How super is taxed. Inside. Accumulation 1 and Spouse Account members. The University of Melbourne THIS DOCUMENT WAS PREPARED ON 1 OCTOBER 2015.

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1 How super is taxed Accumulation 1 and Spouse Account members The information in this document forms part of the UniSuper Accumulation 1 Product Disclosure Statement and UniSuper Spouse Account Product Disclosure Statement, both issued on 1 October THIS DOCUMENT WAS PREPARED ON 1 OCTOBER Inside Tax on contributions 1 Government caps on contributions 2 Payment of tax on excess contributions 2 Spouse contributions tax offset 3 Tax on transfers 3 Taxation of contributions where no TFN has been provided 3 Providing your TFN 4 Tax on investment earnings 4 Tax on withdrawals 4 Anti-detriment payments 5 Definitions for tax purposes 5 The University of Melbourne

2 SuperRatings, a superannuation research company, has awarded UniSuper a Platinum rating for its Accumulation products. Go to for details of its rating criteria. SuperRatings does not issue, sell, guarantee or underwrite this product. Chant West has awarded UniSuper Super Fund of the Year 2015 and Investments Best Fund They have also awarded UniSuper a 5 Apples rating for its Accumulation products. For further information about the methodology used by Chant West, see Chant West has given its consent to the inclusion in this document of the references to Chant West and the inclusion of the logos and ratings or awards provided by Chant West in the form and context in which they are included. This document contains more detailed information about how superannuation in your Accumulation 1 or Spouse Account is taxed. Information contained in this document which is not materially adverse may change from time to time. Updated information can be found on our website or by contacting us. In this document, UniSuper is referred to as UniSuper or the Fund, ABN UniSuper Limited is referred to as UniSuper or the Trustee, ABN UniSuper Management Pty Ltd is referred to as USM, ABN , AFSL No

3 How super is taxed 1 Tax on contributions The table below provides an overview of tax on contributions and assumes that you have provided your tax file number (TFN). MAIN TYPES OF CONTRIBUTIONS Concessional (before-tax) contributions are contributions from your before-tax income. Concessional contributions include: Superannuation Guarantee (SG) employer contributions Salary sacrifice contributions made by your employer from your before-tax salary Personal contributions where you provide us with a valid form that states your intention to claim a tax deduction. Non-concessional (after-tax) contributions are contributions made from your take-home pay. Non-concessional contributions include: Personal contributions that have not been claimed as a tax deduction Contributions your spouse makes on your behalf are treated in the same way as after-tax contributions, provided your spouse does not claim the contribution as a tax-deductible employer contribution and provided you are not living separately from your spouse Excess concessional contributions not released from your super account. HOW MUCH TAX IS PAID 15% on contributions up to the concessional contributions cap.* Contributions which exceed your concessional contributions cap are included in your assessable income and taxed at your marginal tax rate. An excess concessional contributions charge will also apply. You will also be entitled to a 15% tax offset on the excess concessional contributions (because you have already paid tax on this money). The offset is not refundable. You can release up to 85% of your excess concessional contributions from your accumulation super account. Any excess concessional contributions you release from your super account no longer count toward your non-concessional contributions cap. Any excess concessional contributions not released from super are counted towards your non-concessional (after-tax) contributions cap. There is no tax payable on non-concessional contributions made up to your non-concessional contributions cap. If you exceed the non-concessional contributions cap, you may choose to release the super contributions in excess of your nonconcessional contributions cap plus 85% of any associated earnings. The associated earnings released are taxed at your marginal tax rate. You will also be entitled to receive a 15% tax offset on the associated earnings included in your assessable income (because you have already paid contributions tax on this money). The offset is not refundable. If you choose not to release your excess nonconcessional contributions they will remain in your super account and the excess will be taxed at 49%. HOW THE TAX IS PAID The tax is deducted from your super account. The Australian Taxation Office (ATO) will provide you with an assessment. The tax is paid out of your pocket to the ATO. N/A The ATO will provide you with an assessment. The tax is paid on the associated earnings out of your pocket to the ATO. The excess contributions tax is paid out of your nominated super account. * If you earn more than $300,000 in an income year, Division 293 tax will apply to your concessional contributions. Refer to the section Additional tax for high income earners on page 3 for more information.

