Statewide Pension.

Transcription

1 Statewide Pension Combined financial services guide and product disclosure statement This document was prepared on 3 August

2 Contents Welcome to the Statewide Pension 3 The Statewide Advantage 4 Sustainability at Statewide 6 Choosing your Statewide Pension 7 How to invest in the Statewide Pension 10 Your investment planning for the long term 11 Statewide s investment options What else do you need to know about investment? 18 What happens to your pension if you die? 20 Fees and other costs 21 Taxation 25 Your Statewide Pension and Centrelink/ Department of Veterans Affairs entitlements 27 Other information you should know 28 Financial services guide 30 Important information The Statewide Pension product disclosure statement (PDS) offers an interest in Statewide Industry Fund (Pension), division 3 within the Statewide Super Trust (the fund). The fund is a regulated and complying superannuation fund. Statewide Superannuation Pty Ltd ABN Australian Financial Services Licence (AFSL) Number , is the issuer and Registrable Superannuation Entity (RSE) licensee and trustee of the fund and is authorised to offer a MySuper product (unique identifier ). The information in this PDS is not personal advice. In providing this information to you we have not taken into account your objectives, financial situation or needs. We recommend that you seek professional financial advice from a licensed adviser. Significant benefits and risks Statewide can assist you in saving for your retirement in a tax-effective environment. It enables you to tailor your investment strategies to your own circumstances and attitude to risk. You should be aware that if you leave the fund you may get back less than the original amount you transferred into your pension account. This could be due to the level of investment returns earned by the fund, the fund s charges and the impact of tax. Laws affecting super may change at any time. The trustee is committed to ensuring that the fund is prudently managed. This commitment is demonstrated by a number of measures, such as corporate governance policies and codes of conduct. These can be found on our website under Investments. The trustee wants to make the following information clear to you: Neither the performance of the fund, the repayment of capital nor any particular rate of return is guaranteed by the trustee, the investment managers, service providers or associated companies of the parties mentioned in the PDS. Investment markets do fluctuate. If the investment options you choose are not right for you, you may not achieve the goals you set. Please refer to the investment sections of this PDS for further information. Who should read this PDS? This PDS is for everyone who wants to invest in a Statewide Pension product. Statewide offers both a retirement pension and a transition to retirement (TTR) pension. The differences between these two pension options are clearly explained in this booklet. Joining Statewide s as easy as 1-2-3! Read this PDS to make sure you understand all about the benefits of the Statewide Pension and the range of services that Statewide offers you. Complete the relevant application form enclosed with this PDS. Give the completed form to your financial planner, post it straight to us or drop it into our member centre at 211 Victoria Square, Adelaide. If you need any help our client services officers will be happy to assist you. Call This PDS may be updated or replaced at any time. Changes that are not materially adverse will be updated and made available on our website at Page 2 Statewide Pension

3 Welcome to the Statewide Pension Statewide is the industry fund for South Australians, with $6 billion in assets. In this product disclosure statement (PDS) you ll find important information about the features, costs, benefits and risks of investing in the Statewide Pension. Why choose the Statewide Pension? If you re already a member of Statewide, you ll be staying with the local super fund that you know and trust to make super easy for you. If you re a new member, you ll be joining a long-established super fund that s proud of its reputation for providing great products and services to its members since By investing in the Statewide Pension, not only will you benefit from keeping your retirement money in the tax-effective super environment, you ll also benefit from being able to choose from a range of investment options to help you meet your retirement goals. And we keep the costs of the Statewide Pension as low as possible, while providing you with great products and services. The Statewide Pension provides you with two options for your super money: a transition to retirement (TTR) pension, which allows you to continue to contribute to super through paid employment while receiving payments from your TTR a retirement pension, which provides you with regular income payments once you retire. Where to find more information Copies of this PDS and other Statewide publications can be downloaded from our website at Our website provides you with all the information you need about Statewide s great range of products, as well as access to a number of online services. That s part of the Statewide Advantage! Statewide Pension Page 3

4 The Statewide Advantage As an industry fund, Statewide is here solely for the benefit of our members people just like you. We re committed to ensuring that Statewide provides everything you need in a pension product. We re with you for the long term! Just because you re thinking about retirement or the big day s already arrived it doesn t mean that you have to leave Statewide. You can still enjoy all the benefits of remaining with a super fund you know and trust to make super easy for you. And if you re not already a Statewide member, why not start enjoying all the benefits of joining the industry fund for South Australians as you head into the next exciting phase of your life? We offer comprehensive retirement products for you to access when you re either transitioning to retirement or when you leave the workforce altogether. Investing in the Statewide Pension keeps your money in the tax-advantaged super environment and provides a regular income and a range of other benefits. You have access to Statewide financial planners who can provide you with personal advice to help you plan for your retirement. If you ve not yet retired, why not attend one of our popular retirement sessions, just for Statewide members? More information can be found on our website, or call us on Quality super products at low cost to you Statewide s Pension is low cost, simple to understand and operate, yet flexible. We have low administration fees, there are no entry or exit fees and your first investment switch in any financial year is free. In fact, we keep all our fees and charges as low as possible so that more of your hard-earned money stays working for you in your super. Investment choice and flexibility Statewide offers you a choice of 10 investment options, ranging from high growth options to cash. You have the freedom to invest your money to best suit your personal preferences and circumstances. You can change your investment option and can invest in more than one option at a time. See pages for full investment information. Keeping you up to date Statewide keeps you informed about your pension through: your annual statement annual reports member newsletters special offers e-news. Sign up for e-news and get the latest super info straight to your inbox. Easy to read and informative, it cuts down on natural resources to help save the planet 24-hour access to your account and all the Statewide information you need on our website, Help when you need it Our client services officers are available to give you information over the phone on , or in person at our member centre, located at 211 Victoria Square, Adelaide. Why not call to make an appointment? Manage your pension account online with Statewide.On.Line call to arrange your access today. You have access to a Statewide financial planner to help you with your super and long-term goals. Visit our website, to find out all about Statewide s great range of products. The Statewide Advantage Program The Statewide Advantage Program brings exclusive special offers from South Australian businesses to your inbox each month. These offers are only available via our e-news, so if you haven t yet signed up, visit our website at Just click on Sign up for e-news on the home page and follow the prompts. Or else call and we ll sign you up over the phone. Extra services for members Statewide does more than look after your pension account! Statewide members have access to ME Bank s range of banking products including home loans, term deposits, online and savings accounts and more, as well as discounted first aid courses, kits and other products through St John SA. Members also have access to discounted health insurance with Health Partners, with a 6% discount across their range of insurance products. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Offers available in South Australia only. You receive a 3% discount if you pay your insurance premium by direct debit and an additional 3% for being a Statewide member. No further discount applies. Page 4 Statewide Pension

