Why isn’t my Government co-contribution shown on my benefit statement?
A.
Your benefit statement lists all of your account transactions for the six-month period ending 30 June 2009.
Before the ATO can allocate any Government co-contribution payment to your super they need to have received your tax return for the relevant financial year and ensure that it meets all eligibility criteria.
You will receive any Government co-contribution to which you are entitled in the following financial year ie the Government co-contribution for the 2008/2009 financial year will not be credited to your account until the 2009/2010 financial year and when you do receive this depends upon when you lodge your tax return and if you satisfy the eligibility requirements.
ACSRF usually receives the first round of co-contributions payments for the 2008/2009 financial year around November 2009 for people who lodge their tax returns early.
Q.
I have heard that surcharge tax was abolished. Why is it still appearing on my benefit statement?
A.
Surcharge tax on contributions and employer eligible termination payments was abolished by the Commonwealth Government from 1 July 2005. Although future contributions do not attract a surcharge debt, outstanding debts relating to contributions made into your super account prior to 1 July 2005 remain and will still have to be paid.
More information on surcharge debts can be found on page 30 of the Fund’s current PDS or by phoning your local ACSRF office on 1300 658 776.
Q.
What are the preservation components of my super as listed on my benefit statement?
A.
The preserved component of your super benefits cannot be accessed until you satisfy a ‘condition of release’. For example, if you retire after age 55 or on termination of your employment after age 60.
If your statement shows an unrestricted non-preserved component, please contact the Fund to establish when you are able to access this benefit.
Your restricted non-preserved component will become unrestricted and non-preserved (hence accessible) when you terminate your employment.
Q.
How is the insurance value listed on my benefit statement calculated?
A.
Please refer to the detailed insurance section of ACSRF’s Superannuation Plan Product Disclosure Document (PDS) (pages 18–27).
For personal assistance or to request a printed copy of the PDS, please phone your local ACSRF office on 1300 658 776.
Q.
On my statement, what does my ‘future contributions investment choice’ mean?
A.
This section on page 2 of your benefit statement shows details of your chosen investment options and the percentage split you have elected for any future contributions you make into your account, as recorded at the time of printing (which will be after the statement date). It may not reflect the current investment mix of your account, only where your future contributions will be directed.
As ACSRF does not rebalance your account, you should regularly review your account’s investment mix to ensure it complies with your risk profile.
Your investment options that applied as at the statement date (most recently 30 June 2009) are also shown.
Q.
Why does ACSRF want my tax file number?
A.
The Fund simply wants to ensure that you avoid paying more tax on your super than is absolutely necessary.
The following taxation rules will apply if you do not have a TFN recorded with your superannuation fund:
Super funds will only be able to accept your non-concessional contributions (ie lump sum (post-tax) contributions) if you have quoted your TFN.
If you were an existing fund member as at 1 July 2007 and have not quoted your TFN, your concessional contributions (ie employer (Superannuation Guarantee), salary sacrifice and self-employed contributions) in excess of $1,000 for the financial year will be subject to penalty taxes. The $1,000 limit does not apply if you joined the fund after 30 June 2007 and accordingly, all of your concessional contributions will be taxed at 46.5% instead of the normal 15% and the super fund must remit the taxes to the Australian Taxation Office (ATO).
It is not compulsory to provide your TFN, however, to avoid the rejection of post-tax contributions or additional taxes being imposed on other contributions, please complete an ACSRF Tax file number nomination form and return it to us as soon as possible. You will then be able to continue to contribute on both a pre-tax or post-tax basis without penalty, provided you are eligible.
Q.
How can I use the BPAY details listed on the first page of my benefit statement?
A.
ACSRF offers this facility so that it is easier and quicker for you to make lump sum (member post-tax) contributions to your ACSRF super account - without the need for any paperwork or forms to be completed! You may wish to reap the rewards of the Government Co-contribution Scheme or just top-up your super.
