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Moving Forward October 2013
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Transcript of Moving Forward October 2013
Telstra Super Pty Ltd ABN 86 007 422 522
movingforward October 2013
Telstra Super Pty Ltd ABN 86 007 422 522 OCTOBER 2013 VOLUME 17 ISSUE 1
IN THIS ISSUE:
Introducing Direct Access
+ Super under the new Federal Government
+ Everything you need to know about MySuper
+ Clean out your glove box
Gear up for greater control
Page 2
Super under the new federal government
• stepstoencouragegreatercompetitionintheselectionofdefaultsuperfundsbyemployers
• mandatorydisclosureofanyconflictsofinterest.
Manyoftheseproposalswouldrequirelegislativechangesandatthisstage,nolegislativetimetablehasbeenannouncedbythenewgovernment.
New ministerial line-up
Achangeofgovernmentalsomeansachangeinthekeyfinanceandeconomicportfoliosthathaveabearing,directlyorindirectly,onsuperannuationandinvestmentmarketsmoregenerally.
• areviewofminimumdrawdownamountsforaccount-basedpensions,suchasTelstra Super RetireAccess
• reviewofregulatorybarriersthatlimittheproductfeaturesofincomestreamssuchasTelstra Super RetireAccess
• paymentofsupercontributionsaspartofthePaidParentalLeavescheme,whereupto$75,000inincomereplacementwouldbepaidforsixmonths
• the‘appropriateprovision’forindependentdirectorsontheboardsofnot-for-profitfunds(TelstraSuper’sBoardhasanindependentChairmaninDavidLeggo)
Inthelead-uptotheelection,theCoalition’sPolicyforSuperannuation1highlightedseveralintentions:
• atwoyeardelayintheincreaseofSuperGuarantee(SG)contributionsemployersmakefortheiremployees.SGwouldremainat9.25%fortwomorefinancialyears,reaching12%inJuly2021insteadof2019
• removaloftheLowIncomeSuperannuationContribution(LISC)of$500peryeartopeopleearningbelow$37,000,whicheffectivelyrebatedthe15%taxpaidoncontributions
• reviewofcontributioncaplimitsandtheco-contributionschemeoncetheBudgetreachesasurplusposition
The election of Tony Abbott’s Liberal/National coalition in this year’s federal poll will see many changes take place in a number of policy areas, and we expect some to have an impact on the superannuation system.
TheCoalitionministerialteamacrosstheseareashasbeenannounced:
• Treasurer:JoeHockey
• Finance:MatthiasCormann
• AssistantTreasurer:ArthurSinodinos
• TradeandInvestment:AndrewRobb.
TheAssistantTreasurer,MrSinodinos,willtakeresponsibilityforthesuperindustry.
We’llkeepmembersandemployersuptospeedwithanyrelevantchangesasmoreinformationontheCoalition’sintentionsbecomesknown.1TheCoalition’sPolicyforSuperannuation,September2013.Availableatwww.liberal.org.au/our-policies
Ifyouhavehadmorethanonejobinthepast,it’slikelythatyoursuperisbrokenupintoseparateaccountsandbeingeatenawaybyextrafees.ConsolidatingyourothersuperaccountsintooneTelstraSuperaccountiseasyandletsyou:
•Save on paying unnecessary fees
ConsolidatingyoursupertoTelstraSuperwillmeanyoupayjustonesetofcompetitivefeestoanexpertfundtolookafteryoursuper.
• Boost your account balance
Themoneyyousaveinreducedfeescanthenbereinvestedintoyoursuper,givingyouevengreaterbenefitfromthemagicofcompoundinterest.
•Simplify your arrangements
Asinglesuperaccountsimplifiesyourfinancialarrangementsandreducesyourpaperwork,givingyouextratimetospendonthemoreimportantthingsinlife.
Need a torch?Youcanimproveyourconsolidationknow-howinlessthan3minutesbyviewingourinformativeSuperBitevideo‘Consolidatingsuper’.
IfyouhaveasmartphonewithaQRCodeapp,scanthiscodeandwatchthevideoinstantly.
Betteryet,completethesupersearchconsentformatwww.telstrasuper.com.au/tfnconsentandwe’lldotheheavyliftingforyou!
