BT Lifetime. Personal Super Flexible Pension. Annual Report. for the year ended 30 June 2015

Transcription

1 BT Lifetime Personal Super Flexible Pension Annual Report for the year ended 30 June 2015 BT Funds Management Limited ABN AFSL Westpac Banking Corporation ABN

2 Table of contents Recent developments in superannuation 1 Proposed changes to superannuation 3 Product changes 4 Understanding your investment 12 Performance information 16 Investments exceeding 5% 17 Other important information 22 Financial information 24 About this Annual Report BT Funds Management Limited ABN , AFSL , is the Trustee ( Trustee ) of the BT Lifetime Super Fund ( the Fund ) ABN BT Lifetime Personal Super and BT Lifetime Flexible Pension (referenced as the Plan throughout this document) are parts of the Fund. The Fund is a regulated superannuation fund under the Superannuation Industry (Supervision) Act 1993 (SIS) and is not subject to a direction under section 63 of SIS. The trust is governed by the terms of the BT Life Superannuation Trust Deed. A Product Disclosure Statement (PDS) is available for BT Lifetime - Personal Super and BT Lifetime - Flexible Pension and can be obtained by calling , or visiting bt.com.au. You should obtain and consider the PDS before deciding whether to acquire, continue to hold or dispose of interests in BT Lifetime - Personal Super and BT Lifetime - Flexible Pension. The investment manager for the BT investment options is BT Investment Management (Institutional) Limited (BTIM) ABN , AFSL and for the BT Multi-manager investment options, the investment manager is Advance Asset Management Limited ABN , AFSL The Trustee may use other investment managers from time to time which are detailed within relevant disclosure material. Investments in BT Lifetime Personal Super (referenced as BT Super throughout this document) and BT Lifetime Flexible Pension (referenced as BT Pension throughout this document) are not an investment in, deposit with or any other liability of Westpac Banking Corporation ABN (the Bank) or any other company in the Westpac Group. It is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. The Bank and its related entities do not stand behind or otherwise guarantees the capital value or investment performance of any investment option offered through BT Lifetime - Personal Super and BT Lifetime - Flexible Pension. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. Past performance is not a reliable indicator of future performance. A financial services guide in relation to the Trustee is available on our website bt.com.au or by calling The tax position described is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. The Annual Report was prepared on 30 November 2015.

3 Recent developments in superannuation /16 superannuation thresholds The superannuation contributions caps and various other superannuation thresholds that apply for the 2015/16 financial year are as follows: Low rate cap: $195,000 Concessional contributions cap: Age 49 or over on 30 June 2015 $35,000 Under age 49 on 30 June 2015 $30,000 Non-concessional contributions cap: $180,000 1 Capital Gains Tax (CGT) Cap (lifetime limit): $1,395,000 Government Co-contributions: maximum co-contribution 2 $500 lower threshold $35,454 upper threshold (cut off) $50,454 1 If you were under age 65 on 1 July 2015 you may be able to make up to $540,000 of non-concessional contributions over three financial years. If you triggered the bring forward non-concessional cap in 2013/14, you can only make non-concessional contributions up to $450,000 over the relevant 3 year period. 2 The maximum co-contribution payable is phased out by cents for every dollar of total income over the lower threshold, until it reaches zero at the upper threshold. 2. Higher concessional contributions cap An increased concessional contribution cap of $35,000 pa (not indexed) is available for members aged 59 years or over on 30th June 2013 or 49 years or over from 30 June 2014 (see table below). Income Year Concessional cap for those aged 49 years or over on 30 June years or over on 30 June years or over on 30 June $35,000 $35,000 $35, $35,000 $35,000 $30, $35,000 $25,000 $25,000 From 1 July 2015 the general concessional contribution cap is $30,000 pa. The higher cap will cease to apply when the general concessional contributions cap reaches $35,000 as a result of indexation. 3. Preservation Age increases Generally you can access your superannuation when you have permanently retired on or after reaching your preservation age or after you reach age 65. You can access your superannuation in other limited circumstances such as if you become permanently incapacitated, are suffering from a terminal medical condition or are suffering severe financial hardship. If you are aged between preservation age and age 65 you can also commence a transition to retirement pension allowing you to access your superannuation in the form of a non-commutable income stream. If you were born before 1 July 1960 your preservation age is 55. If you were born on or after 1 July 1960 your preservation age is between 56 and 60 depending on your date of birth (see the table below). Date of Birth Preservation When you will reach Age Preservation Age Before Before 55 1 July July July July June June July July June June July July June June July July June June 2023 After 30 June After 30 June Terminal Medical Condition of release From 1 July 2015, the certification period has been extended from 12 to 24 months for individuals suffering from a terminal medical condition. If you are suffering from an illness or have incurred an injury that is likely to result in death within 24 months, you may be eligible to access your super as a tax-free lump sum benefit. It s important to note that if you hold insurance and you withdraw your entire superannuation benefit you will lose any insurance you currently have. To continue your insurance you will need to leave sufficient balance in your account to fund future premiums. This information is intended as a guide only and does not constitute advice. Before making a withdrawal under Terminal medical condition you should speak to your financial adviser about the impacts this could have on your insurance entitlements. Annual Report

