ASB Easyplan Retirement Savings Scheme

Transcription

1 19 September 2005 ASB Easyplan Retirement Savings Scheme INVESTMENT STATEMENT Make your retirement dream a reality.

2 > This document is an Investment Statement for the purposes of the Securities Act It was prepared as at 19 September A Prospectus has been registered under the Securities Act containing an offer of the securities to which this Investment Statement relates and a copy is available upon request. Neither the Trustee, ASB Bank Limited or its subsidiaries (the Banking Group ), Commonwealth Bank of Australia, nor any other company in the Commonwealth Bank of Australia Group, nor any of their directors, nor any other person guarantees the securities offered in this Investment Statement (including the repayment of any capital) or the performance of the Scheme (including any of the investments or returns). Investments in the Scheme do not represent bank deposits or liabilities of the Banking Group or the Commonwealth Bank of Australia and are subject to investment risk, including the loss of income and principal invested. > Important Information (The information in this section is required under the Securities Act 1978) Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. > Choosing an Investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: Section Page Number 1 What sort of investment is this? 2 2 Who is involved in providing it for me? 8 3 How much do I pay? 9 4 What are the charges? 12 5 What returns will I get? 14 6 What are my risks? 17 7 Can the investment be altered? 19 8 How do I cash in my investment? 19 9 Who do I contact with enquiries about my investment? Is there anyone to whom I can complain if I have problems with the investment? What other information can I obtain about this investment? 20 In addition to the information in this document, important information can be found in the current registered Prospectus for the investment. You are entitled to a copy of that Prospectus on request.

3 > Choosing an Investment Adviser You have the right to request from any investment adviser ( Investment Adviser ) a written disclosure statement stating his or her experience and qualifications to give advice. That document should tell you: > Whether the Investment Adviser gives advice only about particular types of investments > Whether the advice is limited to the investments offered by one or more particular financial organisations > Whether the Investment Adviser will receive a commission or other benefit from advising you. You are strongly encouraged to request that statement. An Investment Adviser commits an offence if he or she does not provide you with a written disclosure statement within five working days of your request. You must make the request at the time the advice is given or within one month of receiving the advice. In addition: > If an Investment Adviser has any conviction for dishonesty or has been adjudged bankrupt, he or she must tell you this in writing > If an Investment Adviser receives any money or assets on your behalf, he or she must tell you in writing the methods employed for this purpose. Tell the Investment Adviser what the purpose of your investment is. This is important because different investments are suitable for different purposes. > ASB Investment Advisers ASB Bank Limited ( ASB ) has a role in the marketing and distribution of ASB Easyplan, but is not a promoter of ASB Easyplan as defined in the Securities Regulations ASB offers you access to a nationwide team of friendly, professional ASB Investment Advisers. The ASB Investment Advisers are a dedicated, specialist team who will help you to achieve your investment and retirement goals. Their investment advice is complimentary and you are under no obligation to invest. ASB Investment Advisers are supported by a nationwide team of specialist investment accredited Personal Bankers who assist with investment enquiries and your everyday banking needs. This advice would normally only apply to investment products and services offered by ASB and its subsidiaries. To arrange an appointment with an ASB Investment Adviser or investment accredited Personal Banker call us on: 1

4 > 1. What sort of investment is this? ASB Easyplan Retirement Savings Scheme ( ASB Easyplan ) is a registered superannuation scheme under the Superannuation Schemes Act What is the nature of ASB Easyplan? ASB Easyplan is a simple and effective retirement savings plan that offers flexible savings options and a range of diversified investment choices. ASB Easyplan is an investment where individual investors pool their savings. It comprises a range of investment funds ( Funds ) that are operated by ASB Group Investments Limited (as the Trustee ). The Trustee accepts contributions from a number of individual investors and then collectively invests those contributions in specified assets or investment sectors. The assets of the Funds are held in the name of the Trustee on behalf of all the investors in the relevant Fund. Your personal investment in this pool is measured in units ( Units ). When you invest you are effectively buying a number of Units at the value of each Unit in the Fund ( Unit Price ). As the investments made by a Fund rise or fall in value, so too does the value of each individual Unit. A pooled investment is a simple and effective way for professional Investment Managers to diversify your savings across a wide range of different investment options. It allows you to do this in a manner which most individuals would not be able to achieve on their own. Registered Superannuation Scheme ASB Easyplan is registered with the Government Actuary as a registered superannuation scheme. Registered superannuation schemes may be eligible for certain benefits over non-registered investment vehicles. To gain registration, the principle purpose of ASB Easyplan must be retirement savings. Access to your Funds is limited until you reach 50 years of age. (see Access to your Funds, page 15, for the restrictions on access) ASB Easyplan Retirement Savings Scheme The ASB Easyplan range currently includes four Funds, each with a unique risk/return profile. Each Fund invests in a diversified mix of investment sectors, described under Section 5 What returns will I get? The four Funds are: > Cash Enhanced Fund > Conservative Fund > Balanced Fund > Growth Fund (these are referred to individually and collectively in this document as both the ASB Easyplan Fund/s and/or the Fund/s ) 2

