Virgin Super. Member Guide

Transcription

1 Virgin Super Member Guide 1 December 2015 Issued by the Trustee The Trust Company (Superannuation) Limited ABN , AFSL , as trustee for Virgin Super ABN

2 The information in this guide forms part of the Product Disclosure Statement (PDS) for Virgin Super dated 1 December The information in this guide may change from time to time. For any changes that are not materially adverse, we ll notify you of the changes via regular member communications or our website. You can also request a paper copy of any updated information at any time, which will be provided free of charge, by contacting our Customer Care Team on REMINDER: Please check out our website virginmoney.com.au for updated information. References in the PDS and this guide to: Our Customer Care Team is a reference to the Customer Care Team provided by the Administrator. The Customer Care Team is the Administrator s responsibility. Our website is a reference to the website (virginmoney.com.au) provided by the Promoter. The Promoter is responsible for any information accessible through the website (other than Trustee publications like the PDS and this guide), not the Trustee. The parties named in the PDS have given written consent (which has not been withdrawn at the date of this PDS) to being named in the form and context in which they are named, in this PDS. Each party named below who has consented to be named in the PDS: - has not authorised or caused the issue of this PDS; - does not make or purport to make any statement in the PDS (or any statement on which a statement in the PDS is based) other than as specified; and to the maximum extent permitted by law, takes no responsibility for any part of the PDS other than the reference to their name in the statement included in the PDS. The information in this Member Guide is of a general nature only and does not take into account your personal financial situation or needs. You should use the information to consider Virgin Super s suitability in view of your investment objectives, financial situation or needs. You should obtain financial advice from your financial adviser tailored to your personal circumstance before making a decision. For more information about Virgin Super, check out our website virginmoney.com.au or contact our Customer Care Team on between 8am to 6pm AEST/AEDT weekdays (apart from public holidays). 2 Virgin Super

3 A few words from Richard Branson Superannuation might not be the sexiest market that Virgin has ever entered, but it may well be the most important. In true Virgin style, we identified a gap in an industry ripe for disruption, and saw an opportunity to change things for the better. All Australians deserve a bright future which is exactly what Virgin Super aims to deliver. Virgin Super will make your super work harder for you. Find out all the details in this helpful guide. Virgin Super 3

4 The who s who Virgin Super Virgin Money has brought together strong partners to provide you with Virgin Super an attractive and competitive super product. Virgin Money s partners offer: Market leadership and industry innovation Integrity, experience and expertise. The product, Virgin Super, is a regulated and complying super fund. It operates under the Virgin Super Trust Deed. Virgin Money (Promoter) Virgin Money Financial Services Pty Ltd ABN , AFSL Level 8, 126 Phillip Street, Sydney NSW 2000 Virgin Money, the Promoter, is a financial services company that is connected with one of the most well-known brands in the world the Virgin Group. The Virgin Group has successful enterprises in over 29 countries, spanning industries as diverse as finance, travel, telco s and entertainment. Virgin Money aims to give customers simple, great value and transparent financial services products, backed up by our world-famous Virgin customer service. What does Virgin Money do? As the Promoter, Virgin Money will provide general advice and arrange for customers to acquire products issued by Virgin Super s Trustee, both directly (including online at Virgin Money s website virginmoney.com.au and indirectly, through its agents). Virgin Money provides these services under its own Australian Financial Services Licence (AFSL) and not as the Trustee s representative. The Trustee doesn t accept responsibility for any information provided on Virgin Money s website or the advice and arranging services provided by Virgin Money under its own AFSL. Virgin Money and its related entities don t guarantee the capital invested by members, the performance of the specific investments available or Virgin Super generally. Trustee The Trust Company (Superannuation) Limited ABN , AFSL Level 20, 357 Collins Street, Melbourne VIC 3000 The Trustee is the trustee of Virgin Super and the issuer of the PDS and this guide. The Trustee is one of Australia s largest specialist trustees. Neither the Trustee nor any of its related entities guarantee the capital invested by members, the performance of the specific investments available or Virgin Super generally. 4 Virgin Super