4 Recent developments in superannuation Con t 5. Deeming of account-based income streams Account-based income streams that commenced on or after 1 January 2015 are subject to deeming rules for income test purposes when determining an individual entitlement to Centrelink and DVA benefits. Under the deeming provisions, all financial investments are assumed to earn a certain rate of income regardless of the income actually generated. Customer Threshold^ Deeming Rate Single Up to and 1.75% including $48,600 Above 3.25% Member of a couple (combined) Member of allowee couple Up to and 1.75% including $80,600 (combined) Above 3.25% Up to and 1.75% including $40,300 Above 3.25% ^Rates and thresholds are effective from 1 July 2015 and are indexed in line with CPI each year. For account-based pensions that commenced prior to 1 January 2015 will adopt the grandfathering provisions if: you were in receipt of an income support payment immediately before 1 January 2015; and you have been continuously receiving an income support payment since 1 January 2015; and your account-based pension commenced before 1 January 2015 and has continued to be provided to you since the commencement date. An income support payment includes common pensions and allowances such as the age pension, disability support pension, carer payment (not carer allowance), a DVA service pension, DVA income support supplement and newstart allowance. If you are eligible under the grandfathering provisions, you should note that: any changes in your circumstances resulting in you becoming ineligible for income support after 1 January 2015 may mean income from your account-based pension will be assessed using the deeming rules if you commute your existing pension to commence a new account-based pension, income from the new pension will be assessed using the deeming rules if you have made an automatic reversionary death benefit nomination for your spouse to continue to receive your account-based pension in the event of your death, your spouse may be eligible to continue to have income from the pension assessed using the current income test provided certain conditions are satisfied You should speak to your financial adviser or Centrelink or DVA about how these changes may impact your income support payment entitlements. 6. Lost member accounts transferred to the ATO If your account is considered to be lost*, the Trustee may be required to transfer your account balance to the ATO if: your account balance is less than the small lost account threshold; or the Trustee is satisfied that it will never be possible to pay an amount to you (because you cannot be identified based on the information reasonably available to the Trustee). From 31 December 2015, the small lost account threshold will increase to $4,000 (currently $2,000) and from 31 December 2016 it will increase further to $6,000. If your account balance is transferred you will be able to reclaim it from the ATO. The ATO will pay interest on unclaimed super money amounts paid directly to eligible individuals for the period the money was held by the ATO after 1 July Any interest paid is tax free. *Your super account will generally be considered lost if: no contributions or rollovers have been added to your account in the last year and either the Trustee has never had an address for you or mail sent to you by the Trustee has been returned unclaimed, or for default employer super plans, no contributions or rollovers have been added to your super account in the last five years 2 BT Lifetime

5 Proposed changes to superannuation ATO payment of unclaimed super money In certain circumstances superannuation funds may be required to transfer super account balances to the ATO as unclaimed superannuation money. Currently, the ATO can only pay this money directly to a person, if they have reached age 65 or the amount is less than $200. It is proposed that from 1 July 2016, the ATO will be able to pay unclaimed superannuation money directly to individuals suffering from a terminal medical condition. Requests for payment can be made using the ATO Payment of unclaimed super money - individual form. Certified copies of medical certificates must also be provided from two registered medical practitioners, one of which is a specialist in the area related to the individual s illness or injury, certifying that the individual suffers from an illness, or has incurred an injury, that is likely to result in the death of the individual within 24 months. Individuals can also request the ATO to transfer unclaimed superannuation money held on their behalf to a complying super fund at any time. Annual Report