5 > Specialist Investment Managers and Providers The Trustee has appointed a number of specialist Investment Managers and Providers to handle the day to day investment of the ASB Easyplan Funds. The investments are carried out within defined guidelines for each investment sector, which are strictly monitored and reviewed by the Trustee. The Trustee has selected specialist Investment Managers or Providers for each investment sector based on their reputation, size and cost to the investor. The currently appointed Investment Managers and Providers are outlined in the following summary according to the investment sector they manage. The Trustee may change the management approach and Investment Managers or Providers from time to time without notice to Members. You should be aware that the investment asset mixes of the Funds as described on the following pages represent the benchmark mixes that the Trustee will aim to maintain as far as practically possible. You should also be aware that the matters outlined in these summaries can change from time to time. In particular, the Trustee, can change the management approach, the objectives and the investment asset mixes of the Funds. This flexibility is required to ensure that these Funds, which are long-term investment vehicles, can adapt to changes in the investment environment. You will be notified prior to any material changes to the details of the investment asset classes. New Zealand cash World fixed interest New Zealand fixed interest Property World shares New Zealand shares The Funds portfolio of cash deposits is invested in money market deposits with ASB Group Investments Limited ( ASB Group Investments ). The Funds portfolio of world fixed interest securities is invested in a fund provided by State Street Global Advisors, Australia, Limited ( State Street ). The Fund s portfolio of New Zealand fixed interest securities is managed by ASB Group Investments. The Funds portfolio of property investments is invested in an Australian property fund provided by Colonial First State. The Funds portfolio of world shares is invested in a fund provided by AMP Capital Investors (New Zealand) Limited ( AMP Capital ). AMP Capital manages the Funds portfolio of New Zealand companies shares. 3

6 > Cash Enhanced Fund Objective To provide investors with returns consistent with a lower risk investment strategy. The Fund aims to achieve this objective by investing in New Zealand cash and fixed interest securities. Risk profile Low risk/return profile Time frame up to five years refer ASB Investment Guide Management fee* 0.80% p.a. of the asset value Management Expense Ratio* 0.65% (for the year ended 31 March 2005) *See Section 4 on page 12, What are the charges?, for a full explanation of the fees. Nature of Investments The Cash Enhanced Fund aims to closely track the investment performance of selected market indices for cash and New Zealand fixed interest securities. Investment sector Selected Investment Manager or Provider Investment asset mix or selected market index New Zealand cash ASB Group Investments NZX New Zealand 90 Day Bank Bill Index New Zealand fixed securities ASB Group Investments 50% NZX NZ Government Bond Index 50% NZX NZ Corporate Bond A Grade Index Investment asset mix of the Cash Enhanced Fund Benchmark New Zealand cash 80% New Zealand fixed interest securities 20% Taxation For information about the taxation of ASB Easyplan Funds please refer to the Taxation summary, on page 16. Who should invest in the Fund? The Cash Enhanced Fund may appeal to those investors who: > are retired or nearing retirement > want a lower risk investment > want an investment with flexible deposit and withdrawal options > have an investment time horizon of up to five years. 4

7 > Conservative Fund Objective To provide investors with returns consistent with a conservatively balanced investment strategy. The Fund aims to achieve this objective by investing in a diversified mix of predominantly New Zealand cash deposits and New Zealand and world fixed interest securities, world shares and to a lesser extent property and New Zealand share investments. Risk profile Low to medium risk/return profile Time frame Medium term, 5 years plus refer ASB Investment Guide Management fee* 1.00% p.a. of the asset value Management Expense Ratio* 0.78% (for the year ended 31 March 2005) *See Section 4 on page 12, What are the charges?, for a full explanation of the fees. Nature of Investments The Conservative Fund aims to closely track the investment performance of selected market indices for cash, world and New Zealand fixed interest securities and world and New Zealand share investments. For property, the Fund invests in property investments in New Zealand and Australia. Investment sector Selected Investment Manager or Provider Investment asset mix or selected market index New Zealand cash ASB Group Investments NZX New Zealand 90 Day Bank Bill Index World fixed interest securities State Street Citigroup World Government Bond Index 100% (plus or minus 5.0%) hedged into NZD New Zealand fixed interest securities ASB Group Investments 50% NZX NZ Government Bond Index 50% NZX NZ Corporate Bond A Grade Index Property Colonial First State Management of a portfolio of New Zealand and Australian property investments World shares AMP Capital AMP World Index which covers approximately 83% of the MSCI World Index with 50% (plus or minus 2%) hedged into NZD New Zealand shares AMP Capital Management of a portfolio of New Zealand companies shares Investment asset mix of the Conservative Fund Benchmark New Zealand cash 15.0% World fixed interest securities 27.5% New Zealand fixed interest securities 27.5% Property 3.0% World shares 22.0% New Zealand shares 5.0% Taxation For information about the taxation of ASB Easyplan Funds please refer to the Taxation summary, on page 16. Who should invest in the Fund? The Conservative Fund may appeal to those investors who: > are retired or nearing retirement > want a lower risk investment but with the potential for some modest capital growth > are saving for their retirement and want some of their investment in a lower risk balanced investment > wish to balance their investments with the consistent returns offered by cash and fixed interest securities. 5

