Archived news 

Managing your super in a shaky market

9 August 2011

There’s been a lot of hype in the media following the recent events with stocks around the world falling sharply on investor fears of a slowdown in global economic growth. 

It’s important to know what this means for long term investments such as superannuation and where you can get help if you need it.
 

Focus on long term investment goals

Ups and downs are a normal part of the investment cycle

Take comfort that the majority of members have invested in a well diversified portfolio

What should I do?

In times of market volatility it’s natural to feel anxious, but it’s important not to lose sight of your long term investment strategy. The diversified nature of our TWUSUPER portfolio means we have exposure to other asset classes (not just shares) so we’re well-placed to ride out the bumpy share market and deliver strong, consistent investment returns over the long term. While there may be volatility from time to time, this does not change the long term nature of these investments.

It’s important to periodically review your personal investment needs and objectives to make sure they’re still right for you.  You can expect peaks and troughs throughout the term of the investment and the fund is designed to protect your investment over the longer term.

Don’t be tempted to overreact to short term movements in the investment market. You could miss out on growth opportunities as the markets rebound. If you’re thinking about making changes to your investments consider the full impact of making those changes.
 

What’s TWUSUPER doing?

The investment of your super or pension is outsourced to a group of professional investment managers, all appointed and supervised by the Trustee Board.

We have 37 experienced and qualified investment managers who use a disciplined investment process to identify good quality stocks and other types of investments such as bonds, infrastructure and property.

We remain committed to managing a well diversified portfolio that generates strong investment returns over the long term. It’s very hard to predict exactly what will happen in the short term. The impact of the current market conditions is different for everyone. We don't know exactly when, but markets have always recovered over time in the past.

Falling markets can provide excellent opportunities to buy good quality assets at bargain basement prices. Superannuation funds can take opportunities to buy shares and other assets cheaply and reap the benefits as the markets recover.

We should continue to expect volatility in markets in the near future, but remember the longer term approach TWUSUPER takes towards management of super. We remain mindful of short term risks, but also alert to longer term opportunities.
 

Is there any good news?

Despite the difficult investment conditions, you’ll be pleased to know TWUSUPER has performed well during this difficult period in comparison to most of our competitors.

It’s good to know that the TWUSUPER diversified investment options are invested across a broad range of growth asset classes that include shares, bonds, infrastructure and property, as well as defensive assets such as bonds and cash.

A broad range of investments reduces your portfolio’s reliance on the performance of any one investment or asset class.

Where can I get help?

We understand that members, particularly TransPension members or members approaching retirement could benefit from specialist financial advice to ensure that their investment is protected during this difficult period.

TWUSUPER allows you access to advice on a fee for service basis with no commissions payable, and your first phone consultation on a super related issue is provided free of charge. If you’d like to get qualified financial advice about your investment strategy, contact us.  We’re behind you every step of the way. 

Income tax rates 2011/2012

Government flood levy and super

21 June 2011

Many of our members will be aware of the Government's Temporary Flood and Cyclone Reconstruction levy that will be payable by individuals in the 2011-12 income year only.

The levy will apply to salary and wages, including eligible termination payments and some payments out of super. In this update we provide TWUSUPER members information on how the flood levy affects super payments.

How does the flood levy work?

The flood levy is applied at a rate of 0.5% for income (including relevant super benefits) between $50,001 to $100,000 and 1.0% on amounts above $100,000.

Super lump sums and the flood levy

Although many members making lump sum withdrawals from super will be affected by the levy, a proportion will not.

Specific levy exclusions include rollovers, super lump sum benefit withdrawals less than $200, the tax free component of lump sum benefits, pension payments to members age 60 or over, TPD payments and death benefit payments to dependants.

In addition, individuals affected by natural disasters may claim an exemption from paying the flood levy. For more details go to the ATO flood levy information page.

The following tables highlight the relevant age and lump sum superannuation components that the flood levy will apply to.
 

Example: Super lump sum withdrawals. How it works

In 2011/12 Bob, age 59 withdraws a superannuation lump sum of $150,000 ($50,000 tax-free component and $100,000 taxed element). Bob has no other income.

Rates are:

• Nil on the first $50,000 tax-free component as this is exempt income.
• 0.5% on $50,000 = $250 (Nil levy payable on the first $50,000 of the $100,000 taxable component)

Bob pays a $250 flood levy.
 

Superannuation income streams (taxed)

A levy will normally only apply to members of TransPension's Account Based Pension and Transition to Retirement Pension if they are under age 60.
 

Example: Super income stream payments. How it works

In 2011/12 John, age 59 draws down an income of $80,000 from his TransPension Transition to Retirement account. This income contains no funds from an untaxed source. John has no other income.

Rates are:

• John pays no levy on the first $50,000 of his income as this is exempt.
• 0.5% on $30,000 = $150

Bob pays a $150 flood levy.
 

When the levy is applied

The levy is payable in addition to any superannuation taxes and/or Medicare levy payable on superannuation lump sum or pension benefits and is deducted from your account at the time of payment.
 

More information

See the ATO super levy information on the ATO website
Call 1800 222 071 between 8am and 8pm (AEST), weekdays
Seek financial advice if you would like assistance to assess the impact of making a lump sum withdrawal in 2011/12 

 

30 April investment update 

17 June 2011

In spite of a challenging investment climate in recent months, TWUSUPER investments have performed strongly in 2010/11 with annualised 12 month investment returns to 30 April currently ranked well above the median (mid-point) of all surveyed super funds (as reported by SuperRatings) for all of our investment options.

In the table below, TWUSUPER investment returns are compared to the SuperRatings Index returns, representing the largest 50 investment options in that space. SuperRatings is Australia's leading superannuation ratings agency.
 

A major contributor to the recent strong investment performance of TWUSUPER has been the active tactical asset allocation decisions made by the Board of Trustees over the last two years to take advantage of opportunities that arose in the aftermath of the Global Financial Crisis (GFC).

