1On the money

ON THE MONEY

04. INVESTMENT UPDATE06. A BRIGHTER FUTURE WITH

SUSTAINABLE INVESTING 08. THREE STEPS TO BEGINNING

YOUR ESTATE PLAN

There’s only one symbol to look for.

You can find it at CareSuper.

October 2019

CareSuper02

A word from our CEO.

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INDUSTRY SUPER

INVESTMENT UPDATE

SUSTAINABLE INVESTING

SUPER UPDATE

SUPER INVESTMENTS

FINANCIAL PLANNING

FEATURE

There’s only one symbol to look for. You can find it at CareSuper.

SUPER

ESTATE PLANNING

Three steps to beginning your estate plan at any age.

Another positive year for members.

A brighter future with sustainable investing.

Super changes explained.

As an Industry SuperFund, we feel proud to be among the cohort focused solely on driving benefits for our members. In this edition, we discuss what it means to be an Industry SuperFund and how it benefits you as a CareSuper member. We’ll also introduce you to our revamped Sustainable Balanced investment option, that focuses on investments that drive positive change for people and the planet. Read all about it on page 6.On the topic of investments, we’ve had another good year. Our Balanced options for both super and pension members comfortably outperformed their investment objectives returning 6.88% for super and 7.50% for

Julie Lander CareSuper CEO

pension members. Read more on our returns on page 4. Have you thought much about estate planning? It’s one of those necessary administrative tasks we often put off. But, it’s important to have your affairs in order, and the great news is, you can start at any age. We show you how on page 8.It’s been a big six months, full of legislative changes and CareSuper updates. We explain how these might affect you and what steps to take on page 10.

WELCOME

On the money 03

There’s only one symbol to look for. YOU CAN FIND IT AT CARESUPER.So, you’re with an Industry SuperFund. You recognise the symbol and know that being with an industry fund is a smart decision. But do you know what it really means for you and how it can make a difference to your savings?

As an Industry SuperFund, these are three things CareSuper lives and breathes:

1. Industry funds are run to benefit members, no one else.

That’s not a given for all super funds. Some, like bank-owned super, walk a tightrope to generate profits for super members and profits for shareholders. We don’t. Our decisions — and our profits — are all about you.

2. They have a history of keeping costs low. But not at the expense of your returns.

Take our approach to investing. We make active investment choices, hunting for the best opportunities to add that bit extra to your return. (We could just follow the ASX and give you the same results as a cheaper fund, but we know you expect more.) See how this pays off at caresuper.com.au/compare.

3. Financial planners working in your best interests.

We strongly believe in the benefits of financial advice, which is why we offer you access to this service, with any fees disclosed and agreed to upfront. There are no hidden costs. It’s either part of your membership or fee for service. Full stop. Head to caresuper.com.au/advice and explore the financial advice options we offer.

THE DIFFERENCE BETWEEN ‘INDUSTRY’ AND ‘RETAIL’ SUPER FUNDSNow that you understand what an Industry SuperFund is, let’s take a look at what it isn’t. You’ve probably heard the term ‘retail super fund’ thrown around, but what does it really mean? Retail funds are generally run by financial institutions like banks, and their profits go back to shareholders and investors. Unlike industry funds

* Past performance is not a reliable indicator of future performance and should never be the sole factor considered when selecting a fund. Comparisons modelled by SuperRatings, commissioned by ISA and shows average difference in net benefit of the main balanced options of 15 industry super funds and retail funds tracked by SuperRatings, with a 15 year performance history, taking into account an assumed starting balance of $50,000 and initial salary of $50,000, along with historical earnings and fees — excluding contribution, entry, exit and additional advisor fees — of main balanced options. Outcomes vary between individual funds. Modelling as at 30 June 2018. See www.industrysuper.com/assumptions for more details about modelling calculations and assumptions. Consider a fund’s Product Disclosure Statement (PDS) and your personal financial situation, needs or objectives, which are not accounted for in this information, before making an investment decision. ISA Pty Ltd ABN 72 158 563 270 Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514.

INDUSTRY SUPER

(like us) that return their total profits back to their members. Like you! In fact, over the last 15 years to 30 June 2018 the average retail fund has delivered around $47,000 less to their members than the average Industry SuperFund.*

CARESUPER AND INDUSTRY SUPERFUNDS — A PARTNERSHIP TO BENEFIT MEMBERSIndustry SuperFunds represents the collective voice of 15 Industry SuperFunds, including ours. You’ve likely seen the ads or ‘compared the pair’. Together, we work on research, policy, marketing and advocacy initiatives to improve the superannuation system for everyone. Our shared goal is to give you the best possible retirement.

