Income Protection helped Tanya recover

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1 SEPTEMBER 2012 Income Protection helped Tanya recover You will recall that all members of were provided with automatic income protection insurance back in November Here s an example of just how valuable that insurance cover can be. Tanya Beard is the first aid officer at JBS Australia - Beef City near Toowoomba in Queensland. In November last year, she was breaking-in her horse, Zanzii, when she broke her ankle. It was 24th November at 4:30pm I can remember it clearly! she says. I went to put Zanzii s bridle on when he stepped on my leg, just above my ankle. He s not a very big horse but he just managed to get just the right spot and broke my ankle in several places. Tanya went to Toowoomba Base Hospital. The staff were great. I had to stay in for seven days before they could operate because the swelling just wouldn t go down, she says. The doctors Tanya Beard had told me the surgery would be about an hour, but it actually took 5, as it was difficult to put back together. When they were finished, they told me I did not want to know how many stitches I had. Tanya now has a plate and 6 screws on one side of her foot and 4 screws on the other. So far, she s had a total of five months off work as a result of the injury. When News caught up with her in April, she had only been back at work for a few weeks and was still in a moon boot and undergoing ultrasound bone healing treatment. However, if her ankle fails to heal correctly, she may end up having to go back on leave. I didn t really think about claiming on my income protection insurance. I thought I was only going to be off for 6 weeks, so I didn t bother, she says. But given the extended nature of her leave, Tanya has now applied for a back-payment of her income protection insurance. Remember, if you have an injury or sickness that prevents you from working, you have up to 12 months to make a claim. As a member of, Tanya automatically received the 4 units of cover costing her just $3 per week. This provides up to 75% of a yearly salary of $32,000 that s $2,000 per month before tax. While Tanya earns more than $32,000, she hadn t applied for a higher level of cover. Like a lot of members, she just hadn t thought about it and certainly didn t expect to break her ankle and be off work for 5 months. But increasing your cover to match your wage is very easy to do and there are no medical questions asked if you earn less than $400,000! And if you do have an accident like Tanya s, you ll be very glad you took out the cover. continued overleaf... Hop on the web! For all the latest information about, log onto Get the latest news and results, view fact sheets and download forms. It s all there to make your super easier to understand. Tanya at work in her moon boot.

2 Income Protection helped Tanya recover - continued It s so good learning about the Income Protection insurance. To be honest, I had figured it was just too late to put in a claim, so anything I get will be a bonus, Tanya says. It was hard going for 5 months. I didn t have a lot of sick leave or annual leave because of stand-down days. Thankfully we have an employee run emergency fund that costs us all $2 per week and that gave me a few small payments, but 5 months without work really hurts financially. Income Protection at a glance Automatic benefit for all eligible members under age 70 and you re covered anywhere anytime. Unlike some insurance policies, you are covered with no questions asked. Standard cover costs just $3.00 per week and allows you to claim up to 75% of your pay or up to $2,000 per month (whichever is less) if you become sick or injured and are unable to work. If you earn more than $32,000 per year (but less than $400,000) you can increase your level of cover with no questions asked. Benefits are limited to 75% of your normal average income earned from employment during the 52 weeks prior to the last pay period before any injury or sickness resulting in a claim under the Policy. Injuries incurred prior to the commencement of cover do not attract a benefit. The Income Protection benefit is payable for up to 2 years unless you are able to return to work sooner or until you turn 65, whichever happens first. If you are aged between 65 and 70 years, the benefit payment is payable for up to 52 weeks for injury or 12 weeks for sickness or the date you turn 70 (whichever occurs first). Benefits commence after only a 30 (calendar) day waiting period. Income Protection Insurance Income Protection is a type of insurance that could replace up to 75% of your pay if you become sick or injured and can t work helping to protect you and your family from financial hardship while you recover. members automatically receive this insurance with no questions asked. How it works Hotline It s an automatic benefit for all eligible members under age 70 and you re covered anywhere anytime. Unlike most insurance policies, you are covered with no questions asked even if you have a pre-existing sickness. Standard cover is 4 units, at a cost of $3.00 per week for manual workers 1 or $2.12 per week if you work in an office 2. Under this standard cover, you can claim up to 75% of your pay or up to $2,000 per month (whichever is less) if you become sick or injured and are unable to work 3. If you earn more than $32,000 per year you also have the option to increase your level of cover. And if you do so within 60 days of receiving your Welcome Letter from us, the increased benefit will be automatically approved including cover for a pre-existing sickness. This applies to members who earn up to $400,000 per year. Benefits are limited to 75% of your normal average income earned from employment during the 52 weeks prior to the last pay period before any injury or sickness resulting in a claim under the Policy. The Income Protection benefit is payable for up to 2 years unless you are able to return to work sooner or until you turn 65, whichever happens first. If you are aged between 65 and 70 years, the benefit payment is payable for up to 52 weeks for injury or 12 weeks for sickness or the date you turn 70 (whichever occurs first). Benefits commence after only a 30 (calendar) day waiting period. This is exclusive to members This Income Protection Insurance is exclusive to. It is a great opportunity to give you and your family genuine peace of mind. For full details of this Income Protection Policy, please refer to the Member Guide, visit our website at or call the Hotline on A manual worker is a member who is employed to perform manual and or physical duties in an abattoir, processing plant, butcher s shop or similar environment. 