First Super Annual Report FY2016-17 V4
ANNUAL REPORT
FIRST SUPER
2016/17
You can obtain a hard copy or register to receive a hard copy by calling
1300 360 988 or emailing mail
@
˜rstsuper.com.au.
Issued by First Super Pty Ltd ABN 42 053 498 472, AFSL 223988, Trustee
of First Super ABN 56 286 625 181 RSER No. R1067385
Level 3, 200 Arden Street, North Melbourne VIC 3051
Co-Chairs™ message
2
CEO™s message
5
FY2016/17 highlights
6
First Super is
y our
Industry Super Fund
7
Important information for
Accumulation Members
8
Investment performance
9
Your investment options
12
Investments held by the Fund
16
Taking care of First Super
18
Directors™ remuneration report
20
Fees and charges
2
1
Financial information
22
Superannuation update
23
Bene˜ts
25
General information
26
Contact us
Back cover
Content s
THE INDUSTRY FUND FOR
EMPLOYEES IN THE TIMBER,
PULP& PAPER AND FURNITURE
& JOINERY INDUSTRIES.
2
The Board is pleased to present
members and stakeholders with First
Super™s annual report for the 2016/17
˜nancial year. The report includes
details about First Super™s above target
investment returns and developments
within the fund during the last ˜nancial
year.
Strong investment returns and a
number of fund initiatives demonstrates
First Super continues to put members
˜rst. However, the Funds™ ability to
continue to do so is under sustained
threat.
INVESTMENT PERFORMANCE
Your Fund declared strong returns
again for the 2016/17 ˜nancial year.
First Super™s MySuper option, in which
the majority of members are invested,
returned 11.5% for accumulation
members and 11.79% for pension
members, for the year ending 30 June
2017.
These returns represent double the
5.43% annual return target, building
upon previous years™ strong returns.
Accumulation members in our MySuper
option have received an annualised
return of 10.23% for each of the last
˜ve years. Contained in the Investment
Performance section of this report are
details of the investment performance
of each investment option.
As in previous years, the Board
has conducted its annual review of
investment strategy for all options.
It resolved to make no change to
investment strategy, continuing the
more defensive positioning of the
MySuper option relative to other funds™
MySuper option.
The outlook for investment returns
in the medium term remains lower.
Despite the Board™s concerns,
investment markets were not as volatile
as expected. This is not to say we cannot
expect volatility this year and potentially
lower than targeted returns.
First Super™s Investment Committee
reviews investment performance
quarterly, reporting to First Super™s
Board on whether any change in
investment managers and strategy is
required.
If there are changes of signi˜cance to
investment strategy, your Board will
inform you of those changes and the
likely impact upon you.
GOVERNMENT POLICY
The Board is concerned a series of
government initiatives threatens the
viability of industry funds, and thus
your Fund™s ability to continue to deliver
higher investment returns than the
retail for-pro˜t sector. According to
monthly SuperRatings data, industry
super funds have outperformed bank-
owned super funds on average by
more than 2 per cent over 10 years.
Over the last ˜ve years your fund has
returned MySuper members 10.23% per
Dear Members
Welcome to the 2016/17 Annual Report of First Super. We want to thank you for your continued support and loyalty to us.
We encourage you to read this Annual Report as it gives details of your investment returns and many of the initiatives we
have put into place.
CO˜CHAIRS™ MESSAGE
3
Trade Industry Association.
Bob Smith, an independent director,
resigned effective 30 June 2017 and
was replaced in September 2017 by
Tim Chat˜eld. Tim comes to the Board
with experience establishing and
managing community organisations. He
is currently chair of Aboriginal Housing
Victoria.
Finally, David Kirner, an employee
nominated director gave notice of
his intention to resign, which he did
in August 2017. Scott McDine was
appointed to replace David. Scott is
a former National Secretary of the
Australian Workers™ Union and formerly
a director of Australian Super and Cbus.
CONCLUSION
The Board expresses its thanks to the
Trustee of˜ce staff and service providers
for continuing to collectively put
members ˜rst.
This is seen in investment returns and
the improved member and employer
satisfaction levels.
Finally, thanks for being a First Super
member. We appreciate the trust you
and your family have put in us..
year. By contrast bank owned funds
only returned 7.57%, a 2.66% under
performance each year.
Industry Super Australia™s member
information campaign starkly highlights
the potential consequences of
superannuation changes Πthat only
banks and their shareholders will
bene˜t from these changes. Members
of industry funds will not.
The Productivity Commission, a
Commonwealth government agency,
is reviewing how superannuation
funds become default funds. On any
reasonable view the outcome of this
review will be to make it easier for
bank-owned funds to become default
funds. This means many workers will
end up in bank-owned funds that have
consistently delivered lower returns
than funds where all pro˜ts return to
members.
The Government proposes to change
how your fund is run by imposing more
independent directors on the Fund™s
board. The Government argues there
is a problem that needs ˜xing. Though
the problem is not clear. Looking at
the retail banks, boards dominated by
independent directors have presided
over scandal after scandal and
excessive executive pay packets.
The Board believes the mix of member
and employer nominated directors and
independent directors works. It has
delivered to members superior returns
with modest costs. It will continue to
defend your right to be a member of
a superannuation fund that puts your
interests ˜rst.
SHAREHOLDER ENGAGEMENT
First Super™s Board has put
considerable effort into improving
communication and consultation with
its seven shareholders. In addition
to the annual general meeting, three
meetings were held with shareholders
last ˜nancial year. At these meetings,
the Fund™s strategy and business plan
was discussed and views sought on
these important matters and also how
the Fund should approach introducing
director terms.
First Super will soon introduce a
program of member annual general
meetings where the Fund will travel to
the areas in which our members live
and work to provide a report on the
Fund and provide you the member with
an opportunity to ask questions. The
Fund will also hold an on-line annual
general meeting for those members
who can™t attend because the annual
general meeting™s location or time is not
convenient for them.
GOVERNANCE
First Super™s Board continued with its
renewal program. Janet Gilbert joined
the Board in March 2017 replacing
Martin Lewis. Janet has been appointed
for a four-year term. Janet is a solicitor
with considerable industry experience
and knowledge gained in the Timber
The Fund
has achieved
above target
investment
returns again
this year.