5 Our member advice service We have tailored our advice service to suit your specific personal and financial circumstances. This service has been designed to meet the wide-ranging financial needs of all our members, by offering you access to the following: Factual information You can access factual information about your pension by calling or by visiting our member centre, conveniently located on the ground floor of 211 Victoria Square, Adelaide. General and personal advice If you re looking for general or personal advice about your pension investments, you re welcome to call our member solutions advisers. This service is at no cost to you and is easy to access. You simply call and ask to speak to a member solutions adviser. Full financial planning service Of course, there s our full financial planning service, where you can access financial advice on all areas of your finances. This service is provided by our financial planning team on a fee-for-service basis. Thinking about retirement? It s quite likely that you ve been looking forward to your retirement for many years. It s a time of opportunity and excitement, a chance to do all the things you ve been meaning to do travel overseas, spend more time with family, pursue new hobbies, or do volunteer work. It s a chance to unwind and simplify your life. Your Statewide Pension at a glance The Statewide Pension offers you: great service from a local team to provide you with all the help you need six diversified and four single asset class investment options a low weekly administration fee, with no additional fees for entry or exit Statewide.On.Line our secure online member area where you can view your account and manage your personal details the ability to select the investment option(s) that suits your investment goals. Plus value-added extras: access to financial planning advice educational services to help you understand retirement strategies discounted health insurance through Health Partners access to ME Bank products and services. Statewide can play a part in your retirement plans by helping to simplify your finances. Our pension products provide flexible and low-cost alternatives to help finance your retirement so that you can get on with the business of enjoying yourself. We can help you plan your retirement by offering retirement seminars and access to our financial planners. They can help you negotiate the often confusing worlds of tax and Centrelink rules so that you can make informed decisions about your future. Of course, you can also speak to our client services team and member solutions advisers (see above). Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Statewide Pension Page 5

6 Sustainability at Statewide Statewide has committed to embracing sustainability in the conduct of its business and in investing members money by integrating environmental, social and governance (ESG) principles. Because it s relevant to everything we do, we ve made sustainability a guiding principle across our business our investments, our organisation and our place in the community. In addition, we recognise the role that superannuation has in the wider global economy, including the impact of our operations and that of the companies in which we invest, on the wellbeing of the economic broader community and the natural environment. Responsible investment ESG factors such as climate change, human rights and corporate governance can have a material effect on investments. As such Statewide considers ESG factors to be relevant to the performance of the entire fund across all asset classes, sectors and markets over time. Statewide is a signatory to the United Nations Principles for Responsible Investment. Responsible investment practices are incorporated into our investment decision making in accordance with the Statewide ESG investment policy, which is available at Operating sustainably We believe sustainability makes good business sense so we re committed to minimising our impact on the environment and contributing to the local community while working to maximise your retirement savings through: measuring and managing our carbon footprint minimising our electricity and paper usage reducing waste to landfill, and practicing socially responsible purchasing behaviour. Community wellbeing At Statewide, we recognise our role as a local in contributing to the long-term sustainability of the South Australian community. We re South Australian just like you. We ve supported community programs and the South Australian business community for many years including: Business SA networking events the Mother s Day Classic fundraiser for breast cancer research the Nature Foundation s Walk for Nature Zoos SA Tammar Wallaby Conservation Program. For more information about sustainability at Statewide please visit the Sustainability page in the About us section of our website at Page 6 Statewide Pension

