Folio JR - Member Handbook by Jonathon Rann

30 June 2007

Allocated Pension Member Handbook

TISS Allocated Pension Product Disclosure Statement

Issued by TISS Pty Ltd ABN 42 053 498 472 AFSL 223988 RSEL L0003049, Trustee of the Timber Industry Superannuation Scheme (TISS) ABN 56 286 625 181 RSER R1067385.

Further information call 1300 360 988 or visit www.tissuper.com.au

About this Product Disclosure Statement (PDS) Investments in the Timber Industry Superannuation Scheme (TISS) are offered by the Trustee of the Fund, TISS Pty Ltd ABN 42 053 498 472.

Contents Introduction

Fees and Other Costs

About TISS

Fees at a glance

This PDS describes the main features of the TISS Allocated Pension and explains:

Features and benefits

Additional explanation of fees and costs

j significant features of the product; j the benefits you will receive; j how and when benefits are paid; j the risks associated with investing in this product; j the cost to buy the product; j the ongoing costs of the product; j any other additional costs you may indirectly incur; j taxation and other information that you need to understand; j that there are no commissions or similar payments to any party;

About Pensions

Taxation and Social Security

Your TISS Allocated Pension may not provide an income for the rest of your life. Payments will continue to be paid until the balance of your account has run out. The amount of the balance in your account is determined by the amount invested by you, the investment returns earned by TISS, the Fund’s fees and charges, the value of any commutations made and how much retirement income has already been paid to you. If you do not make an investment choice, then payment will be in the same proportion as your initial investment allocation. This PDS was up-to-date at the time of issue. The Trustee will amend the PDS or withdraw it from circulation in the event of any material alteration occurring in any of the information contained in the PDS. Certain information contained in this PDS that is not materially adverse is subject to change from time to time. TISS will provide updated information in respect of such material on its website at www.tissuper.com.au A paper copy of this information can also be obtained from TISS on request, at no charge. You may only use the application forms provided at the back of this PDS if you intend to join and invest

j how you may make a complaint, and how complaints are resolved; j the cooling-off period and what conditions of entry apply; and j how we inform you about this product from time to time, and how you can access this information. It will help you to: j decide whether this product will meet your needs; and j compare this product to others you may be considering.

in the Pension Division of the Fund. By becoming a member of the Fund, applicants agree to be bound by the Trust Deed and any amendments. If you leave the Fund within a few years of joining, you may get less than the purchase price due to the level of investment returns earned by the Fund, the Fund’s charges and any pension payments made to you. Important: Neither TISS Pty Ltd, nor any service provider to the Fund, guarantees the performance of the Fund or any particular rate of return. Investments may rise or fall in value. Past performance is not an indicator of future returns. The information contained in this PDS is general information only and does not take into account your individual objectives, financial situation or particular needs. You should seek the advice of a professional investment adviser before making an investment decision. You should read this PDS before making any decision regarding this product.

What is an Allocated Pension?

Tax File Numbers

What are the benefits?

Calculating tax on your pension

Tax on commutations

Tax on Death Benefit payments

Social Security

What is a Transition to Retirement Allocated Pension? 7 Tax concessions

Your Membership

Joining TISS

General Information

Transfers into TISS

Cooling-off period

Complaints

Privacy Statement

Definitions

Application checklist

TISS Allocated Pensions

TISS Allocated Pension

Transition to Retirement Allocated Pension

General information about Allocated Pensions

Application Forms

Retirement income payments

Membership Application – Allocated Pension Division 37

What happens when you die?

Tax File Number declaration form

Member Investment Choice

Withholding declaration form

Risk versus return

Understanding asset classes

Your investment options

Telephone: 1300 360 988 Facsimile: 1300 362 899 Mail: PO Box 666, Carlton South VIC 3053 Email: mail@tissuper.com.au Website:

www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au

Introduction The Timber Industry Superannuation Scheme (TISS) was established in 1985 as the industry superannuation fund for workers in the forest and forest products industry. About TISS The Board and management of TISS have strong and active relationships with member organisations and employer associations, and the Board takes great care that the scheme continues to comply with all the relevant Regulatory requirements.

More information on the directors and the Trustee’s operation and management can be found in our Annual Report. The Trustee of the Fund is TISS Pty Ltd (‘Trustee’).

Service providers

The Trustee holds both an Australian Financial Services License issued by the Australian Securities and Investment Commission and an RSE License issued by the Australian Prudential Regulatory Authority.

TISS appoints professional advisers and organisations to assist in the day-to-day running of the Fund. All significant service providers are appointed following a process of due diligence. At the time of preparing this PDS, TISS used the following service providers:

At June 2007, TISS had over 36,000 members, 2,600 employers and more than $600 million in funds under management.

Administrator Super Benefits Administration Pty Ltd

Members are still primarily from the forest and forest products industries, but other industries are well represented through members who have moved jobs but chosen to keep their TISS membership.

Liability Insurer AIG

Auditor Ernst & Young

The Pension Division of the Fund commenced in 2005.

Investment Advisers Frontier Investment Consulting Pty Ltd

Who runs TISS?

Legal Adviser Slater & Gordon

TISS is governed by a Trustee Board comprising an equal number of employee and employer representatives from the forest and forest products industry, as well as two independent directors. The directors meet regularly to assess the performance of TISS and monitor the activities of service providers who assist in the conduct of the Fund.

Master Custodian National Custodian Services (National Australia Bank) Tax Adviser Ernst & Young

Features & Benefits

pension account

j No commissions to agents or dividend payments to shareholders j History of competitive investment earnings* j Choice of three investment options

Important note: If your account balance falls below $1000, we may close your account by paying you the full balance.

*P ast performance should not be taken as an indicator of future returns, and the value of your investment can rise or fall over time.

Introduction

j No entry fees j Minimum investment of $10,000 required to start your

Further information call 1300 360 988 or visit www.tissuper.com.au

About Pensions An Allocated Pension is an investment that produces a regular income for your retirement. Allocated Pensions generally suit investors seeking: > a regular income stream in retirement, or while still working (after reaching their superannuation preservation age â&#x20AC;&#x201C; see page 12); > access to their investment at any time; > flexibility regarding how much income they receive; > flexibility regarding how often they receive income payments; and > a choice of investment options.

What are the benefits? As well as generally being tax-effective, Allocated Pensions may be treated favourably for social security purposes in comparison to other income-producing investments. You may change the amount or frequency of the regular income payments at any time to suit your changing needs. However, your annual pension payment must meet the minimum level set by the Federal Government from time to time. An Allocated Pension also enables you to convert some or all of your retirement income back into a lump sum (commutation) if your circumstances change. In the event of your death, the remainder of the balance of your account can be paid to your spouse, dependants or Estate. Alternatively, you can arrange to continue the pension and have it paid to your surviving spouse.

What is a Transition to Retirement Allocated Pension? A Transition to Retirement (TtR) Allocated Pension allows members who have reached their preservation age, and are under age 65, to invest in a noncommutable* allocated pension even while they are still working. The benefits and features are generally the same as an Allocated Pension. However, tighter restrictions apply in relation to: > lump sum withdrawals; and > the maximum income per annum is limited to 10% of your account balance. * This means that you cannot cash the remaining account balance until you retire. You should seek professional financial planning advice before making a decision to invest in the TISS Allocated Pension or Transition to Retirement Allocated Pension.

Tax concessions There may be certain tax advantages for payments from Allocated Pensions when compared with other investment alternatives. These include: > no lump sum tax when you rollover your superannuation benefit into an Allocated Pension; > no tax on investment earnings while they are in an Allocated Pension; > part of each regular retirement income payment may be tax-free if you are under age 60; > you may be eligible for tax offsets (rebates) if you are under age 60; and > for people who are or who turn 60 years of age on or after 1 July 2007, no tax will be paid on your income payments (or lump sum cashings), provided the payments are at or above the new statutory minimum level (see page 11 for details). We recommend that you discuss your own circumstances with your financial planner.