During the crisis, growth assets were aggressively sold off as panic gripped equity markets. Liquidity dried up in global financial markets amidst fears that the international financial system would collapse.

Just as markets tend to rally too strongly when investor optimism is high, markets often fall too far when fear takes over. This was certainly the case during the GFC as many investors, who had borrowed heavily, were forced to sell assets (often at fire sale prices) in order to satisfy lenders demanding repayment.

This in turn created opportunities for nimble investors, such as TWUSUPER, to invest additional funds in a number of asset classes at what, in hindsight, have proven to be attractive prices.

Over the last two years, the tactical decisions of the Board to increase exposure at different times to Australian shares, credit opportunities and hedge funds have all boosted returns to members.

While returns in the current financial year to the end of April have been strong, share markets suffered a major setback in the first half of March. Political unrest in the Middle East, war in Libya, the devastation of the Japanese natural disasters and the accompanying threat of a nuclear disaster all contributed to the market weakness.

Share markets had started to recover in April from these setbacks before fresh concerns regarding the possibility of Greece defaulting on its sovereign debt obligations and economic growth in the US stalling saw a further sell-off in growth assets. Against such a backdrop, investors will need to brace themselves for a likely volatile end to the financial year.

Super size your super benefit

17 June 2011

Knowing you should plan for your future, and doing something about it are two different things.  But the fact is, the earlier you start planning and contributing towards your retirement, the sooner you can think about quitting work and putting those retirement plans into action.

Even 1% extra can make a big difference to your super savings, no matter how old you are. And the result can make a world of difference to the type of lifestyle you lead in retirement.  

Two ways to top up

Deciding the best way to top up your super largely depends on your income.

1. After tax

Making regular or one-off contributions from your after tax income to your super could entitle you to free money from the Government!

If you earn $31,920 per year or less and are eligible, the Government will match every after tax dollar you contribute to super each year up to $1,000. That's $2000 extra in your super. You can earn up to $61,920 and still be eligible for some free money.

If you are eligible, don't delay!  You have until 30 June to make your contribution and receive a co-contribution for 2010/11.

Download a Co-contribution fact sheet for details and how to contribute
Download a Voluntary contribution form to arrange your contribution today
 

2. Before tax (salary sacrifice)

'Sacrificing' some of your salary to your super through your employer can be a great way to boost your super and pay less tax. 

And if you earn more than $37,000 a year, building your super through salary sacrifice makes sense, as your contributions may cost you less than what you lose from your take home pay.

Download a Salary sacrifice fact sheet to find out how salary sacrifice works
Download a Salary sacrifice arrangement agreement to set up before tax contributions with your employer today

Learn the 1% difference

Need convincing? Find out just how much 1% extra can make to your super savings no matter what your age group.

Go to 1% can make a difference
 

Case study: Pat Stapleton, Forklift driver "For me, reaching 50 was the turning point. Relying on a pension when I'm old isn't going to cut it. I want to enjoy myself! The $50 a week I put aside now really doesn't hurt and the Government actually gives me extra money just for contributing. TWUSUPER put me on the right track with their Super Tips. But it was me who made it happen." Read Pat's full story

The difference fees can make

17 June 2011

TWUSUPER carries the Industry Super Funds' symbol so you can be sure you are with a super fund that is run only to benefit members.

With a strong record of low fees, competitive returns and not paying commissions to financial planners, industry super funds like TWUSUPER have proven they are the best vehicle for workers to retire with adequate savings.
 

Thousands of dollars ahead

Based on fee differences alone, over a 40 year working life, you could be better off by up to $57,862 or 14.8%, by being a TWUSUPER member compared with being a retail fund member.*

This is because TWUSUPER has lower average fees compared with retail super funds, and is run only to benefit members.
 

* The amount is not a prediction or estimate of an actual outcome. Differences in fees may change in the future and this would alter the outcome. Outcomes will vary between individual funds. The modelling shows projected outcomes, applying today’s average fees for TWUSUPER and a sample of retail super funds, over 40 years. The above example is based on a comparison of two employees age 25, each with an initial salary of $43,500 and starting account balance of $28,593. See detailed assumptions. Current at 31 December 2010 and may be revised if further information becomes available.

Additional benefits

In addition, being a member of TWUSUPER provides a range of other benefits including:

• Flexible and cost-effective insurance
• Commission free financial advice and retirement planning
• Low cost banking with ME Bank
• Low cost and strong long term investment returns

The Industry Super Fund network is highly influential in Australia and has led the campaign for higher employer super payments and lower fees for members.
 

Improved insurance cover for you

15 June 2011

As Australia's largest transport industry super fund, TWUSUPER has used its size and bargaining power to negotiate a better insurance deal for you from 28 May 2011.

An independent 2008 survey revealed that 50% of industry fund members were underinsured for death and disablement by $100,000 or more¹.

TWUSUPER insurance makes it easier for you to get more cover at a better price. Make the most of it!
 

How you benefit*

Extra automatic Basic death and Total and Permanent Disablement (TPD) cover. Eligible employer sponsored members of TWUSUPER and Transuper divisions receive extra automatic Basic TPD cover. No paperwork required!

• Optional additional death and TPD cover. Accept our offer for extra cover within 120 days and you won't need to provide health evidence!

Higher death cover. Maximum cover limit increased from $5 million to $10 million.

Higher TPD cover. Maximum cover limit increased from $2 million to 2.5 million.

Improved age-based limits.  TPD cover has been extended beyond age 65 to age 70.

• Reinstated TPD cover. TPD cover has automatically been reinstated if you are over age 65 and your TPD cover had previously lapsed.

New interim accident cover. Our interim accident cover keeps you covered while your insurance application is being assessed.

New lifetime event cover. You can apply for extra death and TPD cover on marriage, birth of a child, divorce, death of a spouse, as well as upon other events – without providing health evidence.

New worldwide cover. Death and TPD cover applies even if you're overseas.

New bonus loyalty cover. If insured with the Fund for 10 or more consecutive years you will receive 5% extra cover if a death (includes terminal illness) or TPD benefit is payable. 