Forover-the-phoneassistanceortofindoutmoreabouthowwecanhelpmakemanagingyoursupereveneasier,call1300 033 166between8.00amand5.30pm (Melbournetime)MondaytoFriday.
Most car owners will tell you their glove box has a collection of loose coins gathering dust, probably beneath a wad of papers and food wrappers. Similarly, most of us have super accounts all over the place too, but it’s time to clean up!
3 quick steps to wiping away multiple fees
Find any super you may have forgotten about
Visitwww.ato.gov.au/superseekerwithyourtaxfilenumbertouncoveranylostsuper
Finish up the paperwork
LogintoSuperOnlinetodownloadapre-populated‘Consolidateyoursuper’formwithyourdetailsalreadyfilledoutORdownloadandcompletetheformyourself
Send your form to us
Don’tforgettoincludeacertifiedcopyofyourID
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Clean out your glove box
movingforwardPage 4Page 4 movingforward
Introducing an exciting new investment option
Direct Access to Term Deposits
InvestinginatermdepositthroughDirectAccessoffersyoutheaddedcomfortandsafetyofafixedrateofreturn.Youwillalsohavetheflexibilitytochoosefromarangeoftermdepositprovidersandterms,withnewratestobepublishedeachweek.
Direct Access to SharesTheopportunitytotakegreatercontrolofhowyourretirementsavingsareinvestedinthesharemarketisanattractiveproposition,especiallyforthosememberswhoareequippedwithhighlevelsofinvestmentknowledge.
Whetheryouwanttobuildaninvestmentportfolioaroundspecificsectors,companies,servicesoronyourownidealsandethics,DirectAccessgiveseligiblememberstheopportunitytobuyandsellsharesinASX300-listedcompaniesthatmeettheirindividualcriteria.
their investment decisions, Direct Access offers eligible accumulation members the ability to choose from a range of term deposit options and to invest in companies on the ASX300 through real time, online trading access.
A facility for members in the pension phase will follow.
Telstra Super is proud to introduce the latest addition to our range of investment options – ‘Direct Access’.
Designed to meet the needs of members who wish to take greater control over
The2012/2013AnnualReportaimstocelebratetheretirementdreamsofourvaluedmembers,whetherthatmaybefulfillinglong-heldpassionsoftravel,artandadventure,orsimplyenjoyingthosespecialday-to-daymomentswithclosefriendsandfamily.
Overthepastthreeyears,wehavebeenluckyenoughtosharesomeamusing,inspiringandheartwarmingstoriesfromTelstraSupermembersinourAnnualReport.Thisyear’sreportisnodifferent,withthreemembers–Dave,MelissaandChrisgenerouslyinvitingustosharewhattheyhaveplannedoncetheyleaveworkbehindforgood.
ToreadmoreaboutDave,MelissaandChris,andtoseehowTelstraSuperishelpingallourmemberstoachievetheretirementlifestyletheydreamof,keepaneyeoutforthe2012/2013TelstraSuperAnnualReport-comingsoonatwww.telstrasuper.com.au
Telstra Super Annual Report: Coming soon!
Page 5www.telstrasuper.com.auOctober 2013
Find out moreTofindoutmoreaboutDirectAccessandseewhetherournewestinvestmentoptionmaysuityourlong-terminvestmentstrategy,visit www.telstrasuper.com.au/directaccess
Who can invest in Direct Access?ToregisterforaDirectAccessaccount,youmustholdaminimumTelstraSuperaccountbalanceof$60,000:
• $50,000requiredinDirectAccess(whichincludesensuringaminimumbalanceof$200inaCashTransactionAccount);and
• $10,000requiredtoremaininyourotherTelstraSuperinvestmentoptions.
Memberswishingtoinvestinthisonline-onlyoptionmustalsoberegisteredusersofSuperOnlineandhaveprovidedbothaTaxFileNumber(TFN)andavalidemailaddresstoreceiveallDirectAccesscorrespondence.
Making the right choice for youWheneveryou’rethinkingaboutanytypeofinvestmentswitch,whetherintoDirectAccessoracrossourrangeofexistingoptions,it’simportanttoconsiderhowthisfitsinwithyourlong-terminvestmentstrategy.
