1 CommInsure Corporate Insurance Superannuation Trust Annual Report 2013 Fund CommInsure Corporate Insurance Superannuation Trust ABN R PO Box 1282 ALBURY NSW 2640 Phone: Facsimile: Trustee and Issuer CCSL Limited ABN AFS Licence No RSE Licence No L Registered Office Level 7, 530 Little Collins Street Melbourne VIC, 3000 Custodian RBC Dexia Investor Services Trust ABN AFS Licence No Administrator SMA Super Pty Ltd ABN AFS Licence No Insurer The Colonial Mutual Life Assurance Society Limited ABN AFS Licence No This Annual Report should be read in conjunction with the annual member statement recently provided to you, which shows your member entitlements at 30 June 2013.
3 Employer s Contributions As benefits within the CCIST relate to insurance only, members are not able to make any contributions or rollovers for accumulation purposes within the CCIST. The participating employer will make employer contributions on behalf of members. These contributions will be equal to the Insurance Premium payable for the insurance cover as detailed in the applicable PDS Part B: Employee Insurance Guide. Superannuation law limits the amount of superannuation that can be contributed in any financial year at a concessional tax rate. The concessional contributions caps for the 2012/13 and 2013/14 financial years are set out below. Income year 2012/13 $25, /14 $25,000 Amount of cap The $25,000 limit will be periodically increased in line with Average Weekly Ordinary Times Earnings in $5,000 increments. However, Parliament passed legislation to pause the indexation of the concessional contributions cap at $25,000 up to and including the 2013/14 year. Normal indexation resumes for the 2014/15 year. Recent changes now provide an un-indexed concessional contributions cap of $35,000 for: From 1 July 2013 individuals who are 60 years old or over From 1 July 2014 individuals who are 50 years old or over. Details of the cap for later years will be available from your adviser or by calling the Client Service Line on The contributions paid by participating employers for the cover provided under the CCIST are classified as concessional contributions and are included in the concessional contribution cap. Contact the Australian Taxation Office on or visit for further information. Tax File Numbers We are authorised to collect each member s Tax File Number (TFN). It will remain confidential and will be used only for lawful purposes, such as providing information to the Australian Taxation Office. These purposes may change in the future as the result of legislative change. A TFN may be disclosed to another superannuation provider when a member s benefits are being transferred, unless the member requests in writing that their TFN is not to be disclosed to any other Trustee. Membership to the CCIST is only available if a TFN has been provided. Therefore, insurance cover will not be provided to any employees where we do not have a TFN on file. Tax on contributions If a Tax File Number (TFN) is not provided to the CCIST, an additional tax of 31.5% (including Medicare Levy) may apply to the entire contribution. This cost would be borne by the CCIST. For this reason employees will not be accepted as members of the CCIST unless their TFN has been provided. Tax on death benefits The taxation of death benefits will depend on whether the beneficiary is a dependant as defined under taxation law (tax dependant). Note that this is different to the definition of dependant under superannuation law. A person will be a tax depe ndant if they are: A spouse (this includes married couples, de facto spouses (including same -sex) and certain registered relationships); A child of the member or spouse of the member (including an adopted child, step-child or ex-nuptial child or someone who is a child within the meaning of the Family Law Act 1975) so long as the child is under age 18; A person with whom the member had an interdependency relationship A person who was a financial dependant of the member. Also, if any part of the death benefit is paid to a Legal Personal Representative, it may be deemed to have been paid to a tax dependant if the Commissioner of Taxation accepts that the person receiving the payment via the member s estate is a tax dependant. Death benefits are tax-free if paid to a tax dependant. Death benefits paid to a non-tax dependant are generally taxed at 16.5%, inclusive of Medicare levy. A portion of the benefit may be an untaxed element (relating to the future service period of the insurance amount). That element is taxable at the maximum rate of 31.5%, inclusive of Medicare Levy. Below is a summary of how lump sum death benefits are taxed: Lump sum paid to: Tax dependants Tax Free Non-tax dependants Taxed element 15% 1 1 Plus Medicare Levy of 1.5% Tax on terminal illness benefits Untaxed element 30% 1 The insurance policy may allow for death benefit to be paid if the member is terminally ill. Lump sum benefit payments paid to a member who is terminally ill will be tax-free. A member will be taken to be terminally ill if two medical practitioners (at least one of these a specialist) certify that the member is suffering from an illness that in the normal course would result in death within 12 months. For each of the certificates, the certification period must not have ended. Tax on TPD benefits 2
