Your death and disability benefits (Personal Members)

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1 Rio Tinto Staff Superannuation Fund Guide 7 Your death and disability benefits (Personal Members) The information in this document forms part of the following Product Disclosure Statements for the Rio Tinto Staff Superannuation Fund: Accumulation Division for Rio Tinto Employee and Personal Members issued Accumulation Division for QAL Management and Wages Employee and Personal Members issued In this guide, you ll find the following information: About your insurance benefits 1 Eligibility for insurance cover 2 A fixed amount of cover 2 Cost of cover 2 When your cover stops 2 Cancelling or re-instating your cover 3 Death benefit 3 Total and permanent disablement (TPD) benefit 3 Investment earnings applicable to death and TPD benefits 4 Beneficiaries 4 If you are an eligible Personal Member, the Rio Tinto Fund will provide you with automatic insurance coverage that will help provide security for you and your family in the event of your death or total and permanent disablement (TPD). About your insurance benefits If eligible, you are automatically entitled to insurance cover on becoming a Personal Member of the Accumulation Division if you die or if the insurer (and ultimately the Trustee) deem that you are totally and permanently disabled (as that term is defined in the relevant insurance policy). The insurance cover is a fixed amount based on your age at the date of death or TPD. You are covered 24 hours a day, 7 days a week, while you are at work, at home or anywhere else. These insurance benefits are designed to provide you and/or your dependants with financial assistance should you die or become totally and permanently disabled. This insurance cover is provided by MLC Limited (MLC) ABN , a wholly-owned subsidiary of the National Australia Bank. You are able to cancel this cover at any time (see the section Cancelling or re-instating your cover that appears later in this guide.). IMPORTANT NOTE: 1. The insurance arrangements described in this guide only apply to Personal Members of the Accumulation Division. Employee Members have different insurance arrangements which are detailed in Guide 6: Your death and disability benefits (Rio Tinto and QAL). 2. The insurance costs or premiums referred to in this Guide are insurance fees as defined in Guide 4: Fees and costs (Rio Tinto, QAL and Personal Members). These are additional to the fees and costs shown in Guide 4 and are deducted from your account in the Fund. Website: Fund Member Helpline:

2 Eligibility for insurance cover You are eligible for automatic death and TPD cover as a Personal Member unless: you are aged 56 or over; you left employment (and so ceased to be an Employee Member of the Rio Tinto Fund) due to TPD or ill health; you are a member of the armed forces (excluding Australian Army Reservists not deployed overseas); you are not an Australian resident (where an Australian resident is someone who has always lived in Australia or has come to Australia to live and is eligible to work in Australia); you lodge a TPD claim and are assessed (or would have been assessed) as being totally and permanently disabled prior to becoming a Personal Member, unless the reason for your disablement is totally unrelated to the condition you had prior to becoming a Personal Member; or you are a Spouse Member. Spouse members must apply for cover using the Cancel or apply for insurance - Accumulation Division - Personal Members form available from the Fund Member Helpline or the Fund website. A fixed amount of cover The amount of insurance cover you will receive is fixed and depends on your age. There is no option to increase your amount of cover. The age based amounts of insurance cover are shown in Table 1 below. Table 1: Death and TPD insurance cover Age at date of death/tpd Death and TPD insurance cover (your insured amount ) Under 35 years $50, years $35, years $20, years $14, years $7, years or over Nil Cost of cover Premiums for your cover are deducted monthly from your super account. The annual premium is based on your age. Current annual premiums for each age are shown in Table 2 below. Table 2: Annual premium for death and TPD insurance cover Age Annual premium ($) Age Annual premium ($) When your cover stops Your insurance cover will stop at the earliest of the following occurring: you cancel your cover; there is insufficient money in your account to cover your monthly insurance premiums; your Rio Tinto Fund membership ceases or your account is transferred to an eligible rollover fund; the date you turn age 56; the day before you commence service in the armed forces of any country (excluding the Australian Defence Force Reserve not deployed overseas); a TPD claim is admitted in respect of the insurance; a terminal illness benefit is paid in respect of the insurance; or you die. 2 Website: Fund Member Helpline:

