First Super Annual Report 2013_14
Annual Report
2013Œ14
You can obtain a hard copy or register to receive a hard copy every year by calling
1300 360 988
.
Issued by First Super Pty Ltd
ABN 42 053 498 472, AFSL 223988, RSEL L0003049
putting members
˜ rst
First
Super
1. Cover version_Web
Photo: With special thanks to Hancock Victorian Plantations
The industry fund
for workers in the
timber, pulp & paper
and furniture &
joinery industries.
First Super
Contents
Co-Chairs™ message
01
CEO™s message
02
First Super is
your
industry
super fund
03
Investment performance 04
Your investment options 08
Investments held by the Fund 12
Taking care of First Super 14
Directors™ remuneration report 16
Fees and charges
18
Financial information
19
Super update
20
Bene˜ ts
22
General information
24
Contact us
Back cover
Enjoy your retirement by ensuring
your super lasts the distance.
Call us on
1300 360 988
to ˜nd
out how.
80
The average life
expectancy for men born
today. For women, it™s 84.
Photo: With special thanks to Hancock Victorian Plantations
Putting members ˜ rst
1
Co-Chairs™ message
Allan Stewart
Timber Trade
Industrial Association
President
30 June
2 015
Target date for
businesses with 20 or
more employees to
meet the SuperStream
requirements when
sending superannuation
contributions on behalf
of their employees.
First Super can help you
meet the SuperStream
standards. Call us on
1300 360 988
.
Photo: With special thanks to Hancock Victorian Plantations
Challenges
Looking forward, occupational
superannuation faces a number of attacks
upon the superannuation system™s fairness.
We are proud that First Super plays a
signi˜ cant role in collecting, investing and
growing members™ retirement savings.
Without industry funds like First Super,
the Superannuation Guarantee (SG)
system, and the industrial campaign
for superannuation in the 1980s, the
overwhelming majority of First Super™s
members would have no superannuation
at all and would have to rely exclusively on
Australia™s pension system.
The current federal government has
recently launched a number of attacks at
the heart of the superannuation system.
These attacks are:
˜
Deferring increases in SG contributions
until next decade Πwhich would leave
a 25 year old member $100,000 worse
off at retirement.
˜
Eliminating the low income
superannuation contribution scheme
Πthis scheme meant that low income
earners were not penalised by super tax.
˜
Winding back the future of ˜ nancial
advice reforms Πreforms necessary
because of malpractice in the
˜ nancial advice industry. The recent
Commonwealth Bank ˜ nancial planning
scandal reminds us why this is
necessary.
˜
Threatening funds with changes to their
governance structures. This has the
potential for funds governing bodies to
forget that funds are here to ensure that
all the pro˜ t goes to members.
First Super will, with other industry funds
and community organisations, campaign
to ensure that our superannuation
system remains one of the three pillars in
Australia™s retirement income system.
Board renewal
Last ˜ nancial year and this ˜ nancial year
marks another period of Board renewal.
Kevin Millie retired as a director in
December 2013. Kevin was one of the
founding directors of First Super and was
a director of the Pulp and Paper Workers
fund, one of the three funds that merged
to create First Super.
We acknowledge Kevin™s contributions
to the good governance of First Super,
particularly in relation to ensuring that
First Super, the trustee of˜ ce and
First Super™s service providers keep
members ˜ rst.
We welcomed Denise Campbell-Burns to
the First Super Board in February 2014
as Kevin™s replacement. Denise came to
the First Super Board well prepared and
credentialed having been appointed First
Super™s initial associate director in 2012.
Lindsay Morling has advised the Board
that he intends to retire from the Board
this coming December. On behalf of the
Board we would like to acknowledge
Lindsay™s contribution to First Super. Like
Kevin Millie, Lindsay is a founding director
of First Super having been a director of
TISS, one of the three successor funds,
since 2001.
Part of Board renewal is agreement
by the Board to appoint an additional
independent director during this ˜ nancial
year and to work towards having three
independent directors during the 2015/16
˜ nancial year.
Conclusion
We thank our fellow directors for their
diligent contributions to First Super™s
governance, to keeping our investment
managers on their toes and to ensuring
that the Trustee of˜ ce and First Super™s
service providers remain focussed on
putting members ˜ rst.
We also thank employer associations
and the CFMEU for their contributions
to First Super™s vitality and success.
And we thank our service providers, who
have each contributed to First Super™s
continuing excellent performance.
Finally, we acknowledge the work of the
Trustee of˜ ce.
First Super continues to put members
˜ rst. Our goal is to ensure we are the
superannuation fund of choice for
employers and workers within:
˜
the timber, pulp and paper and
furniture and joinery industries and
their families.
˜
clearly de˜ ned communities such as
rural and regional Australia.
Last ˜nancial year has been another terri˜c year for First Super™s members.
As a consequence of strong manager performance, investment option returns, with the
exception of cash, exceeded their annual benchmark targets.
It was pleasing to see that our Growth option which is similar to other funds™ default option
returned more to our members last ˜nancial year than many other funds™ default options and
well above SuperRating™s median fund return of 12.7%.
Michael O™Connor
Construction Forestry
Mining & Energy Union
National Secretary
fi
F
irst Super
continues to put
members ˜ rst.
fl
First Super
2
CEO™s message
Did you know?
First Super is run
only to bene˜t
members.
Firstly, we conducted a survey to
establish how well we meet members
and employer™s needs. We found that,
overall, members and employers are
happy with our service, but there are
areas where First Super and its wholly
owned administrator, Superannuation
Bene˜ ts Administration, can improve.
We have taken action to respond to this
feedback. Our administrator is ˜ nalising
an upgrade to the administration system.
This will deliver substantial improvements
to members when they access their
accounts. For employers, it will be
easier to make online contributions. Our
administrator will also introduce initiatives
to enable employers to meet their
SuperStream requirements.
Secondly, First Super has introduced a
monthly email newsletter that provides
information on fund performance and
investment market outlook. Selected
investment managers will be featured in
this newsletter so you can understand who
is looking after your retirement savings.
This year First Super has introduced a number of initiatives to improve our service to members and employers.
A third initiative was the introduction of a
quarterly email newsletter for members
with information on superannuation and
money related topics.
In a further initiative, First Super agreed
to support
The New Daily
, an online
newspaper that provides news and
educational material on ˜ nancial markets,
superannuation and general news. It is
emailed to members six days a week.
One challenge during 2013/14 was
that First Super had to increase its
administration fees for accumulation fees
from $1.35 per week to $1.50 per week
and introduced an asset fee of 0.05% of
funds in a member™s account.
This is the ˜ rst increase in administration
fees in early six years. To put it in context,
for a member with $50,000 invested in
First Super, the cost of us managing their
money increased by 63 cents per week.
This year, First Super has taken an active
role and participated in industry forums
and committees. We want to ensure that
the industry fund movement remains true
to its core purpose – to create retirement
savings for members in an economical
manner.
This is a signi˜ cant challenge for industry
funds as they grow and become larger and
more corporate. We are not banks and
our job is to ensure that manager fees are
kept low and fund staff are not paid like
fund managers or people working in retail
superannuation and banking industries.
Bill Watson
CEO
fi
We want to ensure
that the industry
fund movement
remains true to its
core purpose.
fl
Putting members ˜ rst
3
First Super is
your
industry fund
Did you know?
As an industry fund, we
offer low fees, including
no entry fee, and we
don™t pay commissions
to ˜ nancial advisors.
First Super manages $2 billion in member
funds for over 72,000 members. We offer
superannuation, insurance, Transition to
Retirement and Pension products. As
an industry super fund our pro˜ ts are
returned to you, our members, not to
shareholders.