4 Where the Trustee allows, TPD insurance cover benefits paid to those aged 60 or over are generally tax free. Benefits paid to those under age 60 are taxed as set out in the following table: Both forms are located in the PDS. For a copy of the PDS contact the CCIST Administrator using the contact details in the Directory at the back of this report. Age Taxable Component 60 and above Tax free On or over preservation age and under age 60 0% up to Low Rate Threshold 1 15% 2 over the Low Rate Threshold 1 Under preservation age 20% 2 on the whole amount 1 The Low rate threshold is $180,000 for 2013/14 is a lifetime limit per person and is indexed annually to AWOTE in increments of $5,000 2 Plus Medicare Levy of 1.5% Insurance Cover Members will receive either death only or death and total and permanent disablement cover through an insurance policy held in the CCIST. The type and level of cover is chosen by the participating employer. The details of the cover provided are explained in the PDS Part B: Employee Insurance Guide. Guaranteed renewability The Insurer guarantees to renew the insurance cover each year provided no termination event has occurred. The insurer will not cancel the insurance cover or increase premiums due to any change in the health, occupation or pastimes of the members during the guarantee period. Binding nomination Members can make either a binding or non-binding death benefit nomination to nominate who is to receive all or part of the member s benefit upon death. If the benefit is paid to the member s Legal Personal Representative, it will be distributed according to their Will. A non-binding death benefit nomination is not binding on, but will be considered by the Trustee. The Trustee will use its discretion when deciding how the death benefit should be paid. A binding death benefit nomination is binding on the Trustee. This means that, provided the nomination is valid at the time of death, the Trustee must pay the death benefit as the member has specified. To make a nomination, either the Binding or Non-Binding nomination form needs to be completed and the form returned to: CCIST PO Box 1282 Albury NSW
5 THE CCIST S ACCOUNTS This is an abridged summary of the CCIST s audited accounts for the year ended 30 June The full audited accounts, including the audit report will be available at the end of October If you would like a copy please contact the CCIST Administrator (see contact details in the Directory on the back cover). CommInsure Corporate Insurance Superannuation Trust Statement of Financial Position as at 30 June $ $ ASSETS Cash and cash equivalents 459, ,131 Other assets Return of overpaid interest receivable 10,047 0 Total assets 469, ,131 LIABILITIES PAYG tax provision 7,638 0 Current tax liability 1,496 2,548 Deferred tax liability 0 1,100 Benefits payable 450, ,973 Total liabilities 459, ,621 NET ASSETS AVAILABLE TO PAY BENEFITS 10,215 11,510 Represented by: Liability for accrued benefits 0 0 Not yet allocated 10,215 11,510 10,215 11,510 CommInsure Corporate Insurance Superannuation Trust Operating Statement for the year ended 30 June $ $ Investment revenue from ordinary activities Interest 20,564 14,269 Return of overpaid interest 10,047 0 Contribution revenue Taxable contributions 4,170,930 3,428,713 Other revenue Group life insurance proceeds 3,978,440 1,450,787 Total Revenue 8,179,981 4,893,769 Less expenses Insurance premiums 4,170,930 3,428,713 Bank fees and charges 60 1,100 Total expenses 4,170,990 3,429,813 Benefits accrued as a result of operations before income tax 4,008,991 1,463,956 Income tax expense attributable to benefits accrued as a result of operations 3,076 1,975 Benefits accrued as a result of operations 4,005,915 1,461,981 4
7 Enquiries and Complaints The CCIST has an established procedure for dealing with member enquiries and complaints about the operation and management of the CCIST. Enquiries and complaints should be made to the Administrator. For the cost of a local call, you can call our Client Services Team on (the cost may be higher if calling from a mobile), or us at The procedure requires the Trustee to consider and respond to a complaint within 90 days. If you are not satisfied with the Trustee s handling of your complaint or its decision or the Trustee does not respond within 90 days, you may contact the Superannuation Complaints Tribunal. The tribunal is an independent body set up by the Federal Government to assist members or beneficiaries to resolve certain types of complaints with fund trustees. The tribunal may be able to assist you to resolve your complaint, but only if you are not satisfied with the response received from the Trustee s handling of your complaint. If the tribunal accepts your complaint, it may attempt to resolve the matter through conciliation, which involves assisting you and the CCIST to come to a mutual agreement. If conciliation is unsuccessful, the complaint is referred to the tribunal for a determination which is binding. You should be aware, however, that a party may appeal a decision of the tribunal to the Federal Court. If you wish to find out whether the tribunal can handle your complaint and the type of information you would need to provide, phone the following number for the cost of a local call anywhere in Australia: DIRECTORY CCIST Administrator SMA Super Pty Ltd ABN AFS Licence No Level 1, 540 Swift St PO Box 1282 ALBURY NSW Fax: (02) Insurer The Colonial Mutual Life Assurance Society Limited ABN AFS Licence No Level 12, 52 Martin Place Sydney NSW 2000 Trustee CCSL Limited ABN AFS Licence No RSE Licence No L Registered Office Level 7, 530 Little Collins Street MELBOURNE VIC 3000 Phone: Postal Address Superannuation Complaints Tribunal Locked Bag 3060 MELBOURNE VIC 3001 Phone: Fax: (03)