –shares

2001/2002 3.65% 4.38% 2000/2001 4.86% 5.89% 1999/2000 – – 1998/1999 – – 1997/1998 – –

2 year compound 4.25% 5.13% average p.a. (since introduction)

Allocated Pension account

OBJECTIVE

NET RETURNS*

To credit members’ accounts, over 1 year periods, with an average return of 0.5% p.a. below the cash rate after administration fees, but before tax.

Accumulationaccount

n This option is invested 100% in cash.

n Although low interest rates affected the performance of the cash option, the objective set for the financial year has been reached.

Returns 2001/2002: Accumulation account 3.65%

Allocated Pension account 4.38%

NET RETURNS*

2002/2001 0.03% -0.01% 2000/2001 5.26% 5.90% 1999/2000 8.68% 8.84%

1998/1999 6.32% 6.86% 1997/1998 7.01% 7.52%

5 year compound 5.42% 5.78% average p.a.


Accumulationaccount #

ASSETCLASSES

Allocation ranges

Cash 47% - 65% 50.4% 50.2%

Australian fixed 3% - 7% 7.7% 5.1%interest

International 0% - 11% 3.9% 3.7%fixed interest

Property 2% - 8% 6.6% 7.0%

Australian shares 15% - 20% 19.3% 18.8%

International 9% - 21% 12.1% 15.2%shares

OBJECTIVE

To credit members’ accounts, over 3 year periods, with an average return of cash + 0.75% p.a. after administration fees, but before tax.


Allocated Pension account -0.01%

Allocation 30/6/2001


n This option invests 32.5% of its assets in shares. The negative performance of Australian and international sharemarkets has significantly impacted on earnings.

n Solid returns in the property market contributed positively to the option. The substantial allocation to cash and fixed interest products has benefited the option through the defensive characteristics of these investments.

* Net returns are reflected in the unit price declared for each of the options.

Includes a neutral exposure of 7.5% to foreign currency.



# The VPP (closed) option has a capital guarantee fee taken off the account balance at the end of this financial year. The fee for this capital guarantee is 0.35%.

Applicable9/10/2001


ASSETCLASSES

NETRETURNS*

To credit members’ accounts, over 5 year periods, with an average return of cash + 2% p.a. after administration fees, but before tax.

Allocation ranges

2001/2002 -4.15% -4.57% 2000/2001 5.12% 5.61% 1999/2000 12.88% 13.03% 1998/1999 8.86% 9.46% 1997/1998 – –

4 year compound 5.48% 5.67% average p.a. (since introduction)


Accumulationaccount

n This option has a 65% neutral allocation to shares. The negative returns of the Australian and international sharemarkets have impacted significantly on the earnings of the product.

n The solid return of property over the financial year has benefited the option, which also gained from the stable returns of cash and fixed interest.

Returns 2001/2002: Accumulation account -4.15%

Allocated Pension account -4.57%n Balanced with Reserves has the same investment strategy

as the Balanced option. The investment reserve has been used to support the earnings of this option. As a result, the reserve as a percentage of member funds at 30 June 2002 equalled 0% (refer to page 18 for further comment).


Allocated Pension account 1.56%

ASSETCLASSES

Cash 0% - 25% 1.9% 0.8%


International fixed 0% - 20% 7.6% 7.3%interest

Property 5% - 15% 13.0% 14.0%



To credit members’ accounts, over 5 year periods, with an average return of cash + 1.5% p.a. after administration fees and transfers to/from the reserve, but before tax.

Allocation ranges



NET RETURNS*

2001/2002 1.63% 1.56% 2000/2001 4.84% 4.60%† 1999/2000 12.00% – 1998/1999 9.75% – 1997/1998 10.00% –

5 year compound 7.58% 3.14%††

average p.a.


Accumulationaccount

(commenced 17/7/2000)

OBJECTIVE OBJECTIVE

Cash 0% - 25% 1.9% 0.8%


International fixed 0% - 20% 7.6% 7.3%interest

Property 5% - 15% 13.0% 14.0%





Includes a neutral exposure of 15% to foreign currency. Includes a neutral exposure of 15% to foreign currency.