3 Cancelling or re-instating your cover You can cancel your death and TPD insurance cover at any time. To cancel your cover, complete and return the Cancel or apply for cover Accumulation Division Personal Members form available from the Rio Tinto Fund website or call the Fund Member Helpline for a copy. If you cancel your cover, you will cancel both your death and TPD cover. You cannot have only death or TPD cover. You are able to request cover at a later time after cancelling your cover, however, you will need to provide the insurer with evidence of good health before cover can be reinstated. Insurance cover is an important super benefit that provides financial security and peace of mind for you and your family if you can t work or if you die. Before cancelling any cover, you should seek advice from a financial adviser to understand the financial implications. You can call the Fund Member Helpline on to speak to a financial adviser over the phone at no cost. Death benefit A lump sum death benefit is payable to your dependants or your legal personal representative if you die*. The Fund benefit payable is: Your Account Balance Plus Your insured amount * If you become terminally ill, your death benefit may be paid in advance of your death. You are considered to be terminally ill when you suffer an illness that, in the opinion of the Trustee and the insurer after consideration of the medical evidence, will reduce your life expectancy to less than 12 months. Your insurance cover must be in place at the time your life expectancy is reduced to be eligible for the insured component. Who receives your death benefit? You may nominate a beneficiary (or beneficiaries) to receive your death benefit. Your nominated beneficiaries must be your dependant and/or a legal personal representative (generally, the executor of your Estate). If you nominate more than one beneficiary, you must specify the proportion of your benefit you wish to be paid to each beneficiary. There are two types of nominations available to you. The first is the standard nomination which is not legally binding on the Fund s Trustee. The second type of nomination is a legally binding nomination, which the Trustee is required to follow. For further information on both types of nominations refer to the Beneficiaries section of this guide. Total and permanent disablement (TPD) benefit A lump sum benefit is payable to you in the event of your TPD. The Fund benefit payable is: Your Account Balance Plus Your insured amount To be eligible to receive a TPD benefit your claim must, in the opinion of the Trustee and insurer, satisfy the insurer s definition of TPD as specified under the insurance policy. TPD is defined in the insurance policy to mean: a. where, at the time of suffering TPD, the member is working 15 hours per week or more (averaged across the entire six months prior to the date of total disability): the member has been absent from their occupation solely through injury or illness for six consecutive months and is incapacitated to such an extent that, in the insurer s opinion, after consideration of medical and other relevant evidence, the member was, at the end of six consecutive months absence from employment, unlikely to ever engage in work for reward in any occupation for which the member is reasonably suited by education, training or experience; or b. where, at the time of suffering TPD, the member is working less than 15 hours per week (averaged across the entire six months prior to the date of total disability) or not employed: the member is not employed or has been absent from their occupation solely through injury or illness for six consecutive months and is incapacitated to such an extent that, in the insurer s opinion, after consideration of medical and other relevant evidence, the member was, at the end of the period of six consecutive months absence from employment, or if the member was not employed, at the end of the period of six consecutive months from the date of claim, unlikely to ever be able to perform at least two Activities of Daily Living without the physical help of someone else. Activities of Daily Living means: bathing and/or showering; or dressing; or moving from place to place including in and out of bed and in and out of a chair; or eating or drinking; or using the toilet. The insurer may impose special conditions and restrictions in respect of your insured cover on admission to the Fund as a Personal Member and at other times see the earlier section Eligibility for insurance cover. 3 Website: Fund Member Helpline:

4 Investment earnings applicable to death and TPD benefits As explained above, your death and TPD benefit is calculated as your Account Balance plus your insured amount. In the event of your death, your Account Balance will be calculated based on the latest sell unit price for your chosen investment option(s) as at the date the Fund administrator is advised of your death. At this time, your Account Balance will then be moved into the Fund s Cash option and will be updated with the net investment return achieved by the Fund s Cash investments to the date of payment. The Trustee adopts this approach in order to ensure as far as possible that the benefit is not subsequently reduced by short-term negative investment returns from the occurrence of death until the date of payment. In the event of your total and permanent disablement, your Account Balance will remain invested normally until the date of payment (i.e. net investment returns both positive and negative, will continue to be applied to your account via daily unit prices). In the event of your death (including terminal illness) or total and permanent disablement, your insured amount will generally be updated with investment earnings from the date the Fund receives the insured amount from the insurer to the date of payment at the net investment return achieved by the Fund s Cash investment option. The Trustee adopts this approach in order to ensure as far as possible that the insured component of the benefit is not subsequently reduced by short-term negative returns from the date of receipt by the Fund until the date of payment. Beneficiaries For the sake of your family, it s important that the Rio Tinto Fund has a record of your wishes as to who you d like to receive your super benefit if you die while you re a member. If you die while you re a member of the Rio Tinto Fund, your benefit will be paid: 3. If you have made a valid binding nomination that is valid at the time of your death, in accordance with that nomination; or 4. In the absence of a valid binding nomination, to any one or more of your dependants and/or your legal personal representative in any proportion determined by the Trustee after taking into account the circumstances that exist at the time of your death In these circumstances a non-binding nomination will assist the Trustee in exercising its discretion, by indicating your preference as to who should receive the Fund benefit. How you can make a nomination You may nominate who you would like to receive your benefit in one of two ways. Option 1 Non-binding nomination You can nominate who you would prefer to receive your benefit in the event of your death. This is an indication of your preferences only, and pertains to the distribution of your benefit in the event you do not make a binding death benefit nomination. The Trustee will not be legally bound by your wishes but will take them into account. Making or changing your non-binding nomination To let the Trustee know your wishes, you can make a non-binding nomination, or change your nomination at any time either through the Fund website or by completing and returning a Making a non-binding death benefit nomination form, available from the website or by calling the Fund Member Helpline for a copy. Option 2 Binding nomination You can nominate one or more of your dependants or a legal personal representative that you direct the Trustee to pay your benefit to, and in what proportions, by making a binding death benefit nomination. You can make a binding death benefit nomination that the Trustee will be bound to follow in the event of your death, unless it is invalid or is no longer in effect, by completing and returning a Making a binding death benefit nomination form. A binding death benefit nomination will be invalid if: it is not made using the Rio Tinto Fund Making a binding death benefit nomination form (the Form); or the Form has not been properly completed in accordance with the relevant legal requirements which are specified on the Form (for example, the nominated proportions are not clear or do not equal 100%, or the Form has not been signed and witnessed correctly); or at the time of your death, one or more of the persons nominated by you in the Form has died or is not your dependant or legal personal representative (such as if you remarry after making the nomination in favour of your former spouse); or you were legally incapable of making the nomination; or the Trustee is legally restrained or prohibited from paying your super benefit to one or more of the persons nominated by you in the Form. A binding death benefit nomination will cease to have effect if: three years has passed from the day you signed the Making a binding death benefit nomination form or last re-confirmed that nomination; or you have revoked the nomination; or the Trustee is prevented from making payment in accordance with your binding death benefit nomination due to the operation of the Family Law Act 1975; or you are subject to a Family Court Order that prevents you from making a binding death benefit nomination or that requires you to revoke an otherwise valid binding death benefit nomination. 4 Website: Fund Member Helpline:

5 Making, changing, revoking or re-confirming your binding nomination If you wish to make a binding death benefit nomination, or amend or revoke an existing binding death benefit nomination, please call the Fund Member Helpline or visit the website for the Making a binding death benefit nomination form, which contains full instructions on how to complete it. If you wish to re-confirm your existing binding death benefit nomination to continue for another three years, you can do this by calling the Fund Member Helpline for the necessary form to complete and return. Note: If you were an Employee Member whose membership is being continued as a Personal Member, this is simply a continuation of your membership and so your nominated beneficiaries (if any) will remain the same unless and until you make a new nomination or your existing nomination ceases to be valid. Who you can nominate When making a non-binding nomination or a binding nomination you have the choice of nominating one or more of your dependants and your legal personal representative (your Estate). Your dependants can include: your Spouse* (this includes de facto and same-sex partners) your children including step-children, adopted children and your Spouse s children any other person who the Trustee considers is wholly or partially dependent on you, and any other person with whom you have an interdependency relationship. This may occur where you have a close personal relationship with another person (whether or not related by family) and: you and that other person live together you, the other person, or both of you provide the other with financial support, and you, the other person, or both of you provide the other with domestic support and personal care. It may also occur where you have a close personal relationship with another person but due to a disability the other criteria of interdependency cannot be met. As mentioned previously, you can also nominate your legal personal representative (your Estate). If your legal personal representative receives your benefit, it will be distributed according to your will, or if you don t have a will, according to the laws of the State in which you resided at the date of your death. If you don t have any dependants or a legal personal representative, the Trustee of the Fund has the discretion to pay your super benefit to any natural person allowed by the law. *Definition of Spouse The Fund s Trust Deed defines a person s Spouse as: a. another person who is legally married to the person (or in the case of a deceased person was legally married to them at the time of their death) b. another person (whether of the same or a different sex) with whom the person is in a relationship that is registered under a Prescribed Law* as a prescribed kind of relationship (or in the case of a deceased person was in such a registered relationship at the time of the person s death), and c. another person who, although not legally married to the person, lives with the person on a genuine domestic basis in a relationship as a couple for the purposes of the SIS Act (or in the case of a deceased person was in such a relationship at the time of the person s death). * For this purpose, Prescribed Law means a law of a State or Territory prescribed for the purposes of section 22B of the Acts Interpretation Act 1901 (Cth). This guide provides general information only, and has been prepared without taking into account your personal objectives, financial situation or needs. Therefore, before acting on this information, you should consider the appropriateness of it having regard to your personal objectives, situation and needs. You may also wish to consult a licensed or appropriately authorised financial adviser. You should also read and consider the Fund Product Disclosure Statement and all relevant guides that apply to your membership which are available on the Fund website, or by calling the Fund Member Helpline on This guide has been issued by Rio Tinto Staff Fund Pty Limited (ABN ), Australian Financial Services (AFS) Licence No , as Trustee of the Rio Tinto Staff Superannuation Fund (ABN ). MySuper authorisation June 2014 RT0429 This guide provides general information only, and has been prepared without taking into account your personal objectives, financial situation or needs. Therefore, before acting on this information, you should consider the appropriateness of it having regard to your personal objectives, situation and needs. You may also wish to consult a licensed or appropriately authorised financial adviser. You should also read and consider the Fund Product Disclosure Statement and all relevant guides that apply to your membership which are available on the Fund website, or by calling the Fund Member Helpline on This guide has been issued by Rio Tinto Staff Fund Pty Limited (ABN ), Australian Financial Services (AFS) Licence No , as Trustee of the Rio Tinto Staff Superannuation Fund (ABN ). MySuper authorisation December 2014 RT475 5 Website: Fund Member Helpline: RT18293_Guide7_Death and Disability Benefits (Personal Members)_1014_WEB