6 Product changes Insurance definition changes impacting BT Lifetime Personal Super As a result of changes to superannuation regulations, the insurance definitions for Total and Permanent Disability (TPD) were amended for new insurance cover issued within BT Lifetime Personal Super on or after 1 July These definitions, along with the other terms of your cover, determine whether you are eligible for a payment from the insurer due to a terminal medical condition or incapacity. The table below illustrates the changes to these definitions. Type of cover Pre 1 July 2014 definition Post 1 July 2014 definition Total and Permanent Disability (TPD) Total and Permanent Disability definitions You may receive a lump sum benefit for TPD under either of the definitions outlined below. Definition 1 You have suffered the total and irrecoverable loss of use of: both hands; or both feet; or one hand and one foot; or the sight of both eyes; or one hand and the sight of one eye; or one foot and the sight of one eye. OR Definition 2 a. If you re an Insured Member under age 65 and are working 15 or more hours per week (including as a Casual Employee and Contractor): you re unable to follow your usual occupation by reason of an illness, accident or injury for a period of six consecutive months after the occurrence of the illness, accident or injury; and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. b. If you re: an Insured Member aged 65 and above; or an Insured Member under age 65 and are working less than 15 hours per week (including as a Casual Employee or Contractor); or a non-working Insured Member Total and Permanent Disability definitions You may receive a lump sum benefit for TPD under either of the definitions outlined below. Definition 1 You have suffered the total and irrecoverable loss of use of: both hands; or both feet; or one hand and one foot; or the sight of both eyes; or one hand and the sight of one eye; or one foot and the sight of one eye and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. Definition 2 a. If you re an Insured Member under age 65 and are working 15 or more hours per week (including as a Casual Employee and Contractor): you re unable to follow your usual occupation by reason of an illness, accident or injury for a period of six consecutive months after the occurrence of the illness, accident or injury; and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. 4 BT Lifetime

7 Type of cover Pre 1 July 2014 definition Post 1 July 2014 definition Total and Permanent Disability (TPD) and you re continuously and totally unable to perform at least two of the following Activities of Daily Living, as certified by a qualified medical practitioner appointed by the Insurer. Bathing; the ability to wash oneself either in the bath or shower or by sponge bath without the standby assistance of another person. Dressing; the ability to put on and take off all garments and medically necessary braces or artificial limbs usually worn, and to fasten and unfasten them, without the standby assistance of another person. Eating; the ability to feed oneself once food has been prepared and made available, without the standby assistance of another person. Toileting; the ability to get to and from and on and off the toilet, without the standby assistance of another person and ability to manage bowel and bladder functions through the use of protective undergarments or surgical appliances, if appropriate. Transferring; the ability to move in and out of a chair without the standby assistance of another person. b. If you re: an Insured Member aged 65 and above, or an Insured Member under age 65 and are working less than 15 hours per week (including as a Casual Employee or Contractor), or a non-working Insured Member and you re continuously and totally unable to perform at least two of the following Activities of Daily Living, as certified by a qualified medical practitioner appointed by the Insurer. Bathing; the ability to wash oneself either in the bath or shower or by sponge bath without the standby assistance of another person. Dressing; the ability to put on and take off all garments and medically necessary braces or artificial limbs usually worn, and to fasten and unfasten them, without the standby assistance of another person. Eating; the ability to feed oneself once food has been prepared and made available, without the standby assistance of another person. Toileting; the ability to get to and from and on and off the toilet, without the standby assistance of another person and ability to manage bowel and bladder functions through the use of protective undergarments or surgical appliances, if appropriate. Transferring; the ability to move in and out of a chair without the standby assistance of another person and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. If you apply for new insurance cover issued on or after 1 July 2014, please ensure you have carefully read the Insurance in your super section of the Product Disclosure Statement (PDS) issued on or after 1 July 2014 and any relevant disclosure documents to understand the impact of these changes to you before applying. You can obtain a copy of the current PDS and any other relevant disclosure documents by visiting bt.com.au or calling BT Customer Relations on Annual Report