Lisa Marty
Co-Chair, First Super
Michael O™Connor
Co-Chair, First Super
4
5
CEO™S MESSAGE
The Fund awarded the contract for
member and employers services to
the Construction, Forestry, Mining
and Energy Union the (CFMEU). The
procurement process was supervised
by a probity auditor to ensure potential
con˚icts of interest were managed and
most importantly, members receive
value for money for these services.
One aspect of the Fund™s investment
process that received considerable
attention was the treatment of
workers, contractors and franchisees
by companies in which the Fund is
invested. The overriding concern by the
Fund is the sustainability of investment
returns. We invest on your behalf for
the long run. We do not want to see the
companies we invest in cut corners and
then subsequently be held to account.
This only leads to long term losses after
misleading short term gains.
During the year the Fund suspended
additional investments in its private
equity programme because of these
concerns. You may have seen media
reports about Aerocare, and its
treatment of workers, and the process
it went through in negotiating an
enterprise agreement. First Super is
indirectly invested in Aerocare and
sought explanations from the Fund™s
manager about these reports. A
recent decision of Fair Work Australia
validates the Fund™s concerns about
Aerocare™s management™s approach to
industrial relations and the impact upon
Areocare™s sustainability.
Similarly, the Fund met with Domino™s
Pizza to discuss concerns about
its franchise model and the impact
upon the staff employed by Domino™s
franchisees.
STAFF
During the year we had a number
of key staff leave. Peter Scott, our
Financial Adviser, who was known
to many members and their families
retired in December 2016. Peter™s broad
shoulders were appreciated by many
members and their families, when he
assisted them with their insurance
claims, setting them up for retirement
and during redundancies. We wish
Peter well and know his retirement is a
gain for cricket and umpiring, and his
extended family.
David Galloway, our Operations and
Governance Manager, also retired at the
end of the ˜nancial year. David™s job was
not an easy one, ensuring the Fund was
well positioned to meet the rising tide
of compliance and regulatory change.
David did the work of many, and that
has been appreciated by the Board and
myself.
As both the Co-Chairs and I have noted
in previous reports, we are well served
by our out-sourced service providers.
We depend upon them for many of our
critical activities and they do this well.
On behalf of both my colleagues in
the Trustee of˜ce and myself, our
thanks to BNP Paribas Securities
Services, the CFMEU, Frontier Advisors,
MetLife and Superannuation Bene˜ts
Administration.
The 2016/17 ˜nancial year has
been a busy year for your Fund
with signi˜cant progress made to
implement business plan initiatives.
Most importantly, the Fund has again
generated above target investment
returns. We are entrusted with your
retirement savings, we invest those
savings prudently and when you are
ready to retire, you get back more than
you invested.
Positive investment returns over the
last number of years have meant that
First Super has met that promise to
you.
The following section on the Fund™s
investments and returns will explain
how your investment returns and
retirement savings were generated.
KEY FUND INITIATIVES IN
2016/17
During the 2016/17 year, the Fund and
its Administrator, Superannuation
Bene˜ts Administration, invested
in a signi˜cant enhancement to
Fund administration process, client
management systems and the online
member transactional environment.
The enhancement will improve
member and employer communication
and allow our Member Services Team
to provide better member service. We
also expect the enhancements will
allow the Fund™s administration cost to
be contained.
The Fund also embarked upon a major
procurement exercise during the
year, calling for public tenders for the
provision of member and employer
services.
First Super provides a service where
Coordinators are available to visit
members and employers to deal with
the complexity of superannuation
through advice and service, which
enables members and employers
to deal with the complexity of
superannuation through advice and
assistance.
Bill Watson
CEO, First Super
6
1685
STATISTICS
seminars,
site /
off-site
visits
7550
member
meetings
FY2016/17 HIGHLIGHTS
33,996
phone calls
from
members
$
2.7bn
funds under management
56,000
website visits
99,000
website sessions
˜
Up 1.7%
˜
Up 4.3%
11,166
emails from members
64,000
members
Total and
Permanent
Disability
Death
Income
Protection
85.7%
increase in members
accessing personal
advice
Below is an overview of how First Super performed during
FY2016/17.
$
18.8
m
paid in
claims
Terminal
Illness
7
First Super is an industry super fund, supporting over 64,000 members who trust us
to manage more than $2.7 billion of their hard-earned savings, as at June 2017. We
offer superannuation, insurance and Allocated Pension Products including Transition
to Retirement. As an industry super fund our pro˜ts are returned to you, our members
and not to shareholders.
As the industry fund for all employees in the timber, pulp & paper and furniture &
joinery industries, we are committed to providing our members with the bene˜ts that
enhance their long term ˜nancial position, well-being and security.
QUALITY SERVICE AND ADVICE
We are committed to providing our members with high quality, personalised service
and advice. Our Member Services Team is available to help you manage your super
and inform you of your options. The Member Services Team can also help you arrange
for a First Super local Coordinator, or Business Development Manager to visit your
workplace. They are available to provide you with the information you require to better
understand your super and our services.
We also offer members access to licenced Financial Planners who can help you plan
for your retirement.
Call our Member Services Team on
1300 360 988
to book a free initial consultation with
a Financial Planner, or to book an appointment with a local Coordinator or Business
Development Manager.
INVESTMENT OPTIONS TO SUIT YOUR NEEDS
Your s
uper can be a safe, low-cost and tax-effective way of saving for retirement.
At First Super we offer members ˜ve investment options with a varying mix of growth
and defensive investments. You can invest your savings in one option or invest in a
combination of options; the choice is yours. You can also change your investment
options at any time, providing you have at least $1,000 in your account.
FIRST SUPER IS YOUR
I
NDUSTRY FUND
DID YOU KNOW?
Small differences in both
investment performance
and fees can have a
substantial impact on your
long-term returns.
8
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
unexpected were to happen.
TYPES OF COVER
Death
Death cover provides a lump sum payment in the event of your
death, or on diagnosis of a terminal illness. Amongst other
things, it can help pay for your debts, funeral costs, or to help
your family pay ongoing bills.
Total and Permanent Disability
TPD cover provides a lump sum payment if you become totally
and permanently disabled. Amongst other things, it can be used
for your ongoing bills (such as mortgages and living expenses)
and for your medical expenses.
