The Executive Superannuation Fund

Transcription

1 The Executive Superannuation Fund

2 Agenda Overview of The Executive Superannuation Fund ( the Fund ) Contributions ti and insurance benefits available to KPMG staff Investment option asset allocation Investment performance to 30 September 2012 Preservation and taxation Pensions Legislative changes Fund website Contact details 1

3 Fund information

4 Overview of the Fund Trustee The Trust Company (Superannuation) Limited Policy Committee SA/WA/NT Rep: Mark Hordacre QLD Rep: Lisa Hurwood VIC/TAS Rep: Russell Schoenfisch NSW/ACT Rep: To be appointed Service Providers Legal Advisers Greenfields Financial Services Lawyers Asset Consultant Newport Investment Consulting Insurer OnePath Life Limited Administration & General Consulting KPMG Superannuation Services Limited Auditor UHY Haines Norton 3

5 Contributions and insurance

6 Contributions The Fund is able to accept the following types of contributions: Superannuation Guarantee (employer) contributions Additional employer contributions Salary sacrifice contributions Personal (after-tax) contributions Spouse contributions Government (e.g. the Government Co-Contribution) contributions In addition, the Fund is also able to accept: Rollovers from other Australian superannuation funds Rollovers from overseas superannuation / pension funds (the Fund is registered in the UK as a Qualifying Registered Overseas Pension Scheme ( QROPS )) 5

7 Types of insurance benefits The Fund provides you with the following types of insurance benefits: Death / Terminal Illness insurance cover This cover provides a benefit which is paid to your beneficiary/ies upon their death, or is paid to you if you have been declared terminally ill by two registered medical practitioners. Where this benefit is paid to your dependant (in the case of death) or to you (for terminal illness) it will be tax-free. Total and Permanent Disablement ( TPD ) insurance cover This benefit is paid if you are working more than 15 hours a week and: have experienced ill-health (whether physical or mental), have been absent from work continuously for six months and the Trustee is reasonably satisfied that you are unlikely, because of the ill-health, to engage in gainful employment for which you are reasonably qualified by education, training, or experience; or Due to injury, you have suffered the loss of two limbs or the sight of both eyes, or the loss of one limb and the sight of one eye (where limb is defined as the whole hand or the whole foot). Salary Continuance Insurance ( SCI ) cover This cover provides a benefit where you have been assessed as having a continuous or total and temporary inability to engage g in your usual occupation as a direct result of injury or sickness. 6

8 Insurance benefits provided to KPMG staff Benefit Class Death and TPD Automatic Salary Continuance Income Automatic Insurance Acceptance Limited Insurance (SCI) Acceptance Limit (AAL) (IAAL) Managers and above of 7 x Salary up to a $800,000 75% of Salary up to a $15,000 KPMG maximum of $800,000 maximum of $15,000 per month Below manager staff of KPMG (Excl. casuals) 5 x Salary up to a maximum of $800,000 $800,000 75% of Salary up to a maximum of $15,000 per month $15,000 Spouse or Other Personal Division Member Voluntary Death & TPD up to a maximum of $3 million n/a n/a n/a The premiums associated with Standard Death and TPD insurance and Salary Continuance Insurance cover are paid by KPMG 7

9 Death and TPD insurance cover Standard Death and TPD insurance cover additional terms If you undertake an international assignment, a career break, parental leave or another type of unpaid leave, an Overseas Secondment and Leave Notification Form must be completed and returned to the Fund in order to ensure your continued eligibility for insurance cover If you cease employment with KPMG, your standard cover will be automatically continued as voluntary cover, with the cost of premiums deducted from your member account (unless you elect otherwise) You can now apply to transfer existing Death and TPD insurance cover held in another superannuation fund into the Executive Fund. Contact the Fund for more details 8

10 Standard Death and TPD insurance cover amount payable TOTAL BENEFIT PAYABLE ON DEATH, TPD OR TERMINAL ILLNESS = INSURED BENEFIT + ACCOUNT BALANCE IN THE FUND 9

