Australian YMCA Superannuation Fund

Transcription

1 Australian YMCA Superannuation Fund Report for the year ended 30 June 2010 Trustee: AUSTYMCA Nominees Pty Ltd RSE Licence L Fund Registration R

2 A message from the Chairman The Trustee of the (AYSF) is pleased to present the report to members for the year ended 30 June This Annual Report to Members is designed to provide you with important information about the operation of your Fund, AYSF. The Report highlights the financial position and investment performance results of AYSF, and alerts you to changes occurring in the Fund. Thank you for taking the time to read our Annual Report. If you have any comments or questions please contact the super staff. Richard Edwards Chairman Report contents Important Member information 03 AYSF Information 05 Your Investments 05 Investment Performance 07 Growth Investment Strategy 08 What are AYSF s historical returns? 09 How do AYSF returns compare over a longer time frame? 10 Fixed Interest Investment Strategy 11 Interim Crediting Rate 12 Financial statements 12 Other information 15 Australian YMCA Superannuation Fund Directors Richard Edwards (Chair) Alan Bray Ed Ferguson Ian Heraud Adrian Lombardo Sathy Sappany Mark Sargent John Simkiss Staff Kim Campbell - Administrative Assistant Sabina Hamidovich - Fund Administrator Regan Lesko - Administrative Assistant Chris Shelly - Finance Manager Carolyn Todhunter - Strategy and Compliance Contact the super staff You can contact the superannuation team either by: Telephone Fax super@ymca.org.au 02 Report for the year ended 30 June 2010

3 Important Member information Member Representative Election Result AYSF is managed by a Board of eight Directors. Half of the Board is employer appointed and the other half is appointed via an election process where members are given the opportunity to vote for their preferred candidate. Ross Melville and Robert Anderson retired in May The member representative trustees who successfully nominated for a position on the Board of Directors are: Mr Alan Bray Mr Ed Ferguson Mr Sathy Sappany Mr Mark Sargent The number of nominations submitted equalled the available vacancies. Therefore there was no election required. The three year term for the incumbent member representative Directors commenced May Information about the requirements of the role of a member representative Director is included on our website select Fund Elections. Investment Choice AYSF now offers choice based on two investment strategies; a Growth Investment strategy and a Fixed Interest Investment strategy. Members are able to choose a blend of the two strategies to create an investment strategy which suits their needs. Members are able to change their investment strategy quarterly. Information about investment choice in AYSF is available on our website select Investment Choice. Alternatively if you would like information sent to you please contact the super staff. Estate Planning Binding Death Nominations If you would like to provide specific instructions to the Trustee about the distribution of your superannuation benefit in the event of your death you should complete a Binding Death Nomination. The Trustee is obliged to follow the instructions in your Binding Nomination provided it is valid at the time of your death. If you would like further information please contact the super staff. Nominated Beneficiaries In the event a death benefit is payable the Trustee will refer to your nomination and be guided by it when determining how to distribute your benefit. Please take this opportunity to review your Nominated Beneficiaries and update the nomination if appropriate. Refer to page 2 of your latest Annual Review Statement for a list of your current Beneficiaries. Superannuation Guarantee Contribution When an employee s gross income exceeds $450 per month, their employer must pay a minimum of 9% of the employee s income into superannuation. This means that the minimum contribution paid on your behalf in any month will be $40.50 if you have earned $450 or more in a month. If you have questions about the contributions paid into AYSF by your employer please contact your payroll centre. Your Tax File Number Please ensure that we have recorded your Tax File Number (TFN) to avoid unnecessary additional tax on your contributions or your benefit. Refer to the right hand side of the Personal Details box on the first page of your latest Annual Statement to check whether we have your Tax File Number. If we have received employer contributions on your behalf and we do not have your TFN your employer contributions may be subject to an additional 31.5% tax. This means you will be paying a total of 46.5% tax on your employer contributions. Your Annual Review Statement will illustrate any additional tax within the Full Transaction Statement beginning on page 3. Extra tax will be shown as an Income Tax Expense. You should also be aware we are unable to accept any member contributions from you if we do not have your TFN. Member contributions are the contributions which are considered when determining your eligibility for government cocontributions. If we don t have your TFN and you would like to provide it to us please contact the super staff. Report for the year ended 30 June