Income Protection
Income Protection cover provides you with an ongoing payment
of up to 85% of your income (depending on your level of cover) if
you are unable to work for a long period because you are sick or
injured. This way, you don™t have to think about the bills, you only
need to focus on getting better.
HOW MUCH DOES IT COST?
Premiums for your insurance cover 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 your Preservation Age (the age at which you
can access your super) and starting to think about retirement,
First Super™s Allocated Pension products allow you to stay with
us through your working life and beyond. An Allocated Pension
lets you convert your superannuation into regular income in
retirement. You can choose the number of payments you wish
to receive and their frequency, which can be fortnightly, monthly,
quarterly, half-yearly or yearly.
You can also draw down lump sums when it suits you. The
minimum lump sum withdrawal is $1,000 Πa lump sum
withdrawal cannot occur until you have received at least one
regular income payment. This is a legal requirement that cannot
be waived.
If you have reached your Preservation Age and are still working,
a First Super Transition to Retirement Allocated Pension can
provide you with the ˚exibility to reduce your working hours and
top up your 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 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 Member Services
Team on
1300 360 988
to discuss your options or make an
appointment to see a ˜nancial planner.
Preservation Age
Because the Government wants to encourage everyone to
save for retirement, it provides tax savings for money invested
in super. Since the purpose of super is to help you build up
retirement savings, you generally cannot withdraw your money
from super until you retire permanently from the workforce and
after you have reached your preservation age.
Your preservation age depends on when you were born. If you
were born before 1 July 1960, your preservation age is 55. Once
you are 60 and retired, your money can be taken out of super tax
free as a pension or lump sum.
Date of birth
Preservation age
Before 1 July 1960
55
1 July 1960 Π30 June 1961
56
1 July 1961 Π30 June 1962
57
1 July 1962 Π30 June 1963
58
1 July 1963 Π30 June 1964
59
From 1 July 1964
60
DID YOU KNOW?
As an industry fund, we offer low fees.
Nearly half of working Australians have multiple super accounts. We can help you rollover your super
accounts Œ at no cost\! Complete a Transfer your Super form and we™ll do the rest\!
IMPORTANT INFORMATION FOR
ACCUMULATION MEMBERS
9
Last ˜nancial year was another year where
members received returns above the investment
return target.
Despite uncertainty in investment markets as we entered the
2016/17 ˜nancial year, returns to First Super members were
above investment targets and our expectations. Members
invested in First Super™s default balanced option – the MySuper
option – received an 11.5% return. For those members with a
greater appetite for risk, returns were even better with 13.61%
returned for the Growth option and 15.98% for the Shares Plus
option. Returns for the less risky Conservative Balanced option
were 8.86% with the Cash option returning 2.26%.
Five year returns were just as impressive, with returns as
follows:
Member investment option
Rate of return(%)
Balanced
11.50
Shares Plus
15.98
Growth
13.61
Conservative Balanced
8.86
Cash
2.26
It was pleasing to see First Super being identi˜ed as a top super
fund by Stockspot on The Today television show.
The unexpected outcome of the Brexit vote in June 2016 was
cause for pessimism as we entered 2016/17. Uncertainty about
the impact upon the European Union, the UK and international
trade led to falls in listed equity markets. The FTSE recovered
but increases in share prices were offset by the fall in the pound.
This has remained the case throughout 2016/17 particularly
following substantial swing to UK labour at the June snap
election.
If things couldn™t get any more unexpected, the election of
President Trump in November 2016 proved the case. President
Trump™s election has seen US stock markets and markets for
other assets reach highs that were not expected. These returns
contributed to very strong international equity market returns.
Meanwhile, China continued its transition in an orderly,
planned fashion from infrastructure investment and
manufacturing services. Despite threats of trade wars from
the US, international trade continued to ˚ow. As China grows
its domestic markets it becomes less dependent on export
markets.
There was no end to record low interest rates globally. Central
banks throughout the OECD including Australia™s Reserve Bank
have remained reluctant to ‚pull the trigger™ on interest rate
hikes. In˚ation remained benign even though governments and
central banks would have preferred to see a pick-up in in˚ation.
Low wage growth continues to retard economic growth.
In Australia, in˚ation and interest rates remained low fuelling
most domestic housing markets. Australian share markets
posted double digit returns, albeit more modest than global
markets.
Within First Super™s investment portfolio standout asset
classes were infrastructure, real property and private equity.
Infrastructure returned almost 14%, property just over 13% and
private equity almost 18%. Within these asset classes there
were standout managers including the industry fund-owned
IFM Investors and ISPT and the privately owned private equity
manager, Stafford.
At a manager level First Super™s listed equity manager, Allan
Gray Australian Equity Fund, outperformed its benchmark by
50%. Its peer international equity manager fund, Orbis Group
equity fund, also outperformed its benchmark, although this out
performance was more modest.
First Super continued to take an active approach to managing
environment, social and governance investment factor risk
(ESG). First Super voted against listed company remuneration
reports where either company executives or boards received
remuneration increases above increases in average weekly
ordinary time earnings for the comparable period. Regrettably
company boards are not listening to shareholders. Boards
continue to excessively remunerate executives and themselves.
It is First Super™s view that excessive executive remuneration
deprives shareholders of their fair share of company pro˜ts.
During the year First Super™s board became increasingly
concerned about the management and governance of
companies within its private equity portfolio. Whilst private
equity returns have been strong, concerns about the
sustainability of private equity business model increased. This
was in light of reports of poor labour management practices
within one company in the portfolio and an apparent industry
wide problem in the hospitality and fast food sector not paying
staff in accordance with the relevant award. Strong pro˜ts one
year in any business can be eroded by subsequent repayment
of underpaid wages and superannuation. The investment risk
attached to operating in grey zones is not acceptable to First
Super. Directors resolved to place the private equity program on
hold until a more acceptable way of investing can be determined.
As in previous years, First Super conducted its annual review of
investment options, asset sectors, allocations between sectors
and managers withing those sectors. First Super elected to
terminate the mandate of one international equity fund and
has commenced a search for a replacement manager. After
receiving advice from its asset consultant and considering
investment risk, the Fund elected to make no changes to
investment options or asset allocation. If First Super makes any
substantial change to investment strategy or asset allocation, it
will inform you.