5 Custodian BNP Paribas Securities Services ABN Level 6, BNP Paribas Centre, 60 Castlereagh Street, Sydney NSW 2000 Administrator Mercer Outsourcing (Australia) Pty Ltd ABN , AFSL GPO Box 4650, Melbourne, VIC 3001 Mercer is the world s #1 global super administrator 5 years running. Mercer has provided superannuation-related services to Australians for over 40 years. For the fifth year in a row in 2015, Mercer was named the World s Best Provider of Pension Plan Administration Services by Global Finance magazine; the global award is another indicator for Australian superannuation funds that they are set to benefit from ongoing global and local innovation in customer administration services, says the world class provider. Mercer provides administration services for Virgin Super, which includes the provision of our Customer Care Team. Fund Manager Macquarie Investment Management Limited ABN The Trustee invests benefits and contributions to Virgin Super in underlying funds managed by Macquarie Investment Management Limited (Macquarie). Macquarie is a responsible entity for Macquarie Investment Management s business activities in Australia. Macquarie Investment Management offers securities investment management expertise across a range of asset classes including fixed interest, listed equities (domestic and international) and infrastructure securities. It delivers a full-service offering to both institutional and retail clients in Australia and the US, with selective offerings in other regions. Macquarie Investment Management is a part of Macquarie Group. The Trustee has unfettered discretion to determine which fund manager(s) and investment products are used in Virgin Super s investment options. The Manager of the underlying funds may change without prior notification to members. Insurer OnePath Life Limited ABN , AFSL The Insurer is one of Australia s leading life insurers. The Insurer provides access to insurance benefits for Virgin Super s members. Virgin Super 5

6 What s Inside? Section 1: How super works 7 Section 2: Benefits and features of Virgin Super 16 Section 3: Privacy statement 18 Section 4: Risks 20 Section 5: How we invest your money 24 Section 6: Fees and costs 34 Section 7: Tax stuff 40 Section 8: Other information 43 Section 9: Jargon Buster 46 6 Virgin Super

7 Section 1 How super works Topics covered in this section include: contributing to your super about rollovers and transfers withdrawals. Contributing to your super What, who and how to make contributions? The what, who and how is described below but contributions rules also apply. These may affect Virgin Super s ability to accept contributions for you or on your behalf, as well as the tax you pay. Check out Tax Stuff in Section 7 of this guide for more information about tax and contribution limits. What We accept the following contributions either on a one-off or regular basis: Employer contributions (one-off or regular) The mandated minimum Super Guarantee (SG) that an employer must pay Personal voluntary (one-off or regular) You choose to make additional payments Who Paid in by? Your employer on your behalf From your post-tax salary or other sources (personal contributions may be deductible for self-employed, or other eligible persons) How Payment method SuperStream^ compliant methods (eg. Clearing house or payroll solution) BPAY Salary sacrifice An arrangement where a portion of your pre taxed salary is paid directly into Virgin Super. This can have tax advantages for some *. Your employer, with your consent from your pre-tax salary SuperStream compliant methods (eg. Clearing house or payroll solution) Spouse (one-off or regular) Your spouse may make contributions on your behalf Rollovers and transfers Moving of monies from one super fund to another Your spouse (including a de facto spouse of the same or opposite sex) Your other super fund (they need to receive an instruction from you, but we can help out so that it s easy!) BPAY SuperStream compliant methods Virgin Super 7

8 What We accept the following contributions either on a one-off or regular basis: Super Guarantee credits Credits that represent super contributions owed to you from a previous employer Co-contributions If you make personal voluntary (after tax) contributions and are eligible, the Government will also make a super co-contribution up to certain limits Who Paid in by? Via the Australian Tax Office (ATO) Government How Payment method We can receive these on your behalf at any time by Government process We can receive these on your behalf after you have submitted your tax return and we have reported your contributions to the ATO ^ SuperStream is the government mandated way for employers to make contributions to superfunds which came into effect 1 July * The tax advantages will depend on your personal circumstances so we recommend you obtain professional advice. Salary sacrifice contributions will count as income when assessing eligibility for Government co-contributions, spouse contribution rebates, tax deductible member contributions or welfare benefits. Rollovers and transfers don t count as contributions under superannuation legislation however we ve shown them here to illustrate the many different ways you can grow your Virgin Super account. Registered to BPAY Pty Ltd ABN You may also be able to pay other amounts into your super, for example: certain disablement amounts on settlement of a disability claim (outside of super); proceeds from the sale of a small business; and super sourced from a foreign super fund. If you re going to receive any of these amounts or are considering payment of them into your super, we recommend you obtain appropriate advice. For Employers Virgin Super does not accept cheque contributions. If Virgin Super is your nominated default fund for SG contributions, you may use the Virgin Super provided clearing house solution or an alternate SuperStream compliant solution such as a Clearing House/Payroll solution of your choice. If you are remitting contributions on behalf of an employee that has exercised choice of fund, you can use the Small Business Superannuation Clearing House (if your business has 19 or fewer employees or an aggregated turnover below $2 million) or any other SuperStream compliant solution such as a Clearing House/Payroll solution of your choice. 8 Virgin Super