Reduced waiting periods. Some TPD benefit waiting periods have been reduced.

Lower premiums. The cost of cover has reduced for most members.

If you need assistance call us on 1800 222 071 between 8am and 8pm (AEST), weekdays.

Financial advice is only a phone call away

If you are unsure about which cover is right for you or how much cover you need, consider seeking financial advice. As a member you are entitled to one free consultation over the phone on a single superannuation issue with a qualified adviser.

More information

See our insurance FAQs for more detail

Use our new Insurance cost and cover calculator to estimate the cost of insurance

*Conditions apply. Please refer to your online Member Information Booklet online for all the details. 
 

¹Investment & Financial Services Association

Insurance upgrade countdown

17 June 2011

TWUSUPER’s basic insurance cover for eligible members increased on 28 May 2011, giving you more cover for your dollar.

From 28 May 2011, the level of basic cover increased to 2 units of death cover and 2 units of TPD cover (previously 1 unit of TPD cover).

For a limited time, eligible members also have the opportunity to further increase basic cover to 3 units of death and 3 units of TPD without evidence of health!
 

Time is running out

Don't miss out!  Your chance to further protect you and your family in the event of your injury, illness or death and increase basic cover without health evidence ends 31 August 2011.

To take up our offer of extra basic cover:

• Refer to your election form with your notification letter. 

For more information about these improved insurance arrangements:

• Look up Frequently asked questions about insurance
• Call 1800 222 071 between 8am and 8pm (AEST) weekdays.

New insurance cost and cover calculator

We’ve also launched a new calculator to help you find out how much your insurance cover will cost. 

Check out the Insurance cost and cover calculator today

Use the calculator to estimate the cost of automatic basic insurance cover or even death only cover, death and TPD cover and Income Protection insurance.

The calculator is simple to use!  Just select your member group, enter your age, annual salary and insurance group.  Choose the level of cover you are interested in and you’ll receive an instant quote.

Budget update 2011

The 11 May 2011 Federal Budget saw the announcement of a range of minor initiatives that will be of interest to members.
 

Superannuation information on payslips

The Government has announced its intention to mandate that all Australian employees receive information on their payslips about the amount of superannuation actually paid into their account, and that super funds are to provide quarterly updates to employees and employers if regular payments cease, effective 1 July 2012.
 

Freeze on superannuation co-contribution indexation extended

The Government announced that income thresholds that set a limit on co-contribution eligibility will be frozen for an additional year to 2012/13.

Income thresholds mean the Government will match after tax contributions to super on a $1 for $1 basis up to $1000, for eligible workers earning up to $31,920 pa.

Eligible workers contributing to super after tax, and earning over $31,920 and up to $61,920 pa, will receive a reduced co-contribution.
 

Refund of excess concessional contributions

For contributions made on or after 1 July 2011, taxpayers who for the first time breach the concessional contribution cap by up to $10,000 will have the option to withdraw the excess concessional contributions out of their super account and have the amount assessed as income at their marginal tax rate, rather than incurring excess contributions tax.

Concessional contributions include employer SG contributions, extra employer contributions and before tax contributions made under a salary sacrifice arrangement. They also include after tax contributions that are claimed as a tax deduction by a self-employed person. 

Excess concessional contributions attract an excess contributions tax of 31.5%, in addition to the 15% contributions tax when contributions are made to the fund – a total of 46.5%.
 

Higher superannuation contribution caps for over 50s

From 1 July 2012, the concessional contributions cap for individuals aged 50 or over with less than $500,000 in superannuation will be set at $25,000 more than the general concession contributions cap for under 50s, taking the 2012/13 cap to $50,000.
 

Minimum pension payment changes for 2011/12 year

The Government will phase out the pension drawdown relief that has been provided over the last three years. This means allocated pension members have to withdraw at least 75% of the legislated minimum pension payments in 2011/12 (compared to 50% in 2010/11).

Minimum payment amounts for account-based pensions are expected to return to their 2007/08 levels in 2012/13.

The Government previously provided pension drawdown relief in the 2008/09, 2009/10 and 2010/11 years by halving the minimum payment amounts in response to the Global Financial Crisis.
 

Please be aware the above proposals are not yet law. For further information on the Government's Budget proposals visit www.budget.gov.au.

Pat gives his super a boost

For forklift driver Pat Stapleton, turning 50 was a milestone that got him thinking about his finances and where he wanted to be in the future. But like all good intentions, by 51 he still hadn't turned the feeling he needed to put more away for the future, into action.

Funnily enough it was at work that Pat got the prod he needed. TWUSUPER's Michael Darmanin, had just delivered a stand of the Fund's new Super Tips booklets, and boss Baden Wales, a TWUSUPER member himself, kindly handed Pat a copy.

"The Super tips were just what I was looking for. The booklet provided some simple information on the options I had to make my super grow. And the age-based tips were short and sharp and easy to understand," Pat said.

After reading about contribution options, Pat got to thinking that he could probably afford to kick in $50 a week to his super and that contributing from his before tax salary probably made sense.

"I gave TWUSUPER a call. After asking me a few questions, the bloke I talked to recommended he transfer me to a Money Coach who could give me specific advice about what I should do, based on my income.  I told the Money Coach I was thinking about contributing and he couldn't have been more helpful. He advised me to split my $50 between before tax and after tax contributions and told me exactly how much I should pay to each. I'm glad I made that call as now my super will grow an extra $350 a year in free Government co-contributions, all for the same money.  TWUSUPER has helped me make my money grow faster and smarter. That's what I call good service. And my Money Coach tells me putting aside that extra $50 a week will put me in much better financial shape to retire," said Pat.

Visit Super tips online

Market update December 2010

After a very disappointing end to the last financial year in which global sharemarkets plummeted more than 10% in the last three months, the start of the 2010/11 financial year has seen a strong, though uneven, recovery in sharemarkets.

Even though the Australian economy continues to be the envy of other developed countries, with strong employment growth and a booming resources sector driven by demand from China and India, the domestic sharemarket has not kept pace with its global peers over the last year.