8 > Balanced Fund Objective To provide investors with long-term capital growth. The Fund aims to achieve this objective by investing in a diversified mix of New Zealand cash deposits and New Zealand and world fixed interest securities, property investments and New Zealand and world shares investments. Risk profile Medium risk/return profile Time frame Medium to longer term, 5 years plus refer ASB Investment Guide Management fee* 1.00% p.a. of the asset value Management Expense Ratio* 0.83% (for the year ended 31 March 2005) *See Section 4 on page 12, What are the charges?, for a full explanation of the fees. Nature of Investments The Balanced Fund aims to closely track the investment performance of selected market indices for cash, world and New Zealand fixed interest securities and world and New Zealand share investments. For property, the Fund invests in property investments in New Zealand and Australia. Investment sector Selected Investment Manager or Provider Investment asset mix or selected market index New Zealand cash ASB Group Investments NZX New Zealand 90 Day Bank Bill Index World fixed interest securities State Street Citigroup World Government Bond Index with 100% (plus or minus 5.0%) hedged into NZD. New Zealand fixed interest securities ASB Group Investments 50% NZX NZ Government Bond Index 50% NZX NZ Corporate Bond A Grade Index Property Colonial First State Management of a portfolio of New Zealand and Australian property investments World shares AMP Capital AMP World Index which covers approximately 83% of the MSCI World Index with 50% (plus or minus 2%) hedged into NZD New Zealand shares AMP Capital Management of a portfolio of New Zealand companies shares Investment asset mix of the Balanced Fund Benchmark New Zealand cash 10.0% World fixed interest securities 15.0% New Zealand fixed interest securities 15.0% Property 6.0% World shares 43.0% New Zealand shares 11.0% Taxation For information about the taxation of ASB Easyplan Funds please refer to the Taxation summary, on page 16. Who should invest in the Fund? The Balanced Fund may appeal to those investors who: > are saving for their retirement or nearing retirement > seek the potential for long-term capital growth > wish to invest in a diversified portfolio of investments. 16

9 > Growth Fund Objective To provide investors with higher long-term capital growth. The Fund aims to achieve this objective by investing in a higher risk diversified mix of New Zealand cash deposits and New Zealand and world fixed interest securities, property investments and New Zealand and world shares investments. Risk profile High risk/return profile Time frame Medium to long-term, 5 years plus refer ASB Investment Guide Management fee* 1.00% p.a. of the asset value Management Expense Ratio* 0.83% (for the year ended 31 March 2005) *See Section 4 on page 12, What are the charges?, for a full explanation of the fees. Nature of Investments The Growth Fund aims to closely track the investment performance of selected market indices for cash, world and New Zealand fixed interest securities and world and New Zealand share investments. For property, the Fund invests in property investments in New Zealand and Australia. Investment sector Selected Investment Manager or Provider Investment asset mix or selected market index New Zealand cash ASB Group Investments NZX 90 Day Bank Bill Index World fixed interest securities State Street Citigroup World Government Bond Index with 100% (plus or minus 5.0%) hedged into NZD. New Zealand fixed interest securities ASB Group Investments 50% NZX NZ Government Bond Index 50% NZX NZ Corporate Bond A Grade Index Property Colonial First State Management of a portfolio of New Zealand and Australian property investments World shares AMP Capital AMP World Index which covers approximately 83% of the MSCI World Index with 50% (plus or minus 2%) hedged into NZD New Zealand shares AMP Capital Management of a portfolio of New Zealand companies shares Investment asset mix of the Growth Fund Benchmark New Zealand cash 4.0% World fixed interest securities 8.0% New Zealand fixed interest securities 8.0% Property 8.0% World shares 58.0% New Zealand shares 14.0% Taxation For information about the taxation of ASB Easyplan Funds please refer to the Taxation summary, on page 16. Who should invest in the Fund? The Growth Fund may appeal to those investors who: > are saving for their retirement over the long-term > seek the potential for higher long-term capital growth > wish to invest in a diversified portfolio with a greater proportion of higher risk investments. 7