In order to make a payment to your ACSRF super account via BPAY, simply use phone or internet banking through your own banking institution (if you haven’t made payments or paid bills via BPAY in the past, you can find more general information at www.bpay.com.au or contact your banking institution for more details)
You will need to quote ACSRF’s Biller Code (444232) and your unique Client Reference Number (CRN) (located in the BPAY box on page 1 of your statement) so that your payment can be identified and attributed to your account.
Please note that ACSRF has a daily limit of $150,000 per transaction for receipt of contributions made via BPAY, however, we do recommend that you also check with your own bank or financial institution to find out if there are any limits that they impose in relation to you making BPAY transactions. Allow for three days of processing time.
Q.
What is the difference between direct fees and other management costs, as listed on my statement?
A.
These two items are listed in the ‘Information on fees and costs’ section of your benefit statement.
Direct fees, such as administration charges incurred over the six-month statement period, are debited directly from your account.
However, other management costs are accounted for in the unit prices and are not deducted directly from your account. These fees include the investment costs charged by the Fund’s custodian and investment managers for managing the Fund’s investments.
ACSRF discloses all the fees you pay in the six-month statement period – this is reflected in the ‘Total fees you paid’ line. As you will notice on your statement, insurance premiums, where applicable, are shown in your transaction listing on page 3.
Q.
How is the withdrawal benefit listed on my benefit statement calculated?
A.
Your withdrawal benefit is calculated based on the number of units you held, multiplied by the hard close sell unit prices for your investment option/s as at the last date of the statement period (for annual statements this date is 30 June and for half-yearly statements the date is 31 December).
Q.
Can you explain the components of my super, as listed on page 1 of my statement?
A.
The components of your ACSRF superannuation account comprise:
Employer Account – holds any employer contributions and earnings, with deductions for fees and taxes.
Post-Tax (Member) Account – this includes any personal after-tax contributions made to your account, as well as earnings.
Pre-Tax (Salary Sacrifice) Account – this includes any salary sacrifice (before-tax) contributions you have made, plus earnings. Any applicable contributions tax (15%) has also been deducted from this account.
Transfer (Rollover) Account – this relates to any amounts you have rolled over or transferred in to your ACSRF super account from other funds. It also includes earnings and any applicable Past Service Grant.
Page 1 of your benefit statement lists the total balance of each of the above account components for the statement period. For a more detailed listing of the individual transactions that have been processed by the Fund and allocated to your various account components, please refer to your ‘Transaction listing for the period 1 January 2009 to 30 June 2009 on page 3. This section includes contributions to your account (less contributions tax, insurance premiums, administration fees) and the investment earning for the six-month period.
Please note that earnings may be negative.
General
Q.
How do I join the Australian Catholic Superannuation & Retirement Fund (ACSRF)?
A.
You can join the Fund as a Permanent member, a Casual member or a Personal member.
As an employee of a Catholic school or church agency in NSW, the ACT, Qld or WA, you will be informed by your employer of the choice of super funds available to you. ACSRF, as Australia's largest Catholic super fund, will most likely be listed in these choices and may in fact be the default fund if no active choice is made. As an employee of a participating Catholic school or Church agency, you will either be a Permanent or Casual member of ACSRF depending on your employment status.
Personal membership of the Fund is available to anyone who is eligible for superannuation in Australia. You do not need to work in the Catholic education system to become a member of ACSRF. Whether you are self-employed or working on a full time, part time, temporary or casual basis in any industry, you are eligible to join ACSRF's Personal Super Plan.
Simply contact the Fund office for details and a membership application form. If you are a Catholic employer and would like to become a participating employer with ACSRF, please contact the Fund office to check your eligibility.
Q.
How do I obtain forms and booklets?
A.
You are able to obtain the forms and booklets you need either by accessing the Forms or Publications section of the website or by contacting your Fund office.
Q.
How do I obtain additional insurance cover?
A.
Members may apply to increase their insurance cover. The insurer will require you to complete an application form. Depending on the content of the application form, you may be asked to complete further paperwork, doctors' reports or assessments may be requested and you may be sent for medical tests.
