Westpac Personal Superannuation Fund.

Transcription

1 Westpac Personal Superannuation Fund. Annual Report for the year ended 30 June

2 1 Features at a glance. 2 Investment Overview. 4 Investment Options. 5 Investment Option profiles. 10 Performance. 12 Fees and other costs. 15 Other important information. Westpac Securities Administration Limited, ABN , AFSL , is the trustee (Trustee) of the Westpac Personal Superannuation Fund (the Fund), ABN, The following products are part of the Fund and are covered in this Annual Report. Westpac Personal Superannuation Bond (commenced 1 October 1992) Westpac Personal Superannuation Investment Plan (commenced 1 October 1992) Westpac Personal Superannuation (commenced 26 February 1990) Westpac Personal Superannuation Bond (commenced 28 April 1992) Westpac Personal Superannuation (commenced 26 November 1987) Westpac Simple Super (commenced 1 November 1992) The Fund is a resident regulated superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 (SIS) and is not subject to a direction under section 63 of SIS. This Annual Report was prepared on 16 November. Your investment in the Fund is not guaranteed. The value of your investment can rise and fall depending on the investment returns achieved by the Investment Option(s) you select. You, with the assistance of your Financial Planner, are responsible for selecting the Investment Options in which you invest. We are not responsible for our decision to invest in the Investment Options you select and are not liable for any loss or damage you may incur as a result of you deciding to invest in, or withdraw from, a particular Investment Option. The information contained with this report is general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether this information is appropriate to you and talk to your Financial Planner before making an investment decision.

3 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Features at a glance Roll over your other super accounts Consolidate your super using our Easy Rollover Tool at Alternatively, you may complete a Request to Transfer form available on our website or by contacting Customer Relations, and send the completed form to your other super fund(s). Free switches Switch your superannuation balance between Investment Options. A range of investment options You can choose from a range of professionally managed Investment Options, covering a broad risk and return spectrum. 1

4 WESTPAC PERSONAL SUPERANNUATION FUND Investment Overview. Understanding the risks of investing No matter which Investment Option you choose to invest in, there will always be some level of investment risk. The variability of returns is known as investment risk. Generally, the higher level of risk you are prepared to accept, the higher the potential returns, or losses. Risk can be managed and even minimised, but cannot be eliminated and there is always a chance you may lose money on any investments you make. You should be aware of these risks when investing and understand that not all risks are foreseeable. Some common types of investment risks are outlined in the table below. Risk type Market risk Security specific risk International investments risk Currency risk Interest rate risk Credit risk Liquidity risk Derivative risk Description of risk Markets are subject to a host of factors, including economic conditions, government regulations, market sentiment, local and international political events and environmental and technological issues. Market risk may have different impacts on each investment and investment style in that market at different times. An investment in a company may be affected by unexpected changes in that company s operations (such as changes in management or loss of a big customer) and business environment. Investing internationally in one of the major asset classes will give exposure to different or potentially greater risks that are not associated with investing in Australia. International investments may be more affected by political and economic uncertainties, lower regulatory supervision, movements in foreign currency and interest rates and more volatile, less liquid markets. For investments in international assets, a rise in the Australian dollar relative to other currencies, may negatively impact investment values and returns. Changes in interest rates can have a direct or indirect impact on the investment value and/or returns of all types of assets. Interest rates may affect a company s cost of borrowings as well as the value of fixed interest securities. Credit risk refers to a risk of loss arising from the failure of a borrower or other party to a contract to meet its obligations. This may arise in securities such as derivatives, fixed interest securities and mortgage securities. This is the risk that an investment may not be easily converted into cash with little or no loss of capital and minimum delay because of either inadequate market depth or disruptions in the market place. Securities of small companies in particular may, from time to time, and especially in falling markets, become less liquid. The value of derivatives is linked to the value of the underlying assets and can be highly volatile. Potential gains and losses from derivative transactions can be substantial. 2

