Income Protection helped Tanya recover

SEPTEMBER 2012 Case Study: Taking an early interest in your super can really pay off. Luke is a 22 year-old butcher earning $32,000 per year. His employer is making the compulsory Superannuation Guarantee (SG) contributions and he currently has a super balance of $8,000 invested in a default balanced option. If Luke was to continue just allowing the minimum SG contributions to be made and not add any further contributions to his super, his retirement prospects may look like this. Assuming he retires at age 65, his super will pay him approximately $28,146 per year (in today s dollars) through to age 90. This means that Luke is dependent on the > continued overleaf Income Protection helped Tanya recover You will recall that all members of AMIST Super were provided with automatic income protection insurance back in November 2010. Here s an example of just how valuable that insurance cover can be. Tanya Beard is the first aid officer at JBS Australia - Beef City near Toowoomba in Queensland. In November last year, she was breaking-in her horse, Zanzii, when she broke her ankle. It was 24th November at 4:30pm I can remember it clearly! she says. I went to put Zanzii s bridle on when he stepped on my leg, just above my ankle. He s not a very big horse but he just managed to get just the right spot and broke my ankle in several places. It s so good learning about the Income Protection insurance. To be honest, I had figured it was just too late to put in a claim, so anything I get will be a bonus, Tanya went to Toowoomba Base Hospital. The staff were great. I had to stay in for seven days before they could operate because the swelling just wouldn t go down, she says. The doctors had told me the surgery would be about an hour, but it actually took 5, as it was difficult to put back Tanya Beard together. When they were finished, they told me I did not want to know how many stitches I had. Tanya now has a plate and 6 screws on one side of her foot and 4 screws on the other. So far, she s had a total of five months off work as a result of the injury. When AMIST Super News caught up with her in April, she had only been back at work for a few weeks and was still in a moon boot and undergoing ultrasound bone healing treatment. However, if her ankle fails to heal correctly, she may end up having to go back on leave. I didn t really think about claiming on my income protection insurance. I thought I was only going to be off for 6 weeks, so I didn t bother, she says. But given the extended nature of her leave, Tanya has now applied for a back-payment of her income protection insurance. Remember, if you have an injury or sickness that prevents you from working, you have up to 12 months to make a claim. As a member of AMIST Super, Tanya automatically received the 4 units of cover costing her just $3 per week. This provides up to 75% of a yearly salary of $32,000 that s $2,000 per month before tax. While Tanya earns more than $32,000, > continued overleaf AMIST Super Hotline 1800 808 614

Income Protection helped Tanya - continued she hadn t applied for a higher level of cover. Like a lot of members, she just hadn t thought about it and certainly didn t expect to break her ankle and be off work for 5 months. But increasing your cover to match your wage is very easy to do and there are no medical questions asked if you earn less than $400,000! And if you do have an accident like Tanya s, you ll be very glad you took out the cover. It s so good learning about the Income Protection insurance. To be honest, I had figured it was just too late to put in a claim, so anything I get will be a bonus, Tanya says. It was hard going for 5 months. I didn t have a lot of sick leave or annual leave because of stand-down days. Thankfully we have an employee run emergency fund that costs us all $2 per week and that gave me a few small payments, but 5 months without work really hurts financially. AMIST Super Income Protection at a glance Automatic benefit for all eligible AMIST Super members under age 70 and you re covered anywhere anytime. Unlike some insurance policies, you are covered with no questions asked. Tanya at work in her moon boot. Taking an early interest - continued age pension to support the majority of his spending. And if he needed money for something like a holiday, medical expenses or a new car he may need to draw down on his super, making him even more dependent on the age pension....his income at age 65 could jump to $32,452 (in today s dollars). This is an extra $4,306 per year. Had Luke sought some financial advice from AMIST Super s Money Coach, a simple change of investment option from Balanced to Growth could provide an income of $29,342 (in today s dollars) at age 65. This is an increase of $1,196 per year in retirement just by getting advice. Better still, Luke could have made extra after-tax (non concessional) contributions