7 Choosing your Statewide Pension Generally, once you re aged 55 or over, you re able to take advantage of the Statewide Pension. You can access the Statewide Pension before you retire through a transition to retirement (TTR) arrangement. And our retirement pension provides you with a regular income in retirement. Opening your Statewide Pension account You re unable to commence your pension with money that you have outside of super, for example your bank account. You must bring any money into your super before transferring it to the Statewide Pension. You can consolidate multiple super accounts into your Statewide Pension via your super account, but only at the time of commencement. You re not able to transfer additional lump sums into your pension account once the account is activated and pension payments have commenced. Please provide details of the number of transfers you will be making into your Statewide Pension on your Transfer your super to statewide form. If all this seems a little complicated, remember our client services team is just a phone call away on to help you through the process. Alternatively, call to make an appointment at our member centre, conveniently located at 211 Victoria Square, Adelaide. Transition to retirement (TTR) pension If you re thinking of transitioning to retirement, once you reach preservation age (see the table below) you can transfer some or all of your super savings into a pension account and start a TTR pension while you continue to work. This enables you to continue making contributions to your Statewide account while using payments from your Statewide Pension account (your TTR pension) to supplement your income. The additional income from your TTR pension may also enable you to increase salary sacrifice contributions into your super account. You are advised to discuss this matter with a Statewide financial planner to see if this suits your particular circumstances. Preservation age Your preservation age depends on when you were born. Date of birth Preservation age Before 1 July July June July June July June July June After 30 June The maximum payment you can receive from your TTR pension is 10% of your pension account balance at the start of the financial year, or at the commencement date of your new TTR pension. We ll let you know your payment limits each year. Until you permanently retire from the workforce after preservation age, you won t be able to withdraw lump sums from your TTR pension in most circumstances. The only situations where you may be able to withdraw funds are: to cash in any unrestricted non-preserved amount (see the next page for more information about when super is unrestricted non-preserved) after satisfying another condition of release and notification us of this (e.g. reaching age 65) total and permanent incapacity in circumstances of severe financial hardship to pay a super surcharge debt to pay a release authority for tax assessment in relation to a family law payment split approval from the Department of Human Services (DHS) on compassionate grounds your death or a certified terminal illness. If you ve commenced a TTR pension you are able to roll your pension account balance back into your Statewide account at any time. When you reach age 65 or permanently retire after reaching your preservation age, you may make partial or full lump sum withdrawals at any time from your pension account. Transition to retirement example Meet Pam. She s 58 and looking to wind down after a busy career as a magazine editor. Pam wants to continue working, but has negotiated with her employer to reduce her hours so that she can spend more time writing picture books for children. After speaking with a Statewide financial planner, Pam found she is able to transfer some of her super to start a Statewide TTR pension and draw a regular income from it. This will make up for the reduction in salary she will experience through working fewer hours in paid employment. As she will still be employed, Pam will continue to make salary sacrifice contributions to her Statewide super account in order to boost her retirement savings. Pam is able to work less without it affecting her income, while still saving for her retirement. And best of all, she now has time to spend doing the things she loves. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Statewide Pension Page 7

8 Retirement pension The Statewide retirement pension is for you when you retire permanently from the workforce. You aren t able to establish your retirement pension with cash (e.g. from your bank account); you can only establish it with money you have in super. You can transfer your existing super savings into a pension account to start a Statewide retirement pension using any unrestricted non-preserved money you have in super. Your super balance becomes unrestricted non-preserved when you: reach preservation age and permanently retire (see page 7 for preservation ages) cease employment with a given employer once you reach age 60 reach age 65, or become totally and permanently disabled. Retirement pension example Meet Tim. He s 61 and after starting work on the factory floor 30 years ago, has progressed to being a manager in a car manufacturing company. After a major restructure at work, Tim finds himself offered a substantial redundancy package. He had planned on working until 65, as he has minimal super, but the redundancy offer causes Tim to reconsider his options. Tim visits a Statewide financial planner and discovers that while he can t roll the redundancy money directly into a pension account, he can make an after-tax contribution to his Statewide super account before he starts a pension. Tim can then roll his super into a pension account to start a Statewide retirement pension, from which he will draw a comfortable income. He has sufficient redundancy money left over to clear a few small debts and update his car. Tim even has enough to finance a trip to Cairns to visit his daughter. If you need help working out your retirement income based on your super savings, check out the retirement calculator in the Tools section of the Statewide website at Getting paid from your Statewide Pension Whether you choose a TTR or retirement pension, you re able to invest your money in more than one investment option. You make this choice on your Pension application form. You also need to select the bank account where you want your pension payments deposited. You can choose how often your regular income payments are made to your bank account fortnightly, monthly, quarterly, half-yearly or yearly. You can also choose when you would like your payments to commence. Payments will be made until your pension account balance is nil. Payments will be made to your bank account on your payment date or on the previous working day (if your nominated day falls on a public holiday or weekend). However, your financial institution may not allow access to the money until the following day. There is a legal requirement that a minimum payment be made to you at least annually. This amount is based on your age and your pension account balance as at the start of the financial year, or when you opened your pension account in the first year of your pension. The minimum payment requirements set out in legislation are shown below. Age Minimum annual payment Under 65 4% % % % % % % Percentage is applied to pension account balance (as described above). There is no maximum limit on the payments you can receive from a retirement pension. And you can withdraw a lump sum from a retirement pension account at any time, with a minimum amount of $2,000. If a partial withdrawal is made from your retirement pension, you must leave $2,000, or 10% of the balance of your pension account prior to withdrawal, in your pension account whichever is the greater. If you have less than $2,000 in your account and you wish to make a withdrawal then you will need to withdraw the entire balance. There is a special rule for calculating your first payment. If you commence your pension on or after 1 June in any year, no minimum payment is required in that financial year. If you commence your pension before 1 June a minimum payment must be made to you before 30 June of that year. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Page 8 Statewide Pension