10 > 2. Who is involved in providing it for me? The name of the Scheme is the ASB Easyplan Retirement Savings Scheme. ASB Easyplan is governed by a trust deed dated 19 December 2000, as amended from time to time. ASB Easyplan is divided into a number of Funds as set out on page 2. Each of the ASB Easyplan Funds are established by a separate schedule in the Trust Deed. The Trust Deed and the relevant schedules set out the rules which govern the operation of the Scheme and each Fund. The Trustee, Promoter and Administration Manager ASB Group Investments is the Promoter, Trustee and Administration Manager of ASB Easyplan ( Promoter Trustee and Administration Manager ). The ultimate holding company of ASB Group Investments is Commonwealth Bank of Australia. ASB Group Investments is also a related company (as defined in section 2(3) of the Companies Act 1993) of ASB and its subsidiaries. ASB has a role in the marketing and distribution of ASB Easyplan, but is not a promoter of ASB Easyplan as defined in the Securities Regulations The directors of ASB Group Investments are, G H Burrett, R M McEwan, J S N Mitchell, J W Duncan, R S De Luca, B J Chapman and L A Wood. The directors of ASB Group Investments may change from time to time. You may contact the Trustee, Administration Manager, Promoter or any of the directors of ASB Group Investments by writing to them at the following address: ASB Group Investments Limited The relevant director Level 28, ASB Centre 135 Albert Street (PO Box 35) Auckland 1015, New Zealand The principal places of residence of the directors of ASB Group Investments are in Auckland, New Zealand. You may also contact ASB Group Investments by phoning on The Auditor PricewaterhouseCoopers has been appointed as Auditor for ASB Easyplan. Activities ASB Easyplan was established in July ASB Easyplan is a registered, defined contribution superannuation scheme. As mentioned above, the basic nature of the Funds is to provide a vehicle through which individual investors can pool their savings for investment and retirement savings purposes. No Guarantors Neither the Trustee, ASB Bank Limited or its subsidiaries (the Banking Group ), Commonwealth Bank of Australia, nor any other company in the Commonwealth Bank of Australia Group, nor any of their directors, nor any other person guarantees the securities offered in this Investment Statement (including the repayment of any capital) or the performance of the Scheme (including any of the investments or returns). Investments in the Scheme do not represent bank deposits or liabilities of the Banking Group or the Commonwealth Bank of Australia and are subject to investment risk, including the loss of income and principal invested. It is impossible to predict the future returns and past returns are no indication of future performance. Returns may be negative and a Unitholder may receive less than is invested. 8

11 > 3. How much do I pay? Lump sum investment or regular savings plan ASB Easyplan accounts may be opened in the name of single or joint individuals. In the case of joint accounts certain restrictions apply to the access of funds when one of the investors is under age 50 (see Access to Your Funds, page 15). You may invest in ASB Easyplan by way of lump sum investments, by regular fortnightly or monthly savings, or a combination of both. Subject to certain limitations set out below, you are able to determine both the amount and frequency of payments. You may vary your regular savings or suspend them at any time, subject to the agreement of the Trustee. Whether you choose to invest by way of lump sum investments or by regular savings will determine the minimum level of investment required in ASB Easyplan. The minimum level of investment is calculated by reference to your total investment in all ASB Easyplan Funds. Minimum levels of investment in ASB Easyplan Funds Lump sum investments Minimum initial lump sum investment $1,000 Minimum additional lump sum investment $200 Regular savings Minimum initial regular savings investment $25 Minimum regular savings contributions $50 each month or $25 each fortnight The minimum investment amounts and holdings set out above may be varied from time to time by the Trustee. You will receive one month s notice of any increase in those minimum amounts. Minimum withdrawal amount Unless your entire holding is being withdrawn $500 Minimum Holding Minimum account balance $1000 Minimum switching amount Unless your entire holding is being switched $500 Salary Sacrifice The Trustee is not able to accept contributions into ASB Easyplan which are either employer contributions or salary sacrifice contributions i.e. contributions made directly from your payroll prior to PAYE tax being deducted but subject to Specified Superannuation Contribution Withholding Tax (SSCWT). Certain other managed funds available through ASB can accept employer contributions and salary sacrifice contributions. For more information please contact your ASB Investment Adviser or phone 0800 ASB FUNDS ( ). 9

12 > How do I invest and who do I pay my money to? Initial and additional investments Investing in ASB Easyplan is easy. You need only complete the attached application form and lodge it with any branch of ASB, your ASB Investment Adviser or investment accredited Personal Banker or send it (free of charge) to ASB Group Investments, Freepost Authority No. ASB, PO Box 35, Auckland You can authorise the transfer of investment amounts from your nominated ASB account by completing the appropriate sections in the application form. We recommend that you talk to an ASB Investment Adviser or investment accredited Personal Banker and complete an Investing Acknowledgement Form prior to investing. The Trustee reserves the right to decline applications for any reason. Any application moneys received will be refunded in full in these circumstances. Applications received by the Trustee before 5pm on any business day will normally be invested, if accepted, at the Unit Price for that day. Applications received after 5pm,if accepted, will normally be invested at the Unit Price applicable for the next business day. Where regular savings are made, the Unit Price will normally be calculated on the date the regular savings payment is received by the Trustee. Regular Savings Plan To establish a regular savings plan please complete the attached direct debit form together with the application form. The amount of your regular savings will be deducted from your nominated bank account automatically. ASB Share Swap Service The ASB Share Swap Service is one way of exchanging your existing shareholdings in publicly listed companies for Units in ASB Easyplan. If you choose to use this service, ASB will arrange for the sale of your shares on your behalf. The scale of brokerage fees for New Zealand shares sold by ASB on your behalf will not be greater than as shown below. Scale of Brokerage Fees (NZ shares) Scale of Brokerage Fees (Australian shares) up to $50, % up to $50, % $50,001 and over 0.3% $50,001 and over negotiable minimum brokerage NZ$24.95 minimum brokerage AU$39.95 Plus NZ Trade Fee (incl GST) $4.50 Brokerage rates for markets other than New Zealand and Australia are available on request. For more information on the ASB Share Swap Service, contact an ASB Investment Adviser or investment accredited Personal Banker by phoning 0800 ASB Funds ( ), or you may visit any ASB branch or the ASB Investments home page at 10