of $20 dollars per week to his super. This would also have allowed him to take advantage of the Government co-contribution, adding a further $500 per year. Under these circumstances, his income at age 65 could jump to $32,452 (in today s dollars). This is an extra $4,306 per year (in today s dollars) for the next 25 years, which could allow him to enjoy a few luxuries and take the occasional domestic holiday during his retirement. Want to be better off than Luke? Call our Money Coach on 1800 808 614 to find out how you can really make your super pay off long-term. The person depicted in this example is fictional and the circumstances outlined are for illustrative purposes only. Standard cover costs just $3.00 per week and allows you to claim up to 75% of your pay or up to $2,000 per month (whichever is less) if you become sick or injured and are unable to work. If you earn more than $32,000 per year (but less than $400,000) you can increase your level of cover with no questions asked Benefits are limited to 75% of your normal average income earned from employment during the 52 weeks prior to the last pay period before any injury or sickness resulting in a claim under the Policy. Injuries incurred prior to the commencement of cover do not attract a benefit. The Income Protection benefit is payable for up to 2 years unless you are able to return to work sooner or until you turn 65, whichever happens first. If you are aged between 65 and 70 years, the benefit payment is payable for up to 52 weeks for injury or 12 weeks for sickness or the date you turn 70 (whichever occurs first). Benefits commence after only a 30 (calendar) day waiting period. For more information, go to our website and download the Fact Sheet. Assumptions: All future income figures are provided in today s dollars. Balanced invests 70% of assets in Shares and Property with an average return of 6.80% pa. Assumed tax rate of 9.0% on investment earnings once franking credits are taken into account. Growth invests 80% of assets in Shares and Property with average return of 7.40% pa. Assumed tax rate of 8.0% on investment earnings once franking credits are taken into account. All super pension payments are tax-free after age 60. After retirement, super is invested in a conservative Super Pension option with average return of 6.50% pa. Investment income and capital gains within pension phase of super are tax-free. The content of this article was provided by Money Solutions Pty Limited (AFSL 258145). Money Solutions has been contracted by The Trustee to provide members with personal financial advice. Any financial product advice given by Money Solutions is provided under their own AFSL. Just call AMIST Super on 1800 808 614 for some simple qualified financial advice.

Market Update with Megan Pham AMIST Super s Chief Investment Officer examines how the slowing global economy impacted financial market sentiment. Financial market sentiment dipped sharply in May 2012 with increased concern of a potential collapse in the Euro zone. A short period of relief across markets followed the election of the pro-austerity party in Greece, but underlying economic weakness remained a concern. Recent US data has also been disappointing adding additional concern that the US recovery will take longer than hoped. And the Chinese slowdown is also feared to have gone further than expected. This could have negative effects on the Australian economy through our trade arrangements. In an effort to counter these effects and provide support to growth, Governments around the world have continued to deliver fiscal and monetary stimulus to their economies. In Australia, business conditions remain mixed between mining and non-mining sectors. Consumer sentiment picked up slightly in May 2012, but is still below the long-term average. Interestingly, the labour market has been a source of strength over 2012, with the current unemployment rate at 5.2% as at 30 June 2012. As a consequence of all of this, investors became increasingly risk-averse, resulting in falls in local share markets and a rise in demand for safehaven bonds. The Reserve Bank of Australia (RBA) has cut the cash rate by a total of 1.25% since June 2011, reflecting mixed domestic conditions and a softening international growth outlook. The cash rate now sits at 3.50% as at 30 June 2012. Performance for this financial year AMIST Super Investment options As at 30 June 2012 1 year return (p.a.) 10 year net compound average return Secure 5.45% 4.86% Capital Stable 5.41% NA* Balanced 0.88% 6.46% Growth -1.19% 5.57% High Growth -4.28% NA* * The AMIST Super Capital Stable Option and the AMIST Super High Growth Option were introduced on 1 April 2010. Megan Pham is Chief Investment Officer at AMIST Super and is responsible for managing the day-today investment activities of the $1 billion fund. This includes monitoring and managing the investment strategies, investment