As the industry fund for all workers in
the timber, pulp & paper and furniture
& joinery industries, we are committed
to providing our members and their
employers with the bene˜ ts that enhance
their long-term ˜ nancial position,
well-being and security.
Personalised service
and advice
We are committed to providing First
Super members with high quality,
personalised service and advice.
Our Contact Centre is available to help
you manage your super and inform you
of your options.
The Contact Centre can help you arrange
for a First Super Coordinator to visit your
workplace. Our Coordinators are available
to provide you with the information you
require to better understand
First Super
,
your account and our services.
We also offer members access to
licenced, commission-free ˜ nancial
planners who can help you plan for
your retirement.
Call
1300 360 988
to talk to a Contact
Centre staff member or to book a free
initial consultation with a ˜ nancial planner.
Investment options to suit
your needs
First Super offers members ˜ ve
investment options with a varying mix of
growth and defensive investments. You
can invest your savings in one option or
choose to invest in a mix of options; the
choice is yours. We also make it easy to
change your investment options at any
time, providing you have at least
$1,000 in your account.
First Super is proud of our industry heritage. We design our products
and services to meet your needs, as well as support and invest in your
industry and the communities in which you work and live.
Your super can be a safe, low-cost and
tax-effective way of saving for retirement.
We use our size and strength to ensure
our members pay low investment
management fees.
Flexible insurance options
at competitive rates
First Super provides you with ˚ exible,
comprehensive insurance options
at competitive insurance rates.
We
understand how important it is that
you and your family are protected if
the worst happens.
Types of cover
Death:
is a lump sum bene˜t paid if you die
or are diagnosed with a terminal illness. This
money can help pay for your funeral, cover
your debts and provide for your dependants.
TPD:
is a lump sum bene˜t paid if
you suffer a total and permanent disability.
The money can help cover the long-term
costs of a disability, including medical
treatment, ongoing care and modi˜ cations
to your home.
Income Protection:
is a monthly bene˜ t
that replaces up to 85% of your income
if you can™t work because of sickness or
injury. These payments can help you pay
your day-to-day expenses.
How much does it cost?
Premiums for these insurance packages are
paid out of your super account. Premiums
depend on factors including age, gender
and the level of risk in your occupation.
You can ˜ nd out how much insurance you
currently have, and how much it costs, by
checking your annual super statement or
by calling First Super on
1300 360 988
.
You can also apply to increase your cover
up to $2 million. Please see the Product
Disclosure Statement (PDS) for information
on default insurance and for the terms and
conditions that apply to insurance.
Planning for retirement
If you are nearing age 55 and starting
to think about retirement, First Super™s
allocated pension products allows you
to stay with us through your working life
and beyond.
If you are age 55 or over and still working,
a
First Super Transition to Retirement
Allocated Pension
can provide you with
the ˚ exibility to reduce your working hours
and make up for lost income by drawing
on your super. It can also be used to boost
your super before you retire. As such, a
Transition to Retirement Allocated Pension
can be a powerful tax planning tool
for wage and salary earners.
If you are over the preservation age
(between 55 and 60, depending on
when you were born) and looking to
retire permanently from the workforce,
a
First Super Allocated Pension
can
provide you with a regular income during
retirement. You can even draw down lump
sum amounts.
To help you plan for your retirement, call
our Contact Centre on
1300 360 988
to discuss your options or make an
appointment to see a ˜ nancial planner.
3
On average, Australians have three separate super funds.
Let us help you consolidate your super accounts Πfree of
charge\! Complete a consolidation form and we™ll do the rest\!
First Super
4
Investment performance
Putting members ˜ rst
5
The Balanced option, the investment
option held by the majority of our
members, earned 11.60% after tax.
This marks a second consecutive year
of double-digit returns for
First Super
™s
default option. This result can be
attributed to:
˜
positive investment returns across
all major asset classes in 2013/14
with the standouts being Australian
Shares (returning 17.3%) and Hedged
International Shares (returning 23.9%),
and
˜
strong investment manager
performance with:
Œ all but one of First Super™s active
Australian and international equity
managers beating their performance
benchmarks set by First Super™s
Board of Directors;
Œ First Super™s private equity fund
managers generating excess returns
by the successful listing of some of
their investments in the Australian
Stock Exchange;
Πtwo out of three infrastructure
investments producing above
benchmark returns; and
Πstrong performance by two real
estate managers.
First Super™s other investment options
with a range of asset classes also
performed strongly, exceeding their
performance benchmarks.
The Growth option, which has a similar
asset allocation to many other super
funds™ default options, returned an
First Super™s investment options performed strongly in the 2013/14 ˜nancial year.
excellent 13.93%. The Shares Plus
option returned 15.93% for the year to
30 June 2014 and the Conservative
Balanced option returned 8.90%.
Record-low interest rates saw the
Cash option returned 2.73%*.
Outlook
Predicting future investment returns is not
for the faint hearted, particularly after two
years of strong returns with many share
markets approaching record highs.
First Super™s Board of Directors
actively monitors economic conditions,
investment returns and manager
performance to ensure that investment
risk is managed and, as a consequence,
members™ investments are best placed to
achieve the investment return objectives.
First Super™s Directors continue to
maintain the view that First Super™s
default investment option with a lower
allocation to growth assets than many
other funds have for their default options,
provides members with a lower likelihood
of negative returns in a falling market.
This more conservative approach has
been taken following feedback from
members.
First Super™s Growth option is also
more similar to many other funds™
default options as it contains a higher
allocation to growth assets. This option
should provide members with higher
returns in rising markets but also has a
greater likelihood of negative returns in a
falling market.
* Past performance is not a reliable indicator of
future performance.
11 . 6 0
%
The Balanced
(default) option
return for the year
First Super
6
Below are the crediting rates for the ˜ nancial year ending 30 June 2014 and prior periods.
Superannuation
Investment Option
1 year
% p.a.
2 years
% p.a.
3 years
% p.a.
5 years
% p.a.
10 years
% p.a.
Return since
inception
Inception
date
Return over
CPI since
inception
Balanced (default)
11.60
12.6
9.1
9.0
6.6
8.4
1 Jul 1988*
5.4
Shares Plus
15.93
17.8
11.0
11.2
6.9
4.9
1 Mar 2001
2.1
Growth
13.93
15.5
n/a
n/a
n/a
12.7
14 Oct 2011
10.4
Conservative Balanced
8.90
10.2
8.2
8.5
n/a
5.2
1 Jul 1988
2.8
Cash
2.73
3.1
4.0
3.9
4.1
4.7
1 Mar 2001
1.9
*The composition of the Balanced option was fundamentally different prior to 1 July 1988.
Pension
Investment Option
1 year
% p.a.
2 years
% p.a.
3 years
% p.a.
5 years
% p.a.
10 years
% p.a.
Return since
inception
Inception
date
Return over
CPI since
inception
Balanced (default)
13.02
14.2
10.4
10.3
n/a
7.0
18 Mar 2005
4.2
Shares Plus
17.83
19.7
12.3
12.3
n/a
7.0
1 Jul 2005
4.2
Growth
10.30*
n/a
n/a
n/a
n/a
10.3 *
10 Aug 2013
7.6 *
Conservative Balanced
10.17
11.5
9.4
9.6
n/a
6.0
1 Jul 2008
3.6
Cash
3.22
3.6
4.5
4.6
n/a
4.5
1 Jul 2005
1.7
*Rate is for the period 10 August 2013 (inception) to 30 June 2014 and is therefore not annualised.