Do I need to advise the Fund of my tax file number?
A.
If you have not provided your tax file number to ACSRF:
you may pay more tax on your superannuation contributions and benefits than you have to
it may be more difficult to find your superannuation benefit if you change your address without notifying your fund or to amalgamate any multiple superannuation accounts.
ACSRF will not be able to accept your non-concessional (post-tax) contributions.
Q.
How do I nominate or alter a beneficiary?
A.
You are able to nominate or alter a beneficiary by completing a Change of personal details form. This enables the Trustee to know to whom you would like your death benefit paid. A nominated beneficiary should be a dependant or your estate. The term 'dependant(s) means spouse (including de facto or same sex spouse), child (including as defined in family law) or any other person who is in an interdependency relationship with you or financially dependent upon you. If you want your benefit paid to your estate and you do have a will, then you may nominate 'as per my will'. Your benefit may be paid to another person only if you have no dependants and no estate.
The Trustee has the discretion to pay the benefit as it thinks best. This allows the Trustee to take the needs of each of your dependants into account and share the benefit among them in whatever proportions it thinks fit. (This does not apply if you have an allocated pension and you nominate your spouse as a reversionary beneficiary. This type of nomination is binding on the Trustee.)
Contributions
Q.
How often should contributions be remitted?
A.
Post-tax contributions MUST be remitted and salary sacrifice contributions should be remitted by the 28th day of the following month in which the deduction was made. SG contributions must be remitted at least quarterly by the close of the 28th day of the month following the end of quarter.
Q.
Can contributions be remitted electronically?
A.
As a member of the Personal Plan, you can elect to contribute to the Fund by direct debit from your nominated bank account on an after-tax basis. Should you wish to contribute in this way, please complete a Direct debit request form.
The Fund accepts electronically-remitted contributions from employers. Please contact your Fund office for details on this procedure, as paperwork must be completed prior to the initial remittance of contributions.
Q.
What is salary sacrificing (pre-taxing) to super?
A.
When you salary sacrifice to the super system, you are accumulating wealth for your retirement, which is taxed at concessional rates. Instead of being taxed at your marginal tax rate (which may be as high as 46.5% including the Medicare Levy), the monies you sacrifice to super are taxed in the Fund at the concessional tax rates applying to super contributions (15%) and your personal income tax only applies to the balance of your salary. Your savings through salary sacrificing is effectively the difference between your marginal tax rate and the super contributions tax rate. Salary sacrificing to superannuation does not affect your long service or annual leave entitlements. A Pre-tax guide is available on this website and is also available from your local ACSRF office.
You should note that salary sacrifice (pre-tax) contributions:
may not be suitable for everyone - you should seek professional advice if necessary
are subject to 15% contributions tax
may be subject to tax upon the payment of your benefit, depending on your age at the time
are subject to preservation requirements, including earnings thereon
your leave entitlements will be based on your gross taxable salary (ie before pre-tax contributions are deducted) while you are still employed with a Catholic employer. If you are with a non-Catholic employer you should check whether you can salary sacrifice and whether your leave entitlements are based on the gross taxable salary prior to any salary sacrificing arrangements
your salary sacrifice contributions plus any other contributions paid by your employer are capped at $25,000 per annum, or $50,000 per annum for members aged 50 or over during the transitional period to 30 June 2012.
Q.
What are post-tax (member) contributions?
A.
Post-tax (member) contributions are made to the Fund on an after PAYG tax basis. Your contributions are deducted from your post-tax (member) earnings before determining your take-home pay. Between 1-100% of your salary can be contributed after tax.
You should note that post-tax (member) contributions:
are subject to preservation requirements, including earnings thereon
are not currently subject to tax upon entry or withdrawal, as you have already paid income tax at your appropriate PAYG tax level on these contributions
the investment earnings on post-tax (member) contributions are subject to tax within the Fund and may be subject to tax upon withdrawal, dpepending on your age at the time
post-tax (member) contributions to super may entitle you to some of the Government co-contribution.
are capped at $150,000 per annum. Members under age 65 can bring forward an additional two years' contributions ie $450,000 at any time during a financial year.