13 Telephone Transaction Service Once your application form has been accepted you can take advantage of our Telephone Transaction Service. If you hold a current ASB account additional investments can be made by transferring funds from your ASB account to your nominated ASB Easyplan Fund(s). In addition, the Telephone Transaction Service lets you switch between any of the Funds, or withdraw funds for deposit to your ASB account. Using our Telephone Transaction Service is easy. Simply call us on 0800 ASB FUNDS ( ). Indemnities and releases The following indemnities and releases apply in relation to all transactions entered into with respect to buying, selling and switching units through the Telephone Transaction Service. If you use the Telephone Transaction Service, you are deemed to have agreed to these conditions. > Subject to the following terms, the Trustee agrees to act on telephone instructions communicated by you or your nominee or agent (as authorised by you in writing) for requests relating to any of: (i) the withdrawal of Units held by you (ii) the switching of Units from one Fund into those Units in another Fund (iii) the purchase of additional Units in a Fund and such withdrawals, switches, or purchases shall be governed in all respects by the provisions of the Trust Deed and each applicable Schedule. > You release, discharge and agree to indemnify the Trustee from and against all actions, proceedings, accounts, claims, demands and liabilities arising from or in relation to telephone instructions. > You agree that neither you, your nominee or agent will have any claim against ASB Easyplan, or the Trustee in relation to any payment made or purporting to be made pursuant to telephone instructions notwithstanding that the payment relates to a request which has been made without your knowledge or authority or in any other circumstances. > You will be asked to select a confidential customer password as part of this service. This password (in addition to any other identification or security requirements) will be required prior to processing any transaction. You will remain responsible for the confidentiality of the password and will not disclose it to any other person. > If deemed necessary by the Trustee, telephone conversations may be electronically recorded, or additional means of identification requested prior to processing a transaction. Keeping you up to date Once your initial application is accepted the Trustee will register your name(s) on the ASB Easyplan register and mail to you an ASB Easyplan investment certificate outlining your initial purchase of Units in ASB Easyplan. Shortly after the end of each quarter, the Trustee will also send you a consolidated ASB Easyplan investment certificate which will outline the Units you have purchased or redeemed in ASB Easyplan during that period and the value of your ASB Easyplan account at the end of that quarter. Any ASB Easyplan investment certificate sent to you will supersede all previous investment certificates sent to you and should be kept in a safe place. The Trustee may alter this procedure. You may also request that an investment certificate be sent to you by writing to the Trustee at: ASB Group Investments Limited Level 28, ASB Centre 135 Albert Street (PO Box 35) Auckland 1015, New Zealand 11

14 > 4. What are the charges? Management Fee The Trustee is entitled to receive from ASB Easyplan certain fees and other costs referred to in this section for various trustee and administration management services. The fees are paid at such time as the Trustee determines (currently quarterly in arrears) and are at a rate set by the Trustee from time to time (but not exceeding 3% annually of the asset value of each Fund calculated daily). The current Management Fees are as set out in the table below but may be varied as referred to above. Management Expense Ratio The Management Expense Ratio ( MER ) represents the cost of on-going fees and expenses (including the annual management fee, audit fees, legal fees, custodial fees and other associated costs) incurred in managing a Fund. The MER does not show the actual on-going fees and other expenses of the Fund or any individual investor in the Fund. It shows the maximum rate of ongoing fees and other expenses of the Fund expressed as a percentage of the average size of the Fund over the relevant financial year. The MERs for the current financial year or any future period are not guaranteed. For example, if the average size of a Fund decreases, generally, the MER for that Fund will increase. The MER does not take into account non-recurring fees such as entry or exit fees. The actual MERs may be lower than those shown if a rebate is applied to fees or other expenses. The table below shows the MERs for the financial year ended 31 March 2005 that have been calculated in accordance with the following formula: MER = NDE + [DE x (1-T)] x 100 Average Fund Size Where NDE = Fees and recovered expenses that are non-deductible for tax purposes. DE = Fees and recovered expenses that are deductible for tax purposes. T = The income tax rate applicable to the Fund for the relevant period. Cash Enhanced Fund Conservative Fund Balanced Fund Growth Fund Management Fee 0.80% 1.00% 1.00% 1.00% Calculated as a per annum percentage of the net asset value of each fund, calculated daily. Management Expense Ratio (for the year ended 31 March 2005) 0.65% 0.78% 0.83% 0.83% Investment Management Fee In addition to the annual Management Fees referred to above, the Investment Managers (which may be appointed to manage certain assets within each Fund) charge a fee. These fees will be charged to the respective Funds up to a maximum of 0.15% per annum of the proportion of the gross asset value of the respective Fund that each Investment Manager manages. They are calculated and accrued daily and paid quarterly. In cases where the fees payable to an Investment Manager exceeds 0.15% per annum of the proportion of the gross asset value of the respective Fund that each Investment Manager manages, the amount in excess of 0.15% per annum is met by the Trustee acting in its capacity as the Administration Manager. 12