2. An office worker is a member who performs only non-manual duties and works at least 75% of the time in an office environment and has done so for the last 12 months. Office workers pay a lower premium because they are less likely to be injured while working. 3. Members can cancel the policy within 60 days of receiving their Welcome Letter from us. Any premiums paid will be refunded. No refunds will be provided on policies cancelled outside the 60 day special offer window. service@amist.com.au Locked Bag 5390 Parramatta NSW 2124 Issued by Australian Meat Industry Superannuation Pty Ltd (ABN , AFSL , RSE Licence L ) as Trustee of the Australian Meat Industry Superannuation Trust (ABN , RSE Registration R ). The material provided is for information purposes only and is not intended to be considered as advice. The Trustee has not taken into account your personal financial circumstances when developing this communication. Before making any decision regarding your superannuation it is recommended that you seek advice from a qualified financial adviser. For more information, go to our website and download the Fact Sheet. Case Study: Do you have enough insurance cover? If you re at that stage in life where your commitments are increasing, perhaps there s a mortgage and a family to consider, not to mention the continuous stream of bills, then it s important to make sure that you and your family are protected just in case you can t work due to serious illness or injury. Or even worse, if you weren t around at all. Did you know that as an member, you already have some insurance protection built into your account (unless you have chosen not to accept it)? offers all members Life Insurance and Income Protection. The Life Insurance pays a lump sum benefit to your dependents in the event of your death and the Income Protection pays you a regular benefit if you are injured or suffer an illness that prevents you from working for a period of time. Having insurance cover within your super means the premiums are paid from your super balance, not your pay. So you can have the cover you need without having to compromise your lifestyle. But can you be sure you have the right amount of cover? When deciding on the right amount of insurance, the main factors you need to consider are covering costs, repaying debts and replacing lost income. For example, Bob is 37, earns $45,000 per year and has a mortgage of $300,000. If he were to die, he would like to have enough insurance to cover his debts and to provide an income of $20,000 per year for 5 years, which would see his youngest child through high school. Using Bob s example he would need the following cover: Repay Debt Mortgage $300,000 Replace Income Income lump Sum Cover Costs Miscellaneous expenses $10,000 Total $405,000 $95,000 (assuming an investment return of 6%pa) As you can see Bob needs to have around $405,000 in cover to make sure his family is looked after if something should happen to him. This level of cover will mean Bob s wife can pay-off the mortgage and look after the kids until the youngest leaves school. How would you and your family cope if you couldn t work for an extended period of time? What would they do if you were to die? The most valuable asset that you have is your ability to earn income. That s why insurance is so important. Want to enjoy the peace of mind that Bob has? Then why not call our Money Coach on to make sure you re properly covered? continued on next page...

3 continued... What you get automatically with AMIST provides Life Insurance and Income Protection that has been designed specifically for meat workers. This means you can get the cover you and your family deserve. In many cases, you can increase your cover without going through any medical examinations or filling in a lot of forms. Income Protection pays 75% of a member s income if they are unable to work, due to illness or injury, for a period longer than 30 days and with a benefit period of two years. The maximum monthly benefit is $50,000 assuming your annual income supports this level of cover. Illness or injuries incurred prior to the commencement of cover do not attract a benefit. offers financial planning services through Money Solutions, so you can discuss your insurance needs with a qualified financial adviser. They will look at your financial commitments and family situation then recommend an appropriate level of cover. This will help ensure that your family is protected if something happened to you. The person depicted in this example is fictional and the circumstances outlined are for illustrative purposes only. Assumptions The lump sum of $95,000 is invested at a rate of 6% with five annual drawdowns of $20,000 pa. All funds are completely exhausted after five years. A change in one or more of the variables and assumptions will produce different results. This is general information only and does not take into account your individual objectives, financial situation or needs. The content of this article was provided by Money Solutions Pty Limited (AFSL ). Money Solutions has been contracted by The Trustee to provide members with personal financial advice. Any financial product advice given by Money Solutions is provided under their own AFSL. Just call on for some simple qualified financial advice. Market Update with Megan Pham s Chief Investment Officer examines how the slowing global economy impacted financial market sentiment. Financial market sentiment dipped sharply in May 2012 with increased concern of a potential collapse