Further in this annual report are details of all managers the
Fund invests in on your behalf. Our website ˜rstsuper.com.au
is updated monthly providing you with details of the investment
performance for the previous month.
INVESTMENT PERFORMANCE
11.50%
T
he Balanced
option™s return for the year 2016/17
10
CREDITING MEMBER ACCOUNTS
Your super account earns investment income at the Fund™s declared crediting rate*.
The crediting rate used will depend on the investment option(s) you have selected. Each
month First Super will declare a crediting rate return for each investment option based
on earnings and estimated fees and tax.
After the end of the ˜nancial year (30 June) or when you leave the Fund, First Super
will adjust your account based on the accumulated weekly performance of each
investment option after deducting tax and fees and allowing for reserves.
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 grows. If the rate is negative, your account balance is reduced.
Interim crediting rates
First Super also determines 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 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.
Below are the crediting rates for the ˜nancial year ending 30 June 2017 and prior
periods.
Superannuation
Investment Option
1 year
% p.a.
2 year
% p.a.
3 year
% p.a.
5 year
% p.a.
10 year
% p.a.
Return
since
inception
Inception
date
Balanced
11.50
8.32
8.69
10.23
4.67
8.40
1 Jul 1988
^
Shares Plus
15.98
10.27
10.84
13.56
4.57
5.98
1 Mar 2001
Growth
13.61
9.17
9.64
11.94
n/a
11.15
14 Oct 2011
Conservative Balanced
8.86
6.76
6.96
8.24
n/a
5.80
1 Jul 2008
Cash
2.26
2.37
2.46
2.71
3.45
4.27
1 Mar 2001
^
The composition of the Balanced option was fundamentally different prior to 1 July 1988.
Pension
Investment Option
1 year
% p.a.
2 year
% p.a.
3 year
% p.a.
5 year
% p.a.
10 year
% p.a.
Return
since
inception
Inception
date
Balanced
11.79
8.72
9.25
11.21
5.39
7.59
18 Mar 2005
Shares Plus
16.69
10.77
11.43
14.66
5.30
8.10
1 Jul 2005
Growth
15.00
10.16
10.74
n/a
n/a
11.12
10 Aug 2013
Conservative Balanced
9.81
7.52
7.73
9.23
n/a
6.54
1 Jul 2008
Cash
2.64
2.75
2.85
3.15
4.05
4.09
1 Jul 2005
Note: ‚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 to your account for reasons including the date you joined and the timing of
contributions. Past performance is not a reliable indicator of future performance.
With First Super,
you control how your
super is invested.
You can choose
an investment
mix that suits
your risk pro˜le
and investment
timeframe.
11
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 and cash
Πhas different levels of risk and different
potential for returns.
THE RISK/RETURN PROFILE 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.
12
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*.
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
Financial Planner to contact you.
* Financial planning is provided by Industry Fund Services Ltd
(IFS) (ABN 54 007 016 195 AFSL 232514)
INVESTMENT OPTIONS
For more information, read the Investing your super booklet
available at Forms and Resources section of
˜rstsuper.com.au
.
USE OF DERIVATIVES
First Super allows some of its investment managers to use
derivative instruments to help manage risk and for other
defensive purposes. The managers must use derivatives within
strict parameters.
Derivative instruments are not used for speculative investing.
The Trustee Derivative Charge Ratio did not exceed 5%.
SOCIALLY RESPONSIBLE INVESTING
Labour standards and environmental, social or ethical
considerations may be taken into account in the selection,
retention or realisation of investments.
YOUR INVESTMENT CHOICE
1
Shares Plus
2
Growth
3
Balanced
4
Conservative Balanced
5
Cash
First Super lets you choose how your super is invested. Members can choose to invest in any one or a
combination of the following ˜ve investment options:
First Super members can choose to invest in any one or a combination of the following options:
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.
13
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
˜
>
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
3.5 YEARS
RISK BAND:
5
RISK LABEL:
MEDIUM – HIGH
Asset allocation and ranges
Actual % as at 30 June 2017.
Asset Class
Actual
Range
Cash
1.8%
0-20%
Australian Fixed Income
5.9%
0-20%
International Fixed Income
5.9%
0-20%
Australian Listed Equities
33.4%
25-45%
Australian Unlisted Equities
5.4%
0-25%
International Listed Equities
26.3%
0-45%
International Unlisted Equities
0.4%
0-10%
Australian Unlisted Property
10.2%
0-20%
Australian Unlisted Infrastructure
5.4%
0-10%
International Unlisted Infrastructure
5.3%
0-10%
Investment options
Asset allocation and ranges
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
˜
>
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 super 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 over the long term.
Standard risk
4.2 YEARS
RISK BAND:
6
RISK LABEL:
HIGH
SHARES PLUS
Asset Class
Actual
Range
Australian Listed Equities
42.2%
30-60%
Australian Unlisted Equities
5.4%
0-20%
International Listed Equities
31.1%
0-40%
International Unlisted Equities
0.4%
0-5%
Australian Unlisted Property
10.2%
0-20%
Australian Unlisted Infrastructure
5.5%
0-10%
International Unlisted Infrastructure
5.2%
0-10%
Actual % as at 30 June 2017
14
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
˜
>
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 super 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 underperform against the Shares
Plus, Growth or Balanced options over the medium to long
term.
Standard risk
1.2 YEARS
RISK BAND:
3
RISK LABEL:
LOW ˛ MEDIUM
CONSERVATIVE BALANCED
Asset allocation and ranges
Actual % as at 30 June 2017.
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 nine
˜
>
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 super along with diversi˜cation
across asset classes.
Risk pro˜le
Designed to provide good growth over the mid to long term
while reducing risk through diversi˜cation. Likely to slightly
underperform against the First Super Shares Plus and Growth
options over the long term.