Data on asset allocation and past returns is provided where the option has an investment history. Net returns are for a member who remained in the option for the entire year and made no transactions. It is net of fees and tax. * Net returns are reflected in the unit price declared for each of the options.

Applicable9/10/2001

Applicable9/10/2001

† Return is only for 11 months.†† Compound average is for 23 months.


Returns 2001/2002: Accumulation account -11.98%

Allocated Pension account -13.14%n The High Growth option has a 65% neutral allocation

to international shares, which experienced an extremely poor return during the financial year. Australian shares, which represent 35% of assets in this option, also recorded negative returns. However, the High Growth option has benefited from its policy of insuring against movements in the Australian dollar (hedging), and has outperformed its benchmark.

After a strategic review of the Defined Benefit account in the 2001/2002 financial year, the Board decided that a mix of 90% growth assets (shares and property) and 10% defensive assets (fixed interest and cash) would best enable the Fund to achieve its long-term investment objective. QIC, as investment manager, implements the asset allocation within defined ranges around the neutral benchmark. Asset allocation ranges (called ‘tactical asset allocation overlays’) have also been established, enabling QIC to take short-term over or underweight positions in certain asset classes to take advantage of market opportunities.

Defined Benefit investment strategy

Allocation30/6/2001

Allocation30/6/2002

ASSETCLASSES

Cash 0% 1.9% -1.9%

Australian 5% 15.3% 4.2% fixed interest

International 5% 7.6% 4.4% fixed interest

Property 10% 13% 13.9%

Australian 40% 38.3% 38.5% shares#

International 40% 23.9% 40.9% shares

Neutral assetallocation

# The allocation to Australian shares includes an investment in QsInvest Limited.

The QSuper Defined Benefit account investments include approximately $82.5 million in investment portfolios with Suncorp Metway, resulting from the transfer of the Queensland Ambulance Service Superannuation Scheme into QSuper during the financial year. The transfer is expected to be completed during 2002/2003. These investments are not yet reflected in the asset allocation above.

n Because benefits from this account are defined, strategy and investment returns will not affect the benefit you will receive from this account. Your fixed Defined Benefit account has shielded you from this difficult year of investment.

n In years of high investment returns, however, it should be noted your Defined Benefit would also be fixed.

ASSETCLASSES

NETRETURNS*

To credit members’ accounts, over 10 year periods, with an average return of cash + 3% p.a. after administration fees, but before tax.

Allocation ranges

2001/2002 -11.98% -13.14% 2000/2001 -7.58% -8.94% 1999/2000 – – 1998/1999 – – 1997/1998 – –

2 year compound -9.81% -11.06% average p.a. (since introduction)


Accumulationaccount

OBJECTIVE

Cash -2% - 2% -0.2% -0.5%

Australian fixed – – –interest

International fixed – – –interest

Property – – –





Includes a neutral exposure of 0% to foreign currency and a maximum exposure of 5% to emerging markets.

Data on asset allocation and past returns is provided where the option has an investment history. Net returns are for a member who remained in the option for the entire year and made no transactions. It is net of fees and tax. * Net returns are reflected in the unit price declared for each of the options.


The Balanced with Reserves option maintains an ‘investment reserve’ which is used to smooth earnings. Members in this option contribute to the reserve in years of positive earnings, and get the protection of the reserve when investment returns are low. The low returns during the 2001/02 financial year resulted in the full investment reserve being used to boost earnings for the year.

The reserve will be replenished as earnings increase. The QSuper Board of Trustees i s current ly reviewing the governing policies of this product to ensure it continues to meet its long-term objective. If you would like a copy of the amended pol icy, plea se ca l l QSuper on 1300 360 750 or visit the QSuper website at www.qsuper.qld.gov.au .

Reserves are amounts held aside to pay for specific items as they occur. The investment reserve is held to smooth returns for members in the Balanced with Reserves option. A general reserve is held to cover insurance for death and disability,

income tax liabilities, and general administration costs. All reserves operate within an established reserving policy, approved by the QSuper Board of Trustees. The reserves are held in a mixture of cash and balanced investments.