9 What are the contribution rules? There are rules set out by the Government relating to the acceptance of contributions by super funds really they just say who can and can t make a contribution. We can t accept: Member contributions from you if we don t hold your Tax File Number (TFN); or A non-concessional (after tax) contribution made for or on your behalf that exceeds your non concessional contributions limit, based on your age on 1 July in the year in which the contribution is made. Contributions made to Virgin Super that conflict with the contribution rules may be rejected or refunded by the Trustee. A refund of contributions after allocation to a member s account may be adjusted for any investment fluctuations, reasonable costs and insurance premiums for cover provided prior to the refund (if permitted under Virgin Super s governing rules). If a refund is not possible, the amount may be transferred to an Eligible Rollover Fund (refer to page 14 for more information). If you would like further information about the Trustee s policy relating to refunds of contributions where a TFN is not held for a member, contact our Customer Care Team on for more information. Employer contributions and personal voluntary contributions by eligible self-employed (or substantially self-employed) persons may be tax deductible provided the criteria for deductibility is met. For personal super contributions made by self-employed (or substantially self-employed) persons, this includes the need for a valid notice of a self-employed person s intention to claim a tax deduction (Deduction Notice) to be submitted to Virgin Super. Go to for more information about claiming a tax deduction for personal super contributions. For more information about the taxation treatment of contributions, including contribution limits for taxation purposes, see Tax Stuff in Section 7 of this guide. Where s my other super? Can t remember where all of your super is? Track it down using the online SuperSeeker tool at ato.gov.au or call them on Virgin Super 9

10 Government Contribution Incentives Take advantage of Government incentives to contribute to super the Government Co-Contribution Scheme and the Low Income Super Contributions. Government co-contributions To be eligible for the Government co-contribution you must satisfy all of the following requirements: you must earn 10% or more of your total income from carrying on a business, eligible employment, or both; your total income (conditions apply) must be under the co-contributions upper threshold. Please see for up-to-date information on the co-contribution threshold that applies; you must not be a temporary visa holder at any time during the income year in which the contribution is made (exceptions apply for New Zealand citizens in Australia and certain other prescribed visa holders); you must be under 71 years of age at the end of that income year; and you must lodge a tax return. If you make a personal after-tax contribution and your total income (conditions apply) is under the co contributions lower threshold ($34,454 in 2015/16), the Government may contribute $0.50 for each dollar you contribute up to $500 p.a. The maximum contribution payable reduces for every dollar your total income exceeds the lower co-contributions threshold, until your total income reaches $50,454 (2015/16). For full information regarding eligibility and to use the ATO Government co contribution calculator go to ato.gov.au. Salary sacrifice contributions and deductible member contributions don t count. However, if you re self-employed and under the age of 71, you may be eligible for the co-contribution if you make non deductible (after-tax) personal contributions, 10% or more of your total income is from employment and/or business activities and you meet the Government s other eligibility criteria. If you d like further information, we recommend you seek professional advice. All thresholds are correct at time of publication, however are subject to change in future years. Go to for up-to-date information including eligibility criteria, income thresholds and Government contribution incentive amounts applicable from year to year. Low income super contributions To qualify for a low income superannuation contribution: you or your employer must make concessional contributions to the Fund; your adjusted taxable income must be $37,000 or less; you must earn 10% or more of your total income from eligible activities, including being an employee, running a business or both; and you must not hold a temporary resident visa at any stage during the year (unless you re a New Zealand resident). If you qualify, the low income superannuation contribution is 15% of the total of your concessional contributions for the year up to a maximum of $500. Note: the government has proposed to repeal the Low income superannuation contributions with effect from 1 July This had not yet passed as law on the date this document was prepared. 10 Virgin Super

11 Important behind-the-scenes information Every time your employer makes a contribution for you, we re required to deduct contributions tax from that contribution (currently at the rate of 15%). This tax is transferred and held in a special account (the Tax Provision Account ) until the monthly payment is made to the ATO. While this money is in the Tax Provision Account, it earns interest. This interest will be put to good use to help pay for administration and management expenses of Virgin Super, such as system upgrades. This means we don t have to pass all of these costs onto you. About rollovers and transfers You can move monies from one super fund to another. For example, you can transfer any super (including lost super) you have in another super fund that you have previously participated in, into Virgin Super. Usually, a transfer request must be actioned within 30 days after all relevant information has been provided to your previous super fund. This is sometimes referred to as portability of super. More information about portability is provided on page 12 under Withdrawals. There are some great reasons to keep your super in one place, instead of having lots of super funds with small amounts of money in them: it may save you fees it reduces the risk of you becoming a lost member (see page 15 for more information) you can keep track of it all! If you ve got super in loads of places, you can also track down lost super using the online SuperSeeker tool at or call them on For more information about the use of TFNs please see Section 7 Tax Stuff. Check with your other super fund(s) what fees you ll incur, benefits you may lose (for example, insurance) or other consequences of moving your old super to Virgin Super (we can t advise you about this). If your rollover comes from an untaxed source (for example, some public sector schemes) you may incur tax (deductible from the rollover amount). You can complete an online rollover request at (sign in using your personal log-in) or we can help you roll in your super over the phone. We will contact the other super fund(s) for you. Call the Customer Care team if you need any help. If your transfer is from an overseas fund, refer to Section 2 of this guide for further information. Virgin Super 11