5 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 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 effective exposure obtained) they can also produce significantly higher losses, sometimes in excess of the amount invested. The Fund does not invest directly in derivative securities and the use of derivatives to gear the Investment Options is not permitted. 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 of members. A change in the value of the members unit price generally reflects the net earnings of the supporting assets in the 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 Future Income Tax Benefit (FITB). A FITB arises when, for tax purposes, a loss is available to offset a future gain (i.e. so as to reduce the amount of gain that might otherwise be taxable). Our policy is to recognise FITBs in Westpac Super as a separate asset of the relevant Investment Option. Like any other asset in an Investment Option, the value of the unit price is adjusted for FITB. The value of a FITB 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 FITB asset may cause unit prices to change (as is the case with a change in the value of any other asset in the Investment Option). The level of FITB recorded in the unit price of an Investment Option may be capped, taking into account the probability that accrued losses are able to be offset against future gains. The Joint ASIC and APRA Unit Pricing Guide to Good Practice, and Westpac policy require that FITB only be recognised in the net asset value and unit price of an Investment Option to the extent that the deferred tax benefit is expected to be realisable in the future. It may be necessary to reduce the level of FITB to ensure that the value of the Investment Option (and the unit price) is not over-stated. Unit pricing We can change the way in which we calculate unit prices, as well as the buy/sell spread used. Information regarding any such change will be available on our website or by calling Customer Relations. Notice will not ordinarily be provided, however we may provide notice on our website, or in the next regular communication. 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. 3

6 WESTPAC PERSONAL SUPERANNUATION FUND Investment Options. The Fund has a range of Investment Options. Members can choose to invest in any combination of these Investment Options (subject to a maximum of five Investment Options at any one time). You cannot switch between the Contribution Fee and Nil Contribution Fee Investment Options. The Fund currently invests through a life policy issued by Westpac Life Insurance Services Limited (represents 100 of the Fund). State Street Global Advisors, Australia Limited has been appointed to manage the Westpac International Share Investment Option and the international share holdings in the Diversified Investment Options. The Investment Option profile section (beginning on the next page) gives you a snapshot of each Investment Option together with other information including: the full range of Investment Options available within the Fund; the investment objectives, strategy and fund size of each Investment Option; and asset information, including strategic range, target position and s for 30 June and 30 June. The following table will assist you with understanding the Investment Option profiles. Investment Objective Strategy Target Position (TP) and strategic ranges The investment objective for each Investment Option represents our current target, which may change over time. These aims may not be achieved and we do not forecast or guarantee the future performance of any Investment Option. The strategy describes the process used by the investment managers when investing in the relevant asset classes to achieve the investment objective. This section provides details on the asset classes, in which each Investment Option invests and the asset target position and ranges for each Investment Option. The asset target position is the starting point for all asset decisions. We will actively adjust the exposure within the specified ranges to maximise the Investment Option s investment returns. Please be aware that the Investment Options available to investors may differ slightly depending on which part of the Fund you are invested in. When reading the information relating to your Investment Options, please ensure you are reading the information for the product you are invested in. 4

7 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Investment Option profiles. Westpac Personal Superannuation (commenced 26 February 1990) Westpac Personal Superannuation Bond (commenced 28 April 1992) Westpac Personal Superannuation (commenced 26 November 1987) Investment Objective Strategy Income Accumulation Aims to provide a high level of capital security and to maximise interest earnings from a portfolio that invests mainly in money market securities. Invests directly through a life policy so that the underlying investments of the portfolio consist wholly of short-term liquid assets such as bank bills. Conservative Growth Aims to provide a conservative level of capital growth over the medium term (at least three years) and a relatively high level of interest earnings. Invests directly through a life policy so that the majority of the underlying assets provide income for reinvestment. Such assets include bank-billed and cash on deposit as well as Australian and international fixed interest. The fund also invests in growth assets such as shares and property, to provide potential for higher returns. Allocation Target Position Strategic Range Target Position Strategic Range Australian Shares n/a n/a n/a International Shares n/a n/a n/a n/a Property n/a n/a n/a n/a Australian Fixed Interest International Fixed Interest n/a n/a n/a n/a n/a n/a Cash