15 Early Withdrawal Fee ASB Easyplan is designed as a long-term investment. For withdrawals made within three months of deposit, the Trustee may charge an Early Withdrawal Fee of 1.00% of the amount being withdrawn. For the conditions applying to early withdrawals, refer to Section 5, How to make withdrawals, on page 15. Switching Fee You are allowed two free switches between Funds in any 12 month period. The Trustee may charge a Switching Fee of 1.00% of the amount being switched for additional switches. For the conditions applying to switching, refer to Section 5, Switching, on page 15. Other fees and review of fees No other fees are currently charged to Members. However, under the Trust Deed the Trustee may charge certain other fees such as an administration fee and a withdrawal fee. The Trustee may also review the level of fees payable from time to time and increase or reduce them accordingly. You will be notified in writing one month before any new fee or charge is introduced or any fee is increased. Payment of fees The Management Fee and Investment Management Fee is deducted from the assets of each Fund as described above, and therefore affects the Unit Price. The other fees referred to above (if applicable) are deducted from your ASB Easyplan account and will therefore affect its value. Management Fees, Investment Management Fees and other fees are paid by ASB Easyplan to the Trustee who uses them to pay the charges of ASB Easyplan s Investment Managers. The balance of the Management Fee and other fees charged are retained by the Trustee in its capacity as Administration Manager as remuneration for administration services. Other expenses of the Trusts In addition to the fees described in this section, under the Trust Deed the Trustee is indemnified in respect of, and is entitled to be reimbursed out of the funds of the relevant ASB Easyplan Fund, for all costs and remuneration of the Administration Manager and the Investment Manager(s) and other costs associated with the Trustee performing its duties under the Trust Deed. 13

16 > 5. What returns will I get? How are your Returns calculated? The ASB Easyplan Funds are pooled funds. The money you invest in an ASB Easyplan Fund entitles you to a share of that pool this share is expressed as a number of Units. The Unit Price is the price you pay or receive when you want to invest or redeem Units in a Fund. The Unit Price is determined by dividing the asset value of the Fund on each business day by the number of Units on issue. The amount of the return on your investment will be reflected as an increase or decrease in a Fund s Unit Price. A Unit Price incorporates both capital growth of a Fund s assets and any capital losses, and income earned after payment of expenses and taxes. The Trustee is legally liable to pay such returns. Your Potential Returns The key factor determining the returns of each Fund is the performance of the investment sectors the Fund invests in, in accordance with the investment guidelines set for each Fund by the Trustee. For example, a key determinant of the returns of the Funds that invest in world shares will be the returns from world sharemarkets, which are in turn influenced by the world economy, the performance of companies and, in the shortterm, investor sentiment. Because the returns for each investment sector will fluctuate, it is impossible to accurately predict the returns that will be achieved in any particular period. In addition, the following factors will also affect returns: > the amount of the charges, referred to under Section 4 What are the charges? on page 12 > taxation, referred to under this section on page 16. The ASB Investment Guide has further information on returns, including the expected range of annual returns, which we recommend that investors read and understand prior to investing. Your ASB Investment Adviser will also be able to discuss returns with you. ASB also makes information available on the latest returns, which you can obtain by: > visiting > phoning 0800 ASB FUNDS ( ) > obtaining a copy of the ASB Investment Update, which will be posted to you quarterly, and is also available from your nearest ASB branch or via the ASB website How do I find out the value of my investment? You can easily find out the current value of your investment by calling 0800 ASB FUNDS ( ). Information on ASB Easyplan Unit Prices can be found on the ASB website, and are also included in most major weekend newspapers (although these may not be as up to date as the prices available from ASB). To calculate the current dollar value of your investment simply multiply the number of Units you currently have in a particular Fund by the Unit Price for that Fund. Unit Prices are normally calculated each business day but provision is made in the Trust Deed to value more or less frequently if required. 14