4 Budget 2010 and Henry Taxation Review In May 2010 the Government responded to recommendations in the Henry Taxation Review by proposing the following initiatives for superannuation: The Superannuation Guarantee (SG) rate will gradually increase from 9% to 12%. Commencing in the 2013/2014 fi nancial year the rate will increase to 9.25%. Subsequent gradual rises will take the rate to 12% by the 2019/2020 fi nancial year. From 1 July 2013 employees will be entitled to SG contributions from their employer up to age 75. Currently SG contributions are only required to be paid to employees aged 70 or less. From 1 July 2012 the Government will contribute up to $500 for individuals with adjusted taxable incomes up to $37,000, effectively reducing the tax on super for these individuals to zero. The maximum amount of $500 will not be indexed. The amount payable will be calculated by applying a 15% matching rate to the SG contributions made for eligible individuals. The concessional contribution cap will increase to $50,000 from 1 July 2012 for those persons aged 50 or more with total superannuation balances of less than $500,000. Concessional contributions typically include SG and Salary Sacrifi ce contributions. Many of these initiatives were linked to the introduction of the proposed Mineral Resources Rent Tax which has subsequently been modifi ed after negotiation with the mining industry. Superannuation Co-Contribution decreased The Government has announced that it will permanently retain the matching rate for the superannuation co-contribution at 100%. The maximum co-contribution payable for personal contributions is $1,000. The Government intends to freeze, for 2010/11 and 2011/12 the indexation applying on the income threshold above which the maximum co-contribution begins to phase down. The thresholds will be frozen at $31,920 and $61,920 for the two year period. Contribution Limits From 1 July 2009 maximum employer contributions (including salary sacrifi ce contributions) per person was halved from $50,000 to $25,000 per annum. The transitional threshold, for members approaching retirement, was also halved to $50,000 and will apply for the 2009/10, 2010/11 and 2011/12 years of income. Pension Age The age pension age will gradually be increased to 67 years of age. The new pension age will apply to new pension entrants from 1 July This means it will apply to people who are 57 years of age or younger in July Pension drawdown relief extended Late in June the Government announced it has extended the drawdown relief to recipients of account-based pensions for a further 12 months. The minimum drawdown amount for account-based pensions is half the original requirement. This means that the minimum amount that a person aged less than 65 must draw down from their pension for the 2010/2011 fi nancial year will remain at 2% of their account balance on 1 July 2010, rather than returning to the normal level of 4%. If you are concerned about the impact of these changes on your superannuation savings you may like to discuss the issues with a fi nancial adviser. At this time the implementation of proposed initiatives for superannuation depends on the ability of the Federal Government to successfully legislate the changes. Super System Review The fi nal report from the Super System Review, also known as the Cooper Review, has been released. There are over 177 recommendations in the report which are being considered by the Government. We will communicate further with you once the Government issues clear policy guidelines about the aspects of the report which will be adopted. 04 Report for the year ended 30 June 2010

5 AYSF Information Your Investments Membership The AYSF was made up of 15,256 members at 30 June Membership is open to all current YMCA employees, and their spouses, in Australia and to former employees who retain their benefit in the Fund. During the reporting period the Trustee transferred 712 inactive accounts with balances of $ or less to AUSFund Eligible Rollover Fund. Administration The Trustee has a service agreement with the National Council of the YMCAs of Australia to provide administration services for the AYSF. This 3 year agreement was reviewed and renewed commencing 1 July Website Our website aims to provide you with specific information about your fund, AYSF as well as general current information about superannuation. It is an important resource for our members. If you have not already visited our website please go to We welcome your feedback about our website. Feedback may be forwarded to super@ymca.org.au Your Investments From 1 July 2009 AYSF offered choice based on two major investment strategies: a Growth strategy, and a Fixed Interest strategy. Members may choose to be entirely in one strategy, or a mix of the two, as long as the total percentage in each option equals 100%. For example, 60% Growth and 40% Fixed Interest. Further information about investment choice in AYSF is available on our website select Investment Choice. Investment Management The Investment Sub-Committee manages the investments of the Fund. The members of the Investment Sub- Committee are: John Simkiss as Chair of the Sub-Committee Richard Edwards Ian Heraud Adrian Lombardo The Trustee is grateful for the asset consulting advice provided by Shadforth Financial Group to the Investment Sub-Committee.