8 WESTPAC PERSONAL SUPERANNUATION FUND Investment Option profiles. Westpac Personal Superannuation (commenced 26 February 1990) Westpac Personal Superannuation Bond (commenced 28 April 1992) Westpac Personal Superannuation (commenced 26 November 1987) Investment Objective Strategy Balanced Growth Aims to provide a high level of capital growth over the long term (at least five years) from a balanced portfolio of assets. Invests directly through a life policy so that the underlying investments of the portfolio include assets with high long-term growth potential such as property and Australian and international shares. Dynamic Growth Aims to maximise capital growth over the long term (at least five years) from a dynamic portfolio that includes a high proportion of Australian and international shares. Invests directly through a life policy so that the underlying investments of the portfolio consist of a diversified portfolio of predominantly growth assets, which may provide the potential for long-term capital growth and include property and Australian and international shares. Allocation Target Position Strategic Range Target Position Strategic Range Australian Shares International Shares Property Australian Fixed Interest International Fixed Interest Cash

9 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Westpac Personal Superannuation Bond (commenced 1 October 1992) Westpac Personal Superannuation Investment Plan (commenced 1 October 1992) Investment Objective Strategy Cash Based Aims to provide a high level of capital security and to maximise interest earnings from a portfolio that invests mainly in money market securities. Invests directly through a life policy so that they underlying investments of the portfolio consist wholly of short-term liquid assets such as bank bills. Managed Stable Aims to provide a conservative level of capital growth over the medium term (at least three years) and a relatively high level of interest earnings. Invests directly through a life policy so that the majority of the underlying assets provide income for reinvestment. Such assets include bank-backed bills and cash on deposit. Part of the underlying assets of the portfolio also include growth assets, such as shares and property, to provide potential for higher returns. Allocation Target Position Strategic Range Target Position Strategic Range Australian Shares n/a n/a n/a n/a International Shares n/a n/a n/a n/a Property n/a n/a n/a n/a Australian Fixed Interest International Fixed Interest n/a n/a n/a n/a n/a n/a n/a n/a Cash n/a

10 WESTPAC PERSONAL SUPERANNUATION FUND Investment Option profiles. Westpac Personal Superannuation Bond (commenced 1 October 1992) Westpac Personal Superannuation Investment Plan (commenced 1 October 1992) Investment Objective Strategy Managed Growth Aims to provide a high level of capital growth over the long term (at least five years) from a balanced portfolio of assets. Invests directly through a life policy so that the underlying investments of the portfolio include assets with high long-term growth potential such as property and Australian and international shares. Growth Plus Aims to maximise capital growth over the long term (at least five years) from a dynamic portfolio that includes a high proportion of Australian and international shares. Invests directly through a life policy so that the underlying investments of the portfolio consist of a diversified portfolio of predominantly growth assets, which may provide the potential for long-term capital growth and include property and Australian and international shares. Allocation Target Position Strategic Range Target Position Strategic Range Australian Shares International Shares Property Australian Fixed Interest International Fixed Interest Cash

11 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Westpac Simple Super (commenced 1 November 1992) Investment Objective Strategy Bank Deposit Aims to provide a high level of capital security and to maximise interest earnings from a portfolio that invests mainly in money market securities. Invests directly through a life policy so that the underlying investments of the portfolio consist wholly of short-term liquid assets such as bank bills. Managed Investment Aims to provide a high level of capital growth over the long term (at least five years) from a balanced portfolio of assets. Invests directly through a life policy so that the underlying investments of the portfolio include assets with high long-term growth potential such as property and Australian and international shares. Allocation Target Position Strategic Range Target Position Strategic Range Australian Shares n/a n/a n/a n/a International Shares n/a n/a n/a n/a Property n/a n/a n/a n/a Australian Fixed Interest International Fixed Interest n/a n/a n/a n/a n/a n/a n/a n/a Cash n/a

12 WESTPAC PERSONAL SUPERANNUATION FUND Performance. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Total returns are calculated: using withdrawal prices appropriate for the month end; taking into account management costs of the relevant Investment Option; and taking into account earnings tax up to a maximum of 15 plus withholding tax paid on foreign income (if any). Certain other fees such as Contribution fees or Withdrawal fees (if any) are not taken into account. Investment returns shown are historical. Investment returns can go up and down and past performance is not a reliable indicator of future performance. Future performance is not guaranteed. Westpac Personal Superannuation (commenced 26 February 1990) Westpac Personal Superannuation Bond (commenced 28 April 1992) Westpac Personal Superannuation (commenced 26 November 1987) Investment Option 2008 () 2009 () One year returns to 30 June 2010 () () () Compound average 10 year annual returns to 30 June pa Income Accumulation Conservative Growth Balanced Growth Dynamic Growth