Note:
10-year rates are based on the crediting rates for similar investment options in the former Timber Industry Super Scheme up to 30 June 2008 and First Super
since. ‚N/A™ indicates there were no similar investment options available 10 years ago. Rates are not guaranteed and may not be the same as those allocated t o y o u r
account for reasons including the date you joined and the timing of contributions. Past performance is not a reliable indicator of future performance.
Crediting member accounts
Your super account earns investment
income at
First Super
™s declared crediting
rate*. The crediting rate used will depend
on the investment option(s) you have
selected.
Each week, First Super will declare an
interim crediting rate return for each
investment option based on earnings
and estimated fees and tax. After the
end of the ˜ nancial year (30 June),
First Super will adjust your account
based on the accumulated weekly
performance of each investment
option after deducting tax, fees, allowing
for reserves and adjustable costs.
At the end of the ˜ nancial year, the
amount applied to your account is based
on your average daily account balance
and the related weekly performance for
your investment option.
You should take into account that
investment returns can ˚ uctuate up or
down and may be negative in some
years. The actual returns are based
on the performance of the underlying
investments and First Super does not
guarantee or promise any speci˜ c rate
of return.
* Crediting rates and interim earning rates may be
positive or negative. If the crediting rate is positive
your account earns money. If the rate is negative,
the amount in your account is reduced.
Interim crediting rates
First Super determines weekly interim
crediting rates of earnings that apply
when members are paid a bene˜ t
during the year. These interim rates
are calculated based on the accruable
declared weekly crediting rates to the
date of exit or withdrawal plus the
estimated investment crediting rate for
any part week up to the date of exit or
withdrawal.
If you leave the fund, an interim crediting
rate is applied to your entire account
balance.
Putting members ˜ rst
7
The risk/return pro˜ le of the main asset classes
This graph illustrates the relationship between higher returns and greater risk. It does not re˚ect
the actual returns or risks.
The link between risk and return
Generally, investment in high risk assets will produce higher returns over the long term, with a
greater chance of a negative return over the short term.
Each of the four main asset classes Œ shares, property, ˜xed interest andcashŒhasdifferent
levels of risk and different potential for returns.
Potential Return
Risk
0
Higher
Higher
Lower
Fixed
Interest
Cash
Property
Shares
Photo: With special thanks to Hancock Victorian Plantations
First Super
8
First Super members can choose to
invest in any one or a combination of
the following options:
1.
Shares Plus
2.
Growth
3.
Balanced (default option)
4.
Conservative Balanced
5.
Cash
You can mix your investment in any
percentage split across the ˜ ve investment
options or you can choose to invest in just
one option. The choice is yours.
Making an investment choice
Before making an investment choice you
should consider your personal situation and
understand the relationship between risk
and return. This is essential to making an
informed investment decision.
You can change your investment mix at any
time, provided you have an account balance
of at least $1,000.
First Super provides all members with access
to low cost ˜ nancial planning services. Our
˜nancial planners receive no commissions*.
They work on a fee for service basis so
you know what it is going to cost you
up front. Your initial consultation is free.
Call
1300 360 988
for more information or to
arrange for a ˜ nancial planner to contact you.
* Financial planning is provided by Industry Fund Services
Pty Ltd (ABN 54 007 016 195 AFSL 232514)
Your investment options
With First Super, you control how your super is invested. Our mix of growth investments and defensive
investments offers you an investment mix that suits your risk pro˜le and your investment timeline.
Investment options
For more information, read the
Investing your super IBR
available at
˜ rstsuper.com.au
.
Use of derivatives
First Super and external investment managers may use derivative investments to
help manage risk and for other defensive purposes. Derivative investments are not
used for speculative investing.
Where derivative investments are used, the Trustee considers the associated risks
and controls that are in place by monitoring the managers™ Risk Management
Statement and preparing its own.
Socially responsible investing
Labour standards and environmental, social or ethical considerations may be taken
into account in the selection, retention or realisation of investments.
Change to asset class names
A change in Government legislation requires superannuation funds to use standard
terms to describe the assets classes in which they invest. While the new names
provide less information than the old, the change has not signi˜ cantly affected how
or where First Super invests, only the names used.
The table below shows the old and new asset class names.
Old Asset class names
New Asset class names
Australian Equities
Australian listed equities
International Equities (Unhedged)
International listed equities
International Equities (Hedged)
International listed equities
Australian Private Equity
Australian unlisted equities
International Private Equity
International unlisted equities
Timber, Furniture and Pulp
Other
Australian Infrastructure
Australian unlisted infrastructure
International Infrastructure
International unlisted infrastructure
Property
Australian unlisted property
Australian Broad Based Bonds
Australian ˜ xed income
International Broad Based Bonds
International ˜ xed income
Floating Rate Debt
50% Australian ˜ xed income/
50% international ˜ xed income
Cash
Cash
Did you know?
You are now able to have
the cost of personal ˜nancial
advice deducted directly
from your super account.
Putting members ˜ rst
9
Shares Plus
Objectives
˜
Achieve an investment return (after tax and
investment expenses) that exceeds in˚ ation, as
measured by the Consumer Price Index, by at least
4.0% per annum over rolling ten year periods;
˜
Con˜ ne the chance of the rate credited to members
falling below zero in any ˜ nancial year to less than
one in ˜ ve; and
˜
Achieve an investment return (after tax and
investment expenses) that exceeds the median of the
SuperRatings High Growth (91-100) Option Survey
over rolling ˜ ve year periods.
Investor pro˜ le
This investment option is likely to appeal to members
with a long-term view of their superannuation savings
and/or who are prepared to accept higher risk in the
search for higher returns.
Risk pro˜ le
The Shares Plus option is likely to provide a high degree
of volatility and ˚ uctuations in returns and is at the high
end of the risk/return range. The risk may increase by
the nature of overseas investments, which means that
this option is subject to the considerable extra risk of
currency ˚ uctuations and international events. It is likely
to outperform the other investment options offered in
the longer term.
Standard risk
4.1 years
Risk band:
6
Risk label:
High
Asset allocation and ranges
Asset Class
Target %Range %
Cash
0.0
0 Π5
Australian ˜ xed income
0.0
0 Π5
International ˜ xed income
0.0
0 Π5
Australian listed equities
42.0
30 Π60
Australian unlisted equities
5.0
0 Π20
International listed equities
32.
0 Π40
International unlisted equities
.
0 Π5
Australian listed property
0.0
0 Π20
Australian unlisted property
10.0
0 Π20
International listed property
0.0
0 Π20
International unlisted property
0.0
0 Π20
Australian listed infrastructure
0.0
0 Π10
Australian unlisted infrastructure
5.0
0 Π10
International listed infrastructure
0.0
0 Π10
International unlisted infrastructure
5.0
0 Π10
Commodities
0.0
0 Π5
Other
0.0
0 Π5
Total
100.0
First Super
10
Growth
Objectives
˜
Achieve an investment return (after tax and investment
expenses) that exceeds in˚ation, as measured by the
Consumer Price Index, by at least 3.75% per annum over
rolling ten year periods;
˜
Con˜ne the chance of the rate credited to members falling
below zero in any ˜nancial year to less than one in six; and
˜
Achieve an investment return (after tax and investment
expenses) that exceeds the median of the SuperRatings
Default Option Survey over rolling ˜ ve year periods.
Investor pro˜ le
This option is likely to appeal to members who are prepared to
accept higher investment risk in the search for higher returns,
but also wish to reduce the risk of very large investment losses
by diversifying into some defensive assets.
Risk pro˜ le
The Growth option is likely to provide a high degree of volatility
and ˚uctuations in returns. It has a lower investment risk/return
pro˜le than the Shares Plus option because it has a higher
exposure to defensive assets. Over the long term it is likely to
outperform the other investment options except for Shares Plus.