About Pensions

What is an Allocated Pension?

Further information call 1300 360 988 or visit www.tissuper.com.au

Your Membership Anyone who meets the eligibility requirements outlined on pages 11 and 12 can apply to invest in the TISS Allocated Pension Division. A minimum investment amount of $10,000 is required to open your account. In general, we are not permitted to accept a superannuation payment rollover unless it is transferred directly to us from a paying institution and the cheque is made payable to TISS by that paying institution.

withdrawn from each option in proportion to the balance in each option at the time of withdrawal, or you can nominate the order of options from which you would like to draw down your payments. Faxed or emailed requests will not be accepted. Please note: Once your TISS Allocated Pension commences, we cannot accept regular contributions or additional investments. However, you may commence a second TISS Allocated Pension in your name, subject to meeting the minimum investment requirements.

Communication When you become a member of TISS, you will receive:

If you are already a member of the TISS Industry Superannuation Division or Personal Superannuation Division, you still need to apply to join the TISS Pension Division.

> a welcome letter once your application form has been processed;

To do so, please complete and sign the Membership Application - Allocated Pension Division form on page 37 of this PDS and return it, with any relevant information, to:

> a Schedule for Centrelink.

TISS Administration PO Box 666 Carlton South VIC 3053

> a copy of your application form; and

After 30 June each year, you will also receive: > a transactions report, showing your total benefit and details of transactions made during the year; > an Annual Report reviewing the operations of the Fund during the financial year;

A 14-day cooling-off period applies from the date your application for membership is accepted. See page 32 for further details.

> a PAYG payment summary if you are under 60 years of age for any part of the year;

Transfers into TISS

> a TISS Allocated Pension variation notice (should you wish to change your pension payment amount or frequency); and

If you wish to collect and combine a superannuation payment from one or more funds to commence your TISS Allocated Pension, you may do so by completing a Transfer your super form, available on request. A separate form must be completed for each of your nominated rollovers. Please note that where two or more rollovers are received, investment earnings will not be allocated for the period between receipt of the initial rollover and the date of any subsequent rollovers. If you invest in more than one TISS investment option, you can specify the proportion of the retirement income payment to be withdrawn from each option. Alternatively, you can elect to have the payments

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> a Schedule for Centrelink;

> from time to time, you may receive other communications, including investment information and legislative updates. You may contact TISS at any time to request copies of this information or an up-to-date account balance. You may also request copies of actuarial reports, the Fundâ&#x20AC;&#x2122;s risk management statement and plan, a copy of the audited accounts or any other relevant information by contacting TISS on 1300 360 988.

Your Membership

Joining TISS

Further information call 1300 360 988 or visit www.tissuper.com.au 11

TISS Allocated Pensions TISS Allocated Pensions are open to retired and semi-retired workers seeking a flexible, tax-effective income stream that allows you to control your income in retirement. TISS offers members a choice of two pension products.

Eligibility To be eligible to invest in the TISS Allocated Pension, you must: > be rolling over a superannuation payment; and > have immediate access to your superannuation benefit.

Minimum balance A minimum investment amount of $10,000 is required to open a TISS Allocated Pension.

Flexibility and control With a TISS Allocated Pension, you can: > choose how much income you want to receive each year. However, your annual pension payment must meet the minimum level set by the Federal Government. From 1 July 2007, no maximum pension payment will apply to Allocated Pensions; > choose how often you want to receive your income payments â&#x20AC;&#x201C; fortnightly, monthly, quarterly, half-yearly or yearly; and > change the amount of your income payments at any time if your needs change. However, it must continue to meet the minimum level set by the Federal Government. If you do not nominate the frequency of your income payments, your income will be paid annually in the month of June, unless you advise us in writing to the contrary. Your payment nominations will remain in place until you ask us, in writing, to change them.

Pension payment limits You can choose the amount of pension you receive from your TISS Allocated Pension in each financial year (1 July to 30 June), as long as it is at least as much as the minimum annual pension set by the Government. You can also change the amount you receive at any time, as long as it stays above the minimum annual pension limit. If you invest in a TISS Allocated Pension between 1 June and 30 June, you do not have to draw any pension in that financial year. The minimum annual pension is calculated at the date you commence your TISS Allocated Pension, and is recalculated every year on 1 July. Each time the minimum annual pension is calculated, it applies for the rest of the financial year, even if the value of your allocated pension changes or you make a withdrawal. You can calculate your minimum annual pension from 1 July by applying the pension factors and formula below:

Minimum annual pension payment = Account Balance x Pension Factor Age

Pension Factor

Under 65 years

65 - 74 years

75 - 79 years

80 - 84 years

85 - 89 years

90 - 94 years

11%

95+ years

14%

TISS Allocated Pensions

1 TISS Allocated Pension

2 Transition to Retirement Allocated Pension

Example: John is 68 years old and invests $150,000 into an Allocated Pension on 1 October. What amount can he expect to receive for the rest of that financial year? John invested part way through the financial year. Therefore, to work out his minimum annual pension and how much pension he can receive, we first need to calculate the minimum annual pension for a full financial year (ie. as if he invested on 1 July) Then, we need to pro rata this amount for the part of the financial year for which he was invested.

JOHN Initial investment (A) Pension Factor (B) Minimum annual pension to be received each financial year (A x B = C) Number of days in a full financial year (D)

Further information call 1300 360 988 or visit www.tissuper.com.au 13

YOU

$150,000 5% $150,000 x 5% = $7,500

365 days

Eligibility To be eligible to invest in the TISS Transition to Retirement Allocated Pension, you must: > be rolling over a superannuation payment; and > be over the preservation age, as determined by a sliding scale depending on your date of birth as show in the following table: Date of birth

Preservation age

Before 1 July 1960

1 July 1960 - 30 June 1961

1 July 1961 - 30 June 1962

1 July 1962 - 30 June 1963

1 July 1963 - 30 June 1964

After 30 June 1964

The only restriction is that you cannot commute a Transition to Retirement Allocated Pension to a lumpsum payout until you retire permanently from the workforce or reach age 65.

Minimum balance

Number of days invested (from date of investment to 30 June)

273 days

A minimum investment amount of $10,000 is required to open a TISS Transition to Retirement Allocated Pension.

Minimum annual pension to be received (C x [E/D])

$7,500 x (273/365) = $5,610

Flexibility and control

The amount John chooses to receive for that financial year must be at least $5,610.

With a TISS Transition to Retirement Allocated Pension, you can choose how much income you want to receive each year. However, your annual pension must be between the minimum and maximum levels set by the Federal Government.

> to return the funds back to your superannuation fund; or

Example:

> as a payout on the death of the retirement income product holder.

Joan is 58 years of age and invests $200,000 into a Transition to Retirement Allocated Pension on 1 July. What are the minimum and maximum pension payment limits applicable that financial year?

In the event of your death, the remainder of your account balance can be paid to your spouse, dependants or Estate. See page 15 for further details.

Transition to Retirement pension payment limits You can choose the amount of pension you receive from your TISS Transition to Retirement Allocated Pension in each financial year (1 July to 30 June), as long as it is at least as much as the minimum annual pension and no greater than the maximum annual pension set by the Government. At any time, you can change the amount you receive, as long as it stays within these limits. If you invest in a TISS Allocated Pension between 1 June and 30 June, you do not have to draw any pension in that financial year. The minimum and maximum annual pension is calculated at the date you commence your TISS Allocated Pension, and is recalculated every year on 1 July. Each time the minimum and maximum annual pension is calculated, it applies for the rest of the financial year, even if the value of your allocated pension changes or you make a withdrawal. You can calculate your minimum and maximum annual pension from 1 July using the following pension factors and formula:

Minimum annual pension payment = Account Balance x Pension Factor Age

minimum Pension Factor

maximum Pension Factor

Commuting a Transition to Retirement Allocated Pension

Under 65 years

10%*

65 - 74 years

N/A

A TISS Transition to Retirement Allocated Pension may be fully or partially commuted:

75 - 79 years

N/A

80 - 84 years

N/A

A TISS Allocated Pension also enables you to convert some or all of your retirement income back into a lump sum (commutation) if your circumstances change.