12 Withdrawals Topics covered in this section include: what benefit are you entitled to? when can you access your benefit? what happens to your super when you die? what is portability? What benefit are you entitled to? Your benefit in Virgin Super is equal to the amount of any contributions or other amounts paid into Virgin Super by you or on your behalf after taking into account the investment performance applicable to your investment option and any fees, costs and taxes. If you re covered by insurance, an additional insurance benefit may also be payable to you in certain circumstances (for example, Total and Permanent Disablement). For information on how investment performance affects your benefits, check out the information about unit pricing in Section 5 of this guide. When can you access your benefit? Your ability to access your benefits from Virgin Super is subject to the Trust Deed and super legislation. Superannuation law prevents you from accessing your super until you retire from the workforce and have reached a certain age (your preservation age ). Your preservation age will vary between 55 and 60 years depending on when you were born: Date of Birth Preservation Age Before 1 July years 1 July 1960 to 30 June years 1 July 1961 to 30 June years 1 July 1962 to 30 June years 1 July 1963 to 30 June years After 30 June years If you are an Australian citizen, New Zealand citizen or permanent resident, your retirement savings can only be accessed under other Government prescribed conditions (called conditions of release) including: you leave employment with a participating employer of Virgin Super and your benefit is less than $200; you leave gainful employment on or after age 60; upon your death; you suffer a terminal medical condition; you become permanently incapacitated; you experience severe financial hardship and meet certain requirements (subject to further cashing restrictions); you have compassionate grounds for needing the money, as approved by the Department of Human Services (subject to further cashing restrictions); attaining age 65; 12 Virgin Super

13 reaching preservation age and permanently retiring from the workforce; you were previously classified as a lost member who is found, and the value of your benefit in the fund, when released, is less than $200; or where the law otherwise permits (for example, to satisfy an ATO Release Authority). Temporary residents can access super savings in some (but not all) of these circumstances or if they permanently depart Australia and their visa has expired or been cancelled in the form of a Departing Australia Superannuation Payment (DASP). New Zealand citizens will not be eligible for a DASP, even if they are the holder of an eligible temporary resident visa. This is because New Zealand citizens may still have retiring rights in Australia regardless of whether they exercise that right. For more information about when temporary residents can access super, go to If you have transferred or rolled over super into Virgin Super, your benefits may include non-preserved amounts (if sourced from pre 1 July 1999 benefits transferred into Virgin Super). From 1 July 1999, all super contributions (including member contributions) and earnings are preserved. Any component of your benefit that was non-preserved at 1 July 1999 will continue to be non-preserved and can be taken in cash at any time if a condition of release has been satisfied in relation to that amount. Any partial payment of super benefits from Virgin Super must be withdrawn from the exempt (tax free) and taxable components in proportion (see Section 7 of this guide for more information about these components). Marriage breakdown If your marriage breaks down, your super may be able to be split under Family Law legislation. Under recent Government reforms, splitting of super under the Family Law Act has been extended to the breakdown of de facto relationships (including same sex relationships). For further details, please contact your legal adviser. What happens to your super if you die? Your benefit entitlement on death (Death Benefit monies) will consist of: your super benefit; plus the proceeds of any insurance claim admitted by the Insurer. You ve got three options for nominating who you d like to receive your Death Benefit if you die (i.e. while you re a Virgin Super member). Refer to Section 8 of this guide for more information on the options. Proof of Identity The Government enacted legislation to counteract money laundering and terrorism financing (AML/CTF legislation). You may be required to provide proof of identity prior to being able to access your benefits in cash (lump sum or pension payments) or purchase a super pension (called customer identification and verification requirements). These requirements may also be applied by the Trustee from time to time in relation to the administration of your super benefits as required or considered appropriate under the AML/CTF legislation. You will be notified of any requirements when applicable. If you do not comply with these requirements there may be consequences for you, for example, a delay in the payment of your benefits. As a result of the AML/CTF legislation the Trustee has become the subject of another regulatory body, called the Australian Transaction Reports and Analysis Centre (AUSTRAC). The Trustee is required to provide yearly compliance reports to AUSTRAC and notify AUSTRAC of suspicious transactions. This may involve the provision of personal information about you to AUSTRAC. Note: confirmation of your identity may also be required when transferring super benefits between super funds. Failure to provide necessary information may result in a delay in the transfer of benefits. Virgin Super 13