6 Asset Mix As at 30 June 2010 the asset mix was: 0.10% 0.10% 4.79% 4.79% 4.79% 0.10% 18.89% 9.99% Cash Private Equity Interest Bearing Securities Property 18.89% 23.86% 42.48% International Shares Australian Shares 9.99% 42.48% 23.86% The market value of the following investments exceeds 5% of the total market value of the Fund s assets: 13.28% Vanguard Australian Shares Index Fund 06.22% Platinum International Fund 05.81% Vanguard Australian Property Securities Index Fund Combined assets invested with a fund manager which exceeds 5% of the total market value of the Fund s assets: Fund policy toward derivative securities The use of derivatives in the investment portfolio is limited. A derivative is a financial contract whose value is derived from the associated share value. Derivative transactions include such instruments as futures, options, share ratios, warrants, swaps and other composites. Total Percentage Fund Manager 5.29% PM Capital split between the Australian Opportunities Fund and the Absolute Performance Fund. 5.78% Investors Mutual split between the Australian Smaller Companies Fund and the Industrial Shares Fund % Platinum split across the Asia, European, International and Japan Funds % Vanguard split across the Australian Shares Index Fund, International Shares Index Fund both hedged and unhedged and Property Securities Index Fund. 06 Report for the year ended 30 June 2010

7 Investment Performance Year Ended 30 June 2010 (AYSF) is pleased to advise members that the Growth investment strategy achieved positive double digit returns for the year ended 30 June At the same time the Fixed Interest investment strategy achieved a return which exceeds the annual Consumer Price Index (CPI) by greater than 1%. AYSF declared a set of quarterly rediting rates for each investment strategy during the year. The quarterly crediting rates, applied for a full year, produce the following results for the year ended 30 June 2010: Accumulation Accounts 14.37% p.a. for amounts invested in the Growth investment strategy, and 4.32% p.a. for amounts invested in the Fixed Interest investment strategy. Income Stream Accounts 15.75% p.a. for amounts invested in the Growth investment strategy, and 4.97% p.a. for amounts invested in the Fixed Interest investment strategy. Fund Performance These results represent a significant improvement from the negative returns experienced twelve months earlier. The significant turnaround in results should reinforce for members the importance of considering long term performance figures when making investment decisions. The returns of super funds are linked to the performance of share markets around the world, and the ongoing volatility in world regions flows straight through to super fund returns. It seems that one of the outcomes of the Global Financial Crisis (GFC) is that superannuation investors are experiencing more investment volatility than ever before. The AYSF Growth investment strategy holds around 70 to 80% of its assets in Australian shares, international shares, and property all typically volatile type assets which can and will result in short term losses from time to time. When markets fall, short term performance returns can be significantly impacted. For these reasons members should be aware that long term performance numbers of around 5 to 10 years provide a good guide of a super fund s performance. Longer-term historical data is useful in assessing the relevance of current year returns to your retirement savings goals, and provides you with some perspective on individual years of over-performance or under-performance. Reserves As at 30 June 2010 AYSF held a reserve of 0.95%. The reserve is an allowance for tax provisions on asset valuations, and for operational risk. Reserves are invested in accordance with the Growth investment strategy. No allowance for smoothing is made. Report for the year ended 30 June

8 Growth Investment Strategy Growth Investment Strategy Annual Returns for year ended 30 June 2010 The Growth Investment Strategy has a benchmark mix of 80% allocation to growth assets such as shares and property, and 20% in more defensive fixed interest assets such as cash, longer dated Government securities and hybrid investments. The objective of the Growth investment strategy is to provide returns which exceed inflation by 3 4.5% per year over the long term, 6 to 10 years. How do AYSF returns compare in the short term? AYSF s annual performance for the year ended 30 June 2010 exceeds the median return published by a number of industry research agencies. The graph of annual returns illustrates AYSF s performance for the year ended 30 June 2010 compared to the median figures published by: 15% 12% 9% 6% 3% 0% Chant West Median Return Selecting Super Median Return Chant West publishes the performance of a range of funds with a growth investment option where growth assets represent between 61 and 80 percent of investments. AYSF Selecting Super publishes the performance of a range of industry, corporate and government funds with growth investment options where growth assets represent more than 75% of investments. AYSF s annual performance not only outperforms the median returns of all survey groups, it exceeds the first quartile result from Selecting Super of 11.6% and Chant West of 11.8% p.a. A further survey group which publishes the performance of Funds with a growth investment option which you may refer to is SuperRatings. The SuperRatings website publishes the latest results, and historical information under media releases. The growth investment option result is the SR50 Growth Index. AYSF s annual performance also exceeds SuperRatings SR50 Growth Index median result. 08 Report for the year ended 30 June 2010

9 What are AYSF s historical returns? The graphs below illustrates the historical annual declared crediting rate over a period of 5 years. Growth Investment Strategy < year end 30 June > % 15% 10% 5% Income Stream Rate p.a. 0% Accumulation Rate p.a. -5% -10% -15% Fixed Interest Investment Strategy < year end 30 June > % Income Stream Rate p.a. 4% 3% n/a n/a n/a n/a Accumulation Rate p.a. 2% 1% 0% Report for the year ended 30 June