Standard risk
3.4 years
Risk band:
5
Risk label:
Medium to high
Balanced
(default option)
Objectives
˜
Achieve an investment return (after tax and investment
expenses) that exceeds in˚ ation, as measured by the
Consumer Price Index, by at least 3.5% per annum over
rolling ten year periods;
˜
Con˜ ne the chance of the rate credited to members falling
below zero in any ˜ nancial year to less than one in ten; and
˜
Achieve an investment return (after tax and investment
expenses) that exceeds the median of the SuperRatings
Default Option Survey over rolling ˜ ve year periods.
Investor pro˜ le
This investment option is likely to appeal to members
seeking mid to long-term growth of their superannuation
along with diversi˜ cation across asset classes.
Risk pro˜ le
Designed to provide good growth over the mid to longer
term while reducing risk through diversi˜ cation. Likely to
slightly under-perform against the First Super Shares Plus
and Growth options over the long term.
Standard risk
2
.
years
Ri
sk band:
4
Ri
sk label:
Med
ium
Asset allocation and ranges
Asset Class
Target %Range %
Cash
2.0
0 Π20
Australian ˜ xed income
6.5
0 Π20
International ˜ xed income
6.5
0 Π20
Australian listed equities
33.0
25 Π45
Australian unlisted equities
5.0
0 Π25
International listed equities
26.
0 Π45
International unlisted equities
.
0 Π10
Australian listed property
0.0
0 Π20
Australian unlisted property
10.0
0 Π20
International listed property
0.0
0 Π20
International unlisted property
0.0
0 Π20
Australian listed infrastructure
0.0
0 Π10
Australian unlisted infrastructure
5.0
0 Π10
International listed infrastructure
0.0
0 Π10
International unlisted infrastructure
5.0
0 Π10
Commodities
0.0
0 Π5
Other
0.0
0 Π5
Total
100.0
Asset allocation and ranges
Asset Class
Target %Range %
Cash
.0
0 Π15
Australian ˜ xed income
1
.5
0 Π40
International ˜ xed income
0 Π40
Australian listed equities
2
.0
15 Π40
Australian unlisted equities
5.0
0 Π25
International listed equities
1
.0
5 Π40
International unlisted equities
.
0 Π5
Australian listed property
0.0
0 Π20
Australian unlisted property
10.0
0 Π20
International listed property
0.0
0 Π20
International unlisted property
0.0
0 Π20
Australian listed infrastructure
0.0
0 Π10
Australian unlisted infrastructure
5.0
0 Π10
International listed infrastructure
0.0
0 Π10
International unlisted infrastructure
5.0
0 Π10
Commodities
0.0
0 Π5
Other
2.0
0 Π5
Total
100.0
Your investment options
continued
Putting members ˜ rst
11
Conservative Balanced
Objectives
˜
Achieve an investment return (after tax and investment
expenses) that exceeds in˚ation, as measured by
increases in the Consumer Price Index, by at least 3.0%
per annum over rolling ten year periods;
˜
Con˜ne the chance of the rate credited to members falling
below zero in any ˜nancial year to less than one in ˜fteen; and
˜
Achieve an investment return (after tax and investment
expenses) that exceeds the median of the SuperRatings
Conservative Balanced (41 Π59) Option Survey over
rolling ˜ ve year periods.
Investor pro˜ le
Members investing for the short to medium term who want a
more secure option with less chance of ˚ uctuations than the
Shares Plus, Growth or Balanced options and/or members
looking for lower risk options for their superannuation savings.
Risk pro˜ le
Designed to provide more stable returns than the Shares Plus,
Growth or Balanced options. It is at the lower end of the risk/
return range and is likely to under perform against the Shares
Plus, Growth or Balanced options over the medium to long term.
Standard risk
1.1 years
Risk band:
3
Risk label:
Low to medium
Cash
Objectives
˜
Achieve an investment return (after tax and investment
expenses) that exceeds in˚ ation, as measured by
increases in the Consumer Price Index, by at least 1.0%
per annum over rolling ˜ ve year periods;
˜
Con˜ne the chance of the rate credited to members falling
below zero in any ˜nancial year being negligible; and
˜
Achieve an investment return (after tax and investment
expenses) that exceeds the median of the SuperRatings
Cash Option Survey over rolling ˜ ve year periods.
Investor pro˜ le
Members investing for the short term and/or those who
want a secure option with a low chance of investment
˚ uctuations. May be suitable for members intending to
realise or reorganise their investments in the near future who
want to avoid the possibility of a loss over that period.
Risk pro˜ le
Designed to provide very stable returns at the lowest end of
the risk/return range. However, it is likely to under-perform
all other investment options offered over all but the
shortest periods.
Standard risk
0.0 years
Risk band:
1
Risk label:
Very low
Asset allocation and ranges
Asset Class
Target %Range %
Cash
2
.
5 Π25
Australian ˜ xed income
1
.
5 Π45
International ˜ xed income
5 Π45
Australian listed equities
17.0
10 Π30
Australian unlisted equities
0.0
0 Π5
International listed equities
13.0
5 Π20
International unlisted equities
0.0
0 Π5
Australian listed property
0.0
0 Π20
Australian unlisted property
10.0
0 Π20
International listed property
0.0
0 Π20
International unlisted property
0.0
0 Π20
Australian listed infrastructure
0.0
0 Π10
Australian unlisted infrastructure
5.0
0 Π10
International listed infrastructure
0.0
0 Π10
International unlisted infrastructure
5.0
0 Π10
Commodities
0.0
0 Π5
Other
0.0
0 Π5
Total
100.0
Asset allocation and ranges
Asset Class
Target %Range %
Cash
100.0 100%
Australian ˜ xed income
0.0
0
International ˜ xed income
0.0
0
Australian listed equities
0.0
0
Australian unlisted equities
0.0
0
International listed equities
0.0
0
International unlisted equities
0.0
0
Australian listed property
0.0
0
Australian unlisted property
0.0
0
International listed property
0.0
0
International unlisted property
0.0
0
Australian listed infrastructure
0.0
0
Australian unlisted infrastructure
0.0
0
International listed infrastructure
0.0
0
International unlisted infrastructure
0.0
0
Commodities
0.0
0
Other
0.0
0
Total
100.0
First Super
12
Investments held
by the Fund
Photo: With special thanks to Hancock Victorian Plantations
Putting members ˜ rst
13
Listed below are the investment funds employed by First Super and the direct investments made
for the ˜nancial year ending 30 June 2014.
Total Investments
$2,132,610,891
*
These assets represent 5% or more of the Fund.