9 Changing your payment amount You may alter the amount you receive from your pension (both TTR and retirement) as long as it falls between the minimum and maximum requirements. Remember, maximum requirements apply to TTR pensions. If your account balance falls to zero, your payments will cease and your account will close. The length of time that you ll receive payments from your Statewide Pension will depend on factors such as the amount of regular payment you choose, investment returns, and any lump sum withdrawals you make (you can t usually make additional cash withdrawals from a TTR pension see page 7). When deciding your payments each year make sure you consider your personal circumstances and how long you want your Statewide Pension account to last. We strongly recommend that you seek professional advice from a Statewide financial planner before commencing, withdrawing or transferring your Statewide Pension to ensure it meets your specific financial situation, needs and objectives. Call to make your appointment. Can I choose where my pension payments come from? You can choose which investment options your payments are taken from by completing the Pension payment drawdown section on the application form. This section allows you to choose how you receive your pension payments in relation to your investment holdings. You can either choose to receive your payments from each of your investment options in proportion to your current investment allocation (which you will have specified in the Investing your account balance section of the form) or you can choose the order or from which option(s) your payments are taken, as long as they match your investment holdings. You can change your selection at any time by completing the Future pension payments section of the Member investment choice/switching (retirement and transition to retirement) form, which is available on the Statewide website, or by calling us on Why talk to a Statewide financial planner? Our planners provide advice on a wide range of financial matters, including super and retirement planning, tax, estate planning, debt consolidation and reduction and more! There are no hidden costs. All fees are agreed upon in advance and we don t accept commissions. The process is simple. Your first appointment is without cost and without obligation. We ll help you work out your needs and objectives, and if you need a financial plan, we ll confirm and agree the cost for your plan straight away and arrange a second appointment. If you don t need further assistance, there will be no charge to you. As a Statewide Pension member, you can ask for the fees that relate to your investment and membership of the Statewide Pension to be deducted straight from your pension account. Otherwise you will be invoiced. Fees cannot be deducted from your pension account for any advice that relates to non-super financial matters. Call to make your appointment. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Statewide Pension Page 9

10 How to invest in the Statewide Pension 1. Read this PDS. 2. Talk to us to make sure you have all the information you need. Call to speak to a member of our client services team, or why not make an appointment at our member centre, 211 Victoria Square, Adelaide? You may also choose to make an appointment with a Statewide financial planner. 3. Complete the Pension application form. State whether you would like a retirement pension or TTR pension (see pages 7 9 for more information). 4. Choose the investment option(s) for your pension (refer to the Investment section of this PDS, pages 11 19). 5. Choose the frequency of your payment options. 6. Nominate a beneficiary someone to receive your benefits in the event of your death (see page 20 for more information). 7. Complete an Application to transfer your super to the Statewide Pension. If you re transferring balances from more than one super fund you will need to complete additional forms. You can download extra forms from our website or contact client services to have one posted to you. 8. Complete a Tax file number (TFN) declaration form. If you will be aged under 60 when you commence your pension, you will need to advise us of any tax rebates or exemptions that may apply to your payments. You can call client services to have a TFN declaration form mailed to you or, alternatively, they are available at Australia Post outlets. 9. Attach certified proof of identity documents. Statewide must be able to verify your name and either your date of birth or residential address from: an original document, or a certified copy. Acceptable documents may be either: One of the following documents only: a driver s licence issued under state or territory law, or a passport. or One of the following documents: birth certificate or birth extract, or citizenship certificate issued by the Commonwealth, or a concession card, including a pensioner concession card, a health care card, or a seniors health card and One of the following documents: Centrelink payment letter, or ATO notice (less than 12 month old), or local council or utilities provider notice (less than three months old) showing your name and address. Visit the Tools section of our website, and download the Proof of Identity fact sheet, for more information on providing proof of identity. 10. Return your form to Statewide: By post: Statewide GPO BOX 1749 ADELAIDE SA 5001 or in person at our member centre, 211 Victoria Square, Adelaide. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Page 10 Statewide Pension

11 Your investment planning for the long term If your retirement s approaching or the big day s already arrived, it s important to remember that your investment is still long term. Your Statewide Pension might need to last you 20 years or more, so remember the performance of your investment should still be judged over time. Remember not to focus on the returns made in a single year. Instead, try to ride the market s short-term highs and lows and stick with your long-term investment plans. If you make a hasty decision and change your investment strategy without having a sound plan, you may do your retirement savings more harm than good. We recommend that you talk to a financial planner to determine which investment option(s) best suits you (see pages 9 and 18 for more information on getting financial advice). Let s take a closer look at pension investment The Statewide Pension offers a range of investment options at this important stage of your life that can help you reach your retirement goals. You can choose to invest in one or more of our diversified or single asset class investment options (see the definitions on page 13). Risk and return Each option has its own level of risk and return. To ensure you choose the investment strategy that s right for you, you ll need to consider: what level of return you want to achieve what level of risk you re comfortable with. An option s level of risk depends on the nature of its underlying investments and how it s structured to achieve its objective. In general, the greater the expected returns, the greater the level of risk, and the greater the likelihood that returns will fluctuate from year to year they may go up or they may go down they may even be negative. If having the higher level of risk associated with seeking greater long-term returns is giving you sleepless nights, you re able to lower your investment risk by spreading your investments across different asset classes. This strategy is known as diversification. Some of Statewide s investment options are diversified investments. See page 13 to find out more about asset classes and diversified options. The diagram below illustrates the expected risk and return attributes of the different investment options offered by the Statewide Pension. Single asset class options risk and returns Diversified options risk and returns Expected Return Expected Return 10.0% 10.0% 9.0% 8.0% Australian Shares International Shares 9.0% 8.0% Active Balanced Sustainable Diversified Growth High Growth 7.0% 7.0% Conservative Balanced 6.0% Diversified Bonds 6.0% Conservative 5.0% 4.0% 3.0% 2.0% 1.0% Cash 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Expected Volatility 0.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Expected Volatility WARNING: The above diagram is for illustration purposes only. The diagram is designed to show the expected return and expected volatility that would be likely to be experienced for an investment in an option relative to other options assuming that the investment time horizons, risk ratings and objectives are those set out for each relevant option on pages 14 to 17. The expected return and expected volatility set out for each option are not a promise or prediction of any particular rate of return or rate of volatility for that option. Therefore the expected return and expected volatility for an investment in an option set out in the above diagram may differ materially to the actual return and actual volatility that will be experienced for an investment in that option. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Statewide Pension Page 11