Standard risk
2.3 YEARS
RISK BAND:
4
RISK LABEL:
MEDIUM
BALANCED
Asset allocation and ranges
Actual % as at 30 June 2017
Asset Class
Actual
Range
Cash
20.8%
5-25%
Australian Fixed Income
13.0%
5-45%
International Fixed Income
12.9%
5-45%
Australian Listed Equities
18.1%
10-30%
International Listed Equities
13.3%
5-20%
Australian Unlisted Property
10.7%
0-20%
Australian Unlisted Infrastructure
5.7%
0-10%
International Unlisted Infrastructure
5.5%
0-20%
Asset Class
Actual
Range
Cash
5.3%
0-15%
Australian Fixed Income
10.7%
0-40%
International Fixed Income
10.8%
0-40%
Australian Listed Equities
23.1%
15-40%
Australian Unlisted Equities
7.5%
0-25%
International Listed Equities
20.4%
5-40%
International Unlisted Equities
0.3%
0-5%
Australian Unlisted Property
10.9%
0-20%
Australian Unlisted Infrastructure
6.5%
0-10%
International Unlisted Infrastructure
4.5%
0-10%
15
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
˜
>
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.
This 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 underperform
all other investment options offered over all but the shortest
periods.
Standard risk
0.0 years
RISK BAND:
1
RISK LABEL:
VERY LOW
CASH
Asset allocation and ranges
Actual % as at 30 June 2017
Asset Class
Actual
Range
Cash
100%
100%
16
INVESTMENTS HELD BY THE FUND
17
30 June 2017
($)
Australian Equities
Eley Grif˜ths Aust Equity Small Companies
Mandate
55,254,953
IFM Enhanced Index Aust Equity Mandate*
222,037,039
Allan Gray Australian Equity Fund*
159,730,104
Perpetual Aust Equity Mandate*
185,593,500
Total Australian Equities
622,615,596
Australian Infrastructure
IFM Aust Infrastructure Fund
114,570,403
PW Hastings UTA
55,621,800
Total Australian Infrastructure
170,192,203
Australian Private Equity
First Trust Portfolio
116,167,815
Frontier Pty Ltd
305,000
ME Bank Ltd
31,030,427
Industry Super Holdings
17,239,779
ROC Partners Trust 3
3,166,022
ROC Partners Trust IV
11,340,721
PW Quay Australia 3 Fund
2,563,268
PW Quay Australia 4 Fund
1,410,645
Super Bene˜ts Administration Pty Ltd
1,518,748
Total Australian Private Equity
184,742,425
Cash & Capital Guaranteed
IFM Specialised Cash Fund
6,055,901
Short Term Cash Account* (Term deposits)
170,800,057
Cash
60,581,332
Total Cash
237,437,290
Fixed Interest
IFM Specialised Credit Fund
97,072,780
Blackrock Indexed Aust Bond Fund
120,579,463
Blackrock Overseas Bond Index
53,258,272
IFM Credit Opportunities Mandate
7,573,387
PIMCO Global Bond Fund
75,436,295
PIMCO Target Return Fund*
147,500,232
ME Super Loans Trust
2,293,258
Westbourne Yield Fund No 1
28,700
Westbourne Infrastructure Debt Fund No 2
40,356,560
Total Fixed Interest
544,098,947
* These assets represent 5% or more of the Fund.
30 June 2017
($)
International Equities (Unhedged)
BGI Unhedged World Ex Aust Equities Index*
139,876,937
Capital Int Global Equities Unhedged*
152,058,577
Orbis Global Equity Fund*
157,565,121
Total International Equities (Unhedged)
449,500,635
International Equities (Hedged)
Blackrock Hedged World Equities Index
92,635,161
Total International Equities (Hedged)
92,635,161
International Infrastructure
IFM International Infrastructure
119,367,165
Total International Infrastructure
119,367,165
International Private Equity
IFM Intl Private Equity 1
971,740
Wilshire Pooled Superannuation Trust
5,868,760
Total International Private Equity
6,840,500
Property
ISPT Core Fund*
179,619,576
ISPT DOF 1
251,588
PW Fortius Active Property
255,761
PW Franklin International Real Estate 2
1,558,154
QIC Property Fund
102,683,691
Total Property
284,368,770
Total Investments
$2,711,798,692
Listed below are the investment funds employed by First Super and the direct investments made for the
˜nancial year ending 30 June 2017.
18
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 $2.7 billion in funds
under management and overseeing its
investments on behalf of over 64,000
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
$190,575,965
The value of contributions made to First Super
member accounts for the 2016-17 ˜nancial year.
THE TRUSTEE BOARD
The First Super Trustee Board is comprised of ˜ve member representatives, ˜ve
employer representatives and two independent directors. 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. Two independent directors were jointly appointed by the other
members of the Trustee board. The Co-Chair persons are elected every three years
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 committees) is commissioned.
19
BOARD COMMITTEES
The First Super Trustee Board has established committees
to deal with issues and to make recommendations to the
Board. Each committee generally meets four times a year, with
additional meetings scheduled as required. The Directors of
First Super and their committee representation as at
30 June 2017 were as follows:
Member representative
Committee representation
Michael O™Connor
(Co-Chair)
Member since 2008
Administration and Marketing
Investment (Chair)
Nominations
Remuneration
Denise Campbell-Burns
Member since 2014
Administration and Marketing
Audit and Compliance
David Kirner
Member 2010 – 2017
Audit and Compliance
Investment (July – Sept 2016)
Administration and Marketing
(Jan – Sept 2017)
Alex Millar
Member since 2008
Investment
Remuneration
Frank Vari
Member since 2008
Administration and Marketing
(July – Dec 2016)
Investment (Jan 2017 -)
Nominations
Employer representative
Committee representation
Allan Stewart
Member since 2008
Administration and Marketing
Investment
Nominations
Remuneration
Martin Lewis
Member 2008 – 2017
Audit and Compliance
Investment
Nominations
Lisa Marty
(Co-Chair)
Member since 2012
Administration and Marketing
(Chair)
Mike Radda
Member since 2008
Investment
Julie George
Member since 2015
Administration and Marketing
Audit and Compliance
Remuneration
Janet Gilbert
Member since 2017
Administration and Marketing
Independent director
Committee representation
Bob Smith
Member 2008 – 2017
Audit and Compliance (Chair)
Nominations
Remuneration
Candy Broad
Member since 2015
Audit and Compliance
Investment
Remuneration (Chair)
Nomination (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 2017, First Super
used the following advisors and service providers:
Actuary
Mercer (Australia) Pty Ltd
Administrator
Super Bene˜ts Administration Pty Ltd*
External Auditor
PricewaterhouseCoopers
Internal Auditor
KPMG
Insurer
MetLife Insurance Limited
Insurance Advisor
IFS Insurance Solutions Pty Ltd
Asset Consultant
Frontier Advisors Pty Ltd*
Legal Advisor
Madgwicks
Master Custodian
BNP Paribas Securities Service
Tax Adviser
Ernst & Young
Financial Planning
Industry Fund Services Pty Ltd
Coordinators
CFMEU FFPD
*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 local Coordinators call
1300 360 988
.