4 2 How super is taxed Government caps on contributions The government imposes limits, called contributions caps, on the total amount of contributions that you can make to super in each financial year and still receive concessional tax treatment on those contributions. If you exceed the caps, you may pay a higher tax rate on contributions that exceed the caps, or we may refuse to accept contributions in some circumstances. Each cap applies to all contributions made by you or on your behalf in a financial year, regardless of how many employers or super funds you have. Government co-contributions are not included in either of the caps. It s your responsibility to monitor the contributions made into your UniSuper account, and to any accounts you may hold in other super funds, to ensure you don t exceed the caps. CAPS ON CONCESSIONAL (BEFORE-TAX) CONTRIBUTIONS Concessional (before-tax) contributions are generally contributions made by, or for you, before tax is paid. They include your employer contributions, salary sacrifice contributions and personal contributions made by you where you provide us with a valid form stating your intention to claim a tax deduction and we acknowledge receipt of this form in writing. If you re aged below 49 on 30 June 2015, you can contribute concessional contributions of up to $30,000 in the 2015/16 financial year and incur the 15% contributions tax, provided we have your TFN and the high income earners tax does not apply to you. See Additional tax for high income earners on page 3 for details. If you re aged 49 years or over on 30 June 2015, your concessional (before-tax) contributions cap is $35,000 for the 2015/16 financial year. If you exceed your concessional contributions cap during a financial year, the excess amount is included in your assessable income and taxed at your marginal tax rate. You will, however, receive a 15% tax offset in your tax return because you have already paid the 15% contributions tax through your super. The offset is not refundable. You may also be liable to pay a charge on the increase in your tax liability relating to the excess concessional contributions for the relevant financial year. If you have excess concessional contributions, the ATO will send you a letter, together with a voluntary release authority form, to authorise the release of money from your superannuation account up to 85% of the amount of your excess concessional contributions for that financial year. ADDITIONAL TAX FOR HIGH INCOME EARNERS An additional tax of 15% is imposed on concessional contributions into your super (referred to as low-tax contributions) made by, or on behalf of, high income earners who earn more than $300,000 for an income year. This additional tax is referred to as the Division 293 tax. Income for Division 293 tax purposes broadly includes the sum of your taxable income, reportable fringe benefits, total net investment income/losses, and low-tax contributions. Low-tax contributions are broadly your superannuation contributions which have been concessionally taxed. Low-tax contributions do not include non-concessional contributions or excess concessional contributions. If the Division 293 tax applies to you it will be applied to the lower of: your low-tax contributions; and the sum of your income for Division 293 purposes and low-tax contributions above the $300,000 threshold. If you need to pay the Division 293 tax, the ATO will issue you with a notice of assessment stating the amount of tax payable for the financial year and provide you with a release authority to enable the amount to be paid from your super account. Former temporary residents who receive a Departing Australia Superannuation Payment may apply to the Commissioner for a refund of any Division 293 tax paid.