Q.
What is the Government Co-contribution Scheme?
A.
Are you eligible to increase your retirement savings?
Government co-contributions of $1.00 are provided for every dollar of undeducted personal contributions to super made by low and middle income earners who are are self-employed or receiving employer support. The maximum $1,000 Government co-contribution will be available to persons with incomes of up to the lower income threshold ($31,920 for 2009/10 and indexed for later years) who make a $1,000 personal contribution. The amount of the co-contribution will phase out for each dollar of income above the lower income threshold, up to a maximum income of the higher income threshold ($61,920 for 2009/10).
Under certain conditions, the government will provide a co-contribution of $1.00 for every $1.00 of personal contributions you make to your superannuation account—up to a maximum of $1,000 (ie this equates to a maximum Government co-contribution of $1,000).
Who is entitled to a co-contribution?
The maximum co-contribution of $1,000 will be available to persons with total incomes* of up to $31,920. If your income is more than $31,920, you can still benefit from super co-contributions. They reduce by just 3.33¢ per dollar of additional income and phase out completely once your total income reaches $61,920.
The table below will give you an idea how much you could gain by topping up your ACSRF super account during the 2009/10 financial year.
If your after-tax super contribution is:
$1,000
$800
$500
$200
And your income* is:
Your Government co-contribution will be:
$31,920 or less
$1,000
$800
$500
$200
$33,920
$933
$800
$500
$200
$37,920
$800
$800
$500
$200
$41,920
$667
$667
$500
$200
$45,920
$533
$533
$500
$200
$49,920
$400
$400
$400
$200
$53,920
$267
$267
$267
$200
$57,920
$133
$133
$133
$133
$61,920 or more
$0
$0
$0
$0
These income bands apply from 1 July 2009 to 30 June 2010. The values are only examples and are not exhaustive. *Your total assessable income, plus reportable employer superannuation contributions and reportable fringe benefits.
How do I qualify for a co-contribution?
To be eligible for the co-contribution, you must:
·make eligible personal contributions to a complying superannuation fund or retirement savings account (RSA)
·have total income (assessable income, reportable employer superannuation contributions plus reportable fringe benefits) of less than the higher income threshold
·earn 10% or more of your total income from eligible employment or carrying on a business or a mixture of both
·not hold an eligible temporary resident visa at any time during the year
·lodge an income tax return for the year of income and
·be less than 71 years old at the end of the year of income.
What do I need to do now?
Contribute post-tax superannuation contribution(s) before the end of the financial year by either:
speaking to your payroll office about making regular post-tax contributions via your salary.
Should you have an enterprise agreement in place with your employer giving you extra superannuation support if you contribute to super, it may be to your advantage to consider making some of your superannuation contributions on a post-tax basis. In this case, fortnightly payroll deductions may be more suitable than a lump sum payment.
Members should seek independent financial advice regarding the make-up of their contributions to superannuation.
Of course, you can still continue to make salary sacrifice (pre-tax) contributions as well, if you so choose.
How does it work?
The Australian Taxation Office (ATO) will work out your entitlement using information supplied by ACSRF (usually in October) and from your income tax return.
The co-contribution will be paid directly into your ACSRF superannuation account once the ATO data-matching is completed.
If you have more than one super find, the ATO determines which fund to send the contribution to.
To calculate your own personal government co-contribution amount, please refer to the ATO website.
What if you have a spouse earning less than $13,800 who has no employer SG support?
Spouse contributions do not qualify for the co-contribution, but if your spouse is receiving less than $13,800 in assessable income, plus reportable employer superannuation contributions and reportable fringe benefits per annum, you are able to make an after tax contribution and can claim a tax offset. The offset is 18% of post-tax spouse contributions of up to $3,000, with a maximum tax offset of $540.