$2,700,000
$2,400,000
$2,300,000
$2,200,000
$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
$1,200,000
Funds Under Management ($™000)
2010
2011
2012
2013
2014
2015
2016 2017
20
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.
Committee and subcommittee meetings
Covering preparation
and attendance at committee and meetings. Payment includes
an allowance for travel and accommodation for interstate
Directors.
Workshop and 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.
The Directors of First Super Pty Ltd are paid for the work they do as Directors. In some cases, payment
is made to the Director™s employer to compensate for time spent by the Director managing the business
of the Fund and the Trustee.
Interstate Travel
Directors travelling interstate for Governance meetings and
Representation duties will be paid Interstate Allowance Rate of
$1,000 for only one meeting on the ˜rst day and no additional
Interstate Allowance Rate for any other meetings held on the
same or successive days. However, those directors shall be
reimbursed for accommodation, meals and incidentals at the
prevailing ATO reasonable travel rate applying to the location at
which the meeting is held for second and subsequent days.
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 committee 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 and Compliance committee at
each meeting and is published on the First Super website.
21
BOARD FEES
The Directors™ fees for the year ended 30 June 2017 are as follows:
Role/Activity
Fees and Allowances
Co-Chairs
$1,500 per calendar month or part thereof
Co-Chairs
and Directors
Board Meetings and Strategic Planning
Day(s)
$3,000 / meeting
Committee Meetings, ad-hoc Committee
and Sub-committee meetings and AGM
$1,500 / meeting
Associate
Directors
Board Meetings and Strategic Planning
Day(s)
$2,500 / meeting
Committee Meetings, ad-hoc Committee
and Sub-committee meetings and AGM
$1,125 / meeting
Workshops / training courses
(Co-Chairs, Directors and Associate Directors)
$1,500 / day
Domestic conferences
(Co-Chairs and Directors)
$1,500 / day
(No Interstate Allowance Rate)
International Conferences & Workshops
(Co-Chairs and Directors)
$1,100 / day plus reimbursement of travel, accommodation
and incidental costs as deemed appropriate by the Chair of
the Remuneration Committee on advice from the CEO; or in
respect of the Committee Chair, as deemed appropriate by the
Co-Chairs of the Fund on advice from the CEO; with details
of proposed or incurred costs reported to the next Board
meeting.
Representational
Committees
AIST Chairs forums
APRA consultations
$2,250 / meeting
(plus $1,000 for Interstate Allowance Rate where applicable)
Industry not for pro˜t committees
(Co-Chairs and Directors)
where no fee or honoraria paid by organisation to Director and
where the Director is required to represent the Fund
$1,100 / day
(plus $1,000 for Interstate Allowance Rate where applicable)
Teleconferences
Fees not applicable
2016˚17 ATTENDANCE AND REMUNERATION
Listed below are Directors™ meeting attendance and remuneration (including GST where applicable) for the year ending 30 June 2017.
Director
Committee
Board (5 held)
Total PD HRs
Fees paid
Fees Paid to
Denise Campbell-Burns
8/8
5/5
21.5
$36,578
CFMEU – FFPD
Candy Broad
11/12
5/5
49.5
$47,053
Candy Broad
Julie George
5/5
8/8
22.5
$64,083
Busi Culture
Janet Gilbert
1/1
1/1
53
$29,428
Crescor Pty Ltd
David Kirner
5/6
3/5
7
$28,600
CFMEU – FFPD
Martin Lewis
3/3
1/1
2
$12,650
Kylken Pty Ltd
Lisa Marty
11/11
5/5
63.5
$85,228
Lisa Marty
Alex Millar
5/5
5/5
23.5
$31,628
CFMEU – FFPD
Michael O™Connor
12/12
5/5
34.5
$79,669
CFMEU – FFPD
Mike Radda
3/4
4/5
42.5
$15,128
Sterad Pty Ltd
Bob Smith
7/8
5/5
20.5
$67,111
Robert Patrick Smith
Allan Stewart
8/10
4/5
50.5
$82,045
Allan Stewart and Associates Pty Ltd
Frank Vari
5/6
4/5
25
$23,100
CFMEU – FFPD
˝
$602,301
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 2017 was $361,538.
22
The following is an abridged version of First Super™s Financial Statements for the ˜nancial year ending
30 June 2017. A copy of the audited Financial Statements is now available to download at
˜rstsuper.com.au
.
Statement of ˜nancial position
30 June 2017 ($)
30 June 2016
($) restated*
Assets
Investments#
2,711,798,692
2,442,975,352
Other Assets
9,076,875
8,072,967
Total Assets
2,720,875,567
2,431,048,319
Liabilities
Tax payable
39,389,884
23,074,404
Other assets
6,007,754
8,822,017
Total liabilities
45,397,638
31,896,421
Net assets available for members bene˜ts
2,675,477,929
2,375,498,411
Members bene˜ts
2,651,978,239
2,375,498,411
Net assets
23,499,690
23,653,487
Equity – Reserves
Operational risk reserves
7,157,540
6,572,185
Other reserves
16,342,150
17,081,302
Total reserves
23,499,690
23,653,487
Income statement for the year ended 30 June 2017
Revenue
2017 ($)
2016
($) restated*
Revenue
Investment income
291,226,052
130,370,424
Other income
1,635,620
2,176,236
Total revenue
292,861,672
132,546,660
Expenses
Investment expenses
6,049,846
7,039,157
Administration expenses
8,985,804
9,278,919
Total expenses
15,035,650
16,318,076
Operating results
277,826,022
116,228,584
Less net bene˜ts allocated to members
(262,318,703)
(110,096,708)
Operating result before tax
15,507,319
6,131,876
Income tax (expense)/bene˜t
(15,109,088)
1,159,733
Operating result after income tax
398,231
7,291,609
Equity – Reserves
Operation risk reserve
7,157,540
6,572,185
Other reserve
16,342,150
17,081,302
Total reserves
23,499,690
23,653,487
* The ˜nancial position and results of operatons of the Fund were affected by the adoption of the accounting standard AASB 1056
S uper annuation Entities
(
AASB 1056
). This applied to annual reporting periods from 1 July 2016 as a result of the change from AAS 25
Financial Reporting by Super annuation Plans
(
AAS 25
). The fund has restated amounts previously reported under AAS 25 for the year
ended 30 June 2016.