Net earning rate

Crediting rate#

5 yearobjective(CPI +4.5%)

Netearning rate

Resignationcrediting rate#

Preservation crediting rate#

YEAR DEFINED BENEFIT ACCOUNT STATE ACCOUNT POLICE ACCOUNT

2001/2002 -4.70% 0% – -4.70% 0% 0% – -4.70% 0% 0% –

2000/2001 5.37% 5.20% – 5.37% 4.80% 5.20% – 5.37% 4.80% 5.20% –

1999/2000 13.41% 13.35% – 13.31% 12.85% 13.25% – 13.36% 12.90% 13.30% –

1998/1999 10.37% 10.35% – 10.35% 9.90% 10.30% – 10.39% 9.95% 10.35% –

1997/1998 10.90% 10.85% – 10.88% 10.45% 10.85% – 10.88% 10.45% 10.85% –

Compound average

3 year 4.43 6.04% – 4.40% 5.75% 6.01% – 4.41% 5.77% 6.03% –

5 year 6.87% 7.84% 5.73% 6.84% 7.50% 7.81% 5.73% 6.86% 7.52% 7.83% 5.73%

Netearning rate

Resignationcrediting rate#

Preservation crediting rate#

Reserve 30 June 2000 30 June 2001 30 June 2002

General $129.12m $152.87m $109.67m

The investment component of the General Reserve is shown below:

$80.56m (7.29%)* $87.44m (7.79%)* $0m (0%)*

*Percentage of member funds in the Balanced with Reserves option.

# This financial year, the Board introduced a smoothing policy for the Defined Benefit account to reduce the volatility of the account’s yearly crediting rate. The crediting rate, which has a fee deducted for management, insurance and tax expenses, applies to your personal contributions to the Defined benefit account, but does not affect the final benefit you will receive on retirement or resignation.




Family Law Legislation Amendment (Superannuation) Act 2001

This Act, amending the Commonwealth Family Law Act 1975, takes effect from 28 December this year. It allows, for the first time, superannuation benefits to be split on the breakdown of a marriage, with the parties encouraged to come to their own agreement (whether before, during, or after marriage) about how to split benefits.

As soon as all the Commonwealth details are known, such as tax and preservation requirements, QSuper will publish information to assist members.

Financial Services Reform Act 2001

The Financial Services Reform Act 2001 was passed in late 2001, and sets licensing and increased requirements for disclosure on financial products, including superannuation funds. Whilst QSuper, as a public sector scheme, is exempt from the new licensing rules, it is intended it will comply with the legislation in terms of the provision of advice and product disclosure. The start date for the new arrangements was 11 March 2002, with a 2 year transitional period for existing products.

Privacy requirements

The Queensland Government introduced a privacy scheme from September 2001. While QSuper has always valued privacy, it is now bound by the requirements of this scheme regulating the collection, storage, use, and disposal of ‘personal information’ held by Queensland Government agencies, including QSuper.

New initiatives

The Commonwealth Government announced in its May 2002 budget a number of new superannuation initiatives. A number of these initiatives have since been made law.

The following initiatives are available to QSuper members immediately:

• deductibility of self employed contributions increasing to $5,000, plus 75% of remainder; and

• access to superannuation for permanently departed temporary residents.

The QSuper Board of Trustees is reviewing the following changes to Commonwealth legislation, and will consider whether it is appropriate to seek similar amendments to the QSuper rules:

• personal contributions up to age 75;

• accept contributions on behalf of minors; and

• allow the ‘baby bonus’ to be paid to parents’ superannuation fund.

Further initiatives were announced in the Commonwealth budget. However, it is not yet clear whether they will be passed as law. These include:

• phased reduction of the top superannuation surcharge rate: 13.5% in 2002/2003, 12% in 2003/2004, 10.5% in 2004/2005; and

• a government co-contribution for low income earners (see page 25).

These are currently being debated in Commonwealth Parliament.