While the Australian share market has returned an impressive 13% financial year to date (to the middle of December), investors have enjoyed better returns in international markets in their local currencies. In the US, shares are more than 19% higher, the UK in excess of 17% higher and global markets as a whole have risen close to 18% this financial year. However, the returns in Australian dollar terms are significantly less because of the strength of the $A against the major currencies.

The factors which were the catalyst for the late sell-off in investment markets last financial year have again driven market volatility this year. The main concerns still relate to the possibility of sovereign default in peripheral European countries and the pace of economic growth in the US (too slow) and China (too fast). Ireland recently accepted an €85 billion euro rescue package from the European Union (EU) and the International Monetary Fund (IMF), and there are fears other European countries will require similar assistance.

The US Government and the US Federal Reserve Bank are doing everything in their power to kick-start the US economy. The Federal Reserve recently confirmed market expectations of a second round of quantitative easing (QE2) of up to $US900 billion and indicated that further QE programs could be implemented should low levels of economic growth and high unemployment persist. In addition, President Obama announced a proposal to extend tax cuts and introduce a range of new fiscal programs designed to boost growth in 2011.

Although these measures have been a positive for share markets which focused on the potential boost to economic growth, the effect on the bond market was the exact opposite. Bond yields rose aggressively as the bond market worried about the negative impact of these moves on the ballooning US budget deficit. While share markets have generated double digit returns this financial year, bond markets have struggled to produce positive returns. The Australian bond market is up less than 1% and the global market has fared only slightly better.

Looking forward, the one thing investors can be confident about is the likelihood of continued volatility in investment markets in the face of short and medium term dangers to the global economy. The US faces ongoing risks from excessively low inflation and stubbornly high unemployment, while European sovereign debt problems remain in the spotlight, with the possibility of Spain and Portugal being the next countries to seek EU/IMF bailouts.

However, on the positive side, investment market strategists point to generally attractive valuations for equity markets when compared with valuations over the past two decades. Despite the medium term risks, the strong cash flow generation of companies should look increasingly appealing to investors when compared to the returns available from cash and bonds.


TWUSUPER investment returns

Flood assistance

TWUSUPER would like to extend our sympathy to those affected by the recent floods and remind members and employers that we are here to help where possible.

Members

Depending on your circumstances, flood victims may be able to claim super due to severe financial hardship or on compassionate grounds.  Please be aware though that strict eligibility criteria still exists and waiting periods apply.

Download a Withdrawing your super fact sheet for more details. Call 1800 222 071 to request an application form or to speak to someone who can help.

Employers

We understand that in the aftermath of the floods, many employers will be focussed on other pressing matters, but missing an SG deadline (the next deadline is 28th January 2011) can be costly.

To make things easy, we provide a wide range of contribution options to employers.   However, if you are unable to meet your SG obligations, you may be able to get an extension from the Australian Taxation Office (ATO). For details, visit the ATO's website. Alternatively, phone the ATO's Emergency Support Information Line on 1800 806 218.

If you have any questions, please call us on 1800 241 877.
 

Information and assistance for flood victims

• Australian Government Disaster Assist
• Centrelink – Government assistance
• Queensland Government flood information
• Victorian Government flood information
• NSW Government flood information 

SuperRatings awards

TWUSUPER is pleased to announce its achievement of a 2011 Platinum Pension Rating for TransPension and a 2011 Gold Rating for TWUSUPER, Transuper and TransPersonal by Australia's leading superannuation ratings agency, SuperRatings.
 

TransPension goes Platinum

The coveted Platinum Pension Rating achieved by TransPension, is awarded to only the best "value for money" funds assessed by SuperRatings.

SuperRatings judged TransPension to be well balanced across all assessment criteria - investment returns, investment methodology, fees, administration and advisory services in a robust, secure and proven governance risk framework.

Platinum rated funds are also judged as providing features that should assist most individuals to meet their retirement goals.
 

Gold awarded toTWUSUPER, Transuper and TransPersonal

The Gold Rating awarded to TWUSUPER, Transuper and TransPersonal is also great news for members. Gold is the second highest possible rating, next to Platinum, and is awarded to "good value for money" super funds.

"Achieving the SuperRatings 2011 Platinum Pension Rating and 2011 Gold Rating is welcome recognition of TWUSUPER's great service and our delivery of simple, value for money super solutions to our members", said CEO Bill McMillin.

Competition winners

TWUSUPER is pleased to announce the winners of its recent Stay in touch with your super competition. We received a great response, with nearly 3,000 members updating their contact details.

Congratulations to our first prize winner Paul Taylor (Vic). 

Paul is set for a great summer enjoying the Beefmaster Premium 4 BBQ valued at $799 (RRP) - Victorian weather permitting!

The following five runners up will receive a $100 Myer Gift voucher in the post.

1. John Franke (Vic)
2. Lynette Anne Charlton (WA)
3. Paul Ankers (Qld)
4. Feroz Khan (NSW)
5. Peter Thomas (Vic)

Thanks to all our members who participated. If you missed out, remember the 25% discount voucher on the Beefmaster Premium 4 BBQ is valid until 1 February 2011.  

Investment returns 2009-10

TWUSUPER is pleased to announce its final investment returns for 2009-10. 

Overall, investment performance for each of our investment options experienced a significant and welcome recovery in 2009-10.

Investment returns for our Balanced investment option are above the median (the mid-point return of all surveyed funds) over 3, 5 and 10 years, and close to the median over 1 year, as reported in the 30 June 2010 SelectingSuper survey of diversified balanced options.

While investment markets improved in 2009-10, the Global Financial Crisis (GFC) is likely to continue to impact returns for all super funds over the next few years.  

It is important to consider your investment timeframe when assessing your super's performance, and seek financial advice before changing your investment strategy.

To find out more about what happened in investment markets throughout the year, read our 2009-10 Market update.
 

TWUSUPER, Transuper and TransPersonal investment returns

The following investment returns are net of tax, investment management fees and other costs.