8 Product changes Con t Understanding the insurance changes to your BT Lifetime Super Personal Plan In conjunction with the Fund s insurer, AIA Australia Limited (AIA), changes were made to the insurance terms and conditions in BT Lifetime Super Personal Plan (the Fund) which were effective from 1 July The following tables explain these changes and how they will apply to you. The current Additional Information Booklet Part 3 Insurance is available at bt.com.au. Changes to the Fund s insurance terms and conditions What is changing? How this change applies to you Updated insurance definitions and terminology We are amending some of the Fund s insurance definitions and terminology to help to clarify existing policy terms for you, and to assist with the administration of the claims assessment process. Please refer to the table below which highlights the changes to the following insurance definitions and terminology in the Fund s PDS: Eligibility - Non-Australian Residents Active Service Hazardous occupations Total and Permanent Disability (TPD) Definitions and Current position New position terminology Eligibility - Non-Australian Summary of change: For further information as not currently disclosed Residents Not currently disclosed Active Service No action is required by you. Insurance cover will continue with the applicable new terms and conditions. Please note if you are currently in the process of claiming insurance benefits, the definitions applicable to you will be those in place at the date of your claimable event e.g. injury or illness diagnosis. Cover for non-australian Residents will only be provided to a Member who holds a Visa and permanently resides in Australia. All cover provided to a non Australian Resident will cease immediately upon the Insured Member departing Australia, except in the case of trips of three (3) months or less. For the purposes of this eligibility condition, Visa means a current and valid visa issued in accordance with the Migration Act 1958 (Cth) or any amending or replacing Act. Examples include: Subclass 457 working visa; Subclass 457 working visa (with an 8107 condition); or Spouse visa (spouse of a permanent Australian Resident on a two year temporary stay visa) without a no work condition. Australian Resident means an Australian Citizen, New Zealand Citizen or Permanent Resident who holds a visa to live and work in Australia. Summary of change: Clarifying that Insured Members are covered whilst participating in training activities with the Australian Defence Force Reserves. means direct participation in military means direct participation in military operations as a member of the armed operations as a member of the armed forces. forces. In the case of Insured Members who In the case of Insured Members who are are enrolled in the Australian Defence Force enrolled in the Australian Defence Force Reserves, the active service exclusion is only Reserves, this means operational deployment applicable where the Insured Member is on and does not apply to training activities. active service. 6 BT Lifetime

9 Changes to the Fund s insurance terms and conditions (continued) Updated insurance definitions and terminology (continued) Definitions and Current position New position terminology Hazardous occupations Summary of change: For further information as not currently disclosed Not currently disclosed. means occupations that are skilled or semi-skilled manual labour and heavy machinery operators who are exposed to high risk accidents or health hazards, any unskilled workers and labourers, and includes: specialist licensed occupations examples includes pilot; occupations with additional hazards examples include miner, seafarer and professional sportsperson; and highly repetitive occupations examples include process worker and long haul driver. Total and Permanent Summary of change: Clarifying that the definition of Total and Permanent Disability (TPD) for an Disability (TPD) Insured Member working in Hazardous occupations will be assessed under definitions 1 and 2 b). You may receive a lump sum benefit for TPD under either of the definitions outlined below. Definition 1 You have suffered the total and irrecoverable loss of use of: both hands, or both feet, or one hand and one foot, or the sight of both eyes, or one hand and the sight of one eye, or one foot and the sight of one eye and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. Definition 2 a) If you re an Insured Member under age 65 and are working 15 or more hours per week (including as a Casual Employee and Contractor): you re unable to follow your usual occupation by reason of an illness, accident or injury for a period of six consecutive months after the occurrence of the illness, accident or injury, and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. You may receive a lump sum benefit for TPD under either of the definitions outlined below. Definition 1 You have suffered the total and irrecoverable loss of use of: both hands, or both feet, or one hand and one foot, or the sight of both eyes, or one hand and the sight of one eye, or one foot and the sight of one eye and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. Definition 2 a) If you re an Insured Member under age 65 and are working 15 or more hours per week (including as a Casual Employee and Contractor): you re unable to follow your usual occupation by reason of an illness, accident or injury for a period of six consecutive months after the occurrence of the illness, accident or injury, and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. Annual Report