11 Salary Continuance Insurance cover Salary Continuance Insurance cover Salary Continuance Insurance (SCI) benefits are designed to provide a monthly income if you become totally disabled for a temporary period through sickness or accident and you are unable to perform your normal duties SCI benefits are provided for current KPMG employees working 15 hours or more per week (excluding casuals) at 75% of your total remuneration package SCI cover is provided by KPMG Australia through a separate insurance policy held outside the Fund A benefit becomes payable until age 65 after you have been unable to work for 6 months (i.e. a waiting period of 180 days applies) due to injury or illness SCI cover does not continue when you cease employment with KPMG, however, you may be able to take out a continuation option by contacting the Fund Administrator within 60 days of leaving KPMG 10

12 Salary Continuance Insurance cover EXAMPLE OF SCI COVER Total remuneration package (including superannuation) = $100,000 p.a. SCI insurance cover calculated as 75% x $100,000 = $75,000p.a. or $6,250 per month. This monthly benefit is gross of tax and superannuation contributions. Benefits are paid by KPMG Payroll to employees nominated bank accounts after the deduction of tax and superannuation contributions. 11

13 Voluntary Death and TPD Insurance cover Under the Fund s Insurance Policy, members (except casuals) can take out voluntary Death and TPD cover The maximum benefits available (including any applicable standard cover) are: Death: Unlimited (note: a maximum benefit of $2.5 million will be payable in the case of Terminal Illness) TPD: $3 million (cannot exceed the level of Death cover) Members will need to provide medical evidence to apply for voluntary cover and any decision regarding voluntary cover is at the full discretion of the Insurer The premiums applicable to voluntary Death and TPD (or Death only) cover are based on an age-based scale, which is provided in the Fund s Incorporated Information Booklet Voluntary insurance premiums ms are deducted from your account in the Fund on an annual al basis Where there are insufficient funds available in your account to meet the cost of voluntary insurance premiums, your voluntary insurance will be cancelled, unless additional contributions are made 12

14 Beneficiary nominations The Fund offers the following two types of beneficiary nominations to allow members to confirm their intentions for the payment of their benefit upon their death: Binding beneficiary nominations Trustee is obliged to pay account balance and any applicable insurance benefit to your nominated beneficiary Nominated beneficiary must be either a dependant or your legal personal representative Nomination must be witnessed by two individuals over 18 and must be renewed every three years Discretionary beneficiary nominations Trustee has discretion to pay the death benefit to the individual/s that the Trustee believes are the most appropriate p recipient/s. Trustee takes into consideration your personal circumstances and any nomination you may have made at the time of your death, but is not bound to pay the benefit to your nominated beneficiary(ies). 13

15 Investments

16 Investment options The Fund offers the following four investment options to members: Aggressive Balanced Conservative Cash Overview Diversified portfolio of Australian and international share managers. Potential for capital losses in the short term, but expected to provide higher returns over the long term. Diversified portfolio of Australian and international share, diversified, fixed interest and cash managers. Medium potential for capital losses in the short term; moderate to high returns expected over the long term. This is the default option. Diversified portfolio of Australian and international share, diversified, fixed interest and cash managers. Low to medium potential for capital losses in the short term; moderate returns expected over the long term. Invested in cash and term deposits. Low volatility expected in this investment option, but low potential returns expected over the long term. Level of risk High Moderate to High Moderate to Low Low Potential for 1 in 4 years 1 in 5 years 1 in 10 years Rarely, if ever negative on average on average on average returns 15

17 Asset allocation The below table provides the underlying asset class allocation for each of the investment options: Aggressive Growth Conservative Cash Australian shares Overseas shares Property securities Private equity Australian bonds Overseas bonds Cash Australian shares Overseas shares Property securities Private equity Australian bonds Overseas bonds Cash Australian shares Overseas shares Property securities Private equity Australian bonds Overseas bonds Cash Australian shares Overseas shares Property securities Private equity Australian bonds Overseas bonds Cash 16