SUPERCHANGES

Information on the progress of the initiatives listed on this page will be posted on the What’s new section of the QSuper website, at www.qsuper.qld.gov.au .

QSuper has now introduced BPAY® for spouse contributions. Check the QSuper website at www.qsuper.qld.gov.au for more details!

QSuper unit prices are now published in the business section of The Courier-Mail on the first working day of each month.



Super answers for super questions

Am I in the right type of account?As a QSuper member you can choose between an Accumulation or Defined Benefit account (casuals excepted). An Accumulation account fluctuates with investment earnings, whereas a Defined Benefit account grows each year by a multiple of your salary. Your choice could make a big difference to your retirement. Here are some things you should consider before making your choice:

How much will your salary grow? Because the amount you receive from a Defined Benefit account is based on your final salary, a promotion can significantly increase your final benefit. However, the Accumulation

account may be the most suitable

option if you think your salary will

remain fairly constant.

What is your attitude to risk? Remember, Accumulation accounts

are directly af fected by the

investment performance of the Fund.

Some people will prefer the certainty

of a Defined Benefit account while

others will prefer to try and maximise

their benef it by tailoring their

own investment strategy in an

Accumulation account.

These are just two of many issues to

consider. If you would like to know

more about which account is right

for you in more detail, call 1300 360

750 and press option ‘3’ to obtain a

transfer book.

I have heard that retiring on 1 July is the best time – why? Often when people retire, they have large amounts of long service and annual leave accrued. As such, they need to decide whether to take the leave and delay their retirement, or take a lump sum payment for it and retire straight away.

If the decision is to take the lump sum option, it is perhaps wise to do so early in a new financial year to minimise the tax due, as there would usually be little other assessable income in that year. However, this can have an impact on Centrelink benefits, such as Newstart, if you are under age pension age.

So, timing your retirement correctly can have a major impact on the amount of tax you will pay. Professional advice will help you set this right.

Can I pay into QSuper after I’ve left Government employment?You can keep your money with QSuper even after you leave Government employment and, in most circumstances, you and your spouse can continue to make voluntary contributions. For many people this is good news because with QSuper, you pay no entry or exit fees and no commissions.

The rule for contributing to super is that you have up to 2 years from when you last worked at least 10 hours in

Nev Robbins has been in the banking and financial services industry since 1964 and has been operating as a financial planner since 1992. Nev successfully completed the Diploma of Financial Planning from RMIT in 1995 and the Certificate of Superannuation Management from Macquarie University in 1997.

Christine Thompson joined QsInvest in 2000. She is also a Certified Financial Planner and has worked since 1984 in the banking and financial services industry. Christine completed her Diploma of Financial Planning from Deakin University in 1998.


QsInvest is required by law to warn you that in preparing this article, we did not take into account the investment objectives, financial situation and particular needs of any particular person. Before making an investment decision on the basis of any information contained in this article, you need to consider, with or without the assistance of a financial planner, whether the advice is approporiate in light of your particular investment needs, objectives and financial circumstances.


Should I salary sacrifice? Salary sacrifice is an arrangement where your employer pays you a lower sa la r y, but in return pays a higher amount into your superannuation. You may be able to arrange for your employer to pay your superannuation contributions before tax is calculated on your salary, rather than afterwards. This means an increase in your take home pay. The QSuper website can show you the potential extra dollars from salary sacrificing your super.

Salary sacrificing super is not suitable for everyone, and you should take into account additional tax that may be payable on your end benefit. If

you have a superannuation surcharge

debt, or are in excess of your lump

sum reasonable benefit limit (RBL),

you should seek specialist advice.

What is an allocated pension? An allocated pension is a product

you can invest in to provide a regular

payment, like a wage, from your

investment. Your capital continues

to receive investment returns, while

you slowly draw down on it, to fund

your retirement.

Allocated pensions are a popular

product due to their favourable

taxation treatment. The income it

pays you is treated as normal taxable

income, but attracts a 15% tax offset,

reducing your tax liability. This is provided the allocated pension was purchased with superannuation money within your RBL.