Find out more about Industry SuperFunds at industrysuper.com.

“INDUSTRY SUPER FUNDS ARE RUN TO BENEFIT MEMBERS, NO ONE ELSE.”

04 CareSuper

According to the SuperRatings survey, our Balanced (MySuper) option was the #1 performer among comparable funds, over 20 years to 30 June 2019.1

Investment updateANOTHER POSITIVE YEAR FOR MEMBERS.

For both super and pension members, the 2019 financial year has been a good one with our Balanced option delivering its tenth consecutive year of positive returns.

The Balanced options for both super and pension members comfortably outperformed their investment objectives, returning 6.88% for super and 7.50% for pension members.CareSuper’s other diversified options also delivered positive returns for the financial year. The best performers were those options with higher allocations to growth assets such as shares, direct property, infrastructure and private equity. According to the SuperRatings survey, our Balanced (MySuper) option was the #1 performer among comparable funds, over 20 years to 30 June 2019, with an average return of 8.13% per year. It also ranked amongst the top 10 performing funds over 5, 7, 10, and 15 years.1

“OUR HISTORICALLY STRONG RETURNS COME DOWN TO OUR PROVEN INVESTMENT PHILOSOPHY”

See how your super’s performing by logging in to MemberOnline at caresuper.com.au/login.

Suzanne Branton Chief Investment Officer

And for our pension members, who mainly have their money invested in our Balanced and Conservative Balanced options, there’s more good news. Both of these options were also among the top performers over similar long-term time frames.2 Our historically strong returns come down to our proven investment philosophy, which is founded on a belief in active management and the genuine long-term horizon of super.We don’t get distracted by short-term trends in the market but remain focused on what’s going to make the biggest difference to our members’ retirement savings, and that’s the long-term net returns.

1 SuperRatings Fund Crediting Rate Survey — SR50 Balanced (60-76) Index, June 2019.2 SuperRatings Pension Fund Crediting Rate Survey — June 2019. Various indices.

On the money 05

INVESTMENTS

RETURNS FOR SUPER MEMBERS (ACCUMULATION) TO 30 JUNE 2019

Managed option 1 yr 3 yrs (% p.a.) 5 yrs (% p.a.) 7 yrs (%p.a.) 10 yrs (%p.a.)

Balanced 6.88 9.55 8.74 10.36 9.34Growth 7.13 10.76 9.36 11.67 10.13

Alternative Growth 6.45 9.18 8.52 10.28 9.39

Sustainable Balanced 9.37 9.09 8.26 9.92 8.98

Conservative Balanced 5.52 7.19 6.56 7.91 7.71

Capital Stable 4.96 5.85 5.55 6.59 6.81

Capital Guaranteed 1.89 1.73 2.07 1.85 2.13

Asset class option 1 yr 3 yrs (% p.a.) 5 yrs (% p.a.) 7 yrs (%p.a.) 10 yrs (%p.a.)

Overseas Shares 7.22 12.52 11.32 14.90 11.82

Australian Shares 7.74 12.75 9.09 11.78 9.99

Direct Property 8.37 11.34 11.38 10.18 9.14

Fixed Interest 5.53 3.14 3.66 4.18 5.83

Capital Secure# 2.00 2.00 2.24 2.49 3.05

RETURNS FOR PENSION MEMBERS TO 30 JUNE 2019

Managed option 1 yr 3 yrs (% p.a.) 5 yrs (% p.a.) 7 yrs (%p.a.) 10 yrs (%p.a.)

Balanced 7.50 10.41 9.52 11.36 10.51Growth 7.98 11.72 10.32 12.86 11.33

Alternative Growth 6.81 10.15 9.39 11.19 10.43

Sustainable Balanced 10.60 10.15 9.14 11.06 10.21

Conservative Balanced 6.10 7.98 7.29 8.87 8.73

Capital Stable 5.54 6.48 6.21 7.37 7.69

Capital Guaranteed 2.28 2.10 2.46 2.15 2.36

Asset class option 1 yr 3 yrs (% p.a.) 5 yrs (%p.a.) 7 yrs (%p.a.) 10 yrs (%p.a.)