13 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Westpac Personal Superannuation Bond (commenced 1 October 1992) Westpac Personal Superannuation Investment Plan (commenced 1 October 1992) Investment Option 2008 () 2009 () One year returns to 30 June 2010 () () () Compound average 10 year annual returns to 30 June pa Cash based Managed Stable Managed Growth Growth Plus Westpac Simple Super (commenced 1 November 1992) Investment Option 2008 () 2009 () One year returns to 30 June 2010 () () () Compound average 10 year annual returns to 30 June pa Bank Deposit Managed Investment

14 WESTPAC PERSONAL SUPERANNUATION FUND Fees and other costs. Fees and charges are either deducted directly from your account or are reflected in the unit price calculation. The amount and method of allocating fees and charges may change from time to time. The Trustee will notify you of any significant change. The main features of the current fee and cost structures are outlined for each product below. For how each fee is defined, please see the section titled Understanding the fees. Westpac Personal Superannuation (commenced 26 February 1990) Westpac Personal Superannuation (commenced 26 November 1987) Westpac Personal Superannuation Bond (commenced 28 April 1992) Contribution Fee This fee is 3.30 of each regular contribution. For each single contribution, the fee is 4 of the first $29,000*, 3 from $29,001 to $96,000*, 2 from $96,001 to $206,000 and 1 of the balance. For each transfer or rollover, the fee is 1 of the amount transferred, subject to a minimum fee of $52.90*. This charge is waived if you are transferring from a fund administered by Westpac Financial Services. This fee is 3.30 of each regular contribution. For each single contribution, the fee is 3.5 of the first $29,000*, 3 from $29,001 to $96,000*, 2 from $96,001 to $206,000 and 1 of the balance. For each transfer or rollover, the fee is 1 of the amount transferred, subject to a minimum fee of $52.90*. This charge is waived if you are transferring from a fund administered by Westpac Financial Services. For each contribution, the fee is 3 of the first $96,000*, 2 from $96,001 to $204,000 and 1 of the balance. Administration Fee $8.28 per month* $4.16 per month* $4.05 per month* Issuer Fee An issuer fee of up to 1.77 pa is deducted from the value of assets in each Investment Option at the time of calculating the unit price. An issuer fee of up to 1.77 pa is deducted from the value of assets in each Investment Option at the time of calculating the unit price. An issuer fee of up to 1.77 pa is deducted from the value of assets in each Investment Option at the time of calculating the unit price. Transaction fee $52.90* $52.90* Buy-sell margin For the Income Accumulation, Balanced Growth and Conservative Growth Investment Options, this margin is the greater of either 1 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for these Investment Options is 1. For the Dynamic Investment Option, the margin is the greater of either 1.2 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for the Investment Option is 1.2. For the Income Accumulation, Balanced Growth and Conservative Growth Investment Options, this margin is the greater of either 1 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for these Investment Options is 1. For the Dynamic Investment Option, the margin is the greater of either 1.2 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for the Investment Option is 1.2. For the Income Accumulation, Balanced Growth and Conservative Growth Investment Options, this margin is the greater of either 1 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for these Investment Options is 1. For the Dynamic Investment Option, the margin is the greater of either 1.2 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for the Investment Option is 1.2. Insurance charges Available on request Available on request Not available *These are the amounts applying as at 1 October. These may increase on 1 October each year in line with increases in the Consumer Price Index. 12