You can draw your income from an a l located pension between prescribed minimum and maximum limits. These limits do require some of your capital to be withdrawn, but as any financial planner will point out – you do not have to spend all of this income. Many allocated pension members choose to save extra income through products like the QsInvest Investment Access Funds.

If you do pass away before your Allocated Pension account is fully withdrawn, the ba lance is paid to your estate. Not all retirement income products provide this.

a week, as long as you are under age 65. This can be any kind of work for which you have been paid.

Between the ages of 65 and 70, personal contributions to super can be accepted, provided they are received when you are working at least 10 hours in the week.

If you don’t fit these conditions, you can still deposit money into your spouse’s account if they are under age 65 (or working 10 hours each week if over age 65, but under age 70).

The Commonwealth Government has passed legislation increasing the age you can contribute to age 75. The QSuper Board of Trustees is reviewing this recent change and will consider whether it is appropriate to make similar amendments to the QSuper rules.

Can my spouse join QSuper?Yes, they can! As a QSuper member, you can open an account for your spouse with as little as $500. This entitles your spouse to gain access to QSuper products, as well as financial planning through QsInvest. Most members are aware of the tax offset you may be entitled to, but there are also other great reasons to open an account for your spouse such as:

• you may be able to income split in your retirement years;

• if your spouse is self-employed, they may be able to claim a tax deduction for the contributions they make into their account; and

• you have the peace of mind of knowing that should you die, your spouse is already a QSuper member and can access all of QSuper’s products and services.

If you are interested in making a contribution for your spouse, you should contact QSuper for a Spouse contribution guide.

Super answers for super questions

QsInvest, a licensed dealer in securities, number 74070, and life insurance agent, is the responsible entity for the Investment Access Funds. QsInvest is jointly owned by QSuper & QIC. QsInvest provides retirement planning advice to QSuper members. Following are some common super questions answered by two of QsInvest’s financial planners.

While QsInvest believes this article is based on reliable information, no warranty is given on its accuracy. Subject to any liability that cannot be excluded by law, QsInvest disclaims all liability to any person relying on the information contained in this article for any loss or damage caused.

Both Nev and Christine are Proper Authority Holders of QsInvest Limited and life insurance sub-agent of MLC Limited (ACN 000 000 402) and AMP Life Limited (ACN 079 300 379).


As QSuper is one of the largest funds in

Australia, in terms of both membership

numbers and assets, with an extensive

range of accumulation and defined

benefit product choices and services,

there is never any shortage of issues

for the Board to consider.

The QSuper Board meets on the

third Wednesday of each month, and

the submissions and reports for each

month’s meeting are circulated to

the Trustees a week in advance. This

gives the Trustees time to pre-read the

material before the Board day. The

meeting itself will normally run for 3

to 4 hours.

On a typical Board day, my colleagues

on the Board and I discuss and make

decisions on a diverse range of issues.

For instance, a recent agenda included

the following items to consider:

• future business directions;

• fees and crediting rates;

• investment objectives;

• tax provisions;

• amendments to the QSuper rules;

• actions in response to changes to Commonwealth regulations;

• appeals against disability decisions made by the Board’s delegate; and

• Fund performance and current issues raised by the Fund’s Executive Officer, Rosemary Vilgan.

The Board also considers reports on such things as:

• QSuper’s administrative perfor-mance over the last quarter;

• membership trends, the movements of funds, and the growth in the Fund’s assets;

I am pleased to be able to represent QSuper members in my capacity as Trustee on the QSuper Board of Trustees. Having been a QSuper Trustee since 1985, I am well aware of the onerous responsibilities taken on by superannuation trustees, but also of the significant consequences of each decision we make.

By Karen Peut

• QIC’s investment performance and analysis;

• marketing and communication;

• audit and compliance; and

• court and Superannuation Complaints Tribunal actions.

I also attend the Board’s Investment Committee, which usually meets on the day of the monthly Board meeting. At the Investment Committee meeting, matters such as reviewing our investment objectives and strategy are discussed and the Fund’s investment performance is analysed in some detail.