30 June 2014
($,000)
Australian Equities
BT Australian Equity Mandate
Š
Eley Grif˜ ths Aust Equity Small Companies
35,900,084
IFM ENH Index
A
ust Equity Opt
ion
153,788,110
Invesco Small Cap Aust Equity Fund
35,179,650
Orbis SM Australian Equity Fund
103,159,965
P
erpetual Aust
Equity Mandate
155,571,947
Total Australian Equities
483,599,756
Australian Infrastructure
IFM Fund
82,838,053
PW Hastings UTA
12,403,966
Total Australian Infrastructure
95,242,019
Australian Private Equity
First Trust Portfolio
56,029,450
Frontier
337,000
IFBT
37,946,287
Macquarie Alternative Investment Trust 4
18,700,532
Macquarie Alternative Investment Trust 3
12,136,419
PW Quay Australia 3 Fund
4,059,581
PW Quay Australia 4 Fund
2,349,572
Super Bene˜ ts Administration Pty Ltd
1,565,237
The New Daily
1,000,000
Total Australian Private Equity
134,124,078
Cash
IFM Transaction Cash Fund
27,942,754
S
hort Term Cas
h Account
202,641,959
Total Cash
230,584,713
Fixed Interest
Alternative Fixed Income Fund
32,210,178
Blackrock Indexed Aust Bond Fund
106,387,556
Blackrock Overseas Bond Index
46,072,528
IFM Credit Opportunities
61,235,363
Pimco DFI Unit Trust
193,993,966
Timber Industry S/Sc ΠSup Bus Loans
9,156,059
Westbourne Yield Fund No 1
41,940,566
Total Fixed Interest
490,996,216
30 June 2014
($,000)
International Equities (Unhedged)
BGI Unhedged World Ex Aust Equities Index
31,475,350
Capital Int Global Equities Unhedged
103,914,951
Global Thematic Fund
71,861,572
International Equity Transistion
Š
Orbis Global Equity Fund
106,129,462
Total International Equities (Unhedged)
313,381,275
International Equities (Hedged)
Blackrock Hedged World Equities Index
105,311,613
Total International Equities (Hedged)
105,311,613
International Infrastructure
FR Amp Strategic Infrastructure Trust EUR
9,072,242
IFM International Infrastructure
64,950,310
Total International Infrastructure
74,022,532
International Private Equity
IFM Global Unit Trust
2,317,796
Wilshire Pooled Superannuation Trust
10,429,913
Total International Private Equity
12,747,709
Property
AMP Property Income Fund
2,484,957
Industry Supe
r Property Tr
ust No 1
112,079,989
PW Fortius Active Property 1
6,443,081
PW Franklin International Real Estate 2
2,735,019
QIC Property Fund
68,857,434
Total Property
192,600,980
Photo: With special thanks to Hancock Victorian Plantations
First Super
14
Taking care of
First Super
The Trustee
The Trustee of First Super is a company,
First Super Pty Ltd (ABN 42 053 498 472,
AFSL 223988, RSEL L0003049).
The Trustee is responsible for managing
over approximately $2 billion in funds
under management and overseeing
its investments on behalf of 72,000
members, in accordance with the Trust
Deed and relevant legislation.
The Trustee holds professional indemnity
insurance. At the date this report was
issued, the Trustee has not incurred
any penalties under Section 38A of the
Superannuation Industry Supervision
Act 1993.
One Independent director is jointly
appointed by the other members of
the Trustee Board.
The Co-Chair persons are elected
annually by the Board.
The Board generally meets four
times a year and undertakes an
annual review of its performance.
Every second year an independent
external review of the Board (and its
subcommittees) is commissioned.
$9,066,248
The value of contributions made to First Super
member accounts for the 2013/14 ˜ nancial year.
The Trustee Board
The First Super Trustee Board
is comprised of ˜ ve member
representatives, ˜ ve employer
representatives and one
independent director.
Directors are appointed to the Board
following consideration of a nominee™s
suitability and quali˜ cations. Member
representatives are nominated to the
Board by the CFMEU (Forestry and
Furnishing Products Division) while
employer representatives are nominated
by employers or employer associations.
Putting members ˜ rst
15
Board subcommittees
The First Super Trustee Board has established subcommittees
to deal with issues and to make recommendations to the Board.
Each subcommittee generally meets four times a year, with
additional meetings scheduled as required.
The Directors of First Super and their subcommittee
representation as at 30 June 2014 were as follows:
Member representative
Subcommittee
representation
Michael O™Connor
(Co-Chair)
Member since 2008
Administration & Marketing
Audit & Compliance
Investment (Chair)
Nominations
Remuneration
Denise Campbell-Burns
Member since 11 February
2014
Administration & Marketing
David Kirner
Member since 2010
Audit & Compliance
Investment
Alex Millar
Member since 2008
Investment
Frank Vari
Member since 2008
Administration & Marketing
Nominations
Remuneration
Employer representative
Subcommittee
representation
Allan Stewart
(Co-Chair)
Member since 2008
Administration & Marketing (Chair)
Audit & Compliance
Investment
Nominations
Remuneration
Martin Lewis
Member since 2008
Audit & Compliance
Investment
Nominations
Lisa Marty
Member since 2012
Administration & Marketing
Lindsay Morling
Member since 2008
Administration & Marketing
Audit & Compliance
Mike Radda
Member since 2008
Investment
Independent director
Subcommittee
representation
Bob Smith
Member since 2008
Audit & Compliance (Chair)
Nominations (Chair)
Remuneration (Chair)
Service Providers
First Super work with a range of independent advisors and
service providers to assist with running
First Super
on a day-
to-day basis. Each advisor and service provider is appointed
following a due diligence process. Advisors and service
providers may change from time to time. As of 30 June 2014,
First Super used the following advisors and service providers:
Actuary
Mercer (Australia) Pty Ltd
Administrator
Super Bene˜ ts Administration Pty Ltd*
External Auditor
KPMG
Financial Advisor
Industry Fund Financial Planning
Internal Auditor
Ernst & Young
Insurer
MetLife Insurance Limited
Insurance Advisor
IFS Insurance Broking Pty Ltd
Asset Consultant
Frontier Advisors Pty Ltd*
Legal Advisor
Madgwicks
Master Custodian
National Australia Bank Ltd
Tax Advisor
Ernst & Young
*First Super holds shares in this service provider as an investment.
First Super Coordinators
First Super™s Coordinators are available to help you over the
phone or visit you at your workplace to discuss the ˜ nancial
planning services available to you.
For more information about First Super™s Coordinators call
1300 360 988
.
Funds Under Management ($™000)
2009
2010
2012
2011
2013
2014
$2,100,000
$2,000,000
$1,900,000
$1,800,000
$1,700,000
$1,600,000
$1,500,000
$1,400,000
$1,300,000
$1,200,000
$1,000,000
First Super
First Super
16
Directors™
remuneration report
The fees paid to Directors are set and
examined regularly by the Remuneration
Committee. Independent advice may be
sought from time to time to ensure Board
remuneration is in line with the market.
Based on information available, the
Remuneration Committee is satis˜ ed that
the level of remuneration paid to First
Super Directors is reasonable.
Director™s fees
The fees paid to Directors are paid in
respect of:
Board meetings
. Covering preparation
for and attendance at Board meetings.
Payment includes an allowance
for travel and accommodation for
interstate Directors.
Subcommittee meetings.
Covering preparation and attendance
at subcommittee meetings. Payment
includes an allowance for travel and
accommodation for interstate Directors.
Workshop & training courses
.
Covering Director participation in all
approved workshop and training courses
and relevant incurred expenses.
Conferences
. Covering Director
participation in approved conferences
and relevant incurred expenses
for travel and accommodation for
interstate Directors.
Extra Duties
. On occasion the Board
may require Directors to take on extra
duties. An additional fee may be paid to
the Director at the Board™s discretion.
Professional development
On accepting a chair on the Board, all
Directors are required to participate in a
thorough induction program leading up to
and following their appointment.
All directors maintain their skills and
competencies by meeting the required
professional development each year.
Professional development may include
participation in industry programs,
seminars and conferences, relevant
presentations at Board and subcommittee
meetings and other approved workshop
and training courses.
Hospitality and gifts
First Super Directors and senior
management may on occasion accept
hospitality and gifts within the constraints
of the Hospitality & Gifts policy. All
hospitality and gifts that are accepted
are recorded in the Hospitality & Gifts
Register. The Register is provided to the
Audit & Compliance subcommittee at
each meeting and is published on the
First Super website.
The Directors of First Super Pty Ltd are paid for the work they do as Directors. In some cases, p a y m e nt i s
made to the Director™s employer to compensate for time spent by the Director managing the business of
the Fund and the Trustee.