15 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Westpac Personal Superannuation Bond (commenced 1 October 1992) Westpac Personal Superannuation Investment Plan (commenced 1 October 1992) Westpac Simple Super (commenced 1 November 1992) Contribution Fee For each single contribution, the fee is 3 of the first $151,000* and 1.5 of the balance. For regular contributions the fee is For each single contribution, transfer or rollover, the fee is 3 of the first $151,000* and 1.5 of the balance. For each single contribution, transfer or rollover, the fee is 3 of the first $129,000* and 1.5 of the balance. Administration Fee $64.20 per annum* $8.91 per month* $6.45 per month* Issuer Fee An issuer fee of up to 1.18 pa is deducted from the value of assets in each Investment Option at the time of calculating the unit price. An issuer fee of up to 1.18 pa is deducted from the value of assets in each Investment Option at the time of calculating the unit price. An issuer fee of up to 1.77 pa is deducted from the value of the assets in each Investment at the time of calculating the unit price. This fee may increase to a maximum of 2 pa. The Trustee will advise you at least three months before any increase. Transaction fee All switches between Investment Options in any calendar year are free (except for the buy-sell margin). All switches between Investment Options in any calendar year are free (except for the buy-sell margin). All switches between Investment Options in any calendar year are free. If you transfer all or part of your investment to another superannuation or rollover fund, you will be charged a transfer fee of $63.80*. Withdrawal fee (The fee on each amount you take out of your investment) No additional fee is charged for your first two withdrawal transactions (include transfers and rollovers) in any calendar year. Any additional withdrawals in that year will incur a fee of $81.30^ per withdrawal. No additional fee is charged for your first two withdrawal transactions (include transfers and rollovers) in any calendar year. Any additional withdrawals in that year will incur a fee of $81.30^ per withdrawal. No additional fee is charged for your first two withdrawal transactions (include transfers and rollovers) in any calendar year. Any additional withdrawals in that year will incur a fee of $63.80^ per withdrawal. Buy-sell margin This margin is the greater of either 1 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for these Investment Options is 1. This margin is the greater of either 1 of the value of the assets in the Investment Option, or an allowance to cover the actual cost of buying and selling the assets. The current margin for these Investment Options is 1. The current margin for these Investment Options is 0. Insurance charges Not applicable Available on request Not applicable * These are the amounts applying as at 1 October. These may increase on 1 October each year in line with increases in the Consumer Price Index ^ Each is determined by the anniversary date of each contribution 13

16 WESTPAC PERSONAL SUPERANNUATION FUND Understanding the fees. Contribution fee This fee is deducted when the Trustee receives your contribution, transfer or rollover. Administration fee This fee is charged to your account each month. Plan fee (Westpac Simple Super clients only) When you start your Plan, you pay a monthly administration fee of up to 0.55 of the annual regular contribution commitment. If you increase your annual regular contribution, you pay up to 0.55 on the increase, from the date of the increase. This fee is indexed each month and deducted from your investment account each month (that is, there are 12 deductions in a year, with the fee increasing each month through indexation). The fee does not apply to any automatic indexation increases in regular contributions. It also does not apply to single contributions, transfers or rollovers. The fee is charged for up to 10 years from the start of your Plan, and for up to 10 years from any increase in regular contributions. If you withdraw your investment before your nominated retirement age, any un-recouped monthly administration fees are taken into account when calculating your Plan s cash value. Administration Fee for the Westpac Personal Superannuation Investment Plan (commenced 1 October 1992) Regular Contributions: a monthly administration fee is payable for 10 years from the commencement of a new regular contribution plan or increase in amount. This fee is 0.55 for the first $2,700, from $2,701 to $6,500 and 0.11 for amounts above $6,500. Issuer fee This is the fee for the product issuer s services in overseeing the product s operations and/or providing access to the product s Investment Options. This fee includes the fee previously disclosed as the Investment Management Fee. Buy/sell margin A buy-sell margin is charged at the time of calculating the issue and redemption prices. The margin is payable to Westpac Life Insurance Services Limited. Insurance charges Where you take out insurance in your plan, the cost of insurance is deducted directly from your account each month. Tables of insurance charge rates are available on request. The insurance charge depends on your level of insurance, gender, age, whether you are a smoker or a non-smoker, the cover selected and any special acceptance terms imposed at commencement of risk by Westpac Life Insurance Services Limited. Tax and GST If GST becomes payable in connection with the Fund (or any associated payment, fees or charges) we are recover an extra amount from you for the GST (and associated expenses) or to reduce any payment due to you by that amount. The Fund may claim input tax credits, or reduced input tax credits, in respect of the GST component of some fees. Members will not be liable for GST on their investment in the Fund. The benefit of any tax deductions is passed on to members in the form of a reduced fee or cost. 14