12 Page 12 Statewide Pension

13 Two important things to remember Your pension is a long-term investment which may need to last you 20 years or more, so focus on your long-term goals, not the short-term fluctuations of your investment. Your investment needs and attitudes to risk may change over time, so you should regularly review your investment strategies. Why not speak to a Statewide financial planner to help work out the best investment strategy for your particular circumstances? See pages 9 and 18 for more information. Asset classes explained An asset class is a category of similar financial assets. Each asset class has its own risk and return characteristics. Statewide invests across a range of asset classes. The major asset classes are: shares property diversified bonds infrastructure alternatives cash. What are single asset class options? The single asset class options generally have higher risk because, unlike diversified investment options, investments are not spread across a range of asset classes. By mixing these options with other investment options or other investments to increase diversification, you may reduce the level of risk your investments are exposed to. The exception to this is the Cash option, which is a low-risk alternative. The four single asset class options are: Cash Diversified Bonds Australian Shares International Shares. Choosing what s right for you There are a number of things you need to consider when choosing your investment option(s): Are you comfortable taking bigger risks to make potentially higher long-term gains? What level of income do you want when you retire? How much super do you already have? Do you have any other investments? Are you happier having a steady but lower investment return? How long will you have your money invested? These can be broken down further to include Australian or international shares, private equity, Australian or international fixed interest, direct or indirect property investments, alternative debt and absolute return funds. What are diversified options? Diversified options invest in a range of asset classes which help to reduce the level of risk. The level of risk for each option varies according to the proportion held in each asset class. For example, the Growth investment option is considered less risky than the High Growth investment option due to a higher exposure to cash and diversified bonds (which may be less volatile or a lower risk in the short term). You can choose from Statewide s six diversified options: Conservative Conservative Balanced Active Balanced Sustainable Diversified Growth High Growth. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Statewide Pension Page 13

14 Statewide s investment options Diversified investment options Conservative Investor profile This is a diversified asset option with a low to moderate exposure to risk. It is suitable for people who are more interested in less volatile returns than higher long-term returns, and who may be cashing out their super in three to five years. However, negative returns are still possible in a particular year. Objectives To achieve returns after tax and fees that exceed Consumer Price Index (CPI) + 1.5% per annum over rolling five-year periods. Limit the probability of generating a negative return to not more than one year in 20. To earn a rate of return after tax and fees that is in excess of the median conservative option in an appropriate industry survey over rolling five-year periods. Benchmark Range % Cash 25% (10-35) Diversified Bonds 40% (20-60) Alternative Debt 5% (0-15) Infrastructure 3% (0-7) Property 10% (0-15) International Shares 7% (0-15) Australian Shares 10% (0-15) Time horizon 3-5 years Risk Low - moderate Investment management fee % Conservative Balanced Benchmark Range % Investor profile This is a diversified asset option with a moderate exposure to risk. It is suitable for people looking for relatively high returns over the medium to longer term who want the growth provided by shares but want lesser fluctuations in returns from year to year. Suitable for people who may be cashing out their investment in five years or more. Objectives To achieve returns after tax and fees that exceed CPI + 2% per annum over rolling five-year periods. Limit the probability of generating a negative return to not more than three years in 20. To earn a rate of return after tax and fees that is in excess of the median conservative balanced option in an appropriate industry survey over rolling five-year periods. Cash 10% (5-25) Diversified Bonds 35% (20-50) Alternative Debt 5% (0-10) Infrastructure 5% (0-10) Growth Alternatives 2% (0-10) Property 10% (0-15) International Shares 14% (10-30) Australian Shares 19% (10-30) Time horizon 5+ years Risk Moderate Investment management fee % Active Balanced Benchmark Range % Investor profile This is a diversified asset option with a moderate to high exposure to risk. It is suitable for people looking for relatively high returns over the medium to longer term who want the growth provided by shares but want lesser fluctuations in returns from year to year than those provided by sharemarkets, and accept negative returns in some years. Suitable for people who may be cashing out their investment in seven years or more. Objectives To achieve returns after tax and fees that exceed CPI + 3% per annum over rolling seven-year periods. Limit the probability of generating a negative return to not more than four years in 20. To earn a rate of return after tax and fees that is in excess of the median balanced option in an appropriate industry survey over rolling seven-year periods. Cash 5% (0-20) Diversified Bonds 20% (10-30) Alternative Debt 5% (0-10) Infrastructure 8% (0-15) Growth Alternatives 2% (0-15) Property 10% (0-20) International Shares 20% (10-50) Australian Shares 30% (10-50) Time horizon 7+ years Risk Moderate - high Investment management fee % The fees stated for are estimated third-party investment management fees (including performance fees), based on our current asset allocation and the investment managers who currently manage money for that investment option. The fees stated are therefore predictive and may differ materially from the fees actually incurred. The actual investment management fees are calculated at the end of each year when returns for the year are known. These are published in the annual report. Page 14 Statewide Pension