Photo: With special thanks to Hancock Victorian Plantations
Putting members ˜ rst
17
Board fees
The fees for the Directors of First Super have not increased since they were ˜rst established in 2008.
The Director™s fees for the year ended 30 June 2014 are as follows:
Co-Chairs ($)
Directors ($)
Board meetings intrastate
5,250
3,000
Board meetings interstate
6,350
4,100
Committee meetings intrastate
2,250
1,500
Committee meetings interstate
3,350
2,600
Workshops & training courses intrastate
1,350
1,350
Workshops & training courses interstate
1,350
1,350
Workshops & training courses Πexpenses
1,100
1,100
Conferences Πper day
1,100
1,100
Reference committees
Reimbursement
of expenses
Reimbursement
of expenses
2013/14 attendance and remuneration
Listed below are Director™s meeting attendance and remuneration (including GST where applicable) for the year ending 30 June 2014:
Director
Board
meetings
Committee
meetings
Professional
development
hours
Remuneration
($)
Payments
made to:
Denise Campbell-Burns*
3/3
2/2
20.75
30,030
CFMEU-FFPD
David Kirner
6/6
8/8
46.5
57,497
CFMEUŒFFPD
Martin Lewis
5/6
8/8
36.5
59,290
Kylken Pty Ltd
Lisa Marty
5/6
4/4
31.75
29,000
Lisa Marty
Alex Millar
5/6
4/4
40.5
33,220
CFMEUŒFFPD
Kevin Millie
ƒ
2/2
2/2
1
13,530
CFMEUŒFFPD
Lindsay Morling
6/6
7/8
32.75
55,470
Lindsay Morling
Michael O™Connor
6/6
16/18
43.75
92,510
CFMEUŒFFPD
Mike Radda
3/6
4/4
20.5
20,130
UCI Projects Pty Ltd
Bob Smith
6/6
18/18
17
93,852
Bob Smith
Allan Stewart
6/6
18/18
53.25
146,102
Allan Stewart &
Associates Pty Ltd
Frank Vari
5/6
4/4
24.75
31,790
CFMEUŒFFPD
Total Remuneration
$619,820
*
Denise Campbell-Burns became a Director from 11 February 2014.
ƒ
Kevin Millie resigned as a Director from 13 December 2013.
Fees paid to interstate directors include payment for travel and accommodation.
The total salary package of First Super™s CEO for the year ending 30 June 2014 was $270,000.
Photo: With special thanks to Hancock Victorian Plantations
First Super
18
Fees and charges
These fees and costs may be deducted from your money, from the returns on your
investment or from the fund assets as a whole.
Yo u s h o u l d re a d a l l o f t h e i m p o r t a n t informationaboutfeesandcostsbecauseit
is important to understand their impact on your investment.
The fees and costs you may be charged are set out below.
Did you know?
Small differences in both
investment performance and fees
and costs can have a substantial
impact on your long-term returns.
Type of fee
Amount
How and when paid
Investment fee
Nil
Not applicable
Administration fee
$1.50 per week ($78.00 p.a.)
plus
0.05% per year of account balance.
$1.50 is deducted from your account
balance on the last working day of the
month.
1/12 of 0.05% of your average account
balance for the month is deducted on the
last working day of the month.
If you leave the fund, these fees are applied
at the date of exit.
Buy-sell spread
Nil
Not applicable.
Switching fee
Nil for the ˜ rst two switches, $30 for
any subsequent switch in the year.
Deducted from your account when the
switch is processed.
Exit fee
$75 for full or partial withdrawals.
Nil for retirement bene˜ ts, pension
payments, death and disablement
bene˜ ts, ˜ nancial hardship and
compassionate payments.
Deducted from your account when
processed.
Not applicable.
Advice fees
Πrelating to all members
investing in a particular product or
investment option.
Nil
Not applicable.
Other fees and costs*
Indirect cost ratio
Shares Plus 0.77%
Growth 0.61%
Balanced 0.68%
Conservative Balanced 0.50%
Cash 0.09%
The Indirect Cost Ratio is not deducted
from member accounts. It is deducted
from investment earnings before
investment returns are declared.
* Other fees and costs may apply, such as Family Law fees, Advice fees for personal advice and Insurance fees.
Please see PDS for more information.
Putting members ˜ rst
19
Financial information
The following is an abridged version of First Super™s Financial Statements for the ˜nancial year ending
30 June 2014. A copy of the audited Financial Statements is now available to download at
˜ rstsuper.com.au
.
Statement of ˜ nancial position
30 June 2014 ($)
30 June 2013 ($)
Assets
Investments
2,132,610,911
1,897,008,572
Other Assets
5,462,340
12,996,179
Total Assets
2,138,073,251
1,910,004,751
Liabilities
Trade and other payables
(7,129,257)
(4,728,205)
Bene˜ ts payable
(685,714)
(471,585)
Current tax liabilities
(11,715,097)
(8,783,858)
Total Liabilities
(19,530,068)
(13,983,648)
Net assets
2,118,543,183
1,896,021,103
Represented by liability for accrued bene˜ ts
Member funds
2,090,414,734
1,878,272,911
Reserves
28,128,449
14,748,192
Liability for accrued bene˜ ts
2,118,543,183
1,896,021,103
Operating statement
30 June 2014 ($)
30 June 2013 ($)
Revenue from investments
241,096,641
247,114,624
Revenue from contributions
161,241,201
153,806,972
Other revenue
17,100,900
12,796,576
Total revenue
419,438,742
413,718,172
Total expenditure
(30,317,881)
(28,399,827)
Bene˜ ts accrued before tax
389,120,861
385,318,345
Tax expense
(29,690,087)
(30,583,353)
Bene˜ ts accrued after tax
359,430,774
354,734,992
$ 213,4 5 9 ,70 0
The amount of earnings distributed to member
accounts for the 2013/14 ˜ nancial year.
First Super
20
New schedule for
increasing the super rate
The legislated minimum contribution
rate that employers must make
to superannuation (known as the
Superannuation Guarantee rate)
increased from 9.25% to 9.5% for the
2013/14 ˜ nancial year. The rate will
remain at 9.5% until 1 July 2021 and
then increase by 0.5% a year, reaching
12% on 1 July 2025.
Super update
There were a number of changes to superannuation during the year, as well as a number of Government
announcements that may impact superannuation.
Changes to contribution limits
The amounts that individuals can add to superannuation at lower tax rates increased
on 1 July 2014. For 2014/15, the limits are:
Before-tax contributions
Including employer, salary sacri˜ ce and
personal contributions for which a tax
deduction is claimed.
$30,000 for those aged under 49 on
30 June 2014.
$35,000 for those aged 49 or more on
30 June 2014.
After-tax contributions
Including personal contributions made from
after-tax pay and spouse contributions.
$180,000 or $540,000 in a three year
period up to age 65*. The period
starts from the ˜ rst year an individual
adds more than $180,000 to their
superannuation after tax.
* Individuals over age 65 and satisfying the ‚work test™ can make non-concessional contributions of up
to $180,000 per year.
3,8 2 8
The number of new
members for 2013/14.
Putting members ˜ rst
21
Option to withdraw
excess after-tax super
contributions
Individuals who have made after-
tax (non-concessional) contributions
f ro m 1 July 2013 that exceed the
non-concessionalcontributions cap are
to be given the option to withdraw the
excess amount plus earnings on the
excess. Currently, contributions that
exceed the cap are taxed at the top
marginal income tax rate.
Individuals who choose to leave
their excess contributions in their
fund will continue to incur excess
non-concessional contributions tax.