14 What is portability? Under the Government s portability rules, you can transfer some or all of your benefits to an alternative super fund at any time. Upon receipt of all necessary information, super funds will have a maximum of 30 days to transfer benefits except that a longer period may apply in the case of illiquid investments. We may require additional information if you request to transfer benefits to a self-managed super fund. Eligible Rollover Fund Trustees of super funds have a broad power under super legislation to transfer super accounts to the ATO, or to an Eligible Rollover Fund (ERF) which is a special super product for lost super and other amounts. Subject to any requirement to pay unclaimed super benefits to the ATO, if we lose contact with you and your balance is less than $2,000 (and you become a lost member) OR your account balance falls below the minimum permitted account balance ($1,000), your benefits may be transferred to an ERF. The Trustee may also transfer No TFN Tax refund amounts recovered from the ATO (for a member or former member) or refunds of contributions under Government contribution rules to an ERF if after reasonable endeavours the refund cannot be made. If it s simply a matter of topping up your account, we ll invite you to do this before we transfer your benefit. When your benefit transfers to the ERF, you won t be a member of Virgin Super and any insurance benefits will cease. The ERF used by Virgin Super is Super Money Eligible Rollover Fund (SMERF), whose contact details are: Super Money Eligible Rollover Fund (SMERF) PO Box A2499 Sydney South NSW 1235 Tel: SMERF has investments and costs that are different to Virgin Super. SMERF doesn t provide insurance cover. If you d like more information about SMERF s features, contact them directly for a copy of the SMERF PDS. The Trustee of Virgin Super is also the trustee of SMERF and receives remuneration from SMERF in that capacity. Unclaimed Super Super providers are required to transfer accounts classified as unclaimed super to the ATO. If two items of written communication to you are returned to us as unclaimed mail from your last known address and no contributions have been received in the last 12 months, or you are regarded to be an inactive member (as defined by Government legislation), we ll classify you as a lost member and report this to the ATO. Where lost members who have balances of less than $2,000 ($4,000 from 31 December 2015), or where an amount has not been received in respect of them in the last 12 months and the super provider is satisfied that it will never be possible having regard to the information available to it to pay an amount to the lost members, their balances may be transferred to the ATO. 14 Virgin Super

15 Other circumstances in which super benefits must be transferred to the ATO include if you re a former temporary resident who doesn t claim their super at least 6 months after expiry of your visa or leaving Australia (as notified to the Trustee by the ATO). The Trustee is obligated to pay unclaimed super of a non-resident to the ATO. A non-resident has the right to apply to the ATO to claim their super. The Trustee has decided that it will not notify or provide an exit statement to a non-resident member whose benefit is transferred to the ATO in accordance with the relevant legislation, relying on relief granted by the Australian Securities and Investments Commission. For more information about lost members or unclaimed money go to Virgin Super 15

16 Section 2 Benefits and features of Virgin Super Choice of products You have flexibility in how you invest your funds Virgin Super Essentials: We do the hard work for you. Your funds will be invested in our LifeStage Tracker Balanced option, which automatically adjusts how your super is invested as you get older, providing you with more security as you approach retirement. Virgin Super Essentials is our default fund (so if your employer added you to Virgin Super, this is the product you ll be in). It is also an authorised MySuper product. Virgin Super Plus: Suited to those who want to get more involved and take control of their super. You can change how your super is invested as often as you like. Once you re in We want you to be informed and excited about your super. So as well as receiving great service from our Customer Care Team, we ll contact you regularly so that you can manage your super account. (Note: Unless you notify us otherwise, and if we have a valid address for you, Virgin Super will send all communications to you via ): to start with you ll receive a welcome letter and online password we ll send you regular information to show you how your super is doing we ll also update you with: periodic newsletters (including investment snapshots) quarterly Reports (to keep you updated as to the market and Virgin Super s performance) your annual statement (to keep you updated on details of your super) Virgin Super s Annual Report (this will be posted on our website but if you prefer to receive this by post just call our Customer Care Team on and we ll send it to you) Don t forget you can check your super and make changes to your investment options online at our website, virginmoney.com.au. Find it all online Check up on your super by logging into your online account at virginmoney.com.au. You can: View your Virgin Super account balance Update your personal details Switch between Virgin Super Essentials and Virgin Super Plus Switch between investment options (Virgin Super Plus only) 16 Virgin Super