15 Sustainable Diversified Benchmark Range % Investor profile This is a diversified asset option with a moderate to high exposure to risk. It is suitable for people who have a preference for a sustainable approach to investing and are looking for relatively high returns over the medium to long term who can handle fluctuations in returns, even negative returns, from year to year, and who won t be cashing out their super for seven years or more. Objectives To achieve returns after tax and fees that exceed CPI + 3% per annum over rolling seven-year periods. Limit the probability of generating a negative return to not more than four years in 20. To earn a rate of return after tax and fees that is in excess of the median balanced option in an appropriate industry survey over rolling seven-year periods. Cash 5% (0-15) Australian Bonds 13% (0-20) International Bonds 12% (0-25) GREITs 4% (0-10) Direct Property 5% (0-10) Direct Infrastructure 3% (0-7) International Shares 27% (0-40) Australian Shares 30% (20-40) Growth Alternatives 1% (0-6) Time horizon 7+ years Risk Moderate - high Investment management fee % Growth Benchmark Range % Investor profile This is a diversified asset option with a high exposure to risk. It is suitable for people looking for relatively high returns over the medium to long term who can handle fluctuations in returns, even negative returns, from year to year, and who won t be cashing out their super for seven years or more. Objectives To achieve returns after tax and fees that exceed CPI + 4% per annum over rolling 10-year periods. Limit the probability of generating a negative return to not more than four years in 20. To earn a rate of return after tax and fees that is in excess of the median growth option in an appropriate industry survey over rolling 10-year periods. Cash 6% (0-15) Diversified Bonds 11% (0-30) Alternative Debt 3% (0-20) Infrastructure 10% (0-20) Growth Alternatives 4% (0-20) Property 10% (0-20) International Shares 23% (10-50) Australian Shares 33% (10-50) Time horizon 7+ years Risk High Investment management fee % High Growth Benchmark Range % Investor profile This is a diversified asset option with a very high exposure to risk. It is suitable for people looking for high long-term returns who can handle wide fluctuations in returns, including negative returns, from year to year, and who won t be cashing out their super for seven years or more. Objectives To achieve returns after tax and fees that exceed CPI + 5% per annum over rolling seven-year periods. Limit the probability of generating a negative return to not more than five years in 20. To earn a rate of return after tax and fees that is in excess of the median high growth option in an appropriate industry survey over rolling seven-year periods. Cash 2% (0-10) Alternative Debt 3% (0-10) Infrastructure 10% (0-20) Growth Alternatives 5% (0-20) Property 7% (0-20) International Shares 29% (10-50) Australian Shares 44% (20-60) Time horizon 7+ years Risk Very high Investment management fee % The fees stated for are estimated third-party investment management fees (including performance fees), based on our current asset allocation and the investment managers who currently manage money for that investment option. The fees stated are therefore predictive and may differ materially from the fees actually incurred. The actual investment management fees are calculated at the end of each year when returns for the year are known. These are published in the annual report. Statewide Pension Page 15

16 Statewide s investment options Single asset class investment options Cash Investor profile This is a single asset class option with a low exposure to risk. It is suitable for people who are willing to accept a moderate return to protect the value of their super and/or who may be cashing out their super within three years. However, negative returns are still possible in any particular year in extreme circumstances. Objectives To achieve returns after tax and fees that are closely aligned with the Bloomberg AusBond Bank Bill Index over rolling 12-month periods. Limit the probability of generating a negative return to not more than one in 50 years. To earn a rate of return after tax and fees that is in excess of the median cash option in an appropriate industry survey over rolling five-year periods. Time horizon 1-2 years Risk Very low Investment management fee % Diversified Bonds Investor profile This is a single asset class option with a low to moderate exposure to risk. It is suitable for people who are seeking higher returns than cash over the medium term and who may be cashing out their super in three to five years. However, negative returns are still possible in a particular year. Objectives To outperform the weighted average return from the Bloomberg AusBond Composite Bond Index, after tax and fees over rolling five-year periods. Limit the probability of generating a negative return to not more than four in 20 years. To earn a rate of return after tax and fees that is in excess of the median diversified bonds option in an appropriate industry survey over rolling five-year periods. Time horizon 3-5 years Risk Low - moderate Investment management fee % The fees stated for are estimated third-party investment management fees (including performance fees), based on our current asset allocation and the investment managers who currently manage money for that investment option. The fees stated are therefore predictive and may differ materially from the fees actually incurred. The actual investment management fees are calculated at the end of each year when returns for the year are known. These are published in the annual report. Page 16 Statewide Pension