I, like my colleagues on the Board, am firmly committed to the fundamental principle that Trustees must act in the best interests of QSuper members. As a Trustee, I believe my primary role at the Board meeting is to oversee the prudential management of the QSuper Fund on behalf of all members and employers. At each meeting, there are decisions to be made about the overall management of the Fund, affecting each and every member, as well as employers.


Are you staring at tax benefits and don’t know it?

Open a QSuper account for your spouse today.Call QSuper on 1300 360 750 or visit our award winning website at www.qsuper.qld.gov.au to find out

the taxation and other benefits of contributing as little as $500 for your partner.

Is your retirement benefit high enough to support you in the future? Voluntary contributions provide an opportunity to earn competitive investment returns. QSuper’s benefit calculator makes calculating how your voluntary contributions will accumulate easy. Give it a try at www.qsuper.qld.gov.au . If you can’t access the web, you can use the QSuper Ready reckoner to see the difference your voluntary contributions will make. It can show you how your voluntary contributions will accumulate with different rates of investment return over different time periods. To obtain a copy of this handy tool, call 1300 360 750, select option ‘1’ for our fax/post service and then request document 825 (this document is available by post back only).

Karen Peut is the Executive Director (Roads Programs) and a Director of Queensland Motorways Limited. She has been a QSuper Trustee since 1985, and is a life member of the Queensland Public Sector Union.

There are also issues involving specific groups of members, and rulings on individual member’s entitlements. It’s an exercise in balancing the interests of the membership as a whole with the interests of individual members and employers.

Another duty, in my capacity as a Trustee, is to seek advice from experts in the superannuation and investment management fields. We are fortunate in that we have the extensive resources of the Government Superannuation Office, QIC, and QsInvest to draw upon during Board meetings, if necessary, and at other times.

As a member representative, I take a great deal of satisfaction from knowing

that, with QSuper, our members have

the opportunity to take control of their

financial future. I have seen the benefits

members, and employers alike, have

obtained from being part of QSuper. I

always seek to bring these benefits to the

attention of members whenever I come

in contact with them.

Since a number of rule changes in

2000, QSuper now provides more

options and greater f lexibility in

membership eligibility. Queensland

Government employees, who in the

past may have had only limited access

to superannuation or were unable to

contribute, are now able to make

real progress toward a satisfying

retirement.


Thinking of changing jobs?If you are considering changing jobs, you need to be aware that most private sector employers include leave loading and superannuation payments within the total employment package they advertise. What’s more, most only pay the minimum amount of super required, which is 9% of salary. With your current position, the Queensland Government pays annual leave loading plus up to 12.75% into your super, and this is on top of your standard salary or wage.

So, if you apply for a job where the advertised salary package is anywhere up to 3% more than your current standard salary or wage, you could end up changing jobs for less money!

If you decide the position is too good to pass up, you’ll need to decide what to do with your QSuper account. Just because you leave Government employment, doesn’t mean you have to leave QSuper.

Unfor tunately, unless your new employer i s par t of the Queensland Government, they will not be able to pay your future contribut ions to your QSuper account. However, continuing an account with QSuper can make good sense if you would like to continue accessing our low-cost products, now and in retirement.

You can call our Information Centre on 1300 360 750 to obtain a quote and some handy information to make choosing what to do with your benefit a little bit easier.

You may, of course, be over 55 years of age and considering retiring from Government employment. This can be a daunting prospect as it is such a change in lifestyle.

Don’t forget, QSuper has a 2 day Retirement preparation seminar to help you with the transition from working life to retirement.

This seminar covers topics such as superannuation, taxation, financial planning and investing, as well as health, updating your will, and the social implications of retirement. If you are unable to get away from work for 2 days, then why not register your interest in a 2 hour condensed version of the seminar?

This is also the time when many of you are retiring and will receive your biggest pay cheque ever. With your employer paying you your long service leave, and left over holiday pay, and your superannuation being available to you, there are many financial choices to be made. You may feel more comfortable making these decisions after a meeting with either QSuper’s Member Investment Services Unit, or QsInvest. QsInvest is the financial planning organisation jointly owned by the QSuper Board of Trustees and QIC.

