text size

-
=
text size
+

FirstSuper_AnnualReport2015

ANNUAL REPORT
FIRST SUPER
201415
You can obtain a hard copy or register to receive a hard copy by calling
1300 360 988 or emailing mail
@
ﬁ
rstsuper.com.au.
Issued by First Super Pty Ltd
ABN 42 053 498 472, AFSL 223988, RSEL L0003049
Co-Chairs’ message
2
CEO’s message
3
First Super is
your
industry super fund
4
Important information for
Accumulation Members
5
Investment performance
6
Your investment options
9
Investments held by the Fund
13
Taking care of First Super
15
Directors’ remuneration report
17
Fees and charges
19
Financial information
20
Superannuation update
21
Beneﬁ
ts
23
General information
26
Contact us
Back cover
Contents
THE INDUSTRY FUND FOR
EMPLOYEES IN THE TIMBER,

PULP & PAPER AND FURNITURE
& JOINERY INDUSTRIES.

2
First Super Annual Report 2014–15
The outlook for this ﬁ
nancial year
and following years is not as certain.

Slowdown in growth in China has both a

direct effect on Australia’s economy, the

global economy and thus the Australian

and international share and investment

markets.
At present, First Super’s Board is
reviewing the Fund’s investment

strategy as the medium term outlook for

investment markets is lower returns but

with increasing ﬂ
uctuations creating the
greater potential for negative returns.
Your directors will take appropriate
actions to balance the need to protect your

superannuation investment whilst seeking

reasonable returns.
We will keep members informed of
signiﬁ
cant investment strategy decisions
through your website and quarterly

emails.
CHALLENGES
It is not so long ago, that only a privileged

few Australians such as politicians,

public servants and bank executives and

employees received superannuation. For

many others such as machinists, timber

mill workers and production workers, they

received no superannuation at all.
In the 1980’s occupational superannuation
opened up superannuation to all.
Last year we informed members of the
signiﬁ
cant challenges that our fair and
equitable superannuation system faced.

Unfortunately, our fears proved well

founded.
The Federal Government eliminated the
low income superannuation contribution

scheme. This will mean that around one in

ten First Super members will miss out on

$2 million of government contributions to

their accounts. We know that for low paid

members this means a lot.
Further research has conﬁ
rmed the
effects of the Federal Government

legislating to defer increasing

superannuation contributions to 12%. As

an example, a 25 year old member would

be $100,000 worse off when they retire.

This, for an average member is a lot of

money.
Meanwhile, the Federal Government has
ruled out stopping the wealthy from using

superannuation as a wealth maximisation

strategy.
In a bright spot, the Senate voted down
Federal Government proposals to allow

large sections of the ﬁ
nancial advice
industry to continue to provide advice that

suited the providers’ interests rather than

the clients’.
The next challenge your fund and other
industry funds face, is the attack on the

very thing that has enabled industry funds

to consistently deliver better returns to

their members than members of retail

funds.
The Federal Government has announced
that it intends to force funds to appoint

more directors who don’t have any links

with their industries.
We fear this will mean that these new
directors won’t have any afﬁ
liation with the
industries that you and other members

are employed in and won’t be committed

to putting members ﬁ
rst .
This threat goes to the heart of what
makes First Super and other industry

funds different from superannuation

funds owned by banks and other ﬁ
nancial
institutions.
We exist to beneﬁ
t members – not the
investors that own those banks and

their highly paid boards of directors and

executives.
Your fund will continue to make an issue
about these negative changes. We will

continue to campaign on your behalf to

receive 12% superannuation contributions

and for members to receive the Low

Income Superannuation Contribution.
We believe it is important that your
superannuation savings are looked after

by those who are committed to only your

interests.
THE BOARD
During 2014-15 your Board continued

with its Board renewal process. As

foreshadowed last year, Lindsay Morling

left the Board in February 2015 having

served members’ interests with great

distinction as a director of TISS and
COCHAIRS’ MESSAGE
We believe it is
important that your

superannuation

savings are looked

after by those who

are committed to only

your interests.
then First Super, the merged fund from
2008. First Super’s Board has always

appreciated Lindsay’s attention to detail

and his ability to ensure that First Super

remained focused on achieving the best

outcome for members.
Julie George has replaced Lindsay as an
employer director. Julie is known to many

of us in our industries as she is the chair

of ForestWorks — our industries’ industry

skills council. Julie has deep links to

the timber product industry through her

senior roles held in Hyne & Son.
In addition to Julie, Candy Broad joined
the Board in April 2015 as a second

independent director, bringing the total

number of Board members to twelve.