# The measurement of investments pursuant to AASB 1056 has changed from finet market valuefl to fifair valuefl, resulting in the write
back of disposal costs.
FINANCIAL INFORMATION
23
Schedule for increasing the Super Guarantee rate
Period
Super guarantee (%)
1˝July 2016 Œ 30˝June 2017
9.5
1˝July 2017 Œ 30˝June 2018
9.5
1˝July 2018 Œ 30˝June 2019
9.5
1˝July 2019 Œ 30˝June 2020
9.5
1 July 2020 Π30 June 2021
9.5
1 July 2021 Π30 June 2022
10
1 July 2022 Π30 June 2023
10.5
1 July 2023 Π30 June 2024
11
1 July 2025 Π30 June 2026 and onwards
12
CONTRIBUTION LIMITS^ FOR THE2016/17 FINANCIAL YEAR:
Concessional Contributions
(Before-tax contributions)
Including employer, salary
sacri˜ce and personal
contributions for which a tax
deduction is claimed.
$25,000 for all ages
Non-Concessional
Contributions (After-tax
contributions)
Including personal contributions
made from after-tax pay and
spouse contributions.
$100,000*
People aged under 65 years may be able to
make non-concessional contributions of up to
three times their non-concessional contributions
cap for the year, over a three-year period. This is
known as the ‚bring-forward™ option.
The bring-forward cap is three times the
non-concessional contributions cap of the
˜rst year.
If you brought forward your contributions in
2016-17 ˜nancial year, it would be
3 x $100,000 = $300,000.
SUPERANNUATION UPDATE
4,887
Number of
new members
for 2016-17.
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
^ These limits are reviewed each ˜nancial year and we will inform you of any changes to these limits, as proposed by the government.
* Individuals over age 65 and satisfying the ‚work test™ can make non-concessional contributions of up to $100,000 per year.
24
WHAT HAPPENS IF YOU
EXCEED THE CONTRIBUTION
LIMIT?
Concessional Contributions:
For contributions made after 1 July 2013
onwards, if the concessional contributions
cap is exceeded, any excess concessional
contributions will be included in the
member™s assessable income for the
corresponding year and taxed at their
marginal tax rate. In addition, the
member will also be liable for the excess
concessional contributions (ECC) charge.
An ECC will increase the member™s tax
liability on the excess contributions. This
charge is applied to recognise that the tax
on excess concessional contributions is
collected later than normal income tax.
To reduce the tax liability, the tax of˜ce
will apply a 15% tax offset to account for
the contributions tax that has already
been paid by your super fund.
You may elect to withdraw up to 85% of
the excess concessional contributions
from your super fund to help pay the
income tax assessment resulting from
excess concessional contributions.
Non-Concessional Contributions:
The new procedure allows a choice for
individuals to release from super an
amount equal to their super contributions
in excess of the non-concessional
contributions cap (cap) plus 85% of an
associated earnings amount, with the
full earnings amount included in the
individual™s assessable income and taxed
at the individual™s marginal tax rate.
The individual will be entitled to a non-
refundable tax offset equal to 15% of the
associated earnings amount.
Excess non-concessional contributions
tax is imposed at the top marginal tax rate
on excess contributions not released from
your super fund.
GOVERNMENT
CO˚CONTRIBUTION THRESHOLD INCREASE
The income threshold for eligibility for a Government co-contribution increased to
$51,813 (up from $51,021) for the 2017/18 ˜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 super tax free.
AGE PENSION QUALIFYING AGE
Period within which a person was born
Pension age
1 Jan 1949 – 30 June 1952
65 years
From 1 July 1952 to 31 December 1953
65 years and 6˝months
From 1 January 1954 to 30 June 1955
66 years
From 1 July 1955 to 31 December 1956
66 years and 6˝months
From 1 January 1957 onwards
67 years
NEW AGE PENSION ASSET TEST LIMITS
From 20 September 2017, the Asset Test Limits for the Age Pension were changed to:
Levels For:
Full Pension
(Assets Below)
Part Pension
(Assets Below)
Single – Homeowner
$253,750
$552,000
Single ΠNon Homeowner
$456,750
$755,000
Couple ΠHomeowners
$380,500
$830,000
Couple ΠNon Homeowner
$583,500
$1,033000
Pensioners will be subject to a new taper rate of $3 for every $1,000 above the new
assets test free areas.
Income support recipients who lose their payment entitlement on 1 January 2017 as
a result of the changes will be automatically issued with a Commonwealth Seniors
Health Card, They will be exempt from the usual income test requirements for these
cards inde˜nitely.
Source: Dept. of Human Services Πvalid from 20 September 2017 to 31 December 2017
SIGNIFICANT EVENTS NOTICE
Fees and cost disclosure
The Australian Securities and Investments Commission (ASIC) announced changes
to the way fees are disclosed to improve transparency in the way fees and costs are
disclosed in investments. We endorse regulatory changes to increase transparency and
this is re˚ected in the Fees and Costs Section of the First Super
Plan for Retirement
and
Star t Retirement
Product Disclosure Statement dated 28 September 2017. The Trustee
has not increased the fees and costs it charges to your account. The main effect of the
ASIC changes is that certain costs paid by the Fund must be shown as though they
were fees charged to you.
See the Pension Product Disclosure Statement on the Forms and Resources section of
˜rstsuper.com.au.
25
Bene˜ts paid by the First Super Allocated Pension Division
First Super offers two allocated pensions:
Ł Allocated Pension
Ł Transition to Retirement Allocated Pension.