WhileweunderstandthatthegreaterlevelofcontrolaffordedbyDirectAccessmaybeparticularlyattractivetosomemembers,weencourageyoutofirstseekfinancialadvicetoensureanypotentialinvestmentmeetsyourpersonalobjectivesandattitudetorisk.
movingforwardPage 6Page 6 movingforward
Stronger Super is the name given to the Gillard government’s package of super reforms, aimed at making the superannuation system simpler and more efficient. As part of Stronger Super, the government has introduced a new, default super product called MySuper. MySuper replaces existing default products and funds who wish to continue to receive default contributions must offer a MySuper product from 1 January 2014. Telstra Super will be offering a MySuper arrangement to new members from 30 November 2013, while existing members who meet certain criteria will have their balance transferred to MySuper next year, unless they opt out.
Telstra Super to launch MySuper arrangement
www.telstrasuper.com.au Page 7October 2013 www.telstrasuper.com.au
MySuper features and benefitsMySuperisintendedtoprovideasimple,transparentproductwhichmembersandemployerscaneasilycompareusingasetofstandardisedfeatures.Italsoaimstomaximisethebalancesofmemberswhodon’tmakeaninvestmentchoicefortheirsuper.
TheMySuperstandardisedfeaturesarelegislatedbygovernmentandinclude:
• aprescribedlistoffees,includingan:
–administrationfee
–investmentfee
–insurancefee
–advicefee.
• asinglediversifiedoralifecycleinvestmentstrategy
–TelstraSuperhaschosentoofferalifecycleinvestmentstrategyinourMySuperarrangement.
• adefaultlevelofdeathandTotal&PermanentDisablement(TPD)insurance,offeredonanopt-outbasis.
• disclosureoffees,investmentperformance,assetallocationandriskinasetformat.
Telstra Super’s MySuper arrangementTelstraSuperispleasedtoannounceourexistingaccumulationproductsmeetthelegislatedrequirementsofaMySuperproductandthatwehavereceivedauthorisationfromAPRAtoofferourMySuperarrangement.
Asmentionedabove,TelstraSuper’sMySuperarrangementhasalifecycleinvestmentstrategy,whichisdesignedtomaximisemembers’investmentoutcomesbyautomaticallyinvestingtheirsuperwithalevelofriskandreturnsuitedtothemember’sageandinvestmenttimeframe.
Thismeansahighergrowth/higherriskinvestmentoptionforyoungermemberswhohavetimetowearshort-termfluctuationsininvestmentmarketsinordertogainlong-termgrowth.Conversely,amoreconservativeoptionischosenforoldermembers,withtheaimofprotectinginvestmentcapital.Here’showitworks.
TelstraSuper’sMySuperarrangementconsistsofthreeinvestmentoptions:MySuperGrowth,MySuperBalancedandMySuperConservativewhichtogetherformthelifecycleinvestmentstrategy.TelstraSuperMySupermemberswillhavetheirbalanceinvestedintherelevantage-basedinvestmentoptionshownbelow,then,asthememberages,theirsuperisautomaticallymovedtotheapplicable,age-basedinvestmentoption.TheMySuperlifecycleinvestmentstrategyreplacesTelstraSuper’sexistingdefaultinvestmentstrategy.
Member age
Current default investment options
MySuper lifecycle investment strategy
Under45 Growth MySuperGrowth
45tounder65
Balanced MySuperBalanced
65andover Conservative MySuperConservative
MySuperhasthesameadministrationandinvestmentmanagementfeesasexistingproductsandMySupermemberswillenjoythesamebenefitsandservicesasothermembers.
Telstra Super members affected by MySuperMySuperwillaffectbothnewandexistingmembersofTelstraSuper:
Existing membersExistingmembersofTelstra Super Corporate Plus, Telstra Super Personal Plus, Telstra Super CasualsandSensis Super Plus-Accumulationwhohaven’tmadeaninvestmentchoiceorwhohavechosentoinvesttheirfullbalanceinthecurrentdefaultinvestmentoptionfortheirage(asshowninthetableabove)willautomaticallyhavetheirbalancetransferredtoMySuper,unlesstheychoosetooptout.TransactioncostsdonotapplytotheMySupertransfer.
MemberswillbegivennoticeoftheMySupertransfer,includingopt-outdetails.MemberscanelecttobetransferredtoMySuper,splittheirbalancebetweentheMySuperarrangementandanotherinvestmentoption(s),oroptoutofMySuperaltogether.Member-electedinvestmentchoiceswillincurtheusualtransactioncosts.