17 Update your Insurance cover View your statements Manage your communications preferences Initiate benefit payments If you re not an online type of person, you can call our Customer Care Team on am 6pm AEST, weekdays. Confirmation of transactions Just so you re sure we haven t missed your request, we ll confirm the following transactions, as well as any others that are required to be confirmed by law: rollover amounts that you transfer into Virgin Super benefit payments full and partial exits Don t forget you can also check these and other transactions by logging into your online account. Flexibility when you leave employment what happens if you leave your job? Avoiding paying multiple fees and keeping things easy are among the benefits of having all your super in the one place. If you leave or change jobs, you will still remain a member of Virgin Super. If you start a new job and are able to choose to have your employer s Super Guarantee Contributions paid into your Virgin Super account, you can print and complete the Super Choice Form from our website and hand it to your HR Manager so they can start paying them into your account. Don t forget to notify us if any of your contact details change so we can keep in contact with you. Also consider the impact of leaving or changing your job on any insurance cover you may have (including the cost of cover). Refer to the Virgin Super Insurance Guide for more information about insurance. Transfers into Virgin Super from the UK In April 2015, the UK Government made changes to the tax and pension rules governing UK pension schemes. These changes meant that many Australian super funds, including Virgin Super, are no longer a UK Qualifying Recognised Overseas Pension Scheme (QROPS). If you wish to transfer your UK pension to a non-qualifying scheme (such as Virgin Super), you will be liable for additional UK tax charges on your transferred funds. It is important that before you transfer any benefits you consider all your options. You should seek independent advice before deciding to transfer your UK pension to Australia. For further information go to virginmoney.com.au While you re on maternity or paternity leave, so are your fees It s a simple change that will put an end to one of the unfair disadvantages new parents have to put up with. Virgin Super offers new mums and dads in the Virgin Super Plus option 12 months freeze on their Administration Fee. For more information and how to apply, go to virginmoney.com.au Virgin Super 17

18 Section 3 Privacy statement How we protect your privacy Virgin Super ( Fund ) is promoted by Virgin Money Financial Services Pty Ltd ABN , AFSL and issued by The Trust Company (Superannuation) Limited ABN , AFSL ( Trust ). The Fund is administered by Mercer Outsourcing (Australia) Pty Ltd ABN AFSL ( Mercer ). This privacy and security notice relates to how Virgin Money Financial Services Pty Ltd and each of its related bodies corporate, including Virgin Money (Australia) Pty Limited (ABN ) and Virgin Money Home Loans Pty Ltd (ABN ) (collectively referred to as Virgin Money ), as well as Trust and Mercer ( our, we, or us ) collect, use and disclose your personal information. We collect your personal information so that we can manage your product, send you statements and other information, let you know about features of any rewards program that may be part of your product, respond to your questions, solve your problems, verify your identity, perform administrative functions, conduct customer satisfaction research, improve our products, develop new products and so that we and our related companies and corporate partners can tell you about other products and services you may be interested in. We may also collect your personal information to comply with legislative and regulatory requirements, for example under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), Superannuation Industry (Supervision) Act 1993 (Cth), Superannuation Guarantee (Administration) Act 1992 (Cth), Insurance Contracts Act 1984 (Cth) and Corporations Act 2001 (Cth). Tax File Number (TFN) The Trustee may use your TFN in accordance with all relevant laws and legislation i.e. consolidating your accounts within Virgin Super. If you provide consent, the Trustee may also use your TFN for the purpose of locating and rolling over super balances from other funds. If you don t provide us with your personal information or otherwise authorise us to collect this information from third parties, we may not be able to provide you with one or more of our products or services. Collection We will ordinarily collect any information about you directly from you or where it is provided to us with your authority. If personal information about you is collected by third parties on any website you have accessed through our websites, we may also collect or have access to that information as part of our arrangement with those third parties. If at any time you supply us with personal information about another person, you should ensure that you are authorised to do so and you agree to inform that person of the content of this notification and consent. With your consent, we may also need to collect health information about you for insurance purposes (from you, from your doctor or from your employer). From time to time we may receive information that we have not asked for about you from third parties. We will only keep, use and disclose this information as permitted by law. 18 Virgin Super