> if you return permanently to the workforce after reaching your preservation age;

85 - 89 years

N/A

90 - 94 years

11%

N/A

A TISS Allocated Pension may be fully or partially commuted and cashed at any time.

95+ years

14%

N/A

> if you reach age 65;

The amount John chooses will affect how long his Allocated Pension will last, as the more he is paid, the earlier his pension will run out.

Commuting a TISS Allocated Pension

> if you cease employment at age 60 or over; > to purchase another non-commutable income stream;

* The maximum amount rule will cease when you meet a condition of release or turn 65 years of age, whichever comes first.

Calculations Initial investment (A) Minimum Pension Factor (B) Maximum Pension Factor (C)

joan

YOU

$200,000 4% 10%

Minimum annual $200,000 x 4% pension to be received = $8,000 each year (A x B) Maximum annual $200,000 x 10% pension to be received = $20,000 each year (A x C) Joan must choose a pension between $8,000 and $20,000 in the first year of payment. The minimum and maximum pension amounts are calculated on 1 July each year or at the date of commencement of your plan. The ability to successfully take advantage of the transition to retirement rules will vary from person to person according to your individual needs. TISS recommends you seek professional financial advice before making a decision to invest.

TISS Allocated Pensions

12 Further information call 1300 360 988 or visit www.tissuper.com.au

14 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 15

General information about Allocated Pensions Retirement income payments

Who is a dependant?

Your retirement income payments are paid into your nominated Australian bank, building society or credit union account.*

> your spouse (including a de facto spouse);

Dependants can include: > any child of yours (including a child over 18);

Retirement income payments are not made by cheque. Your nominated account must be held either in your name or, if the nominated account is held jointly, you must be one of the account holders.

> any person who is wholly or partially financially dependent on you at the date of your death; or

You can opt to have your payments paid fortnightly, monthly, quarterly, half-yearly or yearly. If you have more than one investment option, you can choose either:

The person must be a dependant at the date of death to be a beneficiary.

> the order in which your payments are to be drawn from each option; or > the proportion of the balance in each option at the time of payment. If you do not make a selection, then payment will be in the same proportion as your initial investment allocation. Important: Your TISS Allocated Pension may not provide an income for the rest of your life. Payments will continue to be paid until the balance of your account has run out. The amount of the balance in your account is determined by the amount invested by you, the investment returns earned by the TISS Superannuation Fund, the Fund’s fees and charges, the value of any commutations made and how much retirement income has already been paid to you. * Some of these institutions may charge you a fee for this service.

What happens when you die? In the event of your death, the remaining balance of your TISS Allocated Pension may be paid as a lump sum to your dependant/s and/or legal personal representative (ie. the Executor or Administrator of your Estate) or you can arrange to have a reversionary pension paid to your spouse.

Discretionary beneficiaries If you make a discretionary beneficiary nomination, we will decide which of your beneficiaries will receive your benefit after your death. We will generally pay your discretionary beneficiary/ies, but depending on your circumstances at the date of your death, we may decide to pay your death benefit differently.

Reversionary beneficiaries You may nominate a reversionary beneficiary at the start of your TISS Allocated Pension. In this case, your TISS retirement income payments will automatically revert to the nominated person upon your death. The reversionary beneficiary must be your spouse (including a de facto spouse), both at the date of the commencement of your retirement income payments and at the date of your death. If your spouse dies before you, your retirement income payments will continue to be paid until your death (or until your TISS Allocated Pension has been exhausted). Upon your death, the balance of your account will be paid either to your dependants, your Estate or a combination, as determined by the Trustee. If payments to your spouse have commenced, and he or she subsequently dies while still entitled to the retirement income payments, the balance of the account will be paid, as a lump sum, to his or her Estate. If you would like to change or remove your nominated reversionary beneficiary at a later date, you can only do so by completing a new Membership Application and opening a new TISS Allocated Pension account. As people’s personal circumstances don’t always remain the same, we recommend that you review the appropriateness of your reversionary nomination when and as your personal circumstances change (eg. in the event of a divorce, your subsequent remarriage or the death of your reversionary nominee).

General information about Allocated Pensions

> the proportion of your payment to be drawn from each option; or

> any person with whom you have an interdependency relationship.

16 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 17

Member Investment Choice Your financial security depends to a great extent on the investment decisions that you make.

Unfortunately, there is no single investment strategy that is right for everyone. There are, however, a number of factors you should consider to help determine your personal investment profile.

Risk versus return Understanding the relationship between risk and return is essential to making well-informed investment decisions. Risk refers to the chance your investment has of losing or fluctuating in value as investment conditions change. It includes the potential for negative returns. Return is the amount you can expect to earn from your investment. It is generally expressed as a percentage. Generally, the greater an investment’s potential return, the greater the risk associated with that investment. Growth assets like shares generally fall into this category. Similarly, lower risk investments like fixed interest and cash usually provide lower returns. It’s important to balance the risk of short-term fluctuations in the value of your investment against the long-term retirement benefit that an investment in growth assets can provide. As you may be dependent on a TISS pension to meet your income needs for many years, you also need to understand the risks associated with higher-performing investments.

Investment risks There are a number of investment risks to consider: Inflation: Inflation may exceed the return on your investment. The Fund aims to reduce this risk by investing in assets that are expected to generate returns in excess of inflation over the medium term.

Individual investment risk: Individual assets the Fund purchases can (and do) fall in value from time to time, for many reasons, such as changes in the internal operations or management of a fund or company or changes in the business environment. The Fund aims to reduce these risks through diversified holdings of assets and careful risk analysis of assets acquired. Market risk: Economic, technological, political or legal conditions and even market sentiment can change, and this can mean that changes in the value of investment markets can affect the value of investments in the Fund. The Fund aims to reduce market risk through diversification of the portfolio across asset classes, countries and investment managers. Interest rate risk: Changes in interest rates can have a positive or negative impact directly or indirectly on investment values or returns. Currency risk: TISS invests in other countries and if their currencies change in value relative to our dollar, the value of the investment can change. The Fund undertakes some currency strategies with the goal of reducing the impact of adverse movements in the dollar. Derivatives risk: The Fund and its managers may use derivatives to reduce the risk or gain exposure to other types of investments when deemed appropriate. Risks associated with these derivatives include: > the value of the derivative failing to move in line with the underlying asset; > potential illiquidity of the derivative; > the Fund not being able to meet payment obligations as they arise; and > counterparty risk. TISS aims to keep derivative risk to a minimum by constantly monitoring the Fund’s exposure to derivative contracts and by only ever entering into derivative contracts with reputable counterparties.

General information Member Investment Choice about Allocated Pensions

At TISS, we recognise that everyone is different. That’s why we let you choose how your super savings are invested, in accordance with your own needs and circumstances.

18 Further information call 1300 360 988 or visit www.tissuper.com.au

Changes to superannuation law: Changes are frequently made to superannuation law which may affect your ability to access your investment. Changes to taxation: Changes can occur to the taxation of superannuation which may affect the value of your benefit. Similarly, social security laws change from time to time, which can affect the overall effectiveness of your pension strategy. We suggest that you review your strategy regularly and seek advice from a professional financial planner.

Risk/Return Profile of Main Asset Classes

Property

Negative

Fixed Interest

Cash

Return

Positive

This graph intends to illustrate the relationship between higher returns and greater risk. It does not reflect the actual returns or risks.