Q.
How do I increase my current member contributions towards my account?
A.
Contributions made on a pre-tax basis may be subject to limits imposed by your employer, however, post-tax contributions can usually be between 1-100% of salary. You need to be mindful of the concessional contributions cap. You should contact your employer's payroll office in the first instance as they may have specific paperwork for you to complete. Otherwise, complete a Contribution amendment form available from our website or your local Fund office and forward it to your employer's payroll office for implementation.
Q.
Can I rollover or transfer my other superannuation benefits into ACSRF?
A.
CSRF accepts rollovers from other superannuation funds. For example, you may have monies in a personal superannuation fund or from a previous employer that you now wish to roll into the Fund.
Rolled-in amounts accumulate earnings at the same rate as your existing superannuation account balance. The Fund does not charge fees to accept roll-in amounts.
Effective 20 August 1996, a surcharge on deductible superannuation contributions (employer and pre-tax contributions) for high-income earners was introduced by the Commonwealth Government. For the 2005/2006 financial year and subsequent years, the surcharge has been abolished and contributions tax on employer and pre-tax contributions is set at 15%.
Q.
As a Permanent member, if I transfer to another Catholic employer, can I remain with ACSRF?
A.
If you are transferring to either a systemic, non-systemic school or Church agency (which participates with this Fund) within the Archdioceses of Brisbane, Canberra/Goulburn, Perth or Sydney, or the Dioceses of Armidale, Bathurst, Broken Bay, Broome, Bunbury, Cairns, Geraldton, Lismore, Maitland-Newcastle, Parramatta, Rockhampton, Toowoomba, Townsville, Wagga Wagga or Wollongong, you are still deemed to be a member of the Fund. If you wish to continue with ACSRF, please inform your employer's payroll manager of your current ACSRF membership number.
Benefit payments
Q.
What is preservation?
A.
Preservation is the part of your benefit that must be retained in a superannuation fund, approved deposit fund, retirement savings account or used to purchase a deferred annuity from a life insurance company, until you satisfy a condition of release.
The preserved part of your benefit may be paid to you if:
you leave an employer on or after age 60, irrespective of whether or not you are retiring permanently from the workforce
you permanently retire from gainful employment on or after your preservation age (refer to the table below)
you reach age 65 and request payment of your benefit
you become permanently disabled or die
you are in severe financial hardship (as defined under superannuation law) and the Trustee approves the payment
you require your benefit as follows (subject to approval by the Australian Prudential Regulation Authority and the Trustee):
ofor the payment of medical costs or palliative care (in case of impending death) for you or a dependant or
oto prevent foreclosure of a mortgage or the sale by a mortgagee, of your principal residence or
oto modify your principal residence or vehicle to accommodate special needs arising from your or your dependant’s severe disability
you leave your Participating Catholic Employer and your preserved benefit is less than $200
you are a temporary resident who entered Australia on an eligible temporary resident visa and are permanently departing Australia (subject to a special withholding tax)
you have reached your preservation age and have not retired and invest your superannuation in a non-commutable income stream (eg a transition to retirement pension).
Restricted conditions of release apply to temporary residents. In most cases, you will only be able to access your benefit if you permanently depart Australia, you become totally and permanently disabled or die. This does not apply to New Zealand citizens. Please contact ACSRF for more information.
Q.
What is preservation age?
A.
Preservation age is the age that you are able to receive your preserved benefits after you have permanently retired from the workforce. Your preservation age is set by superannuation legislation and depends on your birth date as set out below:
Your date of birth
Your preservation age
Before 1 July 1960
55 years
1 July 1960 to 30 June 1961
56 years
1 July 1961 to 30 June 1962
57 years
1 July 1962 to 30 June 1963
58 years
1 July 1963 to 30 June 1964
59 years
After 1 July 1964
60 years
Q.
Can I retain my benefit in the Fund?
A.