10 Product changes Con t Changes to the Fund s insurance terms and conditions (continued) Updated insurance definitions and terminology (continued) Definitions and Current position terminology Total and Permanent Disability (TPD) (continued) b) If you re: an Insured Member aged 65 and above, or an Insured Member under age 65 and are working less than 15 hours per week (including as a Casual Employee or Contractor), or a non-working Insured Member and you re continuously and totally unable to perform at least two of the following Activities of Daily Living, as certified by a qualified medical practitioner appointed by the Insurer. Bathing the ability to wash oneself either in the bath or shower or by sponge bath without the standby assistance of another person. Dressing the ability to put on and take off all garments and medically necessary braces or artificial limbs usually worn, and to fasten and unfasten them, without the standby assistance of another person. Eating the ability to feed oneself once food has been prepared and made available, without the standby assistance of another person. Toileting the ability to get to and from and on and off the toilet, without the standby assistance of another person and ability to manage bowel and bladder functions through the use of protective undergarments or surgical appliances, if appropriate. Transferring the ability to move in and out of a chair without the standby assistance of another person and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. New position b) If you re: an Insured Member aged 65 and above, or an Insured Member under age 65 and are working less than 15 hours per week (including as a Casual Employee or Contractor), or an Insured Member working in a Hazardous occupation, or a non-working Insured Member and you re continuously and totally unable to perform at least two of the following Activities of Daily Living, as certified by a qualified medical practitioner appointed by the Insurer. Bathing the ability to wash oneself either in the bath or shower or by sponge bath without the standby assistance of another person. Dressing the ability to put on and take off all garments and medically necessary braces or artificial limbs usually worn, and to fasten and unfasten them, without the standby assistance of another person. Eating the ability to feed oneself once food has been prepared and made available, without the standby assistance of another person. Toileting the ability to get to and from and on and off the toilet, without the standby assistance of another person and ability to manage bowel and bladder functions through the use of protective undergarments or surgical appliances, if appropriate. Transferring the ability to move in and out of a chair without the standby assistance of another person and in the opinion of the Insurer (after consideration of medical and other evidence satisfactory to it), you re unlikely ever to be able to follow your usual occupation and any other occupation for which you re reasonably suited by education, training or experience. Investment option benchmark changes impacting BT Lifetime Personal Super Effective 29 September 2014, the UBS Australia Bond Index series was rebranded to Bloomberg as a result of Bloomberg s acquisition of the UBS Australia Bond Index series. This includes the benchmark index names outlined in the AIB. 8 BT Lifetime

11 The table below illustrates changes to the benchmark names for the relevant investment options. Investment option name APIR code Australian Bond Benchmark (old) Australian Bond Benchmark (new) BT Cash BTA0511AU UBS Bank Bill Index Bloomberg AusBond Bank Bill Index BT Conservative Outlook BTA0512AU UBS Bank Bill Index UBS Composite Bond Index Bloomberg AusBond Bank Bill Index Bloomberg AusBond Composite 0+ Yr Index BT Australasian Bond BTA0028AU UBS Composite Bond Index Bloomberg AusBond Composite 0+ Yr Index Macquarie Diversified Fixed Interest BT Balanced Returns BTA0257AU UBS Composite Bond Index Bloomberg AusBond Composite 0+ Yr Index BTA0513AU BTA0513AU UBS Composite Bond Index UBS Bank Bill Index Bloomberg AusBond Composite 0+ Yr Index Bloomberg AusBond Bank Bill Index Westpac Balanced BTA0098AU UBS Bank Bill Index Bloomberg AusBond Bank Bill Index BlackRock Scientific BTA0160AU UBS Bank Bill Index Bloomberg AusBond Bank Bill Index Diversified Growth BT Future Goals BTA0068AU BTA0068AU UBS Bank Bill Index UBS Composite Bond Index Bloomberg AusBond Bank Bill Index Bloomberg AusBond Composite 0+ Yr Index The benchmark name changes have no direct impact to your investment in BT Lifetime Personal Super there is no change to the underlying index methodology. Information about Bloomberg indices can be found at Investment option benchmark changes impacting BT Lifetime Personal Super Effective 1 April 2015, the UBS Global Property Index (UBS Global Real Estate Investors (ex Australia) Index) was replaced by the FTSE Global Property Index (FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI) as a result of UBS ceasing to be a provider of Global Property indices from 1 April This includes the benchmark index names outlined in the AIB Part 2. The table below illustrates changes to the benchmark names for the relevant investment options. Investment option name APIR code Global Property Benchmark (old) Global Property Benchmark (new) BT Lifetime - Personal Super BT Conservative Outlook NEF BT Lifetime - Personal Super BT Conservative Outlook BT Lifetime - Personal Super BT Balanced Returns NEF BT Lifetime - Personal Super BT Balanced Returns BTA0139AU BTA0607AU BTA0140AU BTA0603AU UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI The previous index provider (UBS) ceased to provide Global Property indices after 31 March 2015 so a suitable replacement index provider had to be selected. The benchmark change incurred a minor oneoff transaction cost (up to a maximum of 0.03% for those investment options with 100% exposure to the Global Property asset class and significantly less for Diversified funds which have small allocations to Global Property) as part of standard buying and selling transactions associated with the ongoing management of these investment options. This will have had no direct impact to your investment in BT Lifetime Personal Super there is no change to the investment return objective, strategy or investment process. Annual Report