Candy is a former accountant and a

minister in the government of Victoria

holding four portfolios over seven years.
Both Julie and Candy bring to the Board
considerable expertise in ﬁ
nancial
management, risk and governance.
THANKS & CONCLUSION
We welcome Julie and Candy, thank

Lindsay for his diligent service and thank

our fellow directors for conscientiously

and diligently applying themselves to

the ever increasingly complex task of

safeguarding and prudently investing your

retirement savings.
As we have noted in previous annual
reports, First Super would not function

effectively without the support of the

trustee ofﬁ
ce and our service providers.
We thank AFA, CFMEU, FIAA, FIAT, TMA,
TTIA, VAFI and employers for their support

for First Super.
We also thank our service providers
Superannuation Beneﬁ
ts Administration,
Frontier Advisors, NAB Asset Servicing

and MetLife for the service provided to our

members.
Finally, we acknowledge the work of the
Trustee ofﬁ
ce .
Allan Stewart & Michael O’Connor
Co-Chairs, First Super
The 2014-15 ﬁ
nancial year again saw strong returns for members
across all investment options other than cash.
First Super’s investment strategy in 2014-15 delivered above
performance benchmark returns to you and our other 70,000 plus

members.

3
First Super Annual Report 2014–15
First Super appointed BNP Paribas
as its new custodian and unit pricing

provider replacing NAB Asset Servicing.

Appointment of BNP Paribas reduced the

cost of this service and also provides

First Super with access to the tools

necessary to effectively manage

investment risk.
We would like to thank NAB Asset
Servicing for their work over many years

providing valuable support to First Super.
During the year First Super also reviewed
the provision of administration and

investment advisory services. The Trustee

is completing the procurement process for

these important services.
Our administrator, Superannuation
Beneﬁ
ts Administration (SBA),
substantially upgraded its IT system.

The beneﬁ
ts for members and employers
from this upgrade have improved online

functionality and the transactional

environment. In addition, SBA introduced

a clearing house which will make it

substantially easier for employers to meet

their contribution obligations.
CEO’S MESSAGE
We will continue our work with SBA to

improve your online experience. We want

to give you the ability to make the changes

you want to you super, whenever you want.
But unlike other organisations, we are
not trying to direct all members to the

website. Our contact centre will continue

to help you and is only a phone call away

on 1300 360 988.
First Super made further progress during
the year in improving the provision of

ﬁ
nancial advice to members. We remain
committed to ensuring that members

have the ability to receive face-to-face

advice in locations convenient to them

from ﬁ
nancial advisers and planners. Our
Financial Advice team always acts in the

best interest of our members, and they do

not receive commission payments.
This year First Super introduced the
provision of intra-fund advice over the

phone via our Service Centre. This advice

solution caters to members seeking ‘on

the spot advice’ about their First Super

account. This phone based advice is

available to all members free of charge.
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.
2014-15 was another year of considerable activity for the Trustee.
Please feel free to call First Super on
1300 360 988 for this advice.
In October 2014, First Super strengthened
its communications and marketing

capacity by employing an in-house

Marketing and Communications Manager.

Using member funds in this way is

necessary to support initiatives to improve

member services, including member

education seminars and providing

objective advice and information.
We reintroduced member education
seminars in June. Our ﬁ
rst seminars
focused on retirement planning and

the initiative was a great success. We

will expand this program and we will

endeavour to continue our seminars in

locations where members work and live.
On behalf of the Trustee ofﬁ
ce we’d like
to thank you, our members, for making

First Super a great superannuation

fund and a place that we enjoy coming

to work each day as we know that what

we do will help you and your family build

superannuation savings and receive

income after you retire.
Bill Watson
CEO, First Super

4
First Super Annual Report 2014–15
First Super manages $2.3 billion in member funds for over 70,000 members as at
September 2015. We offer superannuation, insurance and Allocated Pension Products

including Transition to Retirement. As an industry super fund our proﬁ
ts are returned
to you, our members, 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 beneﬁ
ts that
enhance their long-term ﬁ
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 Service Centre is available to help you manage your super and

inform you of your options. The Service 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 ﬁ
nancial planners who can help you plan for
your retirement.
Call
1300 360 988
to talk to a Client Service Ofﬁ
cer or to book a free initial consultation
with a ﬁ
nancial planner.
INVESTMENT OPTIONS TO SUIT YOUR NEEDS
Your super can be a safe, low-cost and tax-effective way of saving for retirement.
First Super offers members ﬁ
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
YOUR
INDUSTRY FUND
DID YOU KNOW?
Small differences in both
investment performance

and fees and costs can have

a substantial impact on your

long-term returns.