in the Euro zone. A short period of relief across markets followed the election of the pro-austerity party in Greece, but underlying economic weakness remained a concern....the labour market has been a source of strength over 2012, with the current unemployment rate at 5.2% as at 30 June Recent US data has also been disappointing adding additional concern that the US recovery will take longer than hoped. And the Chinese slowdown is also feared to have gone further than expected. This could have negative effects on the Australian economy through our trade arrangements. In an effort to counter these effects and provide support to growth, Governments around the world have continued to deliver fiscal and monetary stimulus to their economies. In Australia, business conditions remain mixed between mining and non-mining sectors. Consumer sentiment picked up slightly in May 2012, but is still below the long-term average. Interestingly, the labour market has been a source of strength over 2012, with the current unemployment rate at 5.2% as at 30 June As a consequence of all of this, investors became increasingly risk-averse, resulting in falls in local share markets and a rise in demand for safe-haven bonds. The Reserve Bank of Australia (RBA) has cut the cash rate by a total of 1.25% since June 2011, reflecting mixed domestic conditions and a softening international growth outlook. The cash rate now sits at 3.50% as at 30 June Megan Pham is Chief Investment Officer at and is responsible for managing the day-to-day investment activities of the $1 billion fund. This includes monitoring and managing the investment strategies, investment managers, cash flows, asset allocation, risk assessment and research. Megan has a vast understanding of the financial services industry, in particular Australian Superannuation, drawn from her previous experience at Non- Government Schools Superannuation and Mercer Investment Consulting. Her background covers a wide variety of key disciplines including investment management, investment risk management, strategy, compliance, and operational management. Megan holds a Bachelor of Mathematics and Finance and has also completed a Master of Actuarial Studies at University of NSW. Performance for this financial year Investment options As at 30 June year return (p.a.) 10 year net compound average return Secure 5.45% 4.86% Capital Stable 5.41% NA* Balanced 0.88% 6.46% Growth -1.19% 5.57% High Growth -4.28% NA* * The Capital Stable Option and the High Growth Option were introduced on 1 April 2010.

4 Megan Pham explains the Growth Option 5% 2% 13% 25% offers members the choice of investing in any of the 5 different investment options. These options vary in terms of the returns they generate and their associated risk levels. Low return options are generally lower in risk, whereas the higher the potential returns, the more likelihood of a negative return on occasions. The Growth Option provides investment mainly in Australian and international shares with a relatively small component in Australian bonds. Returns are expected to vary significantly from year to year. There is a higher probability of negative returns than the Balanced Option with Australian and Overseas Fixed Interest Fixed interest investments generally take the form of bonds. A bond is essentially a loan contract between two parties where the amount paid for the bond will be repaid plus interest after an agreed period of time has passed. Corporations and governments issue bonds in order to raise money. invests in bonds both in Australia and overseas. an estimated probability of a negative return, on average, eight out of every thirty years. The Growth option aims to provide a return of 4% more than the rate of inflation over any five-year period. It was first introduced in January 2002 and as at 30 June 2012 the ten year net compound average return is 5.57%. The pie chart below shows how money in the Growth option is invested as at 30 June 2012 and the types of investment vehicles it uses. As you can see, the money is spread between a variety of sectors (with an obvious bias towards shares) rather than a single investment type. This helps to improve the security of your money by not having all the eggs in one basket. Cash s cash investments are managed in-house. We generally use term deposits offered by the major banks, including ANZ, nab, Commonwealth, Bank of Adelaide and Bank of Queensland. The average length of a term deposit is 4 months, but because we don t need to keep a great deal of cash at hand, we can invest for longer periods and therefore obtain more favourable returns. Alternative Investments 5% Investments that don t fit into any of the other categories 25% are referred to as alternatives. These can include a diverse selection of opportunities such as toll roads, airport and bridges as well as social infrastructure including retirement homes, prisons etc. Examples could include Melbourne Airport, Port of Brisbane and Pacific Hydro. 13% 2% Australian Shares We use five investment managers to invest in companies listed on the Australian Stock Exchange. These investments could include well-known companies such as Westpac, ANZ, Rio Tinto, Telstra, BHP and Woolworths. Direct Property We use three specialist property funds managers to help us with this allocation. is invested in properties such as the Doncaster Shopping Centre, 500 Bourke Street Melbourne as well as Forest Lake Village Shopping Centre and high quality buildings in the CBD of most capital cities. International Shares We use five investment managers each of whom specialises in a different part of the world. At any one time, your money in International Shares could be invested in companies like Walt Disney, Apple, Nestlé, Johnson & Johnson or L Oreal. Hotline