12 Product changes - Con t Investment option benchmark changes impacting BT Lifetime Flexible Pension Effective 29 September 2014, the UBS Australia Bond Index series was rebranded to Bloomberg as a result of Bloomberg s acquisition of the UBS Australia Bond Index series. This includes the benchmark index names outlined in the AIB. The table below illustrates changes to the benchmark names for the relevant investment options. Investment option name APIR code Australian Bond Benchmark (old) Australian Bond Benchmark (new) BT Cash BTA0491AU UBS Bank Bill Index Bloomberg AusBond Bank Bill Index BT Australasian Bond BTA0006AU UBS Composite Bond Bloomberg AusBond Composite 0+ Yr Index BT Conservative Outlook BTA0492AU BTA0492AU UBS Composite Bond UBS Bank Bill Index Bloomberg Bloomberg AusBond Composite 0+ Yr Index AusBond Bank Bill Index BT Balanced Returns BTA0493AU BTA0493AU UBS Composite Bond Index UBS Bank Bill Index Bloomberg AusBond Composite 0+ Yr Index Bloomberg AusBond Bank Bill Index BlackRock Balanced BTA0194AU UBS Bank Bill Index Bloomberg Bloomberg AusBond Bank Bill Index BT Future Goals BTA0066AU BTA0066AU UBS Bank Bill Index UBS Composite Bond Index Bloomberg AusBond Bank Bill Index Bloomberg AusBond Composite 0+ Yr Index The benchmark name changes have no direct impact to your investment in BT Lifetime Flexible Pension there is no change to the underlying index methodology. Information about Bloomberg indices can be found at BT Lifetime Flexible Pension Updating the information in the Product Disclosure Statement Under the sub section Option 4 Automatic reversion within section Nominating your beneficiary on page 35 of the PDS, the last sentence of paragraph 2 (i.e. You can only select an automatic reversion death benefit option when you commence your pension. ) and the whole of paragraph 3 (ie. If you wish to change your nominated beneficiary after that time, you ll have to commute and commence a new pension. ) no longer applies and are deleted. The legislative restrictions which only permitted an automatic reversionary beneficiary nomination at the commencement of an account based pension have been revoked. If you wish to add, amend or revoke any beneficiary nomination on your account you can now do this by completing the latest Nomination of Beneficiary form available from bt.com.au. Investment option benchmark changes impacting BT Lifetime Flexible Pension Effective 1 April 2015, the UBS Global Property Index (UBS Global Real Estate Investors (ex Australia) Index) was replaced by the FTSE Global Property Index (FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI) as a result of UBS ceasing to be a provider of Global Property indices. This includes the benchmark index names outlined in the PDS. 10 BT Lifetime

13 The table below illustrates changes to the benchmark names for the relevant investment options. Investment option name APIR code Global Property Benchmark (old) Global Property Benchmark (new) BT Lifetime - Flexible Pension BT Balanced Returns BTA0493AU UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI BT Lifetime - Flexible Pension BT Balanced Returns NEF BT Lifetime - Flexible Pension BT Conservative Outlook BT Lifetime - Flexible Pension BT Conservative Outlook NEF BT Lifetime - Flexible Pension BT Future Goals BT Lifetime - Flexible Pension BT Future Goals NEF BTA0150AU BTA0492AU BTA0151AU BTA0066AU BTA0149AU Are management costs affected? UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) UBS Global Real Estate Investors (ex Australia) Index net of withholding tax (hedged to AUD) FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI The previous index provider (UBS) ceased to provide Global Property indices after 31 March 2015 so a suitable replacement index provider had to be selected. The benchmark change incurred a minor one-off transaction cost (up to a maximum of 0.03% for those investment options with 100% exposure to the Global Property asset class and significantly less for Diversified funds which have small allocations to Global Property) as part of standard buying and selling transactions associated with the ongoing management of these investment options. This will have had no direct impact to your investment in BT Lifetime Flexible Pension there is no change to the investment return objective, strategy or investment process. Strategic Asset Allocation (SAA) Neutral Position (NP) changes to certain investment options Effective from 20 April 2015, the asset allocation neutral positions of a number of investment options within BT Lifetime Personal Super and BT Lifetime Flexible Pension changed. The table below represents the asset allocation neutral positions as at 20 April Asset Type (%) BT Lifetime - Personal Super & Flexible Pension -BT Balanced Returns & NCF BT Lifetime Personal Super & Flexible Pension - BT Conservative Outlook & NCF Australian Equities Australian Fixed Interest Australian Property 5 4 International Equities 16 7 International Fixed Interest International Property 2 2 Alternatives Cash 4 11 Need more information? Should you require any further information, please contact BT Customer Relations on between 8.00am 6.30pm (Monday to Friday, Sydney time) to understand these changes and the impact they may have on your super account. Annual Report