 Past performance is not a guarantee of future returns.

 

TransPension investment returns

Past performance is not a guarantee of future returns.
 

Investment return updates over Christmas period

Due to the number of public holidays in December and January, there will be some change to the timing in which interim crediting rates are applied to member accounts and investment switches as well as the investment return updates provided on this website over the Christmas and New Year period.

The following table details when this information will be updated for the period. These updates will also be reflected in benefit quotes, available online in MemberAccess, on these dates.
 

Market update: The 2009-10 year in review

Investment returns overall experienced a significant and welcome recovery in 2009-10, due to strong growth in growth assets¹ and defensive assets², and in spite of widespread volatility in share markets during the final quarter of the financial year.

US, Australian and UK share markets, each produced double-digit returns for the year while domestic and international fixed interest also performed well.
 

Post GFC market

For global share markets, the post-GFC (Global Financial Crisis) rally, beginning March 2009, pushed markets up in the first nine months of the financial year.

The positive sentiment that powered the rally in share markets globally began to wane in January, and sharply declined in April as the Greek sovereign debt crisis unfolded and US economic data became mixed.

These factors made investors more risk-averse,  and became the catalyst for a substantial sell-off in growth assets and a retreat to defensive assets in the final quarter.
 

A solid result

The Australian share market³ returned approximately 13%, the US share market⁴  14.3%, the UK⁵ 19.6%, and global markets⁶ as a whole 14.7%.  A notable exception was the Japanese market⁷, which fell more than 7%.

International fixed interest returned 11% for the year and Australian fixed interest approximately 8%.

Market outlook

Investment market strategists are optimistic about the Australian share market outlook in the medium to long term. Despite the present volatility, strategists believe that the local share market offers attractive opportunities, with the local market currently trading below its perceived long-term value.

In spite of this optimism, concerns regarding European debt and economic growth rates in the US and China will need to be overcome for solid returns to be realised in 2010-11.

TWUSUPER investment returns

• Final investment returns for each of our investment options for the 2009-10 financial year will be posted on the TWUSUPER website on 20 August.
•  
• Your Annual Benefit Statement will be sent to you in September, detailing your super’s performance for the year.
•  
• Visit our Annual Reports page in September to read more investment commentary in your 2009-10 Annual Report online.
  
   

¹ Australian shares, international shares, property (listed and direct), private equity, infrastructure 
²  Cash, Australian fixed interest, International fixed interest 
³ MSCI Australian Index
⁴ MSCI US index
⁵ MSCI UK Index
⁶ MSCI World Ex Australia in $A (unhedged)
⁷ MSCI Japan Index

Lost super? Game over!

Use our online Rollover form to get your super together 
 

Find out the documents you need to provide and who can certify them here.
 

Cooper review recommendations approved by Government 

On the 1st of August 2010, the Government gave its tick of approval to MySuper, the latest recommendation to be adopted, in a series of super reforms designed to improve Australians’ retirement incomes.

The introduction of new MySuper accounts, recommended under the recent Cooper Review, is being widely reported as the possible end of expensive retail funds in Australian workplaces, with the Government estimating it will add tens of thousands of dollars to workers’ retirement savings.

From 1 July 2013 existing funds will be required to offer a ‘default’ MySuper product to members.  Funds will need to apply for a licence to offer the product.
 

MySuper features

• Nil entry fees
• Nil investment switching fees
• Limited exit fees (limited to cost recovery)
• A ban on all commissions and hidden fees
• A requirement for funds to meet value for money standards or risk their licence to operate
• New standards around the payment of performance fees to investment fund managers
• Single default investment strategy set by the fund trustee (under consideration are age-based defaults)

• The Government’s Simpler Super website
• Australia’s peak superannuation industry body website, ASFA

Super changes announced in the 2010 Budget

In the 2010 Federal Budget, the Government proposed few new changes to super. Most were announced previously in response to the Henry Review. One exception was changes announced to the Government Co-contribution Scheme. Although many of these changes are yet to be legislated, details of the proposals are below.

Superannuation Guarantee to increase

The Superannuation Guarantee (SG) is proposed to gradually increase from 9% to 12% by the 2019-2020 financial year, helping Australians to save more money for their retirement.

Increases to SG rate

SG age limit to increase

Currently employees age 70 and over are ineligible to receive SG contributions from their employer. It is proposed that the SG age limit will increase from 70 to 75 from 1 July 2013.

Government Co-contribution limit frozen

The Government announced the maximum co-contribution would remain at $1000 pa on a permanent basis, and that income thresholds that set a limit on
co-contribution eligibility will be frozen for 2010-2011 and 2011-2012.

Income thresholds mean the Government will match after tax contributions to super on a $1 for $1 basis up to $1000, for eligible workers earning up to $31,920 pa.

Eligible workers contributing to super after tax, and earning over $31,920 and up to $61,920 pa will receive a reduced co-contribution.

Low-income earner’s contribution

A new Government superannuation contribution proposes to boost low income earners' super accounts by up to $500 from 1 July 2012.

Those with an adjusted taxable income of up to $37,000 pa could receive a boost to their super account from the Government for concessional contributions made to their account.

Coupled with the $1000 available to eligible people through the Govenment co-contribution scheme, low income earners' super accounts could be boosted by up to $1500 a year.

Concessional contributions limit to be extended

From 1 July 2012, people age 50 and over will continue to be able to make concessional contributions of up to $50,000 pa if they have less than $500,000 in total super balances.
 

What are concessional contributions?

Concessional contributions include employer SG contributions, extra employer contributions and before tax contributions made under a salary sacrifice arrangement. They also include after tax contributions that are claimed as a tax deduction by a self-employed person.  


 

Income tax rates 2010-11

Understanding crediting rates

On 1 July 2009 TWUSUPER moved from year-to-date interim crediting rates (updated monthly) to monthly crediting rates updated weekly. Below are some answers to frequently asked questions about crediting rates.

What are crediting rates and how do they work?

How and when are crediting rates used?