Risk

Diversification Diversification means ‘not putting all your eggs in the one basket’. By spreading your money across different types of asset classes, you can effectively spread the risk, reducing the effect of poor returns on the overall value of your investment. TISS invests in a range of asset classes managed by a number of leading Australian and international investment managers. A full list of managers is published in the Annual Report each year.

Understanding asset classes TISS invests your superannuation savings across a range of asset classes. These include: > Shares (Australian and overseas) - provide part ownership of a company. Earnings are derived from dividends and profits (or losses) gained through changes in their share price. Historically, shares have outperformed all asset classes over the long-term, but short-term volatility has seen negative returns recorded in some years. > Property - includes commercial, industrial and retail real estate, held directly or indirectly with other investors through a property trust. Earnings are derived through rental income and increases (or decreases) in value over time. Historically, property investments have produced medium to high returns over the long-term but carry a medium to high level of risk. It is possible for this investment class to give negative returns in some years.

Your investment options Members can choose to invest in any one, or combination of, the following three investment options: 1 TISS Diversified Option (Default option) 2 TISS Secure Option 3 TISS Shares Option

> Fixed Interest (Australian and overseas) - involves the purchase of interest-bearing debt securities issued by governments and businesses. These investments are held for a set period of time in exchange for a set rate of return. Historically, fixed interest investments produce a medium level of return and carry a medium level of risk. It is possible for this asset class to give negative returns in some years.

If you do not select one or more of these options, or if your choice is unclear, your superannuation savings will be automatically invested in the Fund’s default investment strategy, the TISS Diversified Option.

> Cash and Guaranteed Investments - generally take the form of term deposits and short-term bank bills. Interest is earned on the cash invested. Historically, cash investments provide a lower rate of return but with the lowest level of risk. In spite of the lower level of risk, it is possible for this asset class to give negative returns in some years.

• the Trustee will advise members of the investment strategies, their structure and performance, including any changes made to strategies, at least once a year, in the Annual Report.

> Alternative Assets - include development capital investments typically invested in unlisted companies or infrastructure. Alternative assets may also include investments that are not measured against an index like the Australian Stock Exchange, for example, hedge funds or absolute return funds. It is possible for this asset class to give negative returns in some years.

History of investment performance to 30 June 2007 TISS Allocated Pension Division Financial Diversified year to Option 30 JUNE

secure Option

Shares Option

2007

17.9%

5.1%

22.1%

2006

18.4%

3.5%

24.5%

2005

14.5%

N/A

Since Inception

16.92% p.a. 4.30% p.a. 23.29%p.a.

Past performance should not be taken as an indicator of future returns, and the value of your investment can rise or fall over time. Updated interest rates and performance data can be obtained by checking the latest Annual Report or visiting www.tissuper.com.au

TISS has the following objectives and strategies that are common to all three portfolios: • the long-term strategies will be reviewed at least annually; and

General information Member Investment Choice about Allocated Pensions

Fund risk: TISS aims to keep fund risk to a minimum by always aiming to act in members’ best interests.

Further information call 1300 360 988 or visit www.tissuper.com.au 19

20 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 21

Objectives > To reduce the likelihood of negative returns in any one year by choosing an appropriate asset mix; > To achieve long-term returns that exceed CPI inflation by at least 3% to 5% on a rolling five-year basis, competitive with returns of comparable funds.

Investment strategy To provide attractive investment returns in line with the stated objectives on a rolling five-year basis, this option will invest in asset classes across the risk spectrum, consistent with keeping risk within acceptable limits.

Investor profile This investment strategy is likely to appeal to members seeking mid to long-term growth while minimising their volatility and risk. This is the default option for TISS.

Risk profile Designed to provide good growth over the mid to longer term while reducing risk through diversification. Likely to slightly under-perform the TISS Shares Option over the long term.

Strategic asset allocation

2 TISS Secure Option

3 TISS Shares Option

Objectives

> To provide low-risk positive investment returns in most years through investment in liquid shortterm and fixed interest money market securities;

> To provide higher investment returns on a rolling five-year basis through investments weighted to asset classes at the higher end of the risk/ return spectrum, subject to a constraint on overall risk exposure; and > To achieve returns which exceed the inflation rate CPI by 4% to 6% on a rolling seven-year basis.

Strategic Benchmark

Allowable Ranges

Australian Shares

29.0%

25% – 45%

Australian Infrastructure (50%)

2.5%

0% – 5%

> To achieve returns which exceed the bank deposit rate over the same 12-month period.

Australian Private Equity

4.0%

0% – 10%

Investment strategy

27%

Joint 15% – 40%

To provide low-risk positive investment returns in most years through investment in liquid short-term and fixed interest money securities.

Int’l Infrastructure (50%)

1.0%

0% – 5%

International Private Equity

1.5%

0% – 10%

Members wanting maximum security over higher returns and/or members prepared to accept only lower risks with their superannuation savings.

Timber

5.0%

0% – 10%

Risk profile

Total Growth Assets

70.0%

60% – 90%

Designed to provide stable returns and is at the lower end of the risk/return range. However, it is likely to under-perform the Diversified and Shares options for all but the shortest periods.

Asset Class

International Equities (Unhedged) International Equities (Hedged)

Australian Fixed Interest

17.5%

9.5%

Investor profile

6.0%

12%

Joint 8% – 25%

Aust. Infrastructure (50%)

2.5%

0% – 5%

Int’l Infrastructure (50%)

1.0%

0% – 5%

Property*

10.0%

5% – 15%

Absolute Return Strategy

2.0%

0% – 5%

Cash

2.5%

0% – 10%

Total Defensive Assets

30.0%

10% – 40%

International Fixed Interest

> To provide security but not a guarantee of capital invested; and

Strategic asset allocation

These allocations may vary at any point in time within Trustee-approved investment ranges. * The TISS property portfolio is classified as a defensive asset rather than a growth asset. This is due to the structure of the underlying investments, which have been chosen to contain strong income yield securities with wide diversification by sector and geography and a solid weighted-average lease duration.

To provide higher investment returns on a rolling five-year basis through investments weighted to asset classes at the higher end of the risk/return spectrum, subject to a constraint on overall risk exposure.

Investor profile

6.0%

Strategic Benchmark

Allowable Ranges

Cash

50%

30% – 70%

Australian Fixed Interest

25%

10% – 40%

International Fixed Interest

25%

10% – 40%

Asset Class

Investment strategy

These allocations may vary at any point in time within Trustee-approved investment ranges.

Members with a long-term view of their superannuation savings and/or who are prepared to accept the higher risk in the search for higher returns.

Risk profile The Shares Option is likely to provide a high degree of volatility and fluctuations in returns and is at the high end of the risk/return range. The risk may increase by the nature of overseas investments, which means that this option is subject to the considerable extra risk of currency fluctuations and international events. It is likely to outperform the Diversified and Secure options in the longer term. The Shares Option is invested in Australian and overseas shares. These allocations may vary at any point in time with Trustee approval and may be expanded in the future to cover infrastructure and property. This option may return negative returns. Investment managers may hedge to reduce exposure to currency fluctuations and risk.

Strategic asset allocation Strategic Benchmark

Allowable Ranges

Australian Shares

50%

30% – 70%

Overseas Shares

50%

30% – 70%

Asset Class

These allocations may vary at any point in time within Trustee-approved investment ranges.

General information Member Investment Choice about Allocated Pensions

1 TISS Diversified Option (Default option)

Further information call 1300 360 988 or visit www.tissuper.com.au 23

Choosing the right option

Monitoring, reporting and review

Liquidity

TISS policy on derivatives

Each investment option has different investment return objectives, a different blend of assets and different levels of risk. Before making your choice, you should think carefully about your financial position and decide how the choices offered can help you achieve your retirement goals.