5
First Super Annual Report 2014–15
FLEXIBLE INSURANCE OPTIONS AT
COMPETITIVE RATES
First Super provides you with ﬂ
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.
TPD
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 ﬁ
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 FO R 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 – and 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.
If you have reached your Preservation Age and are still working,
a First Super Transition to Retirement Allocated Pension can

provide you with the ﬂ
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 Service Centre on

1300 360 988
to discuss your options or make an appointment
to see a ﬁ
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 birthPreservation age
Before 1 July 196055
1 July 1960 – 30 June 196156

1 July 1961 – 30 June 196257

1 July 1962 – 30 June 196358

1 July 1963 – 30 June 196459

From 1 July 196460
DID YOU KNOW?
As an industry fund, we offer low fees including no entry fee.
Nearly half of working Australians have multiple super accounts. We can help you rollover your super
accounts – at no cost\! Complete a transfer your super form and we’ll do the rest\!
IMPORTANT INFORMATION FOR
ACCUMULATION MEMBERS

6
First Super Annual Report 2014–15
Last ﬁ
nancial year was another year where
members received returns above the investment

return target.
Members enjoyed another year of above target returns.
Member investment option
Rate of
return
(%)
CPI
Plus X%
target
1
Balanced — super9.415.0
Balanced — pension10.315.0
Conservative Balanced — super7.344.3

Conservative Balanced — pension8.154.3

Cash — super2.652.3

Cash — pension3.042.3

Growth — super10.575.1

Growth — pension11.895.1
Shares Plus — super11.995.3
Shares Plus — pension12.765.3
1
Source: Frontier Advisors First Super Look Back Review August
2015.
The different rate of return between super and pension
investment options is due to the fact that pension investment

options earnings are not subject to the 15% superannuation tax.
These above target returns are off the back of very strong
returns in the two previous ﬁ
nancial years. Members in the
balanced, default option, have enjoyed an annualised return of

11.5% each year for the last three years.
Allocation to speciﬁ
c asset sectors had a neutral effect on
the Fund’s performance. Outperformance in international

equities (unhedged) and ﬂ
oating rate debt was offset by
underperformance in Australian equities and cash, in which the

Fund had a marginally overweight position relative to the Fund’s

strategic asset allocation.
Manager selection positively contributed to performance, with
outperformance in Australian private equity, property, hedged

international equities, ﬂ
oating rate debt and cash sectors. This
was partially offset by underperformance by some Australian
equities and infrastructure managers.
First Super’s private equity program through its manager
Stafford Private Equity produced outstanding results as did

PIMCO in international ﬁ
xed interest. Pleasingly, also
First Super’s internal cash management strategies generated

excess returns for members.
OUTLOOK
The outlook for this ﬁ
nancial year is more uncertain. Sudden
declines in stock markets in August and continuing volatility for

the remainder of August and into September do not augur well

for another year of strong returns.
Slowdown in growth in China has both a direct effect on
Australia’s economy, the global economy and thus the Australian

and international share and investment markets.
Our default option differs from other funds’ default options
in that it has a lower allocation to growth assets to reduce

investment return volatility and provide capital protection in

falling markets.
At present, First Super’s Board is reviewing the Fund’s
investment strategy as the medium term outlook for investment

markets is lower returns, with increasing ﬂ
uctuationscreating
the greater potential for negative returns.
First Super’s Board will take appropriate action to balance the
need to protect our members’ superannuation investments

whilst seeking sustainable and reasonable returns.
We will keep members informed of signiﬁ
cant investment
strategy decisions through our website and quarterly emails.
INVESTMENT PERFORMANCE
9.4%
The Balanced (default) option
return for the year
Last year members enjoyed another
year of above target returns.

7
First Super Annual