19 Disclosure We may sometimes disclose your personal information to other organisations to deliver our products or services to you which may include marketing our own products. The types of organisations to which we may disclose this information include other financial services companies that we partner with to provide our products and services, regulatory bodies and government agencies, courts and external dispute resolution schemes, your agents, including brokers or financial advisers, our agents, contractors and professional advisers who assist us in providing our services, your referees and guarantors, your or our insurers, and organisations that carry out functions on our behalf including mailing houses, data processors, researchers, system developers or testers, accountants, auditors and lawyers. We may also disclose your personal information to third parties where you request us to or consent to us doing so or in order to provide our product and services to you and to fulfil our legal obligations. Some of the parties with which we exchange your personal information, including our partners, service providers and other third parties listed above, may be located outside Australia in countries including New Zealand, Philippines, India, Singapore, the United States of America, United Kingdom, Spain and Israel. Virgin Money, their related bodies corporate, affiliate companies and their partners and agents may use your personal information (including your telephone number and your or other electronic addresses) to keep you informed about other products, services and offers which may be of interest to you. They may do this by phone, mail, and SMS or other electronic messages. These consents operate indefinitely and shall remain in effect unless and until you notify us that you do not want to receive such direct marketing communications. If you do not wish to receive these communications please notify us online or by phone on Privacy Policies The Virgin Money, Trust and Mercer Privacy Policies set out how you can access and correct information we hold about you, how you can complain about a breach by us of your privacy rights and how your complaint will be handled. The Virgin Money Privacy Policy can be found at Trust s Privacy policy at and Mercer s Privacy Policy at If you have a complaint about a breach of your privacy, please contact: Privacy Officer, Virgin Money, Level 8, 126 Phillip Street, Sydney NSW 2000 Telephone privacy@virginmoney.com.au. Privacy Officer, The Trust Company (Superannuation) Limited Level 20, 357 Collins Street, Melbourne VIC 3000 Telephone (03) ; or Privacy Officer Mercer Outsourcing (Australia) Pty Ltd GPO Box 4650, Melbourne VIC 3001 Telephone Virgin Super 19

20 Section 4 Risks Risk and return what is it and why is it important? All investments are subject to some degree of risk. This means that you could lose some of the money in your investment. Investment returns may be volatile or investments may not meet your objectives or needs. We cannot guarantee the performance of Virgin Super or its investment options, the repayment of capital or any particular rate of return. If you leave Virgin Super, you may get back less than the amount of contributions paid into Virgin Super because of the level of investment returns earned and fees, costs and taxes. It goes without saying that you should consider all the risks that may affect your investment. In general, asset classes with a higher potential return also have a higher level of risk. This is shown in the table below. Consider the information below together with the risk/return profile and information about the potential for a negative annual return shown for each of the investment options in Section 5 of this guide. Investment risk High Growth Assets shares property Low Risk Low cash fixed interest Return Defensive Assets High 20 Virgin Super

21 The potential for negative annual returns and risk/return profile is based on the nature of the underlying investments and is shown in terms of the likelihood of negative annual returns over a specified period. The Standard Risk Measure is based on industry guidance to allow members to compare investment options that are expected to deliver a similar number of negative annual returns over any 20 year period. The Standard Risk Measure is not a complete assessment of all forms of investment risk, for instance it does not detail what the size of a negative return could be or the potential for a positive return to be less than a member may require to meet their objectives. Further, it does not take into account the impact of administration fees and tax on the likelihood of a negative return. Members should still ensure they are comfortable with the risks and potential losses associated with an investment strategy. Virgin Super 21

22 The general sources of risk The general sources of risk 1. Investment Risk Generally, the higher the investment risk, the higher the investment earnings over the long-term. This relationship between the level of investment risk and the potential investment earnings (or return) of the investment is sometimes called the risk-return trade off. 2. Market Risk Market Risk includes universal factors, such as economic cycles, Government policy, interest rates and inflation, which may cause increases and decreases in market valuations. 3. Currency Risk This is the risk that movements in foreign currency will affect the domestic value of overseas investments (for example, international shares). 4. Liquidity Risk Liquidity risk is the extent to which investments can be converted into cash or other liquid securities without suffering a substantial reduction in value. This risk may arise in circumstances where in order to liquidate an asset quickly, it may be necessary to sell that asset at a substantial discount and so have a negative impact on the overall performance of the Fund. Liquidity risk can change from time to time. An underlying investment may be liquid when acquired but may become illiquid at a later point in time. Where illiquidity affects underlying investments, this may result in delays in meeting benefit payment or transfer requests. 5. Security Specific Risk The value of an individual holding, interest bearing and hybrid securities may change as a result of factors such as changes in management and industry specific events. This risk can be managed by diversifying the holdings across the Fund. 6. Property Risk Property related listed securities invest in direct property related assets. Investment in property may not be as easily converted as cash and may change materially in value as a result a decrease in property values. Income from property can vary due to occupancy rates or rent levels or tenant defaults. 7. Legislation Risk There s always a risk that changes in legislation (such as super and taxation laws) may affect the accessibility, value or other conditions of your super. 8. Fund or Operational Risk This involves a risk that Virgin Super could terminate, the Trustee could be replaced or our fund managers could change. When you invest in a super fund, you also rely on the quality of the personnel and systems utilised to manage its operations (including investments). If key personnel leave or there is a significant failure in administrative systems, your investment may be materially affected. 22 Virgin Super