Should I stay or should I go?


* Pre-existing conditions apply.

Annika didn’t realise she was paying twice for income protection, but if she got sick, she would only be paid once.

“I called the QSuper Information Centre to change my address and got to chatting with one of your staff about my entitlements. It was only then I realised I’d never cancelled the private income protection policy I took out before I joined the Government. I didn’t fully appreciate I already had an income protection benefit as part of my QSuper account and my private insurance probably wouldn’t pay out if I claimed anyway! That phone call saved me hundreds of dollars a year in premiums.”*

Gordon has decided to take up some additional death and disability insurance.

“Before I joined QSuper, I used to rely on a private insurance policy that offered quite a high level of cover. I like the fact I can arrange extra cover at a very competitive premium on top of my standard automatic QSuper cover. This means I can stop paying for my private insurance policy, as all my long-term finances are together – I have complete peace of mind.”*

Alan wasn’t aware he could open a spouse account for his wife and get a tax rebate.

“I was at a QSuper seminar and they were talking about spouse accounts. I hadn’t considered this option before and so when I got home I jumped on the web and downloaded a guide to see if it would suit me. I did some quick calculations and realised I could get a tax offset of $540 for contributing $3,000 into an account for my wife, which sounds like a pretty good deal to me.”

Should I stay or should I go?

The amount Australian employers are required to pay into superannuation has increased from 1 July 2002 to 9% of salary. This increase affects those employed members who are not making standard contributions.

Another increase currently being debated in Commonwealth Parliament is a co-contribution for those earning under $20,000. This new initiative means the Government will match, dollar for dollar, contributions up to $1,000 for members earning $20,000 or less. The amount of co-contribution will phase out completely at $32,500 p.a. If the legislation is passed in its current form, all you will need to do is complete the contribution details in TaxPack 2003, and the Australian Taxation Office will work out your amount of co-contribution and pay it to your fund. Information on the progress of this initiative will be posted on the What’s new section of the website at www.qsuper.qld.gov.au .


The superannuation surcharge is a debt levied by the Australian Taxation Office against superannuation accounts of high income earners. Generally, debts are required to be paid when the member first withdraws funds from their account. If your annual benefit statement shows you have a debt, you may wish to obtain a Superannuation surcharge guide by calling 1300 360 750, selecting option ‘1’, following the prompts and then requesting document number 404. This guide can help you consider strategies to deal with this debt.

Besides keeping you informed and educated, producing an annual report such as Super Scoop each year is a requirement that all superannuation funds must meet. It’s also a vital opportunity for the QSuper Board of Trustees to help you make the most of your QSuper. Members should be pleased to know that the cost of printing this year’s Super Scoop was only 36 cents per issue.

The Australian Taxation Offi ce has recently introduced new requirements for rollovers between superannuation funds.

From 1 July 2002, you will need to obtain either a superannuation product identifi cation number, or your member number with the fund you are rolling over to. Without these numbers, QSuper will not be able to roll over your benefi t to the other fund.

QSuper is classed as an exempt public sector superannuation scheme under the Commonwealth Government’s Superannuation Industry (Supervision) Act 1993 (SIS), and is treated as a complying superannuation fund. However, in line with an agreement between all States and the Commonwealth, QSuper complies with the principles of the

Commonwealth’s retirement incomes policy, including paying benefi ts only at certain times, members having a right to their benefi ts, reporting to members, and the protection of benefi ts members have to date. In addition, the Queensland Government and the Board of Trustees has determined that, in all ways possible, QSuper will comply with SIS.

Derivatives are investment products which have their value linked to the value of another investment product, e.g. shares. Derivatives can be bought and sold and are used to protect an investment portfolio against unfavourable market movements, or to make short-term shifts from the strategic asset allocation cost-effectively.