Valuation and crediting member accounts

Liquidity requirements are met through a combination of cash holdings in the portfolios’ cash flow from contributions and redemptions of invested funds. A significant portion of the invested funds can be withdrawn on 10 business days’ notice. For less liquid investments, the Trustee will seek to negotiate a redemption process that allows the return of the funds as quickly as possible if demand requires it. The Fund is currently growing and remains in a positive cash-flow position.

The Trustee has not, and does not intend to, invest directly in derivatives. However, the Fund’s investment managers have discretion to invest in derivatives in accordance with their offer documents. Where required, the Trustee has obtained a copy of each investment manager’s Risk Management Statement and the Trustee is satisfied with the disclosures and is of the opinion that they are consistent with the requirements of the TISS Investment Policy.

Investment markets are uncertain. The Trustee cannot predict the future returns for any investment option or guarantee a return for any of the investment options. You may wish to speak to a professional financial adviser, who can help you assess the best investment option or combination of options for you. TISS is not licensed to provide financial advice, however we can put you in touch with a qualified noncommissioned financial planner. Contact us on 1300 360 988 for details.

Switching Members can switch between investment options at any time. Requests received by the 25th of the month will be effective on the first day of the following month. There are no minimum or maximum limits on the amount you can switch. TISS allows you to make two switches each financial year free of charge. Any additional switches after this will incur a charge of $30 per switch. Switching costs are payable on the day the switch is processed.

Withdrawals You can make a withdrawal request for all or part of your investment at any time. The minimum partial withdrawal you can make from any investment option is $1,000, unless you are withdrawing your entire balance. If a full or partial withdrawal is made, whether paid in cash or transferred to another fund, you are required to be paid at least the minimum prescribed amount of retirement income in that year. Withdrawals are subject to superannuation payment tax rates outlined on page 30. Contact TISS for details. Withdrawals from your Transition to Retirement Allocated Pension can only be made if you meet a ‘Condition of Release’ (ie, you retire permanently from the workforce or reach age 65).

The current value of the investment in each option is the market value of the underlying assets in that option after deduction of actual and potential fund expenses. The valuation of listed securities is based on published market prices of the underlying investments. The Fund’s Asset Consultant prepares performance figures on each of the Fund’s portfolios, based on their market performance to date, plus an estimate of cash returns for the remaining period to the end of the financial year, less a conservatism factor depending on the length of time remaining until financial year end. These performance figures are supplied to the Trustee who will use them to pay any pension payments or benefits to members during the period at the interim rate calculated from time to time. At the end of the financial year, the annual performance returns adjusted for fees, taxes and costs is calculated and the resultant rate is credited or debited to member accounts based on their average daily balance over the year.

Interim crediting rates Until the final rate is known, the Trustee will apply an interim crediting rate, which is determined from time to time throughout the year and bears a close relationship with the estimated net Fund earnings (or losses) to date. When the final rate of interest for all or part of a financial year is not yet declared, all exit and pension or benefit payments occurring throughout the financial year will be based on the latest known current interim rate for the relevant period. For partial cashings throughout the year, the interim rate will be used, but when a final rate is known, the member’s account will be recalculated using the final rate. When the entire account is cashed or transferred or when investment switches are made during the year, the benefit paid or switched will be done using the interim rate at the date of the switch.

Reserves

Special note

TISS maintains a small unallocated reserve which is used to meet costs such as taxes and to cover administration and other day-to-day costs.

Payments may be delayed in special circumstances

The Trustee has determined that it will maintain a balance of approximately 0.5% of the Fund’s value in the reserve (maintained within the range of 0.1%–0.9%) and this amount will be reviewed by the Trustee each year.

In the event of a major change in underlying investment values (such as a sharemarket crash), the Trustee may suspend lump sum benefit payments for up to one month to prevent a run on funds and allow time to determine an appropriate interim crediting rate.

The reserve will be custodially held and includes a special cash reserve of $250,000. The remaining reserve will be invested in accordance with the TISS Diversified option. However, all investment earnings are generally allocated to member accounts as they occur, and investment returns credited to member accounts reflect the actual Fund earnings at any given time.

Strategic implementation Implementation refers to the arrangements put into place to physically invest the Fund’s assets in accordance with its investment objectives and strategy. The Trustee has thoroughly evaluated a range of prospective investment managers, and agrees that a mix of specialist managers is appropriate for the Fund. The Fund can adjust the proportion of cash-flow going to these managers to control the rate at which the long-term asset mix is approached. The Investment Committee will determine the direction of cash flow.

Socially responsible investing Labour standards, environmental, social or ethical considerations are not taken into account in the selection, retention or realisation of investments.

General information Member Investment Choice about Allocated Pensions

22 Further information call 1300 360 988 or visit www.tissuper.com.au

24 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 25

Fees and Other Costs Consumer Advisory Warning

Fees at a glance

Did you know?

Type of Fee or Cost

Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns.

Fees when your money moves in or out of the fund

You should consider whether investment features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the Fund or your financial adviser.*

To find out more If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website www.fido.asic.gov.au has a superannuation calculator# to help you check out different fee options. * Please note the fees for the Timber Industry Superannuation Scheme are not negotiable. #

The ASIC superannuation calculator referred to above is not designed for Allocated Pensions.

You should read all the information about fees and costs because it is important to understand their impact on your investment.

Fees and other costs This document shows the fees and other costs that may be deducted from your money, from the returns on your investment or from the fund assets as a whole. Taxes are set out in another part of this document. You should read all the information about fees and costs because it is important to understand their impact on your investment.

How and When Paid

Establishment fee: The fee to open your investment account.

Nil

Not applicable

Contribution fee: The fee on each amount contributed to your investment account.

Nil

Not applicable

Withdrawal fee: The fee on each amount you take out of your investment account (excluding pension payments).

Nil

Not applicable

Termination fee: The fee to close your investment account.

Nil

Not applicable

Diversified Option: 0.63% ($630 per $100,000)

The management cost is charged to your account each month in arrears, based on the value of your account on the last day of the month.

Management costs The costs for managing your investment is the total ongoing Administration fee which is also used for ongoing operating expenses of the Fund. The costs are dependent on the investment option you choose.

Secure Option: 0.98% ($980 per $100,000) Shares Option: 0.69% ($690 per $100,000)

Service fees Investment Switching fee: The fee for changing investment options.

Nil for the first 2 switches. Thereafter, $30 per switch.

The first two switches per financial year are free. Thereafter, a $30 administration fee will be charged for each switch and deducted from your account.

Commutation fee: Members may request to commute part of their funds at any time. This is in addition to the income stream. However, this will require a re-calculation of the pension, with possible changes to the minimum and deductible amounts.

Nil for the first lump sum withdrawal.

The first lump sum withdrawal per financial year, other than your regular pension, is free. Thereafter, $100 will be deducted for each additional withdrawal and deducted from your account.

$100 for each subsequent withdrawal in the financial year.

Other fees and charges Family Law Act Information request: This fee is charged when an eligible person (as defined in legislation) requests information under the Family Law Act.

$55

Charged to the person making the request.

Family Law Act Splitting Account fee: This fee is charged to effect a family law splitting order or agreement.

$55

This fee is applied to the non-member spouse.

Adviser service fee: Charged by your adviser for advice about your investment(s) in the Fund

Nil

Not applicable.

Investment expenses: Cover the cost of investing the Fund’s assets. Investment expenses include base and performance fees and are for the financial year ended 30 June 2006. These expenses may change from year to year.

Options Fees Dollar amount based on an account of $100,000 Diversified Option 0.57% $570 Secure Option 0.22% $220 Shares Option 0.51% $510

Deducted or paid annually from investment returns before returns are credited to a member’s account. All returns declared by the Fund are net of these expenses and tax. No investment expenses are charged directly to a member’s account.