managers, cash flows, asset allocation, risk assessment and research. Megan has a vast understanding of the financial services industry, in particular Australian Superannuation, drawn from her previous experience at Non-Government Schools Superannuation and Mercer Investment Consulting. Her background covers a wide variety of key disciplines including investment management, investment risk management, strategy, compliance, and operational management. Megan holds a Bachelor of Mathematics and Finance and has also completed a Master of Actuarial Studies at University of NSW. Take our quick quiz and you could win $200! How well do you know your super? You ll find the answers in this edition of AMIST Super News. In what year was automatic Income Protection Insurance introduced for AMIST Super members? What does SG stand for? What university did Megan Pham go to? What is Australia s current rate of unemployment? What percentage of the Growth investment option is invested in cash? Amongst other things, the Growth investment option invests in Australian shares. Name one of the companies involved. A concessional contribution is one made from before-tax income or after-tax income?... What does LISC stand for?... What is the current maximum annual Government Co-contribution amount?... Entries close 31 December 2012. Just send your answers and details below to: AMIST Super Words GPO Box 4293 Sydney NSW 2001 or Fax to: 02 9230 1111 Please be sure to write your name and contact details clearly. Name:... AMIST Super Member No:... Address:...... State:... Postcode:... Phone:... Email:...

Megan Pham explains the Growth Option. 5% 2% 13% 25% AMIST Super offers members the choice of investing in any of the 5 different investment options. These options vary in terms of the returns they generate and their associated risk levels. Low return options are generally lower in risk, whereas the higher the potential returns, the more likelihood of a negative return on occasions. The Growth Option provides investment mainly in Australian and international shares with a relatively small component in Australian bonds. Returns are expected to vary significantly from year to year. There is a higher probability of negative returns than the Balanced Option with Australian and Overseas Fixed Interest Fixed interest investments generally take the form of bonds. A bond is essentially a loan contract between two parties where the amount paid for the bond will be repaid plus interest after an agreed period of time has passed. Corporations and governments issue bonds in order to raise money. AMIST Super invests in bonds both in Australia and overseas. an estimated probability of a negative return, on average, eight out of every thirty years. The Growth option aims to provide a return of 4% more than the rate of inflation over any five-year period. It was first introduced in January 2002 and as at 30 June 2012 the ten year net compound average return is 5.57%. The pie chart below shows how money in the Growth option is invested as at 30 June 2012 and the types of investment vehicles it uses. As you can see, the money is spread between a variety of sectors (with an obvious bias towards shares) rather than a single investment type. This helps to improve the security of your money by not having all the eggs in one basket. Cash AMIST Super s cash investments are managed in-house. We generally use term deposits offered by the major banks, including ANZ, nab, Commonwealth, Bank of Adelaide and Bank of Queensland. The average length of a term deposit is 4 months, but because we don t need to keep a great deal of cash at hand, we can invest for longer periods and therefore obtain more favourable returns. 5% Alternative Investments Investments that don t fit into any of the other categories 25% are referred to as alternatives. These can include a diverse selection of opportunities such as toll roads, airport and bridges as well as social infrastructure including retirement homes, prisons etc. Examples could include Melbourne Airport, Port of Brisbane and Pacific Hydro. 13% 2% Australian Shares We use five investment managers to invest in companies listed on the Australian Stock Exchange. These investments could include well-known companies such as Westpac, ANZ, Rio Tinto, Telstra, BHP and Woolworths. Direct Property We use three specialist property funds managers to help us with this allocation. AMIST Super is invested in properties such as the Doncaster Shopping Centre, 500 Bourke Street Melbourne as well as Forest Lake Village Shopping Centre and high quality buildings in the CBD of most capital cities. International Shares We use five investment managers each of whom specialises in a different part of the world. At any one time, your money in International Shares could be invested in companies like Walt Disney, Apple, Nestlé, Johnson & Johnson or L Oreal. AMIST Super Hotline 1800 808 614