17 Access to your funds Unlimited access to your funds once all account owners reach 50 years of age. Restricted access to your funds prior to all account owners reaching 50 years of age. Prior to all account owners reaching 50 years of age you are able to make limited partial withdrawals. The amount you intend to withdraw, plus any amount you have already withdrawn, must not exceed 20% of the total value of your ASB Easyplan account since it was first set up (this includes all contributions you have made, plus any earnings you have received). Additional withdrawal reasons You may withdraw all or part of your investment if, at the sole discretion of the Trustee, it is accepted that you are suffering undue hardship, or you become materially and permanently incapacitated. The Trustee may also allow you (at its sole discretion) to withdraw if you are permanently emigrating from New Zealand or it considers your application to be reasonable in the circumstances. An application must be submitted to the Trustee, together with supporting documentation, should you wish to withdraw funds for these special reasons and a fee may be payable. Transferring to another registered superannuation scheme You may transfer the balance held by you in your ASB Easyplan account to another registered superannuation scheme with the approval of the Trustee. Generally, only those registered superannuation schemes with similar withdrawal provisions will be approved for such transfers. How to make withdrawals Following verification, most withdrawals can be processed automatically through any ASB branch. Where requests are received through the mail or over the telephone, payments will normally be made within seven business days by direct credit to your nominated bank account. To make a withdrawal simply talk to your local ASB Investment Adviser or investment accredited Personal Banker, or visit an ASB branch. To make a withdrawal request over the telephone simply call the Telephone Transaction Service on 0800 ASB FUNDS ( ). The minimum amount for each partial cash withdrawal is $500 and you must retain at least $1,000 in your ASB Easyplan account after the withdrawal. If all account owners are less than 50 years of age and therefore you have limited access to your funds, (as mentioned above) you will need an account value of at least $2,500 at the time of withdrawal to allow you to meet the minimum withdrawal amount of $500 (i.e. 20% of the total value of your account). To apply to make a full withdrawal, you will need to complete an Investment Strategy Change/Switch/Closure Request Form which is available from your ASB Investment Adviser, investment accredited Personal Banker, your local ASB branch or by calling 0800 ASB FUNDS ( ). Switching Switching is when you choose to transfer all or part of your investment from one ASB Easyplan Fund to another ASB Easyplan Fund. You can switch between any of the ASB Easyplan Funds at any time. The Trustee reserves the right to decline a switching request. The minimum amount for any switch is $500, unless the entire amount of your investment in a Fund is being switched. A switch will be treated as a redemption of your old Units and an application for new Units with the redemption proceeds. Please note the information on switching fees set out on page 13. How to make a switch To make a switch complete an Investment Strategy Change/Switch/Closure Request Form which is available from your local ASB Investment Adviser, investment accredited Personal Banker or ASB branch. You can also make a switch request over the telephone by calling the Telephone Transaction Service on 0800 ASB FUNDS ( ). 15

18 Joint Investments Two individuals may apply to the Trustee to be joint owners of an investment. If you jointly own an ASB Easyplan account, you will only have unlimited access to your funds once both joint owners have reached 50 years of age. You may not make earlier withdrawals from a jointly owned ASB Easyplan account unless both joint owners qualify for withdrawals. Any instructions given to the Trustee by one joint owner will bind both joint owners. Transfers of units If you have an investment in your sole name, you may transfer it into joint names by giving written notice to the Trustee. If you have an investment account in joint names you may transfer it to one investment in the sole name of one of the joint owners, or split the investment between the individual joint owners, by both joint owners giving written notice to the Trustee. Units may not be sold or transferred in any other circumstances. Death If you die the proceeds of your investment will be paid to your legal personal representative. In the case of a joint investment, where one joint owner dies, the investment will be transferred into the sole name of the surviving owner. The surviving owner will not be eligible to access all of the investment funds until he/she reaches 50 years of age. Extraordinary circumstances Payments will normally be made by the Trustee as soon as possible. However, in certain extraordinary situations, it may be necessary to temporarily delay payout for a period not exceeding six months in order to best protect the interests of all ASB Easyplan Members. The Trustee may also suspend the operation of one or more ASB Easyplan Funds for a period of up to seven days if it deems it appropriate, and in that event, payment of benefits and transfers will be delayed. Taxation summary The following comments are intended to be a general summary and indication of the relevant law as at the date of this Investment Statement. The Trustee does not accept any responsibility for the taxation consequences of your investing in ASB Easyplan. You should consider your own tax position before investing in the investments offered pursuant to this Investment Statement, and where necessary seek expert tax advice. Taxation is currently provided for on net income of the Scheme at the rate of 33% by either the Scheme or any underlying superannuation scheme investments of the Scheme. Tax is not provided for on gains and losses derived on passive investments for which a binding ruling is held confirming the non-taxable status of such gains or losses. The Scheme will claim tax relief on its expenses to the extent permitted under the Income Tax Act Where appropriate, this will include passing those expenses to an underlying investment vehicle for deduction, and seeking compensation from the underlying investment vehicle for the value of any tax benefit it receives. Generally, benefits paid by the Scheme are not taxed in the hands of the Member. The taxation summary above is based on the Trustee s understanding of New Zealand tax law as at the date of this Investment Statement. It is possible that tax law may change in a manner which could adversely affect or benefit the tax treatment of the ASB Easyplan Funds or Member. For specific taxation advice relevant to your own personal circumstances, you should consult your own professional tax adviser. Valuation of investment funds When calculating the current market value of the Funds the Trustee may consider including the value of losses (which may include deferred tax losses or tax assets ) which the Trustee reasonably expects over time will be recovered by the relevant Fund. Tax assets used in the calculation of Unit prices are valued by the Trustee and may be discounted where it is determined by the Trustee that is inappropriate for them to be recorded at full value. The values attributed to tax assets for Unit pricing purposes may therefore change from time to time. 16 1