1. The investment management costs for each investment option are calculated annually in arrears at 30 June and may change from year to year.

Fees and Other Costs

For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30-year period (for example, reduce it from $100,000 to $80,000).

Amount

26 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 27

Additional explanation of fees and costs The total fees you are charged each year generally amounts to 1.2% of your account balance, made up of direct management fees and indirect investment expenses. The table below provides an example of how the fees and costs in the TISS Diversified Option can affect your superannuation investment over a one-year period. You should use this table to compare this product to other superannuation products you may be considering.

Example TISS Diversified Option

Fee (%)

Balance of $50,000 at the start of the year Cost ($)

Initial purchase price + Management costs

0.00%

$0.00

0.63%

$315 For every $50,000 you have in the Fund at the start of the year, you will be charged 0.63% of your balance at 1 July. This amount will be deducted from your account in monthly instalments throughout the financial year.

+ Indirect investment costs

0.57%

$285 Deducted or paid annually from investment returns before earnings are credited to your account.

= Costs of investing in the TISS Diversified Option

$315 + $285 = $600 p.a.

Fees and Other Costs

Note: Additional fees may apply if you make more than two switches or more than one commutation or if there is a Family Law split to your account. No matter which investment option you choose, the total direct and indirect fees for a $50,000 investment will be the same, ie. $600 p.a.

28 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 29

Taxation and Social Security

We will provide a PAYG certificate after the end of each financial year, together with information you need to complete your tax return. Once you are over age 60, no tax is payable and no PAYG certificate issued.

Superannuation surcharge tax If the Australian Taxation Office (ATO) assesses that you are liable to pay the surcharge, this will be levied on you directly. If you need to withdraw money from your account to pay the surcharge, this amount is tax-free. While the superannuation surcharge has been abolished effective 1 July 2005, you may still receive a surcharge assessment notice in respect of previous financial years.

Tax File Numbers Under the Superannuation Industry (Supervision) Act 1993, your superannuation fund is authorised to collect your Tax File Number (TFN), which will only be used for lawful purposes. These purposes may change in the future as a result of legislative change. The trustee of your superannuation fund may disclose your TFN to another superannuation provider when your benefits are being transferred, unless you request the trustee of your superannuation fund in writing that your TFN not be disclosed to any other superannuation provider. It is not an offence not to quote your TFN. However, giving your TFN to your superannuation fund will have the following advantages (which may not otherwise apply):

For pensions that commenced before 1 July 2007 Pension recipient under age 60

PAYG Your pension payments may be subject to income tax (plus the Medicare Levy) if you are under age 60 when receiving the payment. Income tax is deducted from pension payments made to you through the PAYG (pay-as-you-go) withholding system.

Calculating tax on your pension

> other than the tax that may ordinarily apply, no additional tax will be deducted when you start drawing down your superannuation benefits; and

Taxable amount = Pension amount â&#x20AC;&#x201C; Deductible amount The deductible amount is determined when you first purchase the pension or the last time you make a partial commutation from the Fund.

> it will make it much easier to trace different superannuation accounts in your name, so that you receive all your superannuation benefits.

Tax on contributions Generally, you do not pay any tax on the funds you use to open your TISS account. However, if your superannuation payment contains an untaxed post-30 June 1983 component, the Trustee is obliged to deduct 15% tax from this untaxed element when you open your TISS account. Please note: if you have an undischarged contributions surcharge tax liability from a previous fund, that liability will be transferred to your TISS Allocated Pension.

Pension recipient aged 60 or over

Tax on lump sum withdrawals If you make a partial or a full lump sum withdrawal from your TISS Allocated Pension, this payment will be treated as a superannuation payment and taxed accordingly. Tax does not generally apply when you reach age 60.

Restrictions on accessing your benefits Cash withdrawals (other than retirement income payments) that are not rolled over or transferred to another complying superannuation fund, retirement income product or RSA are treated as superannuation payments, and will be subject to the same superannuation payment lump sum tax arrangements that apply to the withdrawal of superannuation benefits.

From 1 July 2007, no tax payable on pension income.

For pensions that commenced on or after 1 July 2007 Pension recipient between their preservation age and age 60

a) Determine the taxed and tax-free components of the purchase price; b) Determine the proportion of taxed and tax-free; c) Apply the proportion in (b) to the pension income recipient;

Tax on investment earnings There is currently no tax payable on investment earnings while your money remains within a TISS Allocated Pension.

No change to existing taxation rules.

d) Tax is payable on the taxed proportion of the income. Pension recipient aged 60 or over

a) Determine the taxed and taxfree component of the purchase price;

Example: John is 58 years old and has $100,000 in a TISS Allocated Pension. The components are: $20,000 tax-free, $80,000 taxed. John wants to draw an income of $10,000 p.a. Based on the taxed/tax-free proportion of the purchase price, TISS would apply the following proportions to Johnâ&#x20AC;&#x2122;s retirement: 20% tax-free, 80% taxable. This means that $2,000 of his retirement income would be tax-free and $8,000 will be subject to PAYG tax-rates. When John turns 60, he will pay no tax on his retirement income.

Tax rebate Example: Example: John has chosen to receive $10,000 from his TISS Allocated Pension this year. His retirement income proportions are: $8,000 taxable, $2,000 tax-free. John is eligible for a 15% rebate on the $1,200 taxable proportion of his pension ($8,000 x 15% = $1,200) to offset any tax payable on the retirement income.

b) Determine the proportion of taxed and tax-free; c) No tax is payable on the taxed proportion of the income.

Taxation and Social Security

This section sets out the current rules relating to the taxation of superannuation, pension and lump sum benefits. This information is of a general nature only and is current at 30 June 2007.

30 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 31

Tax on commutations Lump Sum Benefits Before 1 July 2007

From 1 July 2007

Components

Tax treatment

Components

Tax treatment

Undeducted contributions post-June 1994 invalidity and CGT exempt

Tax-free

Exempt

Pre-July 1983* and concessional

5% taxable at marginal tax rates

The pre-July 1983 component will * be calculated on the value of the member’s benefit as at 30 June 2007 and the amount fixed.

Post June 1983 (taxed)

Under age 55: Taxed at 20%2

Excessive (Amounts above your RBL)

Taxable

Under age 55: Taxed at 20%2 Aged 55-59: First $140,0001 is taxfree and the balance taxed at 15%2

Social Security

Death benefit payments to non-dependants will have to be paid as a lump sum benefit.

This social security information is of a general nature only. Social security laws are complex and can change. We recommend that you discuss your own circumstances with your financial planner or Centrelink before deciding to invest in an Allocated Pension.

The taxable component of a lump sum benefit paid to a non-dependant will be taxed at 15% plus the Medicare Levy.

Anti-detriment payments TISS may pay an amount calculated under taxation law in addition to the lump sum Death benefit if you are under age 65 at the time of death. This additional amount only applies if your Death benefit is paid directly (or indirectly via your legal personal representative/Estate) to your dependant/s. We strongly recommend that you consult a financial planner about how these laws may affect your specific circumstances.

Assets Test The total value of your TISS Allocated Pension is counted as an asset under the Assets Test.

Income Test Regular payments from your account, less an amount representing the return of your investment (nonassessable portion), are included under the Income Test. The formula for the non-assessable portion is:

Post June 1983 (taxed) component: Taxed at 38%2

Original Purchase Price (before fees) – Commutations

Remainder taxed at 45%2

Under the Income Test, the annual retirement income payment less a non-assessable amount is counted as income.

Relevant Number

The low-rate threshold was set at $140,000 on 1 July 2007 and will be indexed to AWOTE in $5,000 amounts.

Plus Medicare Levy.