18 Investment choice You are able to allocate your account balance between the Fund s four investment options in any proportion. In addition, you can choose one of the Fund s four investment options for your future contributions. Investment switches take effect on the last day of each month. The table below provides the due dates for upcoming investment switches: Due date Switch effective date 23 November November December December January January February February March March April April May May June June

19 Investment performance to 30 September 2012 (net of fees and tax) Aggressive Option Aggressive Benchmark Index* Balanced Option Balanced Benchmark Index* Conservative Option Conservative Benchmark Index* Cash Option Cash Benchmark Index* Quarter 7.70% 5.59% 5.91% 4.26% 3.03% 2.68% 1.03% 0.80% One year 15.59% 12.13% 13.11% 9.95% 7.46% 8.38% 4.07% 3.79% 3 year (p.a.) 4.75% 2.78% 5.82% 4.72% 5.97% 5.50% 4.20% 3.95% 5 year (p.a.) -2.86% -2.83% 0.28% 0.21% 2.45% 3.20% 4.12% 4.25% * The Benchmark Index returns are those of the relevant Super Ratings Index. 18

20 Investment comparison as at 30 September 2012 The table below provides a comparison of the performance of the Fund s four investment options (net of fees and tax) with other similar superannuation fund investment options as at 30 September 2012: Investment option Quarter % One year % Three year % Five year % Executive Aggressive AustralianSuper High Growth Accountants Super Aggressive N/A MLC MasterKey Accelerated Growth Executive Balanced AustralianSuper Balanced Accountants Super Growth N/A MLC MasterKey Growth Executive Conservative AustralianSuper Stable Accountants Super Moderate N/A MLC MasterKey Conservative Growth Executive Cash AustralianSuper Cash Accountants Super Cash N/A MLC MasterKey Cash

21 Preservation and Preservation and taxation

22 Preservation ages The preserved component of members superannuation benefits must remain within the Australian superannuation system, generally until an individual s permanent retirement from the workforce after they reach their preservation age. The table below provides an overview of preservation ages: Date of birth Preservation age Before 1 July July 1960 to 30 June July 1961 to 30 June July 1962 to 30 June July 1963 to 30 June After 30 June

23 Taxation of benefit payments The following table provides an overview of the tax rates which apply in relation to lump sum benefits paid from a superannuation fund (i.e. not rolled over to another superannuation fund): Age / status Aged 60 and over Between preservation age and age 60 Less than preservation age Tax treatment No tax payable Benefit does not have to be included in income tax return Tax free component no tax payable First $175,000 (indexed) of taxable component no tax payable Taxable component above $175,000 (indexed) taxed at 16.5% Tax free component no tax payable Taxable component taxed at 21.5% 22

24 Taxation on contributions The following table provides an overview of the tax rates applicable to concessional and non-concessional contributions made in the Fund. Type of contribution Tax Treatment Concessional (pre-tax ) contributions 15% 1 contributions tax up to $25, % 2 contributions tax in excess of the $25,000 concessional contributions cap limit. Non-concessional (after-tax) contributions Nil contributions tax to $150, % tax in excess of the $150,000 nonconcessional contributions cap limit 1 Effective 1 July 2012, the usual 15% tax on concessional contributions will increase to 30% for those with incomes exceeding $300, Excess concessional contributions count towards the non-concessional contributions cap. 3 Individuals under 65 years can contribute up to $450,000 over 3 years using the bring forward rule. 23