5 How super is taxed 3 CAPS ON NON-CONCESSIONAL (AFTER-TAX) CONTRIBUTIONS You can contribute up to $180,000 in non-concessional (after-tax) contributions in the 2015/16 financial year without paying any additional tax. If you are under 65 and your non-concessional contributions exceed $180,000 in a financial year under the bring forward rule, you may be able to make up to three years of non-concessional contributions without paying any additional tax. For example, you could contribute $540,000 in one financial year, but nothing in the subsequent two financial years. Certain conditions apply under the bring forward rule. See the ATO website, for more information. If you exceed your non-concessional contributions cap, you may choose to release the super contributions in excess of your non-concessional contributions cap plus 85% of any associated earnings. The associated earnings released are taxed at your marginal tax rate. You will also receive a 15% tax offset on the associated earnings included in your assessable income. The offset is not refundable. The ATO will issue you with a notice of assessment stating the amount of tax payable for the financial year and provide you with a release authority to enable the amount to be paid from your super account. Alternatively you may choose to leave the excess non-concessional contributions and the associated earnings in your super instead of releasing the funds, in this case, you will be liable to pay tax on the excess contributions at a rate of 49%. If your contributions exceed your non-concessional contributions cap in a financial year, the excess amount could be taxed at up to 95% overall. For more information about the contributions caps and the types of contributions that count towards the concessional and non-concessional contributions caps, please refer to the ATO website, Spouse contributions tax offset Your spouse can contribute to your UniSuper account on your behalf and may be eligible to receive an 18% tax offset on spouse contributions of up to $3,000. However, this is subject to eligibility requirements and depends on the level of your assessable income and reportable fringe benefits and super contributions. For more information about the spouse contributions tax offset, please refer to the ATO website, Tax on transfers No tax is payable if you transfer your benefit from one super fund to another, unless the amount contains an untaxed element, for example from certain public sector super funds. An untaxed element transferred into UniSuper attracts the 15% contributions tax. Please note that UniSuper is no longer a Qualifying Recognised Overseas Pension Scheme (QROPS) under United Kingdom (UK) law, so we can no longer accept UK pension transfers. For more details, please refer to Important changes to QROPS transfers at unisuper.com.au/news. Taxation of contributions where no TFN has been provided As a Spouse Account can generally only be opened if you provide your TFN, this section generally only applies to Accumulation 1 members. If you have not provided your TFN, any contributions or transfers that would attract tax when paid into UniSuper (such as SG or salary sacrifice contributions or any part of a transfer from an overseas super fund that is treated as a taxable contribution) will also attract an additional tax of 34% that will be deducted from those contributions (totalling 49%). If you provide your TFN within the three financial years following the contribution, we may be able to claim this additional No-TFN tax back from the ATO. If we are able to claim the additional No-TFN tax back, we will re-credit it to your Accumulation 1 account if you still have one. Further, we cannot accept various types of contributions, including personal non-concessional contributions for you (including spouse contributions), if you have not provided your TFN.

6 4 How super is taxed Providing your TFN The Trustee is authorised and required to ask you for your TFN by tax law and in accordance with the Superannuation Industry (Supervision) Act Your TFN will only be used for lawful purposes, which include: finding and combining your superannuation benefits where insufficient information is available, providing information, including your TFN, to the ATO, for example when you receive a benefit, to validate initial registration information associated with first employer contributions using SuperTICK or if you are a lost member or have unclaimed benefits, verifying you are the person to whom the super entitlements belong prior to transferring your benefit to another super fund, unless you do not provide consent for your TFN to be used for this purpose, and providing information, including your TFN, to the trustee of another superannuation fund when your benefits are being transferred, unless you advise us in writing that you do not wish your TFN to be passed on. It is not an offence not to quote your TFN, however, providing your TFN to your superannuation fund will have the following advantages (which may not otherwise apply): we will generally be able to accept all types of contributions to your accounts (subject to contributions caps), the tax on contributions to your super accounts will generally not increase, other than the tax that may ordinarily apply, no additional tax will be deducted when you start drawing down your superannuation benefits, and it will make it much easier to identify you as the person to whom the super benefits belong and to trace different superannuation accounts in your name so that you receive all your super benefits when you retire. The lawful purposes for which your TFN can be used and the consequences of not providing us with your TFN may change in future as a result of legislative change. Tax on investment earnings Investment earnings are generally taxed in Australia at up to 15%. In some cases this rate may be lower as a result of any tax deductions and credits for which the Fund may qualify. This tax is deducted from the Fund s investment earnings before they are allocated to your account. Tax on withdrawals You may have to pay tax when you withdraw your benefit from the Fund. UniSuper will normally deduct any tax before paying your benefit. The amount of tax you will pay will depend on your circumstances, such as your age and how your benefit is paid to you. Please note that if you are under 60 and have not provided a TFN, withholding tax at the rate of 49% will generally be payable on the taxable component of a benefit payment made to you. AGE 60 OR OVER If you are 60 or over, the lump-sum benefit paid to you will generally be tax-free. BEFORE AGE 60 If you take your benefit before age 60, tax may apply to your lump-sum benefit payment. Your benefit generally comprises a tax-free and taxable component. When you make a lump-sum withdrawal of your benefit, the amount you receive will be drawn down from your tax-free and taxable components in proportion to the amount of each component in your entire benefit. If you are under 60 and have reached your preservation age, you will pay no tax on the taxable component of your lump-sum benefit up to the low rate cap amount. The low rate cap amount for the 2015/16 financial year is $195,000. The low rate cap is a lifetime limit. You will pay tax of 17% on the amount of the taxable component of your lump-sum benefit in excess of this threshold. If you haven t reached your preservation age when you take your lump-sum benefit, tax will generally be levied on the entire taxable component at a rate of 22%. The above summary assumes that no part of your benefit contains an untaxed element. If any part of your benefit contains an untaxed element, additional taxation would apply.