19 > 6. What are my risks? The Easyplan Funds (apart from the Cash Enhanced Fund which invests only in Cash and Fixed Interest) are fully diversified portfolios, with investments in a range of investment sectors. Depending on the specific risk/return profile, the Funds have varying exposures to cash, fixed interest, property and shares. When it comes to investing, the importance of diversification cannot be over-emphasised. By diversifying your investments (that is spreading your savings across several investment sectors), your investment returns may fluctuate less because losses from some investments may be offset by gains in others. Your chances of success and potentially higher long-term returns are therefore increased. Diversification also makes sense because no single investment sector performs best in all economic conditions. The smartest strategy, therefore, is to avoid putting all your eggs in one basket. It is important to note that investment returns in ASB Easyplan Funds will fluctuate up or down from one period to the next. They are subject to market risk in relation to the performance of the assets in which they invest. It is possible for you to get back less than the amount you invested if returns are negative or insufficient to cover charges and costs. The ASB Investment Guide has further information on risk and returns, which we recommend that investors read and understand prior to investing. Your ASB Investment Adviser will also be able to discuss risk and returns with you. Specific investment sector risks are detailed below. With the Easyplan Funds (apart from the Cash Enhanced Fund) these sector specific risks are minimised by taking a diversified approach to investing. Cash Cash is a lower risk investment, aimed at providing consistent returns. The key risk with cash investments is that the return is eroded by inflation, meaning that your purchasing power may not be increasing over time. For this reason, we recommend cash as being suitable for short-term requirements and as part of an overall investment portfolio, to balance higher-risk investments. Fixed interest Fixed interest securities are lower risk investments, suitable for a medium-term time frame. The key risks with fixed interest investments are: > Capital risk There is a capital risk associated with interest rate changes. When interest rates rise, the capital value of existing bonds declines. Conversely, when interest rates fall, the value of existing bonds rises. > Credit risk There is a credit risk associated with the borrowers not meeting their obligations for the fixed interest security. The Funds invest only in investment rated Government Bonds and Corporate A Grade fixed interest securities. > Re-Investment risk There is a re-investment risk that the proceeds available for re-investment when a fixed interest security matures may be invested at a rate lower than the original fixed interest security. Property Property investments are medium risk, suitable for a medium to long-term time frame. The key risks with property investments are: > Property market risk Supply and demand for individual properties based on use, location and quality, among other factors will impact on the rental stream and therefore the value of the property. By holding a portfolio of quality properties that is diversified both geographically and by use, the risk of a downturn in any one area is mitigated. > Sharemarket risk There is a sharemarket risk associated with listed property share investments. General sharemarket sentiment and returns will impact on the value of listed property share investments. 17

20 World shares World share investments are higher risk, suitable for a long-term time frame. The key risks with world share investments are: > Company specific risk Individual companies profits, cash flow, growth and management are some of the factors that impact on the value of the companies shares. By holding shares in a large number of companies throughout a diverse range of industries, the impact of individual company performance is lessened. > Country risk The economic performance of each country can influence sharemarket returns, as can the legislation and governance of those countries. The Funds invest in a number of countries around the globe, including the largest economies in world. > Market risk The sharemarket as a whole can be influenced by a variety of factors including in the short-term investor sentiment, and in the long-term economic growth. New Zealand shares New Zealand share investments are higher risk, suitable for a long-term time frame. The key risks with New Zealand share investments are: > Company specific risk Individual companies profits, cash flow, growth and management are some of the factors that impact on the value of the companies shares. By holding shares in a large number of companies across a range of industries, the impact of individual company performance is lessened. > Country risk The economic performance of New Zealand can influence sharemarket returns, as can the legislation and governance of New Zealand. > Market risk The sharemarket as a whole can be influenced by a variety of factors including in the short-term investor sentiment, and in the long-term economic growth. Currency Risk The Conservative Fund, Balanced Fund and the Growth Fund invest in funds which buy and sell international investments. This means that currency movements will affect the investment performance of these Funds. To reduce the impact of currency movements, the world shares portion of the Funds have a 50% (plus or minus 2%) currency hedge to New Zealand dollars and the world fixed interest and Australian property portion of the Funds have a 100% (plus or minus 5.0%) currency hedge to New Zealand dollars. Other factors could also result in you receiving less than the total of your contributions. Performance of the parties Various parties will be involved in the operation of ASB Easyplan, including the Trustee and Investment Managers. If any of these parties fail to perform their obligations this could adversely affect ASB Easyplan Members. There is no reason to believe that any such failure will occur. Forfeiture If you assign, charge or alienate your interest in ASB Easyplan, or would be deprived of the beneficial enjoyment of your benefit, it may be forfeited under the Trust Deed. In that event, the Trustee may decide to apply the forfeited benefit for either your benefit or that of your dependants as it decides. If you become bankrupt, your benefit may be forfeited or the Official Assignee may have a claim against your benefits. If the Trustee is of the opinion that you are unable to manage your affairs, it may administer your benefits on your behalf. Insolvency of the Trustee or an ASB Easyplan Fund There are no circumstances in which you will or may be liable to pay money to any person as a result of the insolvency of the Trustee or an ASB Easyplan Fund. If a Fund is put into liquidation or wound-up, the Trustee will meet any liabilities properly incurred or payable by the Fund, including costs relating to the winding up from the assets of that Fund, and will distribute the remaining funds (if any) to the Members pro-rata to the number of Units they hold in the Fund. 18 1