10 How do AYSF returns compare over a longer time frame? AYSF performance figures show that the average net investment return over the five years to 30 June 2010 was 3.75% p.a. Over this same five-year period inflation was 3.03% p.a. Taking a longer term perspective, over the last 10 years AYSF achieved a compound average of 5.77% p.a., whilst inflation over the same period averaged at 2.77% p.a. The graph below presents AYSF s compound annual return performance over 5 and 10 year periods compared to the compound median long term return figures published by the research agencies outlined above. AYSF s performance over the long term is competitive and in particular exceeds the 5 year and 10 year performance median return published by each research agency, including SuperRatings figures. 6% Growth Investment Strategy Long Term Compound Returns to 30 June % 4% 3% 2% 1% 0% 5yr 10yr 5yr 10yr 5yr 10yr 5yr **Note that Chant West does not publish a 10 year return figure. Selecting Super Chant West** Inflation AYSF 010 Report for the year ended 30 June 2010

11 Fixed Interest Investment Strategy How has the AYSF Fixed Interest strategy performed? AYSF has offered a Fixed Interest investment strategy since 1 July The Fixed Interest strategy provides a conservative investment strategy mainly invested in fixed interest. The objective of the Fixed Interest strategy is to provide stable returns over a shorter timeframe, and which will keep pace with inflation over the short to medium term, such as 1 to 3 years. Fixed Interest Investment Strategy Annual Returns for year ended 30 June % 4% 3% 2% 1% 0% Inflation AYSF AYSF s first year result for the Fixed Interest investment strategy illustrates that the annual return of 4.32% exceeds inflation for the year to 30 June 2010 of 3.1% by 1.22%. Report for the year ended 30 June

12 Interim Crediting Rate From 1 July 2010 Financial statements The latest interim rates are located on our website select Investment Returns. Interim rates reflect market performance and are continually monitored. Interim rates may change at anytime. Deductions Fees and charges AYSF charges no Trustee fees because all Directors volunteer their services to the Fund. Entry to the Fund is free and members are charged an annual administration fee of $60. If your account balance at 30 June 2010 is $1,000 or less, the fee is calculated on the value of interest your account balance has earned, subject to maximum of $60. Members who have insurance cover for death or disablement and for ill health have the premium deducted directly from their account balance. The benefit payment fee is currently set at $50. Government taxes The Government s 15% contribution tax and any surcharge taxes are deducted directly from your contribution account and paid to the Australian Taxation Office. An abridged set of the Fund s audited financial accounts for the 12 months ended 30 th June 2010 are presented for your consideration. A full set of the audited accounts and Auditor s report are available on request to the Fund Administrator. Statement of Financial Position at 30 June Investments Australian Shares International Shares Property Diversified fixed income Cash Other Assets 2010 $ ,285 17,518 7,333 13,966 3,459 1, $ ,555 13,426 5,373 11,966 3, Total Assets 75,398 61,215 Less liabilities Income tax payable Provision for deferred income tax Total Liabilities Net assets available to pay benefits 74,610 60,230 Represented by: Liability for accrued benefits Unallocated reserves 72,442 2,168 58,853 1,377 Total 74,610 60, Report for the year ended 30 June 2010

13 Operating Statement of the Year Ended 30 June 2010 $ $ 000 Net assets available to pay benefits at the beginning of the period 60,230 58,761 Plus Net Investment revenue Contributions revenue Employer Member Transfers in from other schemes Other Income 7,554 10, , (5,021) 11, , Total Revenue 20,672 8,316 Less Benefits paid Operating expenses Income tax expenses 5,204 1,287 (199) 4,233 1,126 1,488 Total benefits, expenses and tax 6,292 6,847 Net assets available to pay benefits at the end of the period 74,610 60,230 Trustee The Trustee of the Australian YMCA Superannuation Fund (AYSF) is AUSTYMCA Nominees Pty Ltd (ACN ). Robert Nicholson, CEO, YMCA Australia was the Company Secretary of the Trustee Company. In August 2010 Robert Nicholson retired as CEO, YMCA Australia and was replaced by Katherine Pengilly who accepts the role of Company Secretary of AUSTYMCA Nominees Pty Ltd. The company is managed by a Board of voluntary Directors which consists of an equal number of National Council appointed and member elected Directors. The Directors operate for the benefit of all Members and are responsible for the management of the AYSF in accordance with the Trust Deed and governing legislation. The Trustee has taken out indemnity insurance. Indemnity insurance provides protection to the assets of the Fund in the event of legal action involving the Directors. The Trustee Board meets formally each quarter and has appointed an Investment Sub-Committee to manage the investments of the Fund on a day to day basis. The Investment Sub-Committee reports to the Board at each quarterly meeting and forwards a monthly report to all Directors. Report for the year ended 30 June