You may retain your benefit in the Fund after ceasing employment with the option of transferring your benefit to the Fund's Allocated Pension Plan if you have reached your preservation age.
You are provided with 11 investment options with the ability to choose one or a combination of the options available at any one time. This means that you can continue to take advantage of the Fund's investment performance.
As a Retained member, you can continue to 'top up' your superannuation account by making personal lump sum payments up to age 65 and possibly 75 (conditions apply).
Rollovers into your account from other superannuation funds may be credited to your account at any time with no entry fees.
As a Retained member, partial withdrawals are available on any unrestricted non-preserved monies, allowing you to retain the remainder of your benefit in the Fund. You can transfer the balance of your account to another complying superannuation fund at any time.
Q.
What happens if I leave my employer?
A.
All members have the option of retaining their monies with ACSRF up until their retirement (see Retaining benefits). Alternatively, you will need to complete a Superannuation benefits form if you wish to transfer monies into another superannuation fund.
Retirement income stream
Q.
What are the benefits of an allocated pension?
A.
Monies accumulated in superannuation funds can be converted into an allocated pension where you receive regular pension payments.
With an allocated pension, your investment is held in your name.
Investment earnings are not taxed.
There are tax incentives that you may be eligible to receive.
You can vary the amount of pension you receive within the minimum limits (no maximum) set by government legislation.
You can withdraw lump sum amounts in addition to your pension payment, unless you have taken a non-commutable allocated pension.
In the case of your death, money remaining in your account can be paid to your estate as a lump sum or continue to be paid to your surviving spouse, while funds last.
If you are between your preservation age and age 60, an allocated pension can be used to defer tax on larger benefits.
Pension payments to members aged 60 and over are tax-free.
Q.
What is a non-commutable allocated pension (NCAP) used for?
A.
An NCAP is an income stream purchased with super monies whilst still working. The income stream is not subject to lump sum withdrawals like a fully flexible allocated pension but the income drawn annually will lie between a minimum of 4% (or more, depending on your age) and a maximum of 10% of the account balance. To commence an NCAP you must have reached your preservation age which means you will be aged between 55 and 65. At age 65 the NCAP converts to a fully flexible (commutable) allocated pension even if the user is still working. NCAPs can be rolled back into super at any time.
The NCAP income may be more tax effective than salary income due to the 15% allocated pension rebate. NCAP income is fully tax exempt for users aged over 60. NCAP income can supplement income needs for those working part time. Depending on your circumstances, NCAPs can minimise tax and boost superannuation savings when combined with increased salary sacrifice for those working full time.
Please seek professional advice when considering an NCAP.
Family law
Q.
What happens to my superannuation in the event of divorce or separation?
A.
Family law legislation gives couples a range of options to split their assets, including splitting super entitlements, in the event of divorce or separation.
For further information please contact your Fund office.
Who do the changes effect?
The changes apply to the following:
divorcing legally married couples
genuinely separated couples (for more than 12 months)
couples preparing a pre-nuptial arrangement before marriage
property settlements finalised after 28 December 2002
separating de facto couples, from 2009 (except in WA or SA).
A buy and sell unit price is determined for each investment option. The difference between the two is called the buy/sell spread and reflects the cost of buying and selling the underlying assets of each investment option.
Investment option
Buy spread
Sell spread
Total
Diversified Shares
0.26%
0.26%
0.52%
Growth
0.29%
0.29%
0.58%
Balanced (Default)
0.31%
0.31%
0.62%
Socially Responsible Balanced
0.22%
0.22%
0.44%
Conservative Balanced
0.23%
0.23%
0.46%
Conservative
0.15%
0.15%
0.30%
Australian Shares
0.19%
0.19%
0.38%
International Shares
0.33%
0.33%
0.66%
Diversified Property
1.07%
1.07%
2.14%
Diversified Fixed Interest
0.00%
0.00%
0.00%
Cash
0.00%
0.00%
0.00%
While there is no switch fee to change your investment options, your account balance may change as a result of the applicable buy/sell spread for your switch.