14 Understanding your investment Investing in BT Super and BT Pension BT Super and BT Pension gives you access to a wide range of investment options across all the major asset classes, managed both by BT and a variety of other investment managers. Investment options For more information on the investment strategy and investment objectives for BT Super and BT Pension, please refer to the Product Disclosure Statement (PDS) at bt.com.au or call BT Customer Relations on Changes to investment option details We have the right to change the investment option objective and investment strategy (including the benchmark), asset allocation, target position, investment manager(s) and possible variation and currency strategy (if any), without prior notice in some cases. We will inform account holders of any significant material change to the investment option details on bt.com.au or as otherwise required by relevant law. Understanding the risks of investing All investments involve some level of risk. No matter which investment portfolio you choose to invest in, there will always be some level of investment risk. Investment risk is often described as the risk of fluctuations in the market price of a particular investment. Risk can be managed and even minimised, but cannot be eliminated. No matter how skilled the investment manager, or however strong an investment portfolio s performance has been in the past, there is always a chance you could receive back less than you invested. That is, you may lose money no matter which investment portfolio you invest in. You should be aware of these risks when investing and understand that not all risks are foreseeable. How risk is measured The level of risk, or Standard Risk Measure, for each investment fund is based on an estimate of the number of negative annual returns that may be experienced over any 20 year period as shown in the table. Standard Risk Measure Estimate number of Risk Risk label negative annual returns band over any 20 year period 1 Very low Less than Low 0.5 to less than 1 3 Low to medium 1 to less than 2 4 Medium 2 to less than 3 5 Medium to high 3 to less than 4 6 High 4 to less than 6 7 Very high 6 or greater The Standard Risk Measure allows you to compare the level of risk of investment funds within the Plan as well as other investment options available through other super funds. The Standard Risk Measure is not a complete assessment of all forms of investment risk, for example it does not detail what the size of the negative return may be or the potential for a positive return to be less than the return you require to meet your investment objectives. It also does not take into consideration the impact of fees and tax on investment returns. You should ensure you are comfortable with the risks and potential losses associated with the investment funds you choose to invest in. For more details of the Standard Risk Measure applicable to the investment option(s) available in your product, please refer to our website bt.com.au. Switching between investment options You can choose to invest in and switch between any combination of these investment options at any time. Members cannot switch between the Contribution Fee and Nil Contribution Fee investment options. Please note, the Nil Contribution Fee investment options were closed to new BT Super members from 1 July 2008 and to new BT Pension members from 1 April Only persons who were invested in these fee options prior to these dates are able to invest in and switch within these investment options. 12 BT Lifetime

15 No transaction fee applies for switches between investment options, however a buy/sell spread may be applicable (up-to-date buy/sell spreads for each investment option are available on our website at bt.com.au). There is no limit to the number of switches that you can perform on your account. BT Super offers you three convenient methods to switch your investment options. You can choose to switch your investments via BT Online, by calling and speaking to one of our BT Customer Relations specialists or by downloading a Switch Request form and sending it to us. Restrictions on applications, switches and withdrawals Under certain circumstances allowed under superannuation law and the Trust Deed (for example, where it would prejudice the interests of other members of the Fund), we may delay, suspend or not process your contribution, switching or withdrawal requests. In certain circumstances we reserve the right to delay or suspend unit prices, apply a special price or not process future application, switching or redemption requests. We are only required to transfer or rollover your benefits after receiving all relevant information as set out in the SIS Regulations. Ordinarily, if you haven t made an investment selection we must transfer or rollover your benefits within 3 days, or 30 days if you ve made an investment selection, of receiving all relevant information that is necessary to process your request. However, if you hold managed investments and/or term deposits in your account that are illiquid/suspended or become illiquid/ suspended, it may take longer to transfer your full benefit. Nomination of beneficiary options Members of both BT Super and BT Pension can choose to make a non-binding or a binding death benefit nomination. Non-binding death benefit nomination This kind of nomination is not binding on the Trustee. The Trustee will consider this nomination in determining how the benefit will be paid. It will also consider any other matters it decides are relevant, for example, whether you have any other dependants, or whether you have had a child or married since you made your nomination. If you give the Trustee a non-binding nomination, the Trustee will decide to whom, from among your dependants and your Legal Personal Representative, and in what proportions, to pay your death benefit. In exercising its discretion, the Trustee may not follow your nomination. Binding death benefit nomination This type of nomination allows you to instruct the Trustee to whom you want your benefit paid in the event of your death, and generally, if valid, it cannot be overridden by the Trustee. A binding nomination is valid for three years from the date on which it is made. You must renew or confirm your nomination within this three-year period for it to remain valid and binding. If any beneficiary nominated is no longer your dependant or Legal Personal Representative at the time of your death, they will not be entitled to receive a share of your benefit and the Trustee will pay their share to your estate. Automatic reversionary nomination (BT Pension only) If you are a reversionary beneficiary, this option is not available to you Following recent changes to legislation, an auto reversionary (a dependant of the original investor, generally the spouse, who will automatically continue to receive the pension payments upon death of the original investor) can be added or amended at any time. Annual Report