25 Pensions

26 Superannuation pensions and Transition to Retirement pensions The Fund offers the following two types of pensions to members: Superannuation pensions You must have permanently retired (after reaching their preservation age) or reached the age of 65. If you are over the age of 60, superannuation pensions are paid tax-free. If you are under the age of 60, the taxable component is taxed at marginal tax rate, less a tax offset of 15%. The minimum i annual pension payment of 4% of opening balance for individuals id aged under 65 (a larger minimum annual pension payment apply to older pension members) at commencement, or the start of each financial year. For the 2012/13 financial year, the minimum annual pension payment has been reduced by 25% (i.e. to 3% for individuals aged under 65). There is no maximum annual pension payment. 25

27 Superannuation pensions and Transition to Retirement pensions Transition to Retirement pensions Transition to Retirement pensions can be taken out while you are still employed, provided you have reached your preservation age. There is potential to obtain taxation advantages when combined with a salary sacrifice contribution strategy. Same taxation as a superannuation pension. Same minimum i annual pension payment requirements as a superannuation pension. A maximum annual pension payment of 10% of opening account balance at commencement, or the start of each financial year, is applied. 26

28 Legislative changes

29 Legislative changes Increased tax on concessional contributions for individuals whose income exceeds $300,000 Effective from 1 July 2012 The usual 15% tax on concessional contributions will increase to 30% for those with incomes exceeding $300,000 Definition of income to include taxable income, concessional contributions, fringe benefits, tax-free government pensions and certain other items Will not apply to concessional contributions which exceed the contributions cap (already subject to excess contributions tax) Will include notional employer contributions for defined benefit (DB) members 28

30 Legislative changes (cont ) Deferral of higher concessional contribution cap for over 50s Concessional contribution cap of $50, was to apply from 1 July 2012 for individuals aged 50 years and over with total superannuation balances less than $500, Now deferred to commence on 1 July 2014 Universal concessional cap of $25,000 will apply for everyone for the next 2 years 29

31 Legislative changes (cont ) Changes to the Superannuation Guarantee ( SG ) rate The compulsory SG rate will gradually increase from 9% to 12%. Effective 1 July 2013, employers making superannuation payments on behalf of their employees based on the minimum SG rate (i.e. 9%) will be required to increase this rate to 9.25%. Year Rate % % % % 00% % % % % 30

32 Contact details

33 Fund contact details The table below contains the contact details for the Fund Administrator and Trustee: Name Address Fund Administrator KPMG Superannuation Services Pty Limited PO Box H65 Australia Square NSW 1215 Trustee The Trust Company (Superannuation) Limited PO Box 361 Collins Street West VIC 8007 Telephone number (02) (03) Fax number (02) (03)

34 Fund Website Further information regarding the Fund, including Product Disclosure Statements, Incorporated Information Booklets, Annual Reports and various other guides and forms is available on the Fund s website at: The Fund s website also contains a secure individual member portal which provides access to the following information regarding your account in the Fund: Personal Details Account Balance Asset exposure Insurance details An individual login can be obtained by ing the following internal KPMG functional mailbox and providing your member number: AU-FMNatSuperPINRqst@kpmg.com.au t@k 33

35 KPMG Superannuation Services Pty Limited - disclaimer This document has been prepared by KPMG Superannuation Services Pty Limited (AFSL No: ) to provide you with general information only and does not take into account your individual objectives, financial situation or needs. Before acting or relying on any information contained in this document, you should consider whether it is appropriate for your circumstances having regard to your personal objectives, financial situation and needs. You should obtain and consider carefully the Product Disclosure Statement (PDS) relevant to your category of membership in the Fund prior to making any decision regarding your benefits in the Fund. Copies of the PDS are available on the Fund s website ( or by contacting the Fund Administrator on (02)

36 Questions? 35

37 KPMG Superannuation Services contacts Adam Gee Director Tel KPMG 10 Shelley Street Sydney NSW 2000 Fax KPMG 10 Shelley Street Sydney NSW 2000 Hanna Howard Manager Tel Fax KPMG is an Australian partnership KPMG is an Australian partnership 36

38 Thank you

39 2012 KPMG, an Australian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International Cooperative (KPMG International).