14 As at 30 June 2010, the Board of Directors consisted of: Member Elected Directors Director Date Appointed Comment Alan Bray Ed Ferguson Sathy Sappany Mark Sargent 27/04/ /04/ /02/ /04/2010 Alan is currently the Chief Executive Officer of the YMCA of Brisbane and Y-Care (South East Queensland) Inc. and is a State Council Director. Alan has served with the YMCA for over 20 years in a number of senior management positions. He also has roles as a member of the National Leadership Team and IT Steering Committee and his qualifications include postgraduate study in finance, economics and business management. Ed is currently Chief Executive Officer of the YMCA of Ballarat, a position he has held for the past 13 years. Ed, a qualified teacher, has worked in the sports administration & recreation industry for over 30 years. Ed s management experience includes working for the 1996 Melbourne Olympic Games bid and early feasibility work for the Melbourne Commonwealth Games. Sathy is a Fellow of the Chartered Institute of Management Accountants and a Member of the Institute of Accountants. He has over 15 years of administration and senior management experience in the areas of financial control, risk management, advance budgeting and costing techniques. In addition he has experience auditing local and multi national organizations. Mark is a long term employee with the YMCA, having served for more than 22 years in varying managerial roles, both at state and national levels. Mark previously served as a Director of the fund in the early part of the decade, and today leads the role as chief Executive Officer of YMCA Estore Pty Ltd. Mark has a keen interest in financial management, investment and the share market, as well as qualifications in recreation and marketing. National Council Appointed Director Date Appointed Comment Richard Edwards Ian Heraud Adrian Lombardo John Simkiss 30/11/ /05/ /12/ /02/2004 Richard is a Fellow of the Institute of Chartered Accountants and has over 30 years experience as a Partner in firms of Chartered Accountants with National and International Affiliations. He is a Past President and currently a Director of the National Council of the YMCAs of Australia and the YMCA of Brisbane. He was awarded a medal of The Order of Australia in the General Division on the Queens Birthday 2001 honour list for service to the community. Ian is a Fellow and life member of the Financial Planning Association of Australia (FPA) and is a director of Shadforth Financial Group. He has practised financial planning for over 25 years and has served as a director of the FPA and the international Financial Planning Standards Board. Ian has co-authored two books on superannuation and financial planning and was the finance expert on ABC Melbourne s Saturday morning finance talk back show. Adrian has been involved in the financial services industry for more than 22 years following a successful military career. He is a Senior Vice President Wealth Management at Morgan Stanley Smith Barney, and a past Melbourne Branch Manager of this company, which is a large private client wealth management firm. Prior to joining Morgan Stanley Smith Barney, Adrian worked at Deutsche Bank as an investment advisor, and as a Director for Potter Warburg Securities, Sydney and Brisbane offices. He has also had several years experience as a portfolio and investment manager in the funds management industry. Adrian is an Affiliate of the Securities Institute of Australia. John is a Consultant in financial services, holding positions during his career over the last 30 years as Investment Manager for Telstra Super Pty Ltd, Director of Potter Warburg Group Limited and Group Treasurer of CRA Limited. John holds a Degree in Commerce from The University of Melbourne and is a member of both The Institute of Chartered Accountants in Australia and The Australian Society of Certified Practising Accountants.

15 Other information Eligible Rollover Fund (ERF) When your employment with the YMCA ceases we provide you with an estimate of your benefit entitlement from AYSF. If your benefit entitlement at this time is less than $ you may receive your benefit in cash simply by filling in the forms provided with your quote. If you do not complete the forms and return them to us within 90 days we will automatically transfer your benefit to the Unclaimed Super Fund (AUSfund). If we transfer your benefit to AUSfund you cease to be a member of AYSF. The contact details for AUSfund are: Phone: (for the cost of a local call) Fax: (for the cost of a local call) Post: P O Box 2468 KENT TOWN SA 5071 Hours: 8.30am to 5.00pm Monday to Friday Web: admin@ausfund.net.au Member Fees $10 per member per year or part-year. Responsible Entity operation cost of 0.27%. Investment management fees of 0.53%. As an ERF, all AUSfund accounts are protected from being eroded by administration fees. Member with an account balance below $50 are not charged the administration fee and do receive interest. AUSfund Investment Performance Year Annual Crediting Rate % % % % % % Report for the year ended 30 June

16 Trustee: AUSTYMCA Nominees Pty Ltd YMCA Australia Level 1, 88 Market Street South Melbourne 3205 Ph: Fax: web: RSE Licence L Fund Registration R