17 Australian Shares Investor profile This is a single asset class option with a very high exposure to risk. It is suitable for people looking for high long-term returns who can handle wide fluctuations in returns, including negative returns, from year to year, and who won t be cashing out their super for seven years or more. Objectives To outperform the S&P/ASX 300 Accumulation Index, after tax and fees over rolling seven-year periods. Limit the probability of generating a negative return to not more than six years in 20. To earn a rate of return after tax and fees that is in excess of the median Australian equities option in an appropriate industry survey over rolling seven-year periods. Time horizon 7+ years Risk Very high Investment management fee % International Shares Investor profile This is a single asset class option with a very high exposure to risk. It is suitable for people looking for high long-term returns who can handle wide fluctuations in returns, including negative returns, from year to year, and who won t be cashing out their super for seven years or more. Objectives To outperform the MSCI ACWI (ex-australia) Index (with net dividends reinvested) after tax and fees over rolling seven-year periods. Limit the probability of generating a negative return to not more than six years in 20. To earn a rate of return after tax and fees that is in excess of the median international equities option in an appropriate industry survey over rolling seven-year periods. International Shares 100% Time horizon 7+ years Risk Very high Investment management fee % The fees stated for are estimated third-party investment management fees (including performance fees), based on our current asset allocation and the investment managers who currently manage money for that investment option. The fees stated are therefore predictive and may differ materially from the fees actually incurred. The actual investment management fees are calculated at the end of each year when returns for the year are known. These are published in the annual report. Statewide Pension Page 17

18 What else do you need to know about investment? Where can you get advice? We strongly recommend you seek professional financial advice to help you work out which investment option(s) will best suit your own financial needs and goals. Why not talk to a Statewide financial planner? Our planners can provide advice on a wide range of topics, including helping you make informed decisions about your pension and investments. There are no hidden costs with Statewide financial planning. All fees are agreed upon in advance and your first appointment is free, and without obligation. Your financial planner will help you work out your needs and objectives, and if you need a financial plan, we ll confirm and agree the cost for your plan straight away and arrange a second appointment. If you don t need further assistance, there will be no charge to you. How to pay As a Statewide member, you can ask for the financial planning fees that relate to your pension investment and membership of Statewide to be deducted straight from your Statewide Pension account. You ll be invoiced for financial planning advice relating to advice outside of super. To make an appointment contact one of our client services officers on Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. Changing your investment option(s) When you first apply for the Statewide Pension you re able to choose your investment option(s). The Statewide Pension provides you with the ability to change, or switch, your investment option(s). You can switch options as often as you like at any time. To switch options, use the Member investment choice/switching (retirement and transition to retirement) form, available on the Statewide website, or visit Statewide.On.Line. Unitisation and your pension account Since 1 July 2012, Statewide has operated daily unit pricing. When you invest in the Statewide Pension your money is used to buy units in the investment option(s) you have chosen. The investment earnings of each option are reflected in movements in unit prices (up or down). Unit prices are calculated on a daily basis. What is unitisation? When you invest in any of the Statewide Pension investment options, your money is placed in a pool of investments along with the funds of every other member who s chosen the same option as you. The balance of your Statewide Pension account is applied to buy units in the investment option(s) you have chosen. Movement in unit prices reflects the returns on the investments of your chosen investment option(s). Put simply, unit prices are a way of managing the changes in your account and tracking the performance of your investment option(s). Let s look at an example: Don has $155,000 invested in the Conservative option. The unit price for the Conservative option on 1 July is $1.00, so Don has 155,000 units as at 1 July ($155,000 $1.00 = 155,000). The unit price for the Conservative option increases from $1.00 to $1.05 on 23 July. This means that the value of Don s 155,000 units also increases, from $155,000 to $162,750 (155,000 x $1.05 = $162,750). But if the unit price dropped to $0.95 from $1.00 on 23 July, the value of Don s 155,000 units would decrease from $155,000 to $147,250 (155,000 x $0.95 = $147,250). Other factors will also impact the value of Don s investment, such as withdrawals or transfers out. Fees and the value of the assets that make up the Conservative option are taken into account when determining the daily unit price. Other fees may be deducted from Don s account which may affect the number of units in his account. Please note that this example is for illustration purposes only. Page 18 Statewide Pension