7 How super is taxed 5 TAXATION ADVICE Before you withdraw any benefits or make a substantial contribution, we recommend that you obtain taxation advice from a taxation specialist. TEMPORARY RESIDENTS The taxable component of benefits claimed by temporary residents will generally be subject to 38% withholding tax. For more details, refer to our Departing Australia superannuation payment fact sheet available on our website or by calling us on DEATH BENEFITS Death benefits are paid as a lump-sum and are generally received tax free if paid to a beneficiary who is your dependant for tax purposes. This includes where the benefit is paid to your legal personal representative and a dependant has benefitted or may be expected to benefit from the payment. Tax is generally payable on the taxable component of the lump-sum benefit if it is paid to a beneficiary who is not your dependant for tax purposes. This includes where the benefit is paid to your legal personal representative, and a non-dependant for tax purposes has benefited or may be expected to benefit from the payment. In these circumstances, 17% tax is withheld on any taxed element, and 32% on any untaxed element. There may be additional tax implications if there are insurance proceeds. Anti-detriment payments Definitions for tax purposes DEPENDANT A Your spouse or former spouse. A A Your children under the age of 18. A A person who is in an interdependency relationship with you at the date of your death. A A person who was financially dependent on you at the date of your death. SPOUSE A A person to whom you are legally married. A A A person, whether of the same sex or opposite sex, with whom you are in a relationship that is registered under an Australian state or territory law. A person, whether of the same sex or opposite sex, to whom you are not legally married but who lives with you on a genuine domestic basis as a couple. CHILD Includes a child, adopted child, step-child, exnuptial child, child of your spouse or child within the meaning of the Family Law legislation. INTERDEPENDENCY RELATIONSHIP A relationship between two people (whether or not related by family) if they live together in a close personal relationship, and one or each of them provides the other with financial support, and one or each of them provides the other with domestic support and personal care. If two people have a close personal relationship but don t live together or provide this support or care because either or both of them suffer from a physical, intellectual or psychiatric disability, they may still be deemed to have an interdependency relationship. We may pay an additional amount, referred to as an anti-detriment payment, in addition to the lumpsum death benefit if the death benefit is paid to certain beneficiaries of the deceased member. The anti-detriment payment represents a reimbursement of the contributions tax that the Fund paid on the deceased member s taxable contributions. The payment will only be made where a lump-sum death benefit is paid to the spouse, former spouse or child (including an adult child) of the deceased member. The payment may also be made if a lump-sum death benefit is paid to the trustee of the deceased member s estate and the proceeds of the estate are expected to be distributed to the deceased member s spouse, former spouse or child (including adult child).

8 CONTACT US HELPLINE (overseas members) FAX (overseas members) UNISUPER ADVICE (overseas members) WEBSITE unisuper.com.au enquiry@unisuper.com.au ADDRESS UniSuper Level 35, 385 Bourke Street Melbourne Vic 3000 Australia IMPORTANT INFORMATION This document has been prepared and issued by UniSuper Limited ABN (referred to throughout this document as either UniSuper or the Trustee ) as Trustee of UniSuper ABN (referred to throughout this document as the Fund ). The information in this document is of a general nature only and does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of the information having regard to your personal circumstances and consider consulting a qualified financial adviser before making an investment decision based on information contained in this document. The value of your investments can go up or down and investment returns can be positive or negative. The Trustee does not guarantee the performance of the Fund s investment options. To the extent that this document contains any information which is inconsistent with the UniSuper Trust Deed and Regulations (together, the Trust Deed ) the Trust Deed will prevail. UniSuper Limited 2015 UNISIBR