16 Understanding your investment Con t For more information about our currently available retirement products, please visit bt.com.au, contact your financial adviser or call BT Customer Relations on As this may have important tax consequences, we encourage you to seek professional advice before changing your nomination. Derivatives These are investments whose value is derived from other assets, such as shares, and may be used as part of the portfolio management process. Futures contracts and options are examples of derivatives. Derivatives may be used to reduce risk and can act as a hedge against adverse movements in a particular market and/or in the underlying asset. Derivatives can also be used to gain exposure to assets and markets. While derivatives offer the opportunity for significantly higher gains from a smaller investment (because of the high effective exposure obtained), they can also produce significantly higher losses, sometimes in excess of the amount invested. The investment managers are required to have strict policies and procedures on the use of derivatives and are generally not permitted to use derivatives to gear investment options unless otherwise stated. Net earnings The earnings rate for members in the investment option is reflected in the price of the units, rather than being credited or debited against the accounts for investors. A change in the value of an investor s unit price generally reflects the earnings of the supporting assets in the investment option. Valuing your investment It is BT s practice generally to value each investment option for the calculation of unit prices each Business Day. The unit price and therefore the value of your investment may rise and fall depending on movements in the market. The value of your investment in each investment option can be calculated at any date as the unit price on the applicable date multiplied by the number of units held in the investment option. How we calculate unit prices Each investment option has its own unit price, which is the monetary value of one unit. Unit prices are normally calculated every Business Day by dividing the value of the assets held in the investment option, after allowing for certain fees, taxes and expenses, by the total number. Method of allotment of earnings in all investment options All income, including realised and unrealised capital gains and losses, and expenses for all investment options is brought to account and is fully reflected in the unit price of that option. Income ta, as appropriate, is provided for in the unit price for each investment option. Net value of an investment option The net value of an investment option is the value of all investments and cash held by the investment option less amounts owing or payable in respect of the investment option, including any provision that is considered necessary. For example, provision might be made for possible future losses on an investment that is considered to be overvalued or cannot be fairly determined. A full description of the valuation method is given in the Trust Deed. The net value of an investment option may include an asset known as Deferred Tax Asset (DTA). A DTA arises when, for ta purposes, a loss is available to offset a future gain (ie to reduce the amount of gain that might otherwise be taxable). Our policy is to recognise DTAs in BT Super as a separate asset of the relevant investment option. Like any other asset in an investment option, the value of a DTA is reflected in the unit price for that investment option, through the calculation of the net asset value. The value of a DTA can change over time based on the likelihood of being able to offset the losses against future gains and the time at which they can be used. Accordingly, changes in the value of a DTA may cause unit prices to change, as is the case with a change in the value of any other asset in the investment option. 14 BT Lifetime

17 The level of a DTA recorded in the unit price of an investment option may be capped, taking into account the probability that accumulated losses are able to be offset against future gains. The Joint ASIC and APRA Unit Pricing Guide to Good Practice, and BT policy require that a DTA only be recognised in the net asset value and unit price of an investment option to the extent that the deferred ta benefit is expected to be realisable in the future. It may be necessary to reduce the level of a DTA to ensure that the value of the investment option (and the unit price) is not over-stated. To the extent that it becomes appropriate not to recognise any value in respect of certain DTAs that had, up to that time, been recognised, we or a related party may (but are not obliged to) pay an amount to BT Super to substitute for the written down value of the DTAs. This would be achieved using our own funds or those of a related party. If this occurs, we or the related party would be entitled to recover the amount it paid to BT Super if the relevant DTAs are subsequently recognised. Transaction processing For switches, withdrawals and contributions, where a valid request is received before the daily cut-off time of 4.00pm (Sydney time) on a Business Day, the request will be processed using the application and withdrawal prices for the relevant investment option issued for the Business Day we receive the valid request. We aim to process the request as soon as reasonably practicable and ordinarily within 5 Business Days of receipt. Because units are issued or redeemed on this basis, there can be an effect on underlying fund performance, either positive or negative, depending on market movements between the Business Day for which the application or withdrawal price is used and the date of processing. Ordinarily, the impact on performance is insignificant. Annual Report