19 What happens to my units when a withdrawal is made from my pension account? When you withdraw or transfer an amount of money from your pension account, or have fees deducted from your pension account the number of units you have will reduce. This is because your pension account balance will reduce by the amount of money withdrawn. Under unitisation, the unit price for your pension payment is determined on the business day that your payment is deducted from the fund. What if my pension account doesn t have a rounded dollar figure, e.g. $50,000? It s likely that most members won t have a rounded dollar figure in their accounts that s OK. If you don t have the exact amount in your pension account to purchase a whole unit, you ll be allocated a portion, or percentage, of a unit. Your money will be fully allocated because we allocate fractions of units, up to five decimal places. How does unitisation affect switching? Unitisation means that when you switch your investment option(s), you ll be selling units in one investment option to buy units in another, using the unit prices that apply to both your old and new investment option(s) on the day your switch is processed. How much does switching cost? The first switch in a financial year is free. Additional switches in the same financial year cost $20 per switch and will be deducted from your pension account. When are unit prices declared? Unit prices will generally be determined by 4pm each business day and will therefore be available on the Statewide website the next day. However, there may be some instances where daily unit pricing may be delayed. These would be abnormal circumstances where the information to determine unit prices is not available, or an extraordinary event has occurred. If this was to occur a notice would be placed on our website. Unit pricing errors Our Unit pricing policy ensures that current members will have their pension account corrected in the unlikely event a material error should occur. For people who are no longer members, but were members at the time the error was made, no payment will be made if the error amounted to less than $20. We may seek to recover amounts overpaid to members as a consequence of unit pricing errors. Further information on Statewide s Unit pricing policy is available on request by calling Overseas currency hedging When Statewide invests in other countries, the value of the investment can be impacted by both the movement in value of the underlying investment and the movement in value of the Australian dollar compared to the local currency of the investment. The effects of the changes in international currency values can be reduced by currency hedging. Statewide s international investments will be partially hedged, with the level of currency hedging varying from time to time in accordance with our foreign currency hedging policy. Statewide currently outsources management of currency hedging to a specialist currency manager. In addition to the overall currency hedging arrangements implemented by Statewide, a number of individual managers that invest in international assets on our behalf also manage currency exposure as part of their overall portfolio management. Your pension and responsible investment considerations Statewide is a signatory to the United Nations Principles for Responsible Investment ( and has an Environmental, social and governance (ESG) investment and proxy voting policy. This policy sets out the way in which we aim to incorporate responsible investment considerations, including environmental, social and governance factors into our investment analysis and decision making. Through this policy Statewide seeks to optimally protect and manage investments over time by addressing material risks. This policy is available on the Responsible investing page in the Investment section at From time to time the trustee appoints professional investment managers to manage the investments of the fund. Currently these investment managers consider ESG factors to varying degrees across our investment options. The Statewide Sustainable Diversified investment option is currently the only option to explicitly use ESG factors to guide investment selection. This option also takes into account labour standards and ethical considerations. Reserving policy Statewide maintains an operational risk reserve that is operated in accordance with the Operational risk reserve payments policy. The purpose of the reserve is to meet the costs of incidents where material losses may arise from operational risks and any unforeseen costs of the fund. The level of the reserve maintained is based on an assessment of the risks faced by the fund, determined from time to time. Need help with investment? Why not speak to one of our client services officers, or you may wish to consider talking to a Statewide financial planner. Call us on Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Statewide Pension Page 19

20 What happens to your pension if you die? Thinking about who you d like to receive your pension investment if you were to die can be difficult. But leaving clear instructions should the worst happen can make it easier for your loved ones should the need arise. By nominating beneficiaries, you re telling us who you d like to receive your pension, or pension account balance, if you die. If you wish your pension to continue to be paid to your nominated beneficiary as a pension, special rules apply (please see Reversionary beneficiary section below). We take your beneficiaries into account when determining how to pay your benefits. It s important to update these details to reflect any changes in your personal circumstances, such as getting married or divorced. Your beneficiary/beneficiaries must be: your dependant(s) and/or your legal representative the executor or administrator of your estate a combination of your dependants and legal representative. A dependant includes your spouse (as defined, including de facto or same sex partner) and children (irrespective of age), any person with whom you had an interdependency relationship immediately prior to your death or any person who at the time of your death, and in the trustee s opinion, was wholly or partially financially dependent on you. When nominating more than one person you must state the proportion that you wish to be paid to each person. The total amount must add up to 100%. You should be aware that different tax laws apply to different beneficiaries. If you re unsure about your decision, please call and talk to a client services officer or one of the Statewide financial planners. We ll list your beneficiary/beneficiaries on your annual statement. Types of beneficiary There are three types of beneficiary nominations: Binding beneficiary A binding beneficiary nomination will ensure that your pension benefit is paid to your nominated beneficiary/beneficiaries subject to them meeting legal criteria and certain exclusions (i.e. family law splits/court orders). If upon your death, the trustee finds it is unable to verify any of your nominees as a dependant, your nomination will be declared invalid, and the trustee is then required to fully review to whom your account is paid. Preferred beneficiary Alternatively, you may nominate preferred beneficiaries. While it is not formally binding, the trustee will take into account your nomination, together with any other factors which are relevant at the time of your death. Reversionary beneficiary When you commence your Statewide Pension you also have the choice of nominating a reversionary beneficiary. This means that if you die during the lifetime of your pension payments, your pension immediately reverts to your nominated reversionary beneficiary and your pension account balance is not payable as a lump sum to your beneficiaries and/ or your estate. This ensures income for your nominated reversionary beneficiary as payments continue to be made without any need to wait for a determination to be made about a lump sum distribution. The reversionary beneficiary may choose to cease payments and withdraw the total pension account balance. A reversionary pension can only be paid to a person who at the time of your death was a: spouse (including same-sex partners) person with whom you had an interdependency relationship financial dependant in the case of a dependant who is a child, only if the child is less than 18 years of age, 18 years old but less than 25 and financially dependent on you, or has a disability that meets the definition as defined in the Disability Services Act. If a nominated reversionary beneficiary does not meet the above requirement, then any reversionary benefit can only be paid as a lump sum. An adult child is ineligible for a pension, even where the child, although over age 25, is financially dependent on you (other than due to disability) or had an interdependency relationship with you. In this case the death benefit can only be paid to them as a lump sum, not a pension. It is not possible to nominate more than one reversionary beneficiary for your Statewide Pension. We recommend you discuss the implications of this choice with a financial adviser. Your nomination must be signed, dated, and witnessed by two independent adults (at least 18 years old and not including any beneficiaries). Binding nominations are only valid for three years. If you choose this option, Statewide will advise you to update your nomination prior to your next three-year due date. Financial information and general advice may be provided by representatives of the fund s administrator and wholly owned company, Statewide Financial Management Services Limited, ABN Australian Financial Services Licence No Any personal advice may be provided by an authorised representative of Industry Fund Services Limited (IFS) ABN AFSL No Fees may apply for financial planning advice. IFS is responsible for the advice given to you by its authorised representatives. See page 18 for further details. Page 20 Statewide Pension