Telstra Super Pty Ltd ABN 86 007 422 522
Telstra Super Pty Ltd ABN 86 007 422 522 OCTOBER 2013 VOLUME 17 ISSUE 1
Gear up for greater control
IN THIS ISSUE: Introducing Direct Access + Super under the new Federal Government + Everything you need to know about MySuper + Clean out your glove box
movingforward October 2013
Super under the new federal government The election of Tony Abbott’s Liberal/National coalition in this year’s federal poll will see many changes take place in a number of policy areas, and we expect some to have an impact on the superannuation system.
In the lead-up to the election, the Coalition’s Policy for Superannuation1 highlighted several intentions:
• a review of minimum draw down amounts for account-based pensions, such as Telstra Super RetireAccess
• steps to encourage greater competition in the selection of default super funds by employers
• a two year delay in the increase of Super Guarantee (SG) contributions employers make for their employees. SG would remain at 9.25% for two more financial years, reaching 12% in July 2021 instead of 2019
• review of regulatory barriers that limit the product features of income streams such as Telstra Super RetireAccess
• mandatory disclosure of any conflicts of interest.
• removal of the Low Income Superannuation Contribution (LISC) of $500 per year to people earning below $37,000, which effectively rebated the 15% tax paid on contributions • review of contribution cap limits and the co-contribution scheme once the Budget reaches a surplus position Page 2
• payment of super contributions as part of the Paid Parental Leave scheme, where up to $75,000 in income replacement would be paid for six months • the ‘appropriate provision’ for independent directors on the boards of not-for-profit funds (Telstra Super’s Board has an independent Chairman in David Leggo)
Many of these proposals would require legislative changes and at this stage, no legislative timetable has been announced by the new government. New ministerial line-up A change of government also means a change in the key finance and economic portfolios that have a bearing, directly or indirectly, on superannuation and investment markets more generally.
Clean out your glove box Most car owners will tell you their glove box has a collection of loose coins gathering dust, probably beneath a wad of papers and food wrappers. Similarly, most of us have super accounts all over the place too, but it’s time to clean up!
If you have had more than one job in the past, it’s likely that your super is broken up into separate accounts and being eaten away by extra fees. Consolidating your other super accounts into one Telstra Super account is easy and lets you:
Need a torch? You can improve your consolidation know-how in less than 3 minutes by viewing our informative Super Bite video ‘Consolidating super’.
• Save on paying unnecessary fees
Consolidating your super to Telstra Super will mean you pay just one set of competitive fees to an expert fund to look after your super.
• Boost your account balance
The money you save in reduced fees can then be reinvested into your super, giving you even greater benefit from the magic of compound interest.
• Simplify your arrangements
The Coalition ministerial team across these areas has been announced:
A single super account simplifies your financial arrangements and reduces your paperwork, giving you extra time to spend on the more important things in life.
If you have a smartphone with a QR Code app, scan this code and watch the video instantly. Better yet, complete the super search consent form at www.telstrasuper.com.au/tfnconsent and we’ll do the heavy lifting for you! For over-the-phone assistance or to find out more about how we can help make managing your super even easier, call 1300 033 166 between 8.00am and 5.30pm (Melbourne time) Monday to Friday.
• Treasurer: Joe Hockey • Finance: Matthias Cormann • Assistant Treasurer: Arthur Sinodinos • Trade and Investment: Andrew Robb. The Assistant Treasurer, Mr Sinodinos, will take responsibility for the super industry. We’ll keep members and employers up to speed with any relevant changes as more information on the Coalition’s intentions becomes known. 1 The Coalition’s Policy for Superannuation, September 2013. Available at www.liberal.org.au/our-policies
3 quick steps to wiping away multiple fees 1
Find any super you may have forgotten about Visit www.ato.gov.au/superseeker with your tax file number to uncover any lost super
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Finish up the paperwork Login to SuperOnline to download a pre-populated ‘Consolidate your super’ form with your details already filled out OR download and complete the form yourself
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Send your form to us Don’t forget to include a certified copy of your ID
Introducing an exciting new investment option Telstra Super is proud to introduce the latest addition to our range of investment options – ‘Direct Access’. Designed to meet the needs of members who wish to take greater control over
their investment decisions, Direct Access offers eligible accumulation members the ability to choose from a range of term deposit options and to invest in companies on the ASX300 through real time, online trading access. A facility for members in the pension phase will follow.