Tax on Death benefit payments

Payment to reversionary beneficiaries

Payment to nominated beneficiaries

The tax treatment of reversionary pension payments upon death is as follows:

Where a dependant chooses to receive regular retirement income payments following your death, this will be assessed as income of the dependant and taxed in the same way as the primary retirement income (ie. the retirement income paid to you). Lump sum Death benefit payments will be tax-free when paid to a dependant. Your dependants include your spouse (including a de facto spouse), a child who is a minor, or a person who is partially or wholly financially dependent on you at the date of your death. Payments to non-dependants (eg. a financially independent adult child) or the Estate are taxed as Death benefit superannuation payments.

> If the deceased was 60 years of age or older at the date of death, the pension payments will be tax-free regardless of the beneficiary’s age. > If the deceased was under 60 years of age at the date of death and the beneficiary is 60 years of age or older, the pension payments will be tax-free. > If the deceased was under 60 years of age at the date of death and the beneficiary is under 60 years of age, the tax treatment of the pension payment will continue using the same proportion of taxable and tax-free components on which the PAYG tax will be calculated until the beneficiary turns 60, when the pension payments become tax-free. > The 15% tax offset applies to all taxable pension payments paid for a pension commencing with a Death benefit.

The non-assessable amount is calculated at the start of the retirement income payments by dividing the Original Purchase Price by the Relevant Number. The Relevant Number is the applicable Life Expectancy Factor at the time your pension commences. These factors are published by the Federal Government and updated from time to time. On commencement of your TISS Allocated Pension, we will provide you with a schedule that you may provide to Centrelink, detailing your retirement income information. A schedule will then be provided to you six-monthly and after any commutation. For further information, please contact Centrelink or your financial planner.

Taxation and Social Security

Aged 55 and over: First $135,590 is tax-free and the balance taxed at 15%2

No tax is payable on this component.

Payment to non-dependants

32 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 33

General Information Cooling-off period

Family law and superannuation

Privacy Statement

A 14-day cooling-off period applies from the date your application is accepted. During this period, you may write to the Trustee and cancel your TISS membership. Any rollover you made will be repaid and there will be no fees and charges incurred. There may, however, be an adjustment made for investment fluctuations.

From 28 December 2002, amendments to the Family Law Act 1975 allow couples to divide their superannuation interests in the event of the breakdown of their marriage. The interests may be divided by formal agreement or by a Family Court order. Interests can be divided in the payment phase (when the member is in receipt of retirement income payments) as a percentage of the regular retirement income payments.

TISS takes the utmost care with your personal information and only collects information that is necessary for your membership. This information is used:

To withdraw or transfer your investment, simply send a letter to TISS Administration within the 14-day period.

Complaints The Trustee has established a procedure to deal fairly with member complaints. All complaints will be handled in a courteous and confidential manner, and will be properly considered and dealt with within 90 days. If you believe you have a complaint, please write to:

In the event that a member’s superannuation interests are split, a new interest in TISS can be created by the non-member spouse, or their interest may be transferred or rolled over to another regulated superannuation fund. As the new legislation is complex, we recommend that you seek professional advice from your legal adviser or the Family Court as to the consequences of separation and divorce on your superannuation interests.

Fund information The following information may be viewed at any office of the Trustee during normal business hours:

Complaints Officer TISS Pty Ltd PO Box 666 Carlton South VIC 3053

> the Annual Report of the Fund;

Once the Trustee has investigated your complaint, you will receive a written reply explaining the Trustee’s decision. If you are not satisfied with this decision, you may choose to take your complaint to the Superannuation Complaints Tribunal (SCT).

> the Trust Deed of the Fund;

The SCT is an independent body established by the Commonwealth Government to review certain types of Trustee decisions. If the Tribunal accepts your complaint, it will attempt to resolve the matter through conciliation, which involves assisting you and the Fund to come to a mutual agreement. If conciliation is unsuccessful, the complaint will be referred to the Tribunal for a determination which is binding. If you wish to find out whether the Tribunal can handle your complaint and the type of information you would need to provide, you can contact the SCT on:

> our Financial Services Guide (showing the financial services we offer); and

Superannuation Complaints Tribunal Locked Bag 3060 GPO Melbourne VIC 3001 Tel: 1300 780 808 Web: www.sct.gov.au

> the Audited Accounts and Auditor’s Reports of the Fund;

> the Fund’s Risk Management Policy and Strategy; > any actuarial report that the Fund has received; > your latest Member Statement;

> to enable pension or benefit payments; > to search for any unclaimed benefits you may have; and > to keep you informed about membership opportunities. If you don’t want us to contact you about these opportunities, please let us know in writing. The personal information TISS collects from you, or through your employer, includes your contact details, date of birth and Tax File Number. Over time, this will be supplemented with financial and other information necessary to administer your TISS membership. We may also need some identification from you when setting up your account or paying a pension. TISS protects your personal information and has strict security measures in place to protect it from unauthorised access or misuse.

As a member of TISS, you may ask to see the information held about your membership and to have it corrected if necessary. If you would like further details on the personal information that TISS holds and how it is used, call 1300 360 988. If you believe that a breach of privacy may have occurred in relation to your TISS membership, write to: TISS Privacy Officer PO Box 666 Carlton South VIC 3053 If you would like more information about the Privacy Act or wish to complain about a privacy issue, you can contact the Federal Privacy Commissioner’s hotline service on 1300 363 992 or visit the Privacy Commissioner’s website at www.privacy.gov.au For further information, call 1300 360 988 or visit www.tissuper.com.au

TISS outsources the administration of its member and employer records to an external superannuation company, and contracts with life insurers and other service providers to provide services to you. They and the Fund’s employer and member sponsoring organisations are authorised to only use your personal information under the strictest confidence.

> our latest Member Handbook (PDS). While the Annual Report and Member Statement are sent to you each year, copies of the other documents listed are available on request. All inquiries regarding the Fund should be addressed to TISS Administration on 1300 360 988.

General Information

Within this period, you may withdraw your investment or transfer to another institution without being subject to fees imposed by TISS. The amount of repayment may, however, be adjusted to take account of any increase or decrease in investment value and any taxes payable in respect of the rollover made.

> to establish your membership account;

Your personal information will not be used or disclosed for any other purpose without your consent, except where required by law. For example, the TISS Administrator is required to report information to the Australian Taxation Office.

34 Further information call 1300 360 988 or visit www.tissuper.com.au

Further information call 1300 360 988 or visit www.tissuper.com.au 35

Definitions

Reversionary beneficiary

Trustee

The key words and terms used in this PDS are defined below:

Person to whom the retirement income will continue to be paid upon the death of the primary product holder.

A person or company (corporate trustee) appointed under the terms of the Trust Deed to hold the trust property for the beneficiaries and to make sure that the plan is operated in accordance with the Trust Deed.

A category of financial assets. The major asset classes are shares, property, fixed interest and cash, which can be broken down further to include domestic or international shares, domestic or international fixed interest, and direct or indirect property investments. All asset classes have different risk and return characteristics.

Australian Financial Services License (AFSL) A license issued by ASIC under the Corporations Act that permits the issuing of a financial product or giving of financial advice.

Australian Securities & Investment Commission (ASIC) ASIC enforces and regulates company and financial services laws to protect consumers, investors and creditors. An independent Federal Government body, ASIC has regulated financial markets, securities, futures and corporations since January 1991.

Beneficiary A person for whom benefit assets are being held. Beneficiaries of a superannuation fund are the members and their dependants.

Commutation The process of converting part or all of a retirement income product into a lump sum benefit.

Complying superannuation fund A superannuation fund which qualifies for concessional tax rates. Under legislation, only a regulated superannuation fund that meets the operational standards set down by the Government can be a complying fund. If a fund is not a regulated superannuation fund and/or is non-complying, it is ineligible for the taxation concessions.