QIC is authorised to use derivatives within the limits that are set out in the risk management statement, that is accepted by the QSuper Board of Trustees. While derivatives may be used in portfolios, they are not permitted for gearing or speculative purposes.

The QSuper Board of Trustees, in consultation with QSuper’s investment manager, QIC, has agreed to outsource a proportion of QSuper’s Australian shares portfolio to other investment managers. The Board has been extremely satisf ied with the performance of QIC in this asset class, but recognises the diversifi cation advantages in employing other managers. Some members have also indicated they would be more comfortable with multiple managers

being involved with the investment

of their superannuation assets. QIC

will appoint these managers and

monitor their performance against

set objectives.

This approach has been under

consideration for some time and

has been used successfully with the

International shares portfolio for the

past 3 years. It is intended to increase

diversifi cation within the Australian

shares asset class.

In brief…

The Cash option of the Accumulation account, and the Allocated Pension account included investment in National Australia Bank Bills. This was valued at 6.285% of the funds held in that option.


MEMBER REPRESENTATIVES:(Nominated by Combined Public Sector Unions’ Superannuation Committee)

Chris Barrett 12Assistant General SecretaryQueensland Council of UnionsGrace Grace (Deputy)

Karen Peut 9Council DelegateQueensland Public Sector UnionAlex Scott (Deputy)

Garry Ryan* –Australian Workers’ Union

Steve Ryan 11Vice-PresidentQueensland Teachers’ UnionJeff Backen (Deputy)

Gary Wilkinson 12General PresidentQueensland Police Union of EmployeesMerv Bainbridge (Deputy)

Merv Vining ** 6Australian Workers’ UnionBill Ludwig (Deputy)

EMPLOYER REPRESENTATIVES:(Nominated by the Queensland Government)

Gerard Bradley 12Under Treasurer and Chairman of the BoardTim Spencer (Deputy)

Terri Hamilton 10Managing DirectorMedical and Associate Professionals Funds ManagementRosemary Vilgan (Deputy)

Linda Apelt # 6Director-GeneralQueensland Department of HousingMichael Goode (Deputy)

Helen Ringrose 10Director-GeneralDepartment of Corrective ServicesCathi Taylor (Deputy)

Tony Hawkins # 7Chief Executive OfficerWorkCover QueenslandMichael Goode (Deputy)

Mary Montgomery ## 5Queensland Health

Bob Scheuber ## 4Queensland RailMichael Goode (Deputy)

# Appointed 1 December 2001 ## Served until 30 November 2001

* Appointed 28 June 2002 ** Served until 9 February 2002

3

QSuper member funds as at 1 July 2001

$9,471,280,000

TOTAL ASSETS $9,537,762,000Investments $9,515,152,000Other assets $22,610,000

TOTAL LIABILITIES $27,662,000Provision for fund tax ($17,797,000)Provision for deferred income tax $3,127,000Other liabilities $42,332,000

QSuper members’ funds as at 30 June 2002 $9,287,062,000 QSuper employer funds as at 30 June 2002 $223,038,000

Net assets available to pay benefits at 30 June 2002 $9,510,100,000*This amount represents defined benefit advance employer funding.

*

The Superannuation (State Public Sector) Act 1990 provides for the indemnification of the Board of Trustees. The Trustee has a level of

indemnification that is consistent with Commonwealth superannuation laws and consistent with other State legislation. Any liability would

therefore attach to the State.

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FUND ACCOUNTSThis summary of the Fund’s financial position was prepared before the

audit of the accounts, using information available at the time of publication. The audited financial statements and auditor’s report will be available from

QSuper on request in November 2002.

FINANCING YOUR FUTURE S U B S CR I B ER N E WS L E T T ER

FINANCIAL HIGHLIGHTS AND SUMMARY

Changes in net market ($464,987,000)value of investments

Employer contributions $359,612,000

Member contributions $505,110,000

Transfers in $395,779,000

Other income $1,030,000

Total inflows $796,544,000

Benefits paid $754,890,000

Administration expenses $36,125,000

Income tax expense ($46,754,000)

Other expenses $13,463,000

Total outflows $757, 724,000

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