THE ALLOCATED PENSION
An Allocated Pension lets you convert your super into regular
income in retirement. You can choose the number of payments
you wish to receive and their frequency, which can be fortnightly,
monthly, quarterly, half-yearly or yearly.
You can also draw down lump sums when it suits you. The
minimum lump sum withdrawal is $1,000 Πand a lump sum
withdrawal cannot occur until you have received at least one
regular income payment. This is a legal requirement that cannot
be waived. The government has made rules about the amount
you can draw down in a year, and these are summarised below
under the heading ‚Government Limits on Payments™.
THE TRANSITION TO RETIREMENT ALLOCATED
PENSION
The Transition to Retirement Allocated Pension can give you a
tax-effective income stream while you™re still working, but there
are restrictions on the amount you can withdraw. These are
explained below. If you have reached your preservation age, a
Transition to Retirement Pension can help you ease your way
into retirement without sacri˜cing your standard of living.
Depending on your circumstances, it may help you to:
˜
>
Reduce your working hours
If you want to cut back your hours of work, you can replace
any income lost by drawing regular payments from your
Transition to Retirement Pension.
˜
>
Increase your retirement savings
By making extra contributions to your super account via
a salary sacri˜ce arrangement, you may increase your
retirement savings.
˜
>
Pay less tax
If you have reached your preservation and are under 60 years
of age, your Allocated Pension payments will be subject to
tax. However, some of your payments may be tax free and
you™ll receive a 15% tax offset on any taxable proportion.
Once you reach age 60, all of your Transition to Retirement
Pension payments will become tax free (based on current tax
arrangements).
When you permanently retire, your Transition to Retirement
Pension will convert to an Allocated Pension Πbut if you decide
before then that you want to stop your Transition to Retirement
Pension you can roll the balance of your account back into
your First Super super account. Call us on
1300 360 988
or
visit
˜rstsuper.com.au
to download a copy of the First Super
Allocated Pension PDS.
GOVERNMENT LIMITS ON PAYMENTS
Minimum annual payment:
For both Allocated Pensions accounts, at least one payment
of a minimum amount must be made at least once a year. The
minimum amount is a percentage of account balance by the age
shown below.
Age
Annual percentage of account balance
55Œ64
4
65Œ74
5
75Œ84
6
85Œ94
10
95+
14
Contact us on
1300 360 988
for more information.
Maximum payment:
For the Transition to Retirement Pension, the maximum that can
be withdrawn in any year equals 10% of your account balance at
the start of each year. This means that if you have $100,000 in
your account, you can withdraw a maximum of $10,000 over the
year. There is no limit on the maximum withdrawal amount for
Allocated Pensioners.
An Allocated Pension lets you
convert your super into regular
income in retirement.
26
GENERAL INFORMATION
FUND RESERVES
The Trustee maintains a reserve for administration and
operational purposes, such as paying costs and receiving
investment income. The value of the reserve is generally
between 0.1% and 0.9% of Fund assets and is invested in the
Balanced investment option.
Year ending 30 June
Reserve balance ($)
2017
13,664,730
2016
11,713,491
2015
10,372,114
From 1 July 2013 First Super 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 within 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 2017 was
$7,157,540.
Year ending 30 June
ORFR ($)
2017
7,157,540
2016
6,572,185
2015
6,276,559
TRUSTEE INSURANCE
The Trustee holds indemnity insurance providing cover to protect
the Fund, its directors and of˜cers from the costs and liabilities
that may arise from legal action.
TRANSFER OF ACCOUNTS
First Super may transfer your account to AUSfund, an eligible
rollover fund into which lost super fund members or members
with small inactive accounts are transferred.˝ If your account
is transferred to AUSfund you will no longer be a member of
First Super and any insurance cover you had with First Super
will cease.˝ AUSfund does not offered insured bene˜ts.˝ To
contact AUSfund, call 1300 361 798 or write to Locked Bag 5132
Parramatta NSW 2124 or visit their website:˝ www.ausfund.com.
au
It is a legal requirement that First Super must transfer lost
super account balances under $6,000, or those that are
unidenti˜ed or have been inactive for more than 12˝ months
to the Australian Taxation Of˜ce (ATO).˝ To ˜nd out more, visit,
www.ato.gov.au ˝
Temporary residents permanently leaving Australia
If a former temporary resident employee has left Australia and
their visa has expired or been cancelled, First Super is required
to pay their bene˜t to the ATO if it has not been claimed from
First Super within 6 months of departure.˝˝ Once transferred, the
ATO will need to be contacted to make any claim.˝˝ First Super
relies on the Australian Securities & Investment Commission™s
relief from notifying or supplying an exit statement to a non-
resident in these circumstances.
SUPERANNUATION SURCHARGE
The superannuation surcharge payable by high income earners
on contributions and termination payments made on or after
1 July 2005 has been abolished. However, the ATO continues to
send assessments relating to prior years. Should First Super
receive such an assessment, we will deduct the charge directly
from your account.
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
You can contact AUSfund at:
AUSfund Administration
Locked Bag 5132
Parramatta NSW 2124
T: 1300 361 795
E: admin@AUSfund.net.au
W: ausfund.com.au
You can contact the ATO by calling
13 10 20 or by visiting ato.gov.au.
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 2017.
27
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.
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
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: 1800 367 287
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
Privacy and compliance:
˝
During the year there were no breaches
of the Privacy Act 1988 as determined
by the Privacy Commissioner, and there
were no losses of member or employer
data.˝ First Super has not been subject to
any signi˜cant ˜nds or other sanctions for
failure to comply with laws or regulations.
.
This report was prepared by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988, RSEL L0003049), Trustee of First Super
Superannuation fund (ABN 56 286 625 181, 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. In the event of inconsistency between this report and the rules, the rules of the Fund
prevail. This report was prepared without taking into account your objectives, ˜nancial situation or needs. You should 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
November 2017 but may change without notice.
Contact us
If you require more information or assistance with your First Super account, please contact our Member Services Team.
In person
Level 3, 200 Arden St
North Melbourne
VIC 3051
Mail
PO Box 666
South Carlton
VIC 3053
Phone
1300 360 988
Fa x
1300 362 899
Email
mail
@
˜rstsuper.com.au
Website
˜rstsuper.com.au