New membersNewmembersjoiningTelstraSuperwhodon’tmakeaninvestmentchoicewillautomaticallybeplacedinTelstraSuper’sMySuperarrangement.Likeallmembers,theycanelectaninvestmentchoiceatanytime.
More for youTelstraSupercontinuestooffermembersawiderangeofinvestmentchoices,includingourlatestinvestmentoption,DirectAccess,whichenablesmemberstoinvestinASX300listedsharesandtermdeposits.WelookforwardtobringingmemberstheTelstraSuperMySuperarrangementwhichwillcomplementourexistingoffering.
FurtherinformationaboutTelstraSuper’sMySuperarrangementwillbeprovidedinthecomingmonths.Ifyouwouldliketoknowmoreaboutanyoftheinformationinthisarticle,pleasecallourMemberServicesConsultantson1300 033 [email protected]
ThismagazinehasbeenpreparedbyTelstraSuperPtyLtd,ABN86007422522,AFSL236709,thetrusteeoftheTelstraSuperannuationScheme(TelstraSuper),ABN85502108833.POBox14309MELBOURNEVIC8001,Telephone1300033166©TelstraSuperPtyLtd,October2013TheinformationcontainedinthispublicationiscorrectasatOctober2013andmaychangeinthefuture.Thisinformationisgeneraladviceonlyanddoesnottakeintoaccountyourindividualobjectives,financialsituationorneeds.Beforeactingonanyadviceyoushouldassesswhetheritisappropriateforyouandconsidertalkingtoafinancialadviser.Beforemakinganydecisionaboutacquiringanyproduct,youshouldobtainandreviewitsproductdisclosurestatementbycalling1300033166orvisitingwww.telstrasuper.com.au.TelstraSuperPtyLtddoesnotrecommendthatanymembermakeadecisionconcerningsuperannuationarrangementsbasedsolelyonthispublication.ReferencesinthisdocumenttoTelstraSuperFinancialPlanningarereferencestoTelstraSuperFinancialPlanningPtyLtd(ABN74097777725).TelstraSuperFinancialPlanningPtyLtdisalegalentityseparatetoTelstraSuperPtyLtd.TelstraSuperFinancialPlanningPtyLtdisalicensedfinancialadviser(AFSL218705)andisabletoprovidefinancialadviceaboutTelstraSuperproductstomembersofTelstraSuper.TelstraSuperPtyLtddoesnotendorseoracceptresponsibilityfortheinformationoradviceprovidedbyTelstraSuperFinancialPlanningPtyLtd.TheinvestmentreturnsfromanyTelstraSuperproductarenotguaranteed.®isatrademarkinAustraliaoftheTelstraCorporationLimited.
New investment risk measuresTohelpyoumakeamoreinformeddecisionregardinginvestmentrisk,youcannowseehowourrangeofinvestmentoptionsalignswiththeAssociationofSuperannuationFundsofAustralia/FinancialServicesCouncilStandardRiskMeasure(SRM)framework.TheSRMincludessevencategories,eachwithitsownrisklabel(rangingfrom‘verylow’to‘veryhigh’)andriskband.Theseriskbandsprovideanestimateofthenumberofnegativeannualreturnsthatmayoccuroverany20yearperiod.
TheSRMisdesignedtomakeiteasierformemberstoseehoweachofourinvestmentoptionsmaymatchuptoyourindividualinvestmenttimeframesandattitudetorisk.Formoreinformation,seeyourInvestmentGuideatwww.telstrasuper.com.au/pds
Growing our operational risk reserveLikeallsuperfunds,TelstraSuperisrequiredbylawtomaintainacertainamountoffundstocoverpotentiallossestomembersasaresultofoperationalriskevents.OverthenextthreeyearsTelstraSuperwillbebuildingtheamountoffinancialreservesheldtomeetandmaintaintheOperationalRiskFinancialRequirement(ORFR)targetof0.25%offundsundermanagement,assetbyAPRA’sPrudentialStandards.
The past twelve months has seen a number of legislative changes introduced within the super industry. We thought we’d take the chance to highlight two changes that may be of interest to you.
Some recent changes from your super fund