Overseas Shares 8.28 14.28 12.60 16.61 13.35

Australian Shares 8.80 14.27 10.33 13.34 11.38

Direct Property 8.79 12.50 12.65 11.39 10.27

Fixed Interest 6.41 3.70 4.24 4.85 6.71

Capital Secure# 2.39 2.36 2.59 2.91 3.58

The long-term returns shown in these tables may differ from your actual returns. The returns shown are compound average annual returns (after fees, indirect cost and tax and have been rounded to two decimal places). All net investment returns are reflected in the sell price of each investment option. Past performance is not a reliable indicator of future performance and you should consider other factors before choosing a fund or changing your investments.#On 1 August 2019, the name of this option changed to ‘Cash’. Only the name changed — its objectives and features remain the same.

The Balanced options for both super and pension members comfortably outperformed their investment objectives returning 6.88% for super and 7.50% for pension members.

6 CareSuper06 CareSuper

We’re investing to drive positive change for people and the planet.

Did you know your super investments could help tackle the world’s challenges, from water safety and waste management to wealth inequality? We sit down with our Chief Investment Officer, Suzanne Branton, for a Q&A on sustainable investing.

“TO CREATE A MEANINGFUL, POSITIVE IMPACT, SUSTAINABLE FUNDS TEND TO HAVE DISTINCTIVE INVESTMENTS — WITH A LOT MORE FOCUS ON SECTORS LIKE HEALTHCARE AND EDUCATION AND USUALLY LESS EXPOSURE TO COMPANIES IN INDUSTRIES LIKE ENERGY PRODUCTION OR MINING.”

07On the money

FEATURE

CS: Thanks for joining us. Could you start by explaining to members what ‘sustainable investing’ means?

SB: Happy to be here. ‘Sustainable investing’ is a concept that’s changed and become more prominent over time. At a grass-roots level, it’s a broad term for investment approaches that consider environmental, social and governance (ESG) factors. In recent years, especially as younger generations have become more interested in issues affecting future generations (like climate change), the approaches or ways of investing sustainably have broadened to encompass strategies that can be used in isolation or combined with ESG integration.

CS: How does CareSuper approach sustainable investment?

SB: At CareSuper, while we integrate ESG factors into our investment decisions across all investment options, for our Sustainable Balanced investment option we also adopt a combination of ‘negative screening’ and ‘positive thematic’ strategies. Firstly, we seek to avoid investments in areas considered harmful, such as tobacco, child labour and controversial weapons, and reduce exposure to some activities and business practices such as companies that are involved in thermal coal production and animal cruelty.

Secondly, and most importantly, we actively seek out investments that will have a positive impact on people or the planet. For example, we might invest in companies that help reduce waste, improve energy efficiency, or address healthcare issues or financial inequality in developing countries. We’re directly contributing to positive outcomes, which is different to indirectly influencing change by avoiding investments we think will cause harm.

CS: Is it possible to invest in a ‘sustainable’ fund without compromising long-term returns?

SB: We think so, yes. Our specialist investment managers have proven they can produce very competitive long-term returns, with our Sustainable Balanced option delivering 8.98% per annum over the 10 years to 30 June 2019 (for context, the ‘sustainable fund’ median was 7.99% per annum).1

Of course, to create a meaningful positive impact, sustainable funds tend to have distinctive investments — with a lot more focus on sectors like healthcare and education

and usually less exposure to companies in industries like energy production or mining. They’re likely to perform differently to the broader market, with some short-term variation, but we don’t believe they need to compromise long-term returns. In fact, we think unsustainable practices create risks that can undermine long-term results. And with society starting to seek more sustainable choices, investing sustainably makes financial sense.

CS: How can members decide whether sustainable investing is right for them?

SB: As a member, when you’re thinking about your super investments, it’s important to consider what you want your money to achieve. If that’s a dual purpose (e.g. to contribute to positive change while generating returns), then the Sustainable Balanced option might be right for you. Or, you might prefer one of our 12 other investment options, all of which have different features.

1 Sustainable Fund Crediting Rate Survey 30 June 2019.2 Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd

(MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766.

For expert advice on super investments at no extra cost2, call us on 1300 360 149 or book an appointment via caresuper.com.au/advice.

CS: Where can we find out more?

SB: If you’re interested in learning more about sustainable investing, there’s plenty of information on our website at caresuper.com.au/sustainable-super. You can also learn more about all our investment options at caresuper.com.au/investmentoptions.

8 CareSuper

‘I’ve always felt better with a plan.’

