How to read your CSRF benefit statement

Q. 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 2008. Before the ATO can allocate any Government co-contribution payment to your super they need to have received your tax return for the previous 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 2007/2008 financial year will not be credited to your account until the 2008/2009 financial year and when you do receive this depends upon when you lodge your tax return and if you satisfy the eligibility requirements. CSRF usually receives the first round of co-contributions payments for the 2007/2008 financial year around November 2008 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 CSRF 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. Your unrestricted non-preserved component can be withdrawn from your account at any time. 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 CSRF’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 CSRF 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 CSRF do 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 2008) are also shown. Q. Why does CSRF 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 a CSRF 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. Q. How can I use the BPAY details listed on the first page of my benefit statement? A. CSRF offer this facility so that it is easier and quicker for you to make lump sum (member post-tax) contributions to your CSRF 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 CSRF 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 CSRF’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 CSRF 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. CSRF 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. Why are my investment earnings negative, thus reducing my account balance over the statement period? A. If you are invested in growth assets such as shares and property (which make up 70% of CSRF’s Balanced option) your account will reflect the share market volatility you have seen in the media of late. (The volatility started with the sub-prime credit crisis in the US, has been fuelled by inflation and rising US interest rates which were used as a control measure. There has also been a contracting of US credit markets due to the failure of many high-risk debt instruments in the US and elsewhere, and other US financial institution failures. The difficulties associated with credit supply have had a flow-on effect to Australia and other countries. Financial institutions have since been wary of lending money and this has caused a few highly-geared Australian companies to collapse. Investor confidence has also fallen dramatically with this worsening outlook for the US and global economies.) To keep perspective, however, you should look at the long term. Superannuation is a long-term investment. Monies often remain in this tax- effective environment throughout the 40 or so years of a person’s working life and then perhaps for another 30 years in retirement. Prior to the 2008 financial year, CSRF’s Balanced option enjoyed four years of strong double-digit returns, including a return for the 2006/2007 financial year of 16.7% and a five-year compound average return of 9.3% to 30 June 2008. Furthermore, the Fund’s Balanced option achieved its stated objective of returning 3.5% above inflation over this five-year period. In fact, since its inception in 1982, the Fund has achieved an annual compound average performance of 10.6%. Superannuation investors who use growth assets such as shares and property can expect negative returns at times, as part of the normal investment cycle. However, over the long term, these asset classes have been shown to outperform the more conservative options such as cash. Q. Can you explain the components of my super, as listed on page 1 of my statement? A. The components of your CSRF 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 CSRF 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 2008 to 30 June 2008’ 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.