Government
co-contribution
threshold increase
The income threshold for eligibility for a
Government co-contribution increased
to $49,488 (up from $48,516) for the
2014/15 ˜ nancial year. This is the income
level at which the co-contribution cuts
out. If an individual earns less than
this amount and makes a contribution
to super from their after-tax pay, the
Government may contribute up to $500
to their superannuation tax-free.
Medicare levy increase
The Medicare levy increased from 1.5%
to 2% of taxable income from 1 July 2014.
The increased levy will be applied to
certain superannuation payments.
Temporary budget repair
levy introduced
For those earning more than $180,000
a year, a temporary levy of 2% applies
from 1 July 2014 to 30 June 2017. The
levy will be charged on the income over
$180,000, not on the whole amount.
The budget repair levy impacts a number
of superannuation tax rates that are
based on the top marginal rate, such
as the tax on contributions where an
individual does not provide their fund
with their Tax File Number. In this case, a
tax rate of 49% will be applied, re˚ ecting
the additional 2% budget repair levy and
the increase in the Medicare levy.
Proposed increase in the
Age Pension qualifying age
The Government intends to increase
the Age Pension qualifying age from
67 to 70 year at a rate of six months
every two years, commencing on
1 July 2025. This change follows on the
currently scheduled phased increase in
the pension age from 65 to 67 years by
1 July 2023.
The Government will also index pensions
to in˚ ation from 1 September 2017.
Deeming to apply to
account-based pensions
fiDeemingfl is used to calculate income
for age pension, bene˜ t and allowance
payments. Under current Centrelink rules,
income received from account-based
pensions attracts a non-assessable
portion, which loosely recognises that part
of these pension payments represents a
return of capital.
In comparison, other ˜ nancial
investments are subject to fideemingfl
rules that attribute a ˜ xed rate of return
to these investments, irrespective of how
much income they actually produce.
From 1 January 2015, deeming will be
extended to account-based pensions,
including allocated pensions. This is
intended to ensure that people with
similar ˜ nancial assets will be treated
consistently under the income support
system. The total income will then be
used to work out how much pension,
bene˜ t or allowance is paid.
$ 3 5,000
The maximum amount
individuals aged 49 or more
can contribute (before tax)
to super before incurring
extra tax. For individuals
aged under 49 the
maximum is $30,000.
Want to know more?
For the latest information on changes that affect superannuation,
go to the Australian Taxation Of˜ce website at www.ato.gov.au
First Super
22
Bene˜ ts
Withdrawal Bene˜ t
When you leave First Super, we will pay a
Withdrawal Bene˜ t, which is the balance
of your Member Account. You do not
have to take a W ithdrawal Bene˜ t if you
leave your current employer; you can keep
your money in First Super. In most cases,
you can also choose to have future super
contributions from different employers
made to your First Super account.
Bene˜ ts paid by the First Super Accumulation Division
Retirement Bene˜ t
When permitted by law, you can
re ce i v e a Retirement Bene˜t. Your
Retirement Bene˜t c a n b e ta k e n a s
multiple drawdowns.
You may be able to draw on your
Retirement Bene˜ t if you are aged
55 or over and still working by using
a Transition to Retirement strategy.
Otherwise, to begin drawing your
Retirement Bene˜ t, you must generally
reach:
˜
your preservation age (currently age
55), and permanently retire from the
workforce;
˜
age 60 and cease gainful
employment with an employer; or
˜
age 65.
Death bene˜ ts
If you die while you are a member of First
Super, your Member Account balance will
be paid as a lump sum. In addition, any
Insured bene˜ t may also become payable
provided the Insurer admits a claim made
for payment. Who will receive your Death
bene˜ t when you die depends on the law
and what you instruct us to do. You have
three options:
(i) Do nothing, in which case the law
requires the Trustee to pay your
bene˜ t to your dependants or estate
or, if neither exists,to another person
(see page 23 for the meaning of
‚dependent™);
(ii) Make a Binding Nomination of
Bene˜ ciary (see page 23 for more
information); or
(iii) Make a Non-binding Nomination of
Bene˜ ciary (see page 23 for more
information).
fi
You do not have to
take a Withdrawal
Bene˜t if you leave your
current employer; you
can keep your money
in First Super
fl
Putting members ˜ rst
23
Binding Nomination of
Bene˜ ciary:
This allows you to provide
a written instruction to the Trustee about
who you wish to receive your bene˜ t in
the event of your Death. The Trustee is
legally bound to follow your instruction,
provided that the nomination is legally
valid and the person(s) nominated qualify
for payment under the law when the
bene˜ t is paid. A Binding Death Bene˜ t
nomination is valid for three years and
overrides any Non-binding Nomination of
Bene˜ ciary nomination you have made.
A Binding Nomination of Bene˜ ciary
may be appropriate if your personal
circumstances are stable.
Non-binding Nomination of
Bene˜ ciary:
This allows you to
nominate the people you would prefer
to receive your Death bene˜ t should you
die while a member of First Super. The
Trustee will take this into account when
making a payment, but will ultimately
decide who should receive your Death
bene˜ t according to the law. Payment
will usually be made to one or more of
your dependants or your legal personal
representative. A Non-binding Nomination
of Bene˜ ciary might be appropriate if your
personal circumstances are unsettled.
A form that allows you to make a Binding
or Non-binding Nomination can be
obtained from the PDS, our website
www.˜ rstsuper.com.au
, by contacting
us on
1300 360 988
or by emailing us on
mail@˜ rstsuper.com.au
What is a dependant?:
Under
superannuation law, a dependant is
generally a child, spouse or a person
with whom you have an interdependency
relationship.
Two people may have an
interdependency relationship if:
˜
they have a close personal
relationship;
˜
they live together;
˜
one or each of them provides the
other with ˜ nancial support;
˜
one or each of them provides the
other with domestic support and
personal care.
An interdependency relationship may
also exist where there is a close personal
relationship between two people who do
not satisfy other criteria because either
or both of them suffer from a physical,
intellectual or psychiatric disability.
Examples of interdependency
relationships may include:
˜
same sex couples who reside together
and are interdependent;
˜
siblings who reside together;
˜
an adult child who resides with and
cares for an elderly parent.
To claim a Death bene˜t your spouse,
employer, legal personal representative
or some interested party must notify
First Super in the event of your death.
If you had insurance cover, First Super
will lodge a claim with the insurer and pay
the entire amount to the relevant party(s).
Terminal Illness Bene˜ t
If you are diagnosed as having a terminal
illness whilst you are a member of First
Super, an amount equivalent to your
Death Bene˜ t may become payable while
you are still alive, provided that the insurer
accepts your claim for payment.
Total & Permanent
Disablement Bene˜ t
If you become totally and permanently
disabled (TPD), the balance of your First
Super account may become payable.
In addition, any insured TBD Bene˜ t
may also become payable if the Insurer
accepts your claim for payment.
Income Protection Bene˜ t
Income Protection Bene˜ ts are available
to members who decide to apply for
cover and whose claims are accepted
by First Super™s insurer. Generally, this
insurance provides a bene˜ t of up to 85%
of your salary if you are unable to work
due to temporary illness or injury.
Financial Hardship &
Compassionate Bene˜ ts
You may be able to access some of your
superannuation account under ‚Financial
Hardship™ or ‚Compassionate™ grounds.
The criteria set by the Government for
payment of these bene˜ ts is summarised
below.
To be eligible for a Financial
Hardship Bene˜ t, you must have:
˜
been in receipt of a speci˜ ed
Commonwealth income support
payment (e.g. Newstart Allowance) for
a continuous period of 26 weeks and
be unable to meet immediate family
living expenses; or
˜
reached your superannuation
preservation age; and
˜
received Commonwealth income
support payments for a cumulative
period of 39 weeks after reaching
preservation age and not been
gainfully employed on a full-time, or
part-time, basis on the date of the
application.