08 CareSuper

Discover three steps to beginning your estate plan at any age.

No matter whether you’re closer to Kylie Jenner or Kylie Minogue in age, a solid estate plan can help ensure your assets are transferred as seamlessly as possible to the people you’d like to have them after you’re gone or no longer able to make big decisions. In other words, it’s a way to reduce the burden on those same people who’ll otherwise need to decide things on your behalf if something happens to you.

FINANCIAL PLANNING

1. 3.Select your back-up personMost experts will tell you estate planning is much more holistic than writing a Will (although we’ll cover that further on). The first step they’ll often help you with is setting up a power of attorney, which appoints someone to act in your place if you’re unable to. Think of this person as the Dannii to your Kylie. It might be a long-term friend or family member — someone you’d trust to sign legally binding documents on your behalf. You can set up a simple power of attorney, which you might use, for example, if you need someone to sign a rental agreement while you’re in Croatia. (Lucky you!) Or you can set up an enduring power of attorney, which you might use if, unfortunately, you became very unwell and someone needed to contact your bank in order to pay your bills.

Decide where you want your super to goIt might sound crazy while you’re young, but those of us old enough to remember the lyrics to Locomotion know our super’s likely to be one of the biggest assets we’ll ever own. An easy addition to any estate plan is a ‘beneficiary nomination’. Nominating your beneficiaries lets your super fund know who you’d like to receive your super when you pass away. If you don’t let us know, we’ll investigate to see if you have any dependants, and if it’s not clear who the money should go to, we’ll pay it to your estate. Nominating your beneficiaries is simple, but there are a few rules involved. Find out more at caresuper.com.au/beneficiaries.

Create your legacy planIf the Minogues taught us anything, it’s the importance of a plan that stays relevant through the ages. (And reinventing that plan if something changes!).

While a financial planner might help you with your super beneficiaries, your next step might be to work with an estate planning solicitor to prepare a Will and ensure your assets are passed on in the most foolproof and tax-effective way. As part of this service, your solicitor will usually help you identify and document your advanced care directive (which covers things like your future healthcare, end of life and living arrangement wishes).

Remember, circumstances change and the plan you develop now might not be right in the future. We recommend reviewing regularly with your solicitor — but how often is a personal decision that depends on your situation.

* Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766. Comprehensive advice is provided by one of our financial planners who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.

If you require more complex personal financial advice, including on estate planning, our financial planners, in the course of their initial appointment with you, may refer you to an external advice service provided by Australian Unity Personal Financial Services Limited (ABN 26 098 725 145, AFSL 234459).

Find out more at caresuper.com.au/advice or call us on 1300 360 149.

Estate planning can be an important part of any holistic financial plan, but it can also be complicated, with lots of legal and tax implications. As part of your membership with CareSuper, you have access to financial planners* who can help give you the confidence you’re making the best possible choices, and refer you to external legal and financial advisers when it’s required.

IT’S IMPORTANT TO SEEK THE RIGHT ADVICE

With the help of estate planning experts (both financial and legal), putting a plan together can be simple. Here are three steps to get you started.

2.

09On the money

10 CareSuper

It’s been a big six months, full of legislative changes and CareSuper updates. Feel like you might’ve missed something? In this article, we round up some big recent changes (and some tiny new ones). Have a skim to see if you need to take any action and follow our ‘next steps’ if you do.

Get to know how our insurance works at caresuper.com.au/insurancechanges.

Want to tailor or opt out of your insurance? Do this via MemberOnline at caresuper.com.au/login or download the relevant form at caresuper.com.au/forms.

Not sure what insurance is right for you? See your relevant Insurance Guide at caresuper.com.au/publications.

WE CHANGED OUR INSURANCE FOR SUPER MEMBERS ON 1 AUGUST

We did this to align with the Government’s Protecting Your Super package (more on that later), a new Code of Practice, and to evolve our product so it’s more sustainable for everyone.

ALL (EXISTING) SUPER MEMBERS WERE AFFECTEDIf you were a member with insurance before 1 August, your arrangement changed. We gave you some choices at the time if the new set-up wasn’t quite what you wanted.If you’ve just joined, you would’ve received our updated cover. (Welcome! Did you know we’re required to give new members* certain types of insurance?) You can tailor or cancel any time through MemberOnline, or by getting in contact with us, if it doesn’t suit your needs.

NEXT STEPS

* Applies only to Employee Plan members — those of you who joined through your employer.

Let’s take stock.