Direct Access to Term Deposits Investing in a term deposit through Direct Access offers you the added comfort and safety of a fixed rate of return. You will also have the flexibility to choose from a range of term deposit providers and terms, with new rates to be published each week.
Direct Access to Shares The opportunity to take greater control of how your retirement savings are invested in the share market is an attractive proposition, especially for those members who are equipped with high levels of investment knowledge. Whether you want to build an investment portfolio around specific sectors, companies, services or on your own ideals and ethics, Direct Access gives eligible members the opportunity to buy and sell shares in ASX300-listed companies that meet their individual criteria.
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movingforward movingforward
Telstra Super Annual Report: Coming soon! Who can invest in Direct Access? To register for a Direct Access account, you must hold a minimum Telstra Super account balance of $60,000: • $50,000 required in Direct Access (which includes ensuring a minimum balance of $200 in a Cash Transaction Account); and • $10,000 required to remain in your other Telstra Super investment options. Members wishing to invest in this onlineonly option must also be registered users of SuperOnline and have provided both a Tax File Number (TFN) and a valid email address to receive all Direct Access correspondence.
The 2012/2013 Annual Report aims to celebrate the retirement dreams of our valued members, whether that may be fulfilling long-held passions of travel, art and adventure, or simply enjoying those special day-to-day moments with close friends and family. Over the past three years, we have been lucky enough to share some amusing, inspiring and heartwarming stories from Telstra Super members in our Annual Report. This year’s report is no different, with three members – Dave, Melissa and Chris generously inviting us to share what they have planned once they leave work behind for good. To read more about Dave, Melissa and Chris, and to see how Telstra Super is helping all our members to achieve the retirement lifestyle they dream of, keep an eye out for the 2012/2013 Telstra Super Annual Report - coming soon at www.telstrasuper.com.au
Making the right choice for you Whenever you’re thinking about any type of investment switch, whether into Direct Access or across our range of existing options, it’s important to consider how this fits in with your long-term investment strategy. While we understand that the greater level of control afforded by Direct Access may be particularly attractive to some members, we encourage you to first seek financial advice to ensure any potential investment meets your personal objectives and attitude to risk.
Find out more To find out more about Direct Access and see whether our newest investment option may suit your long-term investment strategy, visit www.telstrasuper.com.au/ directaccess
October 2013
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Telstra Super to launch MySuper arrangement Stronger Super is the name given to the Gillard government’s package of super reforms, aimed at making the superannuation system simpler and more efficient. As part of Stronger Super, the government has introduced a new, default super product called MySuper. MySuper replaces existing default products and funds who wish to continue to receive default contributions must offer a MySuper product from 1 January 2014. Telstra Super will be offering a MySuper arrangement to new members from 30 November 2013, while existing members who meet certain criteria will have their balance transferred to MySuper next year, unless they opt out.
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movingforward
MySuper features and benefits
Telstra Super’s MySuper arrangement
Telstra Super members affected by MySuper
MySuper is intended to provide a simple, transparent product which members and employers can easily compare using a set of standardised features. It also aims to maximise the balances of members who don’t make an investment choice for their super.
Telstra Super is pleased to announce our existing accumulation products meet the legislated requirements of a MySuper product and that we have received authorisation from APRA to offer our MySuper arrangement.
MySuper will affect both new and existing members of Telstra Super:
The MySuper standardised features are legislated by government and include: • a prescribed list of fees, including an: – administration fee – investment fee – insurance fee – advice fee. • a single diversified or a lifecycle investment strategy – Telstra Super has chosen to offer a lifecycle investment strategy in our MySuper arrangement. • a default level of death and Total & Permanent Disablement (TPD) insurance, offered on an opt-out basis. • disclosure of fees, investment performance, asset allocation and risk in a set format.
As mentioned above, Telstra Super’s MySuper arrangement has a lifecycle investment strategy, which is designed to maximise members’ investment outcomes by automatically investing their super with a level of risk and return suited to the member’s age and investment timeframe. This means a higher growth/higher risk investment option for younger members who have time to wear short-term fluctuations in investment markets in order to gain long-term growth. Conversely, a more conservative option is chosen for older members, with the aim of protecting investment capital. Here’s how it works. Telstra Super’s MySuper arrangement consists of three investment options: MySuper Growth, MySuper Balanced and MySuper Conservative which together form the lifecycle investment strategy. Telstra Super MySuper members will have their balance invested in the relevant agebased investment option shown below, then, as the member ages, their super is automatically moved to the applicable, age-based investment option. The MySuper lifecycle investment strategy replaces Telstra Super’s existing default investment strategy. Member age
Current default investment options
MySuper lifecycle investment strategy
Under 45
Growth
MySuper Growth
45 to under 65
Balanced
MySuper Balanced
65 and over
Conservative
MySuper Conservative
MySuper has the same administration and investment management fees as existing products and MySuper members will enjoy the same benefits and services as other members.