How are monthly crediting rates calculated?

How are interim crediting rates calculated?

How do I change investment options?

What happens when I change investment option(s)?

What are crediting rates and how do they work?

At the end of each financial year, investment earnings are applied to your super account.

Investment earnings are also applied during the year if you:

• switch investment options
• make a withdrawal from your super account or transfer to another super fund
• transfer all or part of your super to another division of the Fund.

TWUSUPER uses investment earnings to determine crediting rates. Crediting rates are based on the investment earnings for each investment option (adjusted for estimated tax, investment management fees and other costs).

Crediting rates can be positive or negative depending on investment performance.

Crediting rates are declared monthly for each investment option. Interim crediting rates are updated on a weekly basis. The Trustee reserves the right to declare crediting rates more or less often.

How and when are crediting rates used?

Crediting rates are used to calculate investment earnings which are applied to your super account annually at the end of a financial year and at the time you:

• switch investment options
• make a withdrawal from your super account or transfer to another super fund
• transfer any of your super to another division of the Fund. 

At the end of a financial year

At the end of each financial year, investment earnings are applied to your super account.

Investment earnings for the full financial year will be applied to your account if you have been a member for the entire year and you have not:

• switched investment options during the year; OR
• withdrawn or transferred any amount from your super during the year.

During a financial year

If you have switched investment options during a financial year, investment earnings for your original investment option are applied to your account before the date you switched investment options. Investment earnings for your new investment option are applied to your account for the time you remain invested in that investment option during the financial year.

If you have made a withdrawal or transferred any amount from your super account during a financial year, investment earnings were applied to your account when you made the withdrawal or transfer. For any amount remaining in your super account for the rest of the financial year, investment earnings are applied to your account from the date of the last withdrawal or transfer to 30 June.

If you joined the Fund part way through a financial year, investment earnings will be calculated and applied for the period your money was invested in the Fund up to 30 June.

The investment earnings that are applied to your account are calculated on a daily pro-rata basis by applying the monthly crediting rates for the investment option(s) your money was invested in to the daily account balance.
 

Investment switches, withdrawals and transfers

When you switch investment options, make a withdrawal or transfer any of your super to another division of the Fund during the year the crediting rate(s) applicable at the time the transaction is processed is used to calculate investment earnings based on the amount switched, withdrawn or transferred.

If you switch investment options before the final crediting rate for June is declared (usually August), investment earnings will be applied to your super account at the time of the switch, as set out above. In addition, when the final crediting rate for June is declared, investment earnings will be recalculated and applied to your super account if the final June crediting rate is different to the interim June crediting rate. The investment earnings applied may be positive or negative.

All investment option switches, withdrawals and transfers are processed using the crediting rates for the relevant investment option(s) since the previous 1 July or the last investment option switch, withdrawal or transfer, whichever is later.

Investment earnings to be applied to your switch, withdrawal or transfer are calculated on a daily pro-rata basis by applying the relevant monthly crediting rates for the investment option(s) your money was invested in, up to the day your switch, withdrawal or transfer is processed.
 

Crediting rate adjustments

Where an actual error has been made in respect of the member the amount will be adjusted to reflect the actual rate, provided that the adjustment is considered to be material. An amount is generally considered to be material if the adjustment is at least 0.3% of the member's account balance. The Trustee may apply a lower threshold at its discretion. In the case of exited members, the Trustee may apply a fixed dollar minimum before it pays compensation. The fixed dollar minimum is currently $20.

How are monthly crediting rates calculated?

Monthly crediting rates are declared for each investment option. These crediting rates are based on the investment earnings for each month, taking into account estimates for tax, investment management fees and other fees.

The crediting rates for the month of June are generally reviewed to take account of any difference between estimates for taxes and fees and actual tax and fees incurred by the Fund during the year, once those taxes and fees are known. This is to ensure that the Fund’s net assets cover members’ total account balances at the end of the financial year (30 June). The June crediting rates are usually declared in August each year.

The Trustee reserves the right to change any monthly crediting rate. Monthly crediting rates may be positive or negative because they depend on the performance of investments held in each investment option.

How are interim crediting rates calculated?

Interim crediting rates are based on estimated investment earnings for the period since the last monthly crediting rates, taking into account estimates for tax and fees.

For the Balanced and Equity Plus options, the estimated investment earnings are calculated using the benchmark asset allocation for each investment option and movements in market indices (eg Australian and overseas share markets) from the beginning of the month.

For the Cash Plus option (which is invested in a single product) actual investment earnings are available and updated on a weekly basis.

For any investment option, for periods where market indices are not available (such as when setting an interim rate in advance for the first week of a new month), a cash rate (for instance, the Australian Financial Markets Authority rate) may be used in the calculations.

When the monthly (final) crediting rates are declared for each option, they replace the monthly interim crediting rates.

Interim crediting rates may be positive or negative because they depend on the performance of investments held in each investment option.
 

How do I change investment options?

You can change your investment options in two ways:

Log in to MemberAccess

You can switch investment options up to once a week. If you try to make more than one switch in the same week, only the last switch request received before that week’s deadline will apply.
 

What happens when I change investment options?

When you switch investment options, investment earnings will be credited or debited to your account using the relevant monthly crediting rate(s) on the effective date of the switch.

Crediting rates can be positive or negative depending on investment performance.

Beware of schemes offering early (and illegal) access to your super

The Australian Securities & Investments Commission (ASIC) has issued a warning about super schemes that promise early access to your super. Accessing your super early is illegal and schemes offering this service should be avoided.
Participating in these schemes may expose you to penalties and potential legal and tax consequences. ASIC has also reported cases of people being defrauded of some or all of their super savings.

ASIC’s warning follows the recent discovery of a number of illegal schemes encouraging people to access their super before they reach their preservation age or qualify under another condition of release, using self-managed super funds or through a fee-based service.

The law requires that superannuation funds be maintained for the sole purpose of providing retirement and similar benefits for the member or their dependents. The Government has determined the preservation age, which is the minimum age you must reach before your super benefits can be paid out (unless you qualify for payment on other grounds, such as Total and Permanent Disablement).
 