17 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Other important information. Recent developments in superannuation /13 superannuation thresholds The superannuation contributions caps and various other superannuation thresholds that apply for the /13 financial year are as follows: Low rate cap $175,000 Concessional contributions cap Age 50 or over $25,000 Under age 50 $25,000 Non-concessional contributions cap $150,000 1 Capital Gains Tax (CGT) Cap (lifetime limit) $1,255,000 Proposed Government Co-contributions 2 Maximum co-contribution 3 $500 Lower threshold $31,920 Upper threshold (cut off) $46,920 Concessional contributions cap for those aged 50 or over The transitional $50,000 concessional contributions cap for individuals who are aged 50 or over ended on 30 June. For the /13 and 2013/14 financial years, the general $25,000 concessional contributions cap will apply to all individuals. From 1 July 2014, the Government intends to allow individuals aged 50 and over with superannuation balances below $500,000 to make up to $25,000 more in concessional contributions than allowed under the general concessional contributions cap. Contributions counted against your concessional contributions cap include: employer contributions including Superannuation Guarantee, Award, employer voluntary, and salary sacrifice contributions personal contributions for which you claim a personal tax deduction. Refund of excess concessional contributions for breaches less than $10,000 If you breach your concessional contributions cap by $10,000 or less in /12 or a later financial year you may be able to choose to have the excess contributions refunded from your superannuation fund and taxed at your marginal tax rate rather than incurring excess contributions tax. If you breach your concessional contributions cap you may be eligible for a refund offer if: it is the first time you have breached your concessional contributions cap in respect of /12 or a subsequent financial year; your excess concessional contributions are $10,000 or less; you have lodged a tax return for the financial year in which the excess concessional contributions were made within 12 months of the end of that financial year. 1 If you were under age 65 on 1 July you may be able to make up to $450,000 of non-concessional contributions over three financial years. 2 The Government proposes to reduce the matching rate from $1 to 50 cents and the maximum government co-contribution available to $500 from 1 July. This proposal is not yet law. 3 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. 15

18 WESTPAC PERSONAL SUPERANNUATION FUND Other important information. Any excess concessional contributions for a financial year prior to /12 will not affect your eligibility for a refund offer. If the first time you breach your concessional contributions cap in relation to /12 or a later financial year your excess contributions are over $10,000, you will not be eligible for a refund offer for that breach or any future breaches of the cap (even if a future breach is less than $10,000). The ATO will issue refund offers to eligible individuals. If you receive a refund offer from the ATO you will have 28 days to accept the refund offer. If you decide not to accept the refund offer you will be assessed for excess contributions tax and you will not be entitled to the refund offer in the future. For further details about this one-off refund offer go to ato.gov.au. Low Income Super Contribution From /13 low income earners may receive a government super payment of up to $500 per financial year to help save for their retirement. This payment is called the low income super contribution (LISC). The amount of LISC payable is calculated as 15 of your total concessional contributions for the financial year, up to a maximum of $500. Where the amount of LISC calculated is less than $20, no payment will be made. You will be eligible for a LISC from /13 if: concessional contributions have been made to a complying super fund for you during the financial year; your adjusted taxable income 1 for the financial year is not more than $37,000; you are not a holder of a temporary resident visa (New Zealand citizens are eligible for the payment); 10 or more of your total income 2 for the financial year is sourced from business or employment; and the LISC payable is $20 or more. If you are eligible for the LISC the ATO will automatically make the payment into your super account. If you make personal contributions to super you may also be eligible to receive the Government Co-contribution. For more information on LISC or Government Co-contributions go to ato.gov.au. Employers required to report super payments on payslips From 1 July 2013, employers will be required to report on payslips Superannuation Guarantee (SG) contributions when they are actually made. It is expected that employers will be required to report SG contributions of $0.00 in pay periods where they do not actually make a contribution, and to report an aggregated figure for contributions in the pay period when they do make the contribution. At present, employers are only required to report your accrued SG contributions. Indexation of concessional contributions cap paused until 30 June 2014 Each year the concessional contributions cap is usually indexed to AWOTE 3, rounded down to the nearest $5,000. The Government has paused this indexation for the next two years until 30 June This means the concessional contributions cap will remain at $25,000 for /13 and 2013/14. 1 Adjusted taxable income is the sum of taxable income, adjusted fringe benefits, target foreign income, total net investment loss, tax-free pension or benefits and reportable superannuation contributions less deductible child maintenance expenditure. 2 Total income is the sum of assessable income, reportable fringe benefits and reportable employer superannuation contributions. 3 Average Weekly Ordinary Time Earnings 16