23 The Trustee cannot eliminate all risks associated with your super. However, it manages the impact of any investment risk by carefully adhering to considered investment policies and asset allocation approaches. The investment options also allow (to varying degrees) for diversification of underlying assets or investments. Diversification can help reduce the impact of risk and unexpected short-term movements in returns. You can help manage investment risks by taking an active role in choosing a suitable investment option for your personal circumstances and employing diversification of investments relevant to your needs. Naturally, we plan to keep Fund Risk to a minimum. The Trustee also has a risk management plan to help manage investment and other risks. The above section provides a general outline of the risks that may potentially impact your investment in Virgin Super. However, it s not an exhaustive list. You should seek your own professional advice about risks relevant to your investment, your current financial situation and retirement goals, because everyone is different. For an explanation of some of the terms used in this section refer to the Jargon Buster at the end of this guide. Virgin Super 23

24 Section 5 How we invest your money Topics covered in this section include: what you need to know about investment and performance? what are your investment options? what else do you need to know before you invest? What do I need to know about investment and performance? Our aim is simple; deliver competitive long-term performance. How do we do this? Using an investment approach that is easy to understand, proven and reliable. Investing in funds that are managed by experts. It s up to the Trustee which experts it uses. We use a straightforward investment approach called indexing An index fund manager does not try to pick winning stocks in an attempt to outperform the market like actively managed funds. Instead, they create an investment portfolio that includes all or a representative sample of the securities within a market index. So, if the market goes up or down, the value of the return of an index fund should go up or down in the same proportion. We think this is a smarter way of managing your super, because: you get competitive long-term performance without complexity. you don t have to worry about trying to guess whether one fund manager is going to perform better than another. index fund managers keep their costs lower, and that means we keep your investment fees low. indexing can be very tax efficient and is one of the most effective ways of spreading your investment risk. Check out Virgin Super s past performance at virginmoney.com.au (remember that past performance is not an indication of Virgin Super s future performance). 24 Virgin Super

25 What are your investment options? Virgin Super offers you two product offerings ( offers ) to choose from. You just pick which one you d prefer. 1. Virgin Super Essentials Leave the hard work to us and invest in our pre-mixed investment options, which automatically changes as you get older. We call this LifeStage Tracker Balanced. OR 2. Virgin Super Plus Create your own investment mix by choosing any combination from our range of investment options: a) LifeStage Tracker Balanced b) LifeStage Tracker Aggressive c) Australian Shares d) International Shares e) Listed Property f) Cash/Fixed Interest When your employer joins you up to Virgin Super, your super will be invested in our default option (Virgin Super Essentials) unless you tell us you d like to change offers. If you are signing up to Virgin Super as an individual, then you must choose which offer you d like to join (either Virgin Super Essentials or Virgin Super Plus) when you complete your application. 1. Virgin Super Essentials How does it work? As you get older, LifeStage Tracker Balanced automatically reduces your investment risk by changing your investment mix from growth assets (shares and property) to defensive assets (cash and fixed interest). Generally, younger people have a longer investment timeframe and can therefore invest more in growth assets in order to maximise returns. If young people suffer a short-term loss they often have the time to recover this later. People approaching retirement may be less tolerant to risk as they have a greater amount of retirement savings and less time to recover short term losses. So it may make sense to have a greater proportion of money invested in defensive assets. By changing your investment mix automatically, LifeStage Tracker Balanced aims to give your super greater stability as you get closer to retirement. The table below shows how assets are allocated in LifeStage Tracker Balanced (depending on your age). The asset allocations represent the investment strategy utilised to achieve the objectives of the LifeStage Tracker Balanced options. These are indicative allocations only from time to time there may be some variation depending on the experience of the underlying funds, investment market fluctuations or asset allocation decisions. Virgin Super 25

26 LifeStage Tracker Balanced Under 40 s mix 40 s mix 50 s mix 47% Australian Shares 32% International Shares 6% Listed Property 85% Growth Assets 15% Cash/Fixed Interest 70% Growth Assets 38% Australian Shares 24% International Shares 30% Cash/Fixed Interest 8% Listed Property 50% Growth Assets 25% Australian Shares 15% International Shares 50% Cash/Fixed Interest 10% Listed Property 20% Growth Assets Over 60 s mix 10% Australian Shares 5% International Shares 5% Listed Property 80% Cash/Fixed Interest More information on automatic changes to LifeStage Tracker Balanced asset allocations As you get older and move from one of our life stages to another i.e. when you turn 40, 50 or 60 years old, we ll automatically adjust your super investment mix. We do this when you reach the applicable ages (on your 40th, 50th and 60th birthdays). Remember: Your individual circumstances can change over time, so you may need to re-evaluate your investment objectives and consider whether Virgin Super Essentials is appropriate to your needs. If you re unsure about your choice of investment options or you want advice that takes into account your personal circumstances, you should seek independent financial advice from an appropriately qualified professional. When you re ready to take control, it s easy to switch to Virgin Super Plus. 26 Virgin Super