For example, based on the table above, the buy/sell spread applicable when switching $100,000 from the Conservative option to the Balanced option = 0.62% x $100,000 = $620. Therefore, the remaining account balance after the switch will be $100,000 – $620 = $99,380.
Q.
What costs are involved to switch my investment option?
A.
There is no switch fee, but you will incur a buy/sell spread when you change investment options.
Q.
Can returns for the Diversified Fixed Interest option be negative?
A.
Yes, fixed interest investments can produce negative returns. Negative returns can occur when interest rates increase.
Q.
Why can l get a higher return in the banks than ACSRF’s Cash option?
A.
All of the Fund’s returns are listed after tax and fees. If you have your money invested in a bank, the earnings will be taxed at your marginal tax rate and the earning rate declared will be before taxation.
Q.
How often can I change my investment option(s)?
A.
You can change your investment option(s) on a weekly basis. Switches are updated on the system once a week, usually on a Tuesday. To have your switch made effective on the Tuesday your completed Investment choice form must be received by the Fund by close of business on the preceding Monday. If your form is received after COB on the Monday, your investment switch will have an effective date for the Tuesday of the following week.
If there is a public holiday on the Monday, then the switch will be effective on the Wednesday and the cut off for receipt of forms is close of business Tuesday.
If a public holiday falls on the both the Monday and the Tuesday, then the cut off date for receiving switch forms will be the first business day after the public holiday and the investment switch will be effective two business days after the public holiday.
Q.
Can I select a different investment option for my future contributions?
A.
Future contributions can be directed to different investment option(s) than those investment options in which you have your existing account balance invested.
Q.
In how many investment options can I invest?
A.
You can invest in up to 11 of the investment options in any combination as long as the total investment split equals 100%.
If you select more than one option, this can match the amount of growth and defensive assets that best suits your needs and your tolerance to risk.
Q.
Why is the Balanced option ACSRF’s default investment option when it can yield negative returns?
A.
The Balanced option is designed for members who are looking for a medium to high level of return over a five-year period and are prepared to accept a medium to high level of volatility. This option may not be suitable for everyone and the Trustee offers 11 different investment options so that members can make an investment choice to best suit their requirements.
To achieve its return objectives, the Balanced option is invested 75% in growth assets (eg shares and property). These assets will sometimes produce negative returns.
Q.
Why can investment performance for the Fund’s Allocated Pension Plan be lower than the Super Plan?
A.
In positive years, the Fund’s Allocated Pension Plan members receive the benefit of higher returns as there is no tax on investment earnings in the Fund, but when returns are negative this is reversed.
When returns are negative, the Superannuation Plan members receive the benefits of tax credits due to investment losses, whereas the pension members do not receive these benefits as there is no tax payable.
Q.
Is ACSRF's Cash option guaranteed?
A.
The Cash option is invested in two investment funds, the Colonial First State Premium Cash Fund and the BT Managed Cash Fund as well as in deposits with two major Australian banks. Most of the investments (over 90%) are held in bank deposits, bank bills and negotiable certificates of deposits with the four major Australian banks. When the Government announced its bank deposit guarantee scheme in October 2008, it appeared that all such cash investments would be covered by the guarantee at no cost.
The Government subsequently announced that it would charge a fee for the guarantee on large investments. The fee would generally be between 0.7–1% depending on the type of investment. If this fee was paid by the superannuation fund, it would mean that the return to members from the cash investment would be reduced by the amount of the Government charge. For example, with the most recent reduction in interest rates, if the cash return before the Government fee was 3% then the return after the Government fee would decrease to below 2.3%.
The Trustee has considered the issue and has decided not to pay the Government fee at this stage. This means that the Fund will not be reducing returns to members by the Government guarantee fee and the Government guarantee will not apply to investments in cash. The Trustee believes that this is a prudent positioning to take as most of the investments are with the major Australian banks.
Nevertheless, the Trustee is vigilant and constantly monitors this situation.