Applications may be lodged with the
Trustee and will be assessed according
to the relevant law. Approval is not
automatic.
Applications for a
Compassionate Bene˜ t may be
submitted to the Commonwealth
department of Human Services at
www.humanservices.gov.au and
must relate to paying or meeting
an expense of:
˜
treatment and transport for you or a
dependant concerning life-threatening
illness or injury, acute or chronic
pain, or acute or chronic mental
disturbance;
˜
modifying your home or motor vehicle
if you or a dependant has a severe
disability;
˜
palliative care for you or a dependant,
or the death, funeral or burial
expenses of a dependant;
˜
mortgage payments to prevent your
lender selling your home; or
˜
similar grounds.
To apply for a Compassionate Bene˜ t,
please contact the Australian Prudential
Regulatory Authority at
www.apra.gov.au
.
Insurance issued in error
Insurance cover issued in error is
invalid. If you have been allocated any
insurance cover by First Super and it
is subsequently discovered you were
ineligible to receive it for any reason, all
premiums paid will be refunded to your
account along with an allowance for any
investment earnings lost.
First Super
24
General information
Fund Reserves
The Trustee maintains a reserve for
administration and operational purposes,
such as paying costs and receiving
investment income. The value of the
reserve is generally between 0.1% and
0.9% of fund assets and is invested in the
Balanced investment option. In addition,
First Super holds liquid assets of not
less than $250,000, as a condition of its
Licence issued by APRA.
The value of the reserve at 30 June each
year, for the past three years, is shown
below:
Year ending
30 June
Reserve balance
($)
2014
28,129,169
2013
17,748,192
2012
10,967,020
From 1 July 2013 First Super has
established a separate Operational Risk
Financial Reserve (ORFR) to address
potential losses arising from operational
risks as required under superannuation
legislation. There are speci˜ c guidelines
and processes surrounding the operation
and utilisation of this reserve which are
contained with First Super™s Operational
Risk Requirement Policy.
The ORFR was funded by a transfer of
funds from the administration reserve
after the annual audit was competed for
the 2013 ˜ nancial year. Though initially
invested in cash and ˜ xed interest
securities, the ORFR may be partially
invested in the other assets, including
listed shares and other liquid securities,
at a future time. The value of the ORFR
at 30 June 2014 was $6,121,000.
Please call First Super on
1300 360 988
to obtain current information.
The Trustee also holds a statutory
reserve of $250,000 in a bank account.
Derivatives
First Super and external investment
managers may use derivative
investments to help manage risk and
for other defensive purposes. Derivative
investments are not used for speculative
investing.
Where derivative investments are used,
the Trustee considers the associated
risks and controls that are in place
by monitoring the m a n a ge r s ™ R i sk
Management Statement and preparing
its own.
Eligible Rollover Fund (ERF)
In accordance with superannuation
legislation, First Super has nominated an
Eligible Rollover Fund (ERF) to receive the
accounts of lost members or members
with small, inactive accounts. Our
nominated ERF is Australia™s Unclaimed
Super Fund (AUSfund).
The Government has provided for lost
and inactive members with an account
balance of $200 or less to be transferred
to the ATO instead of an ERF. However,
being transferred to AUSFund or the ATO
may affect your bene˜ ts in other ways
because:
˜
You will cease to be a member of
First Super; and
˜
Any insurance cover you had with
First Super will cease.
Neither AUSfund nor the ATO offers
insured bene˜ ts in the event of death
or disability and may have a different
investment strategy to First Super. If your
bene˜ t is transferred to AUSfund or the
ATO, you will become subject to the
governing rules the operations of either
AUSfund or the ATO.
If First Super can provide AUSfund with
current contact details, it will send you
its current Product Disclosure Statement
(PDS). You can also ask AUSfund for a
copy of its PDS.
If First Super is required to transfer your
account to the ATO, the ATO should
make efforts to contact you. Both
AUSfund and the ATO will generally
protect accounts from erosion due to
any administration levy or fees.
Trust Deed
The Trust Deed contains the rules of First Super.
No changes were made to the Trust Deed for
the ˜ nancial year ending 30 June 2014.
You can contact AUSfund at:
AUSfund Administration
PO Box 2468
Kent Town SA 5071
T:
1300 361 795
F:
1300 366 233
E:
admin@AUSfund.net.au
W:
unclaimedsuper.com.au
You can contact the ATO by calling
13 10 20 or by visiting ato.gov.au.
Putting members ˜ rst
25
Did you know?
First Super has always placed a very high priority on the protection of your privacy and the
security and use of personal information you provide us. New Australian Privacy Principles,
effective 12 March 2014, now impose even higher obligations on First Super, further ensuring
your privacy and the security of your personal information.
Complaints
The Trustee has established a procedure
to deal fairly with member complaints.
All complaints will be handled in a
courteous and con˜ dential manner and
will be properly considered and dealt with
within 90 days. If you believe you have a
complaint, please write to:
Superannuation Complaints Of˜ cer
PO Box 666
Carlton South VIC 3053
The Trustee may contact you during its
investigation of your complaint. Once the
investigation is complete, you will receive
a written reply from the Trustee explaining
the outcome of their investigation. If you
are not satis˜ ed with the outcome, you
may choose to escalate your complaint
to the Superannuation Complaints
Tribunal (SCT).
Established by the Government, the SCT
is an independent tribunal charged with
reviewing certain decisions made by
Trustees. The SCT will seek to resolve
your complaint through conciliation. If
conciliation is unsuccessful, the SCT
will make a ˜ nal, binding judgement.
You can contact the SCT at:
Superannuation Complaints Tribunal
Locked Bag 3060
Melbourne VIC 3001
T:
1300 884 114
F:
03 8635 5588
E:
info@sct.gov.au
W:
sct.gov.au
If your complaint is outside the jurisdiction
of the SCT, we suggest contacting the
Financial Ombudsman Service (FOS) at:
Financial Ombudsman Service
GPO Box 3
Melbourne VIC 3001
T:
1300 780 808
W:
fos.org.au
Privacy
First Super takes the utmost care with
your personal information and collects
only information that is necessary for your
membership. If we share your information
with other organisations, we ensure it is
only for the purpose of administering your
account or as authorised by you.
A copy of our Privacy Policy is available
on request.
If you believe that a breach of your
privacy may have occurred in relation to
your First Super membership, write to:
First Super Privacy Of˜ cer
PO Box 666
Carlton South VIC 3053
˜ rstsuper.com.au
This report was prepared by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988, RSEL L0003049), Trustee of First Super superannuation fund
( A B N 5 6 2 8 6 6 2 5 181, RSER 1067385). The material in this report is a summary only. The rules of the Fund are located in the Trust Deed and relevant
law.Intheevent ofinconsistencybetween this report and the rules, the rules of the Fund prevail. This report was prepared without taking into account
y o u r o bjec t i v e s , ˜n a n c i al s i t u a t i o n o r ne e d s . Should you consider the appropriateness of the material in light of your own objectives, ˜nancial situation
or needs before making any decisions. You can obtain a copy of the Product Disclosure Statement by contacting us. Facts and ˜gures appearing in this
report were accurate at October 2013 but may change without notice.
Contact us
If you require more information or assistance with your First Super account, contact us
In person
Level 3, 200 Arden St
North Melbourne
VIC 3051
Mail
PO Box 666
South Carlton
VIC 3053
Phone
1300 360 988
Fax
1300 362 899
Email
mail@˜ rstsuper.com.au
Photo: With special thanks to Hancock Victorian Plantations