The art is not in making money, but in keeping it. Proverb We re here to help you maximise your super At AMIST Super, we know everyone is different. That s why we try to offer as many options as possible to help members get the most from their super. Excess before-tax Contributions Tax Refund Get some advice We now offer members professional financial advice over the phone, where you can get answers to all kinds of tricky questions such as: How does salary sacrifice work? How can I plan for my retirement? Can I get the Government co-contribution? Are there benefits in having just one super fund? Which investment option is best for me? Should I be putting more money into my super? Just call the AMIST Super Hotline and ask to speak with one of our financial advisers. It s all part of your AMIST Super membership. The Government has identified that a number of people were inadvertently charged additional tax due to circumstances of which they were unaware, such as the timing of the actual payment of contributions by their employer to their superannuation fund. To remedy this, members assessed as having excessive before-tax (concessional) contributions in the financial year ending 30 June 2012 will be allowed to have excess contributions of up to $10,000 removed from their superannuation fund and treated as assessable income (taxed at their marginal tax rate). Tanzanian proverb. This concession may only be claimed once in any financial year ending on or after 30 June 2012 and only applies to concessional contributions. Where the non-concessional contribution cap (e.g. voluntary after-tax contributions) is exceeded the additional taxation will be applied without exception. Member Services Melinda Gibson is the manager of the Member Services team. Meet our team of service professionals. Remember our Member Services Managers are here to help you get the most from your super. Feel free to contact them. Royston Bennett on 0437 697 737 or roystonb@amist.com.au for Vic, SA, WA, Tas and southern NSW. David Ashton on 0434 043 785 or davida@amist.com.au for QLD, NT and northern NSW.

The Government Co-contribution Scheme has changed. The Government Co-Contribution is a scheme where the Federal Government will match the after-tax contributions to super made by members whose assessable income is below $46,920 per annum for the financial year commencing 1 July 2012. The maximum co-contribution the Government will now pay is $500. Under the Co-contribution Scheme, the Government will contribute an additional $0.50 for each $1.00 contributed by a member from their after-tax pay. It s a great way to boost the retirement savings for members who qualify. Low income superannuation contribution (LISC) could help some members. From 1 July 2012, the Government has introduced the LISC. Eligible members will receive a super contribution of up to $500 from the Government which is effectively a rebate of the 15% contributions tax paid on the compulsory Superannuation Guarantee contributions that your employer makes for you. Members with an adjusted taxable income of less than $37,000 p.a. may benefit from the LISC. Eligible members will not need to apply for this benefit after the annual taxation assessment is finalised, the Australian Taxation Office will make the payment to eligible members superannuation funds. We encourage you to seek financial advice to see whether you may benefit from either of these concessions. Just call our Money Coach on 1800 808 614. AM/AR/<30/NEWS 832.8 06/12 ISS2 Do you have questions? If you have any questions about your AMIST Super membership, call the AMIST Super Hotline. 1800 808 614 or hop on the web! For all the latest information about AMIST Super, log onto www.amist.com.au. Get the latest news and results, view fact sheets and download forms. It s all there to make your super easier to understand. Issued by Australian Meat Industry Superannuation Pty Ltd (ABN 25 002 981 919, AFSL 238829, RSE Licence L0000895) as Trustee of the Australian Meat Industry Superannuation Trust (ABN 28 342 064 803, RSE Registration R1001778). The material provided is for information purposes only and is not intended to be considered as advice. The Trustee has not taken into account your personal financial circumstances when developing this communication. Before making any decision regarding your superannuation it is recommended that you seek advice from a qualified financial adviser. Money Solutions (AFSL 258145) has been contracted by AMIST Super to provide members with simple financial advice as part of their membership. Any financial product advice given by Money Solutions is provided under their own AFSL. Just call AMIST Super on 1800 808 614 for simple qualified financial advice at no additional cost. MAILING ADDRESS AMIST Super Locked Bag 5390 Parramatta NSW 2124 AMIST Super Hotline: 1800 808 614 AMIST Super Fax: 1300 855 378 Email: service@amist.com.au www.amist.com.au