A lot has happened in super recently.

11On the money

THERE’S MORE TO PYSFor full details about this legislation, visit caresuper.com.au/pysinsurancefaqs.

THE GOVERNMENT IMPLEMENTED ‘PYS’

The Protecting Your Super (PYS) package commenced on 1 July to reduce accounts being eroded by fees and insurance costs.

While the legislation affects both super and pension accounts, right here we’re just talking about super.

THE ROUND-UP

Here’s some other recent changes we’d like to share with you regarding fees and investments.

For balances under $6000 — the fees and costs on your account were capped at 3% from 1 July, in line with PYS legislation.

On 1 August we changed the name of one of our investment options. Capital Secure is now called ‘Cash’. Only the name changed — the underlying investments and objectives are the same as they were before.

Total investment related fees and costs (made up of an investment fee plus an indirect cost ratio) have been updated to 30 June 2019. Most went down, two (Cash and Fixed Interest) stayed the same, and Direct Property increased. This increase was due to higher transaction costs that came with the sale and purchase of multiple assets by our property managers during the year.

We’re big on transparency, so we’ve given a more detailed explanation of how the ‘guarantee’ works for our Capital Guaranteed investment option. See the new description at caresuper.com.au/capitalguaranteed.

‘INACTIVE’ ACCOUNTS WILL LOSE INSURANCE AND MAY BE ROLLED OUTAn account is considered ‘inactive’ if no money goes in for 16 months in a row. If this is you, here’s what will happen:• Your insurance will be cancelled

if you don’t opt to keep it. Your account may be transferred out to the Australian Taxation Office (ATO) if your balance is less than $6000. The ATO will transfer it to an active fund if you have one or keep it until you claim it. You won’t pay fees, but your returns will be limited to CPI.

HOW TO KEEP YOUR INSURANCE COVER • Complete and return a Keep

or cancel cover form at caresuper.com.au/forms before your account becomes inactive for 16 continuous months

• Consolidate other super into CareSuper or make a contribution before your account becomes inactive for 16 continuous months.

INACTIVE ACCOUNT WITH A BALANCE LESS THAN $6,000? Your account won’t be considered inactive if you’ve: • Made an investment choice or

changed your insurance cover — both of which you can do in MemberOnline, or

• Nominated or changed a binding beneficiary by completing the relevant form at caresuper.com.au/forms.

• Sending an election to us or the ATO that your account is not an Inactive Low Balance account.

Because this legislation’s ongoing, your account could become inactive in future. We’ll reach out to you before this happens, so you can take action if it’s the right move for you. In the meantime, check your personal details are correct in MemberOnline.

You don’t need to do anything, but you can learn more about our fees and investments on our website or in our disclosure documents at caresuper.com.au/pds.

NEXT STEPS

This content was correct at time of writing. However, there may be more changes in the pipeline, so check our website for the latest updates.

GET IN TOUCH ANY TIMEOur goal is to make your super as successful as possible and that includes taking the time to help you understand it.

Get in touch at caresuper.com.au/getintouch or call us on 1300 360 149 if you have any questions. (Please note, call wait times may be longer than usual right now due to these changes, but we will get to you.)

INDUSTRY SUPER

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Grange Offset is PEFC certified. Manufactured in facilities with ISO 14001 EMS certification and made elemental chlorine free with ISO 9706 Longlife certification.

This magazine has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this magazine does not take into account any particular person’s objectives, financial situation or needs and you should read the applicable product disclosure statement. You should consider the appropriateness of this advice, having regard to your own particular objectives, financial situation and needs before acting on any advice. You need to apply the concepts to your own situation before making an investment decision. Opinions expressed by individuals identified in this document are those of the individual and do not necessarily reflect CareSuper’s policy.

CARE Super Pty Ltd (Trustee) ABN 91 006 670 060 AFSL 235226 CARE Super (Fund) ABN 98 172 275 725

Get in touchCall 1300 360 149

Visit caresuper.com.au

Contact caresuper.com.au/getintouch

Write CareSuper Locked Bag 20019 Melbourne VIC 3001

Yet to dip your toes in and explore your new MemberOnline account? We get it, life’s busy. When you get a moment, register then log in for a snapshot of your super and to make changes to your account. Plus, try out some exciting new features.

Try it out now. Head to caresuper.com.au/register.

Take a look around.

The new MemberOnline is here.

Need help? Take a look at our FAQs at caresuper.com.au/faqs.