Report any illegal offers

If you are approached with an offer to access your super before your preservation age, you should report this to ASIC on 1300 300 630 or the ATO on 13 10 20.
 

Performance update – December 2009

Moving on from a tumultuous period

September 2009 marked the one year anniversary of the collapse of US investment giant Lehman Brothers, the largest corporate bankruptcy in history. This event is generally taken as a marker of the beginning of what was one of the worst financial crises since the Great Depression of the 1930s. However, unprecedented government spending – including the Rudd Government’s $42 billion stimulus package – and the lowering of interest rates by central banks helped stabilise financial markets, restored confidence in the banking sector and helped moderate the effects of the Global Financial Crisis.

Since the first signs of share markets recovery emerged in March 2009, there has been a sustained recovery in many parts of the world. Investor confidence has gradually improved as global economic data paints a more positive picture for growth and inflationary pressures remain subdued.

Not out of the woods just yet

While investment markets have started the new financial year positively, volatility in share markets in October shows that a further downturn remains a possibility.

A main area of concern is the uncertainty surrounding the way governments and central banks will choose to wind down their stimulus efforts and the effect of this removal of financial support. For the share market rally to continue, there will need to be strong signs of sustainable economic recovery. 
 

Our investment strategy going forward

With still some uncertainty around the potential for a sustainable recovery, the Fund is taking a measured approach with our investments and is looking for investment opportunities as they arise. We will continue to keep you informed of developments in the performance of the Fund’s investment options. 


Important information: This information is of a general nature only, and is not a comprehensive study. It has been prepared without taking account of any of your objectives, financial situation or needs. Before acting on the information, you should consider its appropriateness having regard to your objectives, financial situation and needs. You may wish to consult a licensed financial adviser when doing this. A copy of the current TWUSUPER Product Disclosure Statement should be obtained from us and considered carefully before you make any decision about whether to acquire the product or continue to hold our products. Issued by TWU Nominees Pty Ltd, ABN 67 002 835 412, AFSL No 239163 as the trustee of TWUSUPER (ABN 77 343 563 307).


 

From 1 July 2009, a number of significant changes are being made both to super and to your super fund.

Changes to TWUSUPER from 1 July 2009:

• TWUSUPER moves to monthly crediting rates
• Weekly investment options switching launched
• Balanced investment option adjusted
• Cap on admin fees for protected members
• Lost accounts to be transferred to AUSfund monthly

Changes to super from 1 July 2009:

• Concessional contribution cap reduced
• Government co-contribution scaled back
• Salary sacrifice now counted as income for co-contribution and other benefits
• Pension payment relief extended
• Changes to the Age Pension qualifying age
• Same-sex reform

Changes to TWUSUPER from 1 July 2009

TWUSUPER moves to monthly crediting rates

On 1 July 2009 TWUSUPER moved from year to date crediting rates updated monthly, to monthly crediting rates updated weekly. TWUSUPER uses crediting rates to determine the investment earnings that are applied to a member’s account. Crediting rates are based on the investment earnings for each investment option, adjusted for estimated tax, investment management and other costs.

Crediting rates are applied to a member’s account at the end of each financial year. They are also applied when a member switches investment options, leaves the Fund, makes a withdrawal or transfers into another division of the Fund.
 

Weekly investment option switching launched

From 1 July 2009, members of TWUSUPER and other divisions will be able to switch their investment options weekly instead of monthly. Changing the way your super is invested is a big decision. This decision should only be made with your long-term investment and risk strategy in mind. We suggest that you talk to a professional financial adviser before you make any changes to your super - it could make a big difference to the amount of money you retire with. Money Solutions*, TWUSUPER’s financial advice partner can help with your investment decisions.

  * The Trustee is not responsible for and does not accept liability for the products or services or actions of Money Solutions AFSL: 258145. You should use your own judgement before taking up any products or services offered by Money Solutions.

Balanced investment option adjusted

Over a period of time from 1 July 2009, TWUSUPER’s default balanced investment option will be adjusted to an asset allocation of 80% in growth assets and 20% in defensive assets. Previously the asset allocation was maintained at 75% growth assets and 25% defensive assets. This will allow us to take advantage of investments that offer attractive returns on a risk-adjusted basis, without altering the long term strategic asset allocation of the balanced investment option.
 

Cap on admin fee for protected members

TWUSUPER protects members’ accounts when they are less than $1,000 from erosion by fees. We do this by ensuring that fees deducted (excluding insurance premiums and taxes) do not exceed the investment earnings credited to the account. When the investment earnings credited or debited to your account are insufficient to cover the administration fee, then the administration fee will be capped at $10 (plus an amount equal to any investment earnings credited).

This administration fee has previously only been applied at the annual review date but from 1 July 2009 it will apply to all account closures throughout any year.
 

Lost accounts to be transferred to AUSfund monthly

From 1 July 2009, TWUSUPER will transfer a member’s benefit to AUSfund monthly where:

• the member’s account balance is less than $1,000 and
• no contribution has been received for at least 15 months.

Previously, TWUSUPER transferred these accounts quarterly.
 

Concessional contribution cap reduced

From 1 July 2009, the concessional contribution cap will be reduced to $25,000 each year for people under 50. Concessional contributions include SG, salary sacrifice contributions, voluntary contributions made by your employer and tax-deductible personal contributions.

This is an important change because some people (particularly people who salary sacrifice into super) might accidentally exceed the reduced cap and be subject to an extra 31.5% tax on that excess. All members who salary sacrifice into super or receive voluntary employer contributions (above 9% SG) should review their contributions for the new financial year. Call us on 1800 222 071 for more information or contact Money Solutions* for professional financial advice.  

The non-concessional contribution cap will stay the same at $150,000 each year. The bring-forward rule still stands, allowing members aged under 65 to make a total of $450,000 in non-concessional contributions over a three year period without penalty.