5 The Government Co-contribution Scheme has changed Low income superannuation contribution (LISC) could help some members The Government Co-Contribution is a scheme where the Federal Government will match the after-tax contributions to super made by members whose assessable income is below $46,920 per annum for the financial year commencing 1 July The maximum co-contribution the Government will now pay is $500. From 1 July 2012, the Government has introduced the LISC. Eligible members will receive a super contribution of up to $500 from the Government which is effectively a rebate of the 15% contributions tax paid on the compulsory Superannuation Guarantee contributions that your employer makes for you. Members with an adjusted taxable income of less than $37,000 p.a. may benefit from the LISC. Under the Co-contribution Scheme, the Government will contribute an additional $0.50 for each $1.00 contributed by a member from their after-tax pay. It s a great way to boost the retirement savings for members who qualify. Eligible members will not need to apply for this benefit after the annual taxation assessment is finalised, the Australian Taxation Office will make the payment to eligible members superannuation funds. 30% contribution tax for very high income earners Take our quick quiz and you could win $200! How well do you know your super? You ll find the answers in this edition of News. In what year was automatic Income Protection Insurance introduced for members? What does SG stand for? We encourage you to seek financial advice to see whether you may benefit from either of these concessions. Just call our Money Coach on From 1 July 2012, the Government has effectively increased the tax on before-tax (concessional) contributions to super from 15% to 30% for people who earn more than $300,000 p.a. At the time of writing the Government has not indicated how it intends to collect this additional taxation. What does LISC stand for?... What is the current maximum annual Government Co-contribution amount?... Entries close 31 December Just send your answers and details below to: Words GPO Box 4293 Sydney NSW 2001 or Fax to: What is Australia s current rate of unemployment? Please be sure to write your name and contact details clearly. Name:... What percentage of the Growth investment option is invested in cash? Member No:... Address:... Amongst other things, the Growth investment option invests in Australian shares. Name one of the companies involved.... What university did Megan Pham go to? A concessional contribution is one made from before-tax income or after-tax income?... State:... Postcode:... Phone:

6 Excess before-tax Life after Contributions work with the Tax Refund AMIST Pension There are several things that make AMIST Pension special. The Government has identified that a number of people were inadvertently charged additional tax due to circumstances of which they were unaware, such as the timing of the actual payment of contributions by their employer to their superannuation fund. There are dozens of reasons why it pays to belong to. There s the low fees, the solid and industry-competitive returns, the fact that all profits go back to members and all the extra benefits like automatic life insurance, automatic income protection as well as financial advice over the phone. And just like, our Pension s fees and charges are very low. In fact, AMIST Pension has been judged as having some of the lowest fees around by Money magazine for the past three years in a row. We ve won other awards too, for outstanding value in But just as important is the fact that AMIST Super is here to look after you throughout your entire life. So when it comes time to hang up the work gear, you can remain an important part of the AMIST family by moving to the AMIST Pension. But in the end the point is to give you an income stream that makes your retirement more comfortable. And when you consider that after age 60, all income drawn from your AMIST Pension is completely tax-free, it s no wonder our pension members are happy. AMIST Pension is an account-based pension for people aged 55 and over who have retired from the workforce. So, when you start to think about your life after work, remember, AMIST Pension is here to help look after you. To remedy this, members assessed as having excessive before-tax (concessional) contributions in the financial year ending 30 June 2012 will be allowed to have excess contributions of up to $10,000 removed from their superannuation fund and treated as assessable income (taxed at their marginal tax rate). This concession may only be claimed once in any financial year ending on or after 30 June 2012 and only applies to concessional contributions. Where the non-concessional contribution cap (e.g. voluntary after-tax contributions) is exceeded the additional taxation will be applied without exception. First, AMIST Pension invests in the same investment options as, so you know you ll be getting the same solid returns. But because AMIST Pension is not required to pay any tax on earnings, the returns are even better! The art is not in making money, but in keeping it. AM/AR/31-49/NEWS /12 ISS2 Proverb Member Services Meet our team of service professionals. Melinda Gibson is the manager of the Member Services team. Remember our Member Services Managers are here to help you get the most from your super. Feel free to contact them. Royston Bennett on or roystonb@amist.com.au for Vic, SA, WA, Tas and southern NSW. David Ashton on or davida@amist.com.au for QLD, NT and northern NSW. Issued by Australian Meat Industry Superannuation Pty Ltd (ABN , AFSL , RSE Licence L ) as Trustee of the Australian Meat Industry Superannuation Trust (ABN , RSE Registration R ). The material provided is for information purposes only and is not intended to be considered as advice. The Trustee has not taken into account your personal financial circumstances when developing this communication. Before making any decision regarding your superannuation it is recommended that you seek advice from a qualified financial adviser. Money Solutions (AFSL ) has been contracted by to provide members with simple financial advice as part of their membership. Any financial product advice given by Money Solutions is provided under their own AFSL. Just call on for simple qualified financial advice at no additional cost. MAILING ADDRESS Locked Bag 5390 Parramatta NSW 2124 Hotline: Fax: service@amist.com.au