Concessional tax rates Superannuation benefits, both when accruing in a superannuation fund and when paid, attract reduced rates of tax when compared with normal wages and

salary or other investment earnings. The concessional rates of tax can make superannuation a tax-effective savings strategy with potentially significant benefits during the working part of your life, during retirement and as a part of Estate planning.

Financial planner Refers to a financial services licensee or an authorised representative of a financial services licensee as defined in the Corporations Act 2001. A planner will work with you to establish your goals and develop a plan to help you achieve them.

Interdependency relationship An interdependency relationship exists between two people if they live together in a close personal relationship and one or each of them provides the other with financial and domestic support and personal care. This may include a same-sex partner, a parent or a sibling with whom you live. An interdependency relationship still exists between two people if they have a close personal relationship, but because either or both of them suffer from a physical, intellectual or psychiatric disability, they do not live together.

Rollover Transfer of a superannuation payment to a rollover fund or to another superannuation fund.

Superannuation payments (formerly ETPs) A lump sum payment from either a superannuation fund, an employer (to an employee when he/she ceases employment), or a rollover fund. Provided the recipient is under age 65, the superannuation payment can be rolled over into an approved deposit fund, deferred annuity, alternative superannuation fund or RSA.

Surcharge A tax that applies to taxable superannuation contributions made by or for a fund member who has an adjusted taxable income that is above a certain annual amount. The maximum tax payable on the contribution is up to 12.5% for the year ended 30 June 2005. While the superannuation surcharge was abolished effective 1 July 2005, you may still receive a surcharge assessment notice in respect of previous financial years.

Nominated beneficiary

Switching

The person to whom the retirement income product holder requests either a lump sum or a retirement income be paid in the event of their death.

Transferring funds between investment options available within a superannuation fund.

Non-commutable income stream Where an allocated pension is purchased after an investor’s preservation age but prior to ceasing gainful employment, that income stream is ‘non-commutable’ and can be paid in cash, or transferred to another complying arrangement, only in limited circumstances.

Preservation age The age at which a member can gain full access to preserved benefits which have built up in a superannuation fund, provided that the member has permanently retired from the workforce. From 2015, the preservation age will gradually increase from 55 to 60 years.

Superannuation Trustees must also comply with a number of legislated requirements as set out in the Corporations Act and Regulations and the Superannuation Industry Supervision Act and Regulations (SIS)

Tax File Number (TFN) A unique number issued to each taxpayer by the Australian Tax Office. The TFN enables the Tax Office to match information it receives about income earned by taxpayers with details disclosed in their tax returns. Trustees of superannuation funds are required to seek, store and pass on TFNs of beneficiaries who have authorised the use of their TFN for superannuation and tax (‘surcharge’) purposes. Trustees must request, quote and transfer TFNs in accordance with statutory guidelines.

General Information

Asset class

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Membership Application Allocated Pension Division

Please complete in pen using BLOCK letters. Applications must be completed in full before an account can be established in your name.

Application Checklist

1. Your personal details Title (Please tick) Mr

Date of birth Miss

Other

M M

First name

Joining TISS Checklist: . Have you provided your personal details in Section 1? . Have you provided your Tax File Number in Section 2? . Have you selected the amount you wish to invest and the pension payment amount you would like to receive in Section 3? . Have you advised your preferred payment frequency in Section 3? . Have you selected the investment option/s from which your retirement income payments will be drawn in Section 4? . Have you advised us of your nominated beneficiaries in Section 5? . Have you signed and dated the form in Section 7?

Consolidating your super savings TISS accepts transfers from any complying superannuation fund, approved deposit fund or retirement savings account. To make a transfer, you’ll need to complete the Transfer your super form, available on request. For further information call 1300 360 988 or visit www.tissuper.com.au

Tax File Numbers You will need to complete the Tax File Number Declaration form, provided on page 39 of this PDS to claim the tax-free threshold. Please note: you can only claim this threshold once. You do not have to provide your Tax File Number, but if you do not do so, we cannot pass on the tax concessions you may be entitled to receive.

Taxation Complete the Withholding Declaration form on page 41 of this PDS if you want TISS to reduce or increase the amount of tax withheld from payments to you.

Need help? If you need help completing these forms, please contact the Australian Tax Office on 13 22 66 or your financial planner. Your application will not proceed and no investment earnings will be credited until all rollovers are received.

Return all signed and completed forms to: TISS Administration PO Box 666 Carlton South Vic 3053

Family name Current mailing address

State

Telephone (home)

Telephone (work)

–

Postcode

Mobile

–

2. Tax File Number I have read the section on Tax File Numbers (TFNs) in this Product Disclosure Statement and understand that I have a choice of providing my TFN. I understand that when provided, TISS will only use my TFN for approved purposes. I hereby choose to provide my Tax File Number:

3. Investment details Please indicate which pension you wish to join (eligibility requirements are outlined on pages 11–12) Allocated Pension

Transition to Retirement Allocated Pension

Initial investment $ Payment frequency

Pension payment amount $ Fortnightly

Quarterly

Half-yearly

Name of Bank BSB Number

Yearly Account Name

–

Account Number

4. Member investment choice Before completing this section, TISS recommends you read the section on Member Investment Choice in this PDS and obtain professional advice relating to your own circumstances. The information provided by TISS is of a general nature and does not constitute investment advice. If you do not make a choice, your account will automatically be invested in the TISS Diversified Option. I would like to invest in the following investment options: Initial Investment Withdrawals TISS Diversified Option (default)

TISS Secure Option

TISS Shares Option

100%

TOTAL must equal

This application is part of the TISS Allocated Pension Product Disclosure Statement dated 30 June 2007

Application Forms

Before making an application to join the TISS Allocated Pension, please ensure that you have read and understood the information contained in this Product Disclosure Statement.

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5. Nominating your preferred beneficiaries Reversionary Beneficiary (spouse only) Full name

Relationship

% Share

Address

100 Date of Birth

D Discretionary Beneficiary/ies 1. Full name

M M

Relationship

% Share

Address

Date of Birth

D 2. Full name

M M

Relationship

% Share

Address

Date of Birth

D 3. Full name

M M

Relationship

% Share

Address

Date of Birth

D 4. Full name

M M

Relationship

% Share

Address

Date of Birth

M M

Y 100%

Total must equal

6. Transfer information I wish to: Transfer the balance of my TISS account into a TISS Allocated Pension. Membership Number: T ransfer the balance of my account in another superannuation fund into a TISS Allocated Pension. You will need to complete a Transfer your super form, available on request.

7. Declaration To apply for membership of the TISS Allocated Pension Division, you must sign and date this form, having read the statements below. I hereby: • apply to the Trustee for admission as a Member of the TISS Allocated Pension under the terms and conditions of the Trust Deed by which the Fund is operated; • acknowledge receiving the Allocated Pension Product Disclosure Statement (PDS) and have read this document; and • acknowledge that I have read the section on Tax File Numbers in the PDS.

Date

Please return this completed form to: TISS Super, PO Box 666, Carlton South VIC 3053 Tel: 1300 360 988 Fax: 1300 362 899 Email: mail@tissuper.com.au Web: www.tissuper.com.au

This application is part of the TISS Allocated Pension Product Disclosure Statement dated 30 June 2007.

M M

Application Forms

Please sign here

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Contact details Administration 1 Grattan Street Carlton VIC 3053

Correspondence PO Box 666 Carlton South VIC 3053

Fund Co-ordinators The Trustee employs three Co-ordinators who work with members, employers, unions and the Fund Administrator to ensure the smooth running of the Fund. To contact a Co-ordinator, telephone 1300 360 988.

Enquiries Tel

1300 360 988 (Local call costs apply from anywhere in Australia.)

Fax

1300 362 899

Email mail@tissuper.com.au Web www.tissuper.com.au

TISS 27221

A copy of this 44-page document can also be downloaded at www.tissuper.com.au