19 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Superannuation Guarantee (SG) changes From 1 July 2013, the SG rate will gradually increase each financial year until it reaches 12 from 1 July The first increment in 2013/14 will bring the SG rate to The table below shows the SG rate applying for each financial year up to 2019/20. Quarter during the income year SG rate () and subsequent income years 12 From 1 July 2013, the maximum age limit for receiving SG contributions (currently age 70) will also be abolished. Portability of superannuation between Australia and New Zealand From 1 July 2013 individuals will be able to voluntarily transfer their superannuation between an Australian complying superannuation fund and a New Zealand KiwiSaver scheme. At the time of writing, however, full details of how this proposed arrangement will operate are not known and the proposed features described below are subject to change. It will be voluntary for a superannuation fund in either country to accept these transfers so you will need to check with your superannuation fund before initiating a transfer. Under this portability arrangement transferred retirement savings must be separately identifiable within the superannuation account in the host country but will generally be subject to the rules of that host country, with some exceptions. The entire amount transferred from a KiwiSaver scheme into an Australian superannuation fund will count toward your non-concessional contributions cap. Any amount of Australian sourced superannuation being returned in the transfer from the KiwiSaver scheme, however, may be excluded from all contributions caps. Australian superannuation benefits transferred to a NZ KiwiSaver account will not have tax withheld at the time of transfer. Lost member accounts to be transferred to the ATO From 30 December, the trustee may be required to transfer to the ATO an account of a lost member which has been inactive for a period of 12 months if: the account balance is less than $2,000; or the trustee is satisfied that it will never be possible to pay an amount to the member. If your account balance is transferred you will be able to reclaim it from the ATO. From 1 July 2013, the ATO will pay interest on amounts claimed. 17

20 WESTPAC PERSONAL SUPERANNUATION FUND Other important information. Upcoming Legislative Change The following items are Government announcements only and are not yet law. Legislation would need to be passed by parliament to make these proposals law. Government Co-contributions The Government intend to reduce the maximum government co-contribution available to $500 from 1 July. If this proposal becomes law, if your total income 1 is more than $46,920, you will not be entitled to a government co-contribution. Further, to attract the maximum co-contribution of $500, you will still be required to make a personal after-tax contribution of $1,000 as the matching rate will reduce to 50 (currently 100). The table below outlines the proposed co-contribution entitlement at different levels of total income from 1 July : Total income 1 $ Maximum Co-contribution entitlement based on total income 2 $ After-tax contribution required $ Up to 31, ,000 34, , , , , , , ,921 Nil N/A Additional 15 tax on super contributions for high income earners The Government propose to introduce an additional 15 tax on concessional contributions made to superannuation for those earning income 3 of more than $300,000 pa. For the purpose of this additional tax, concessional contributions include Superannuation Guarantee contributions, voluntary employer contributions, salary sacrifice contributions and personal deductible contributions. For defined benefit members, concessional contributions also include notional employer contributions to (funded and unfunded) defined benefit schemes. If your income exceeds $300,000 only due to your concessional contributions, the additional 15 tax will only apply to that portion of your contributions in excess of $300,000. For example, if your income excluding concessional contributions was $285,000, and your concessional contributions were $20,000 taking your total income to $305,000, the additional tax would only apply on $5,000 of your concessional contributions. The additional tax will not apply to excess concessional contributions (ie, the value of any concessional contributions over your concessional contributions cap). 1 Total income is the sum of assessable income, reportable fringe benefits and reportable employer contributions less business deductions. 2 Co-contribution entitlement equals $500 - [(total income - $31,920) x ] 3 Income is the sum of taxable income, concessional contributions, adjusted fringe benefits, total net investment loss, target foreign income and tax-free Government pension and benefits less child support payments. 18