Government co-contribution scaled back

From 1 July 2009, the Government will reduce the co-contribution to a maximum of $1,000 or $1 for every $1 an eligible person contributes. This will only be a temporary cut, with the co-contribution gradually increasing back to a maximum of $1,500 or $1.50 for every $1 contributed in the 2014/15 financial year.

The co-contribution is still a great way for people earning less than $61,920 a year (for the 2009/2010 financial year) to boost their super. To find out if you are eligible for the co-contribution, click here or use the ATO’s co-contribution calculator to find out your maximum possible co-contribution (this link will open in a new window).

Salary sacrifice now counted as income for co-contribution and other benefits

From 1 July 2009, salary sacrifice and other voluntary employer contributions no longer reduce total income for people trying to qualify for:

• the government co-contribution;
• certain means-tested benefits, like the $5,000 baby bonus; or
• the tax offset for spouse contributions.

Pension payment relief extended

The Government has extended the temporary 50% reduction in the minimum pension drawdown for the 2009-2010 financial year. This reduction was introduced in February 2009 as a way to help superannuation pensioners avoid crystallising losses caused by the downturn in global financial markets.
 

Changes to Age Pension qualifying age

The 2009 Federal Budget announced that the Age Pension qualifying age will gradually increase to age 67 in 2023. The transition to the higher Age Pension qualifying age will commence in July 2017, with the qualifying age increasing by six months every two years, to reach 67 on 1 July 2023. For more information about qualifying for the Age Pension, please visit the Centrelink website or call Centrelink on 13 23 00.
 

Same sex reform

The Government has recently changed a range of Commonwealth laws, including taxation and superannuation laws, to provide same sex couples with access to the same entitlements as opposite-sex couples.

The new laws apply to the distribution and taxation of superannuation death benefit entitlements, splitting superannuation benefits after the breakdown of a relationship and access to the tax offset for eligible spouse contributions. The legal definitions of ‘Spouse’ and ‘Child’ have also changed. If you would like to know more, please call us on 1800 222 071 or visit the Australian Government Attorney-General’s web page on same sex reform.

Negative returns and your super 

• Why does investment market performance influence super performance?
• What do negative returns mean for your super?
• Fight the urge to switch
• If you’re worried, talk to a professional
• What we are doing to protect your super

Why does investment market performance influence super performance?

Your super is invested in shares, property, cash and other types of assets, depending on which of our investment options you may have chosen since you joined (if you didn’t make a choice, your super was invested in our Balanced investment option). When the value of these assets falls, so does the value of your super

What do negative returns mean for your super?

Your super has the best potential earning power over the long term when you invest it in our Balanced or Equity Plus investment options, but there will always be years where you will experience negative returns.

Fight the urge to switch

In negative markets it’s natural to want to protect your super by switching out of investment strategies with negative returns and into a defensive option like Cash Plus.

You should only consider switching to a defensive investment option like Cash Plus if it is in line with your long term investment strategy.

If you're worried talk to a professional

The most important thing you can do to ensure you have comfort and control over your super is to get access to the right advice, and set yourself a long-term investment strategy.

We know how important it is for you to seek professional advice about super. That’s why we’ll get you started by paying for your first single-issue superannuation advice phone call to our advice partner

Money Solutions: Providing TWUSUPER members with straightforward professional advice

• How much will I save if I combine my super accounts?
• Should I be making extra contributions to my super now or later? 
• Am I eligible to receive the co-contribution payment from the Government?
• Have I chosen the right investment strategy for my needs? 
• Should I take my super as a lump sum or put it in a pension? 

on a flat fee for service basis – so their advisers are focussed on recommending strategies that work for you.
 
Because TWUSUPER believe advice is important for fund members, TWUSUPER will pay for each member’s first ‘single issue’ superannuation advice phonecall to a Money Solutions* Money Coach. To contact Money Solutions, call the TWUSUPER Customer Service Team on 1800 222 071, 8am – 8pm Mon – Fri (EDT) or Money Solutions direct on 1800 046 144, 8am - 6pm Mon-Fri (EDT).

*The Trustee is not responsible for, and does not accept liability for the products or services or actions of Money Solutions. You should use your own judgment before taking up any product or services offered by Money Solutions.

TWUSUPER offers enhanced insurance cover for members

TWUSUPER retains Platinum SuperRating

TWUSUPER launches a Transition to Retirement Pension

 

*The Trustee is not responsible for, and does not accept liability for the products or services or actions of Money Solutions. You should use your own judgment before taking up any product or services offered by Money Solutions.

TWUSUPER signs up to UN PRI

November 2007: TWUSUPER is pleased to announce that it has become a signatory to the United Nations’ Principles for Responsible Investment (UN PRI), with the goal of ultimately increasing long-term benefits to members.
 
This makes TWUSUPER one of a small number of Australian superannuation funds to commit to this program. According to TWUSUPER Chief Executive Officer, Bill McMillin, “We believe the implementation of these principles will be a positive for investment returns and will prove to be in the best long term interests of our members.” 

The Principles for Responsible Investment is an investor initiative in partnership with the United Nations Environment Program Finance Initiative and the United Nations Global Compact. The principles provide a framework of global standards developed in April 2006. The six overarching principles recognize the direct link between environmental, social and governance practices to investment performance. The principles include voluntary actions related to investment decision-making, active ownership, transparency and collaboration.

The PRI initiative has developed into a global network of institutions working together to share best practice and collaborate on emerging environmental, social and governance (ESG) issues in order to deliver long-term returns to beneficiaries and clients. More and more mainstream investors are embracing the view that ESG issues can be material to long term results and, therefore, must be factored into the investment process.

TWU Nominees Pty Limited ABN 67 002 835 412, AFSL 239163, is the trustee of TWUSUPER (ABN 77 343 563 307) and the issuer of interests in it. Prior to any investment in TWUSUPER you should consider whether or not the investment is appropriate for you. Before you make any decision regarding our product, you should consider the Product Disclosure Statement.

Money Solutions

What we are doing to protect your super