October 2013
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Existing members Existing members of Telstra Super Corporate Plus, Telstra Super Personal Plus, Telstra Super Casuals and Sensis Super Plus-Accumulation who haven’t made an investment choice or who have chosen to invest their full balance in the current default investment option for their age (as shown in the table above) will automatically have their balance transferred to MySuper, unless they choose to opt out. Transaction costs do not apply to the MySuper transfer. Members will be given notice of the MySuper transfer, including opt-out details. Members can elect to be transferred to MySuper, split their balance between the MySuper arrangement and another investment option(s), or opt out of MySuper altogether. Member-elected investment choices will incur the usual transaction costs.
New members New members joining Telstra Super who don’t make an investment choice will automatically be placed in Telstra Super’s MySuper arrangement. Like all members, they can elect an investment choice at any time.
More for you Telstra Super continues to offer members a wide range of investment choices, including our latest investment option, Direct Access, which enables members to invest in ASX300 listed shares and term deposits. We look forward to bringing members the Telstra Super MySuper arrangement which will complement our existing offering. Further information about Telstra Super’s MySuper arrangement will be provided in the coming months. If you would like to know more about any of the information in this article, please call our Member Services Consultants on 1300 033 166 between 8.00am and 5.30pm or email contact@telstrasuper.com.au
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Some recent changes from your super fund
The past twelve months has seen a number of legislative changes introduced within the super industry. We thought we’d take the chance to highlight two changes that may be of interest to you.
New investment risk measures
Growing our operational risk reserve
To help you make a more informed decision regarding investment risk, you can now see how our range of investment options aligns with the Association of Superannuation Funds of Australia/ Financial Services Council Standard Risk Measure (SRM) framework. The SRM includes seven categories, each with its own risk label (ranging from ‘very low’ to ‘very high’) and risk band. These risk bands provide an estimate of the number of negative annual returns that may occur over any 20 year period.
Like all super funds, Telstra Super is required by law to maintain a certain amount of funds to cover potential losses to members as a result of operational risk events. Over the next three years Telstra Super will be building the amount of financial reserves held to meet and maintain the Operational Risk Financial Requirement (ORFR) target of 0.25% of funds under management, as set by APRA’s Prudential Standards.
The SRM is designed to make it easier for members to see how each of our investment options may match up to your individual investment timeframes and attitude to risk. For more information, see your Investment Guide at www.telstrasuper.com.au/pds
This magazine has been prepared by Telstra Super Pty Ltd, ABN 86 007 422 522, AFSL 236709, the trustee of the Telstra Superannuation Scheme (Telstra Super), ABN 85 502 108 833. PO Box 14309 MELBOURNE VIC 8001, Telephone 1300 033 166 © Telstra Super Pty Ltd, October 2013 The information contained in this publication is correct as at October 2013 and may change in the future. This information is general advice only and does not take into account your individual objectives, financial situation or needs. Before acting on any advice you should assess whether it is appropriate for you and consider talking to a financial adviser. Before making any decision about acquiring any product, you should obtain and review its product disclosure statement by calling 1300 033 166 or visiting www.telstrasuper.com.au. Telstra Super Pty Ltd does not recommend that any member make a decision concerning superannuation arrangements based solely on this publication. References in this document to Telstra Super Financial Planning are references to Telstra Super Financial Planning Pty Ltd (ABN 74 097 777 725). Telstra Super Financial Planning Pty Ltd is a legal entity separate to Telstra Super Pty Ltd. Telstra Super Financial Planning Pty Ltd is a licensed financial adviser (AFSL 218705) and is able to provide financial advice about Telstra Super products to members of Telstra Super. Telstra Super Pty Ltd does not endorse or accept responsibility for the information or advice provided by Telstra Super Financial Planning Pty Ltd. The investment returns from any Telstra Super product are not guaranteed. ® is a trademark in Australia of the Telstra Corporation Limited.