21 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE Consolidating multiple superannuation accounts within the same fund The Government has proposed that from 1 January 2013, on an annual basis, superannuation funds will be required to identify whether a member of the fund holds multiple accounts. If multiple accounts are identified, the superannuation fund will be required to consolidate these accounts if this is in the member s best interest. The consolidation process must be completed at least once by 30 June When determining whether it is in a member s best interest to merge their superannuation accounts, superannuation fund trustees must consider the possible savings in fees, charges and insurance premiums which will result if they merge accounts as well as any other relevant factors. This requirement will only apply to accumulation accounts, and not to pension accounts. Complaints We have arrangements for dealing with members questions or complaints about the operation or management of the Fund. If you have a concern or a complaint, please contact Customer Relations on Where possible, member concerns received over the telephone are resolved at that time. If your concerns cannot be resolved in this way, you can outline your complaint in writing to: Westpac Personal Superannuation Fund The Complaints Officer GPO Box 3960 Sydney NSW 2001 The Complaints Officer will endeavour to resolve your complaint within 30 days of receiving your letter and is required by law to deal with your enquiry or complaint within 90 days. However, if you are not satisfied with the response, or have not received a response within 90 days, you may contact the Superannuation Complaints Tribunal (the Tribunal): by calling ; or writing to: Superannuation Complaints Tribunal Locked Bag 3060 Melbourne VIC 3001 The Tribunal is an independent body established by the Government to help members of super funds resolve complaints. The Tribunal will attempt to resolve your complaint through conciliation, helping you and us to reach an agreement. If your dispute cannot be resolved through conciliation, the Tribunal may make a binding determination. Important information about Nominated Beneficiaries If you have nominated one or more beneficiaries to receive a death benefit (your account balance) in the event of your death, we suggest you review your nomination regularly (particularly if your personal circumstances change), to make sure your needs are met. It important to note that if, on your death, any nominated beneficiary has died, or is no longer your dependant or Legal Personal Representative, they will not be entitled to a share of your benefit. The Trustee will pay the share: To your Legal Personal Representative; or If there is no Legal Personal Representative to any dependant in proportions determined by the Trustee. If you wish to change or revoke your nomination you should complete a Nomination of Beneficiaries form, which you can obtain online from or by calling Customer Relations on

22 WESTPAC PERSONAL SUPERANNUATION FUND Eligible Rollover Fund (ERF) The Eligible Rollover Fund (ERF) currently selected by us is: SuperTrace Eligible Rollover Fund Locked Bag 5429 Parramatta NSW 2124 If your investment is transferred to SuperTrace: you will cease to be a member in the Fund and any insurance cover provided will also cease you will need to contact the SuperTrace Administrator on in order to claim your investment back or deal with your investment you will not be able to make contributions to the ERF you will not have investment choice the trustee of the ERF will nominate the investment strategy the ERF will normally ensure that your benefits will not be eroded by administration fees and charges however other fees may apply. Please refer to the ERF s disclosure document for more details. Your investment currently may be transferred to an ERF in the following circumstances: If you become a lost member, that is: one piece of written communication has been returned unclaimed, or we have never received your address details unless during the last five years we have verified that your address is correct and have no reason to believe it is not correct. (It is important that you inform us of any changes to your address details so that you are not transferred to the ERF. Trustees of regulated super funds report details of lost members to the ATO, which maintains a lost members register. Persons may search the register to ascertain whether they have benefits which are lost). If your investment balance falls below the minimum balance (currently $1,200) you will be requested to make an additional investment to increase your balance over $1,200. If you do not increase your investment, it may be transferred to the ERF. If you request to transfer your benefit to another fund and we cannot process that request due to insufficient information, or the other fund returns the money to us as they have been unable to process the request. You have requested a cash payment but you fail to present the cheque and the cheque goes stale. In any other circumstances permitted under superannuation law. Indemnity insurance The Trustee is indemnified by a policy of insurance in respect of its duties as trustee of the Fund. Financial information As permitted by the Corporations Act, certain financial and investment information (such as the audited financial statements) have not been included on the basis that the Fund invests through a life policy. You can obtain a complete audited financial statement for the Westpac Personal Superannuation Fund after October by calling Customer Relations. 20

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24 WESTPAC PERSONAL SUPERANNUATION FUND Contact Westpac. Customer Relations am to 6.30pm (Sydney time) Monday to Friday Our registered address is Level 20, Westpac Place 275 Kent Street Sydney NSW 2000 Postal address Westpac Personal Superannuation Fund GPO Box 3960 Sydney NSW 2001 Fax Website westpac.com.au Overseas enquiries Westpac branches Westpac branches are currently located throughout Australia. To find out the location of your nearest branch, simply visit westpac.com.au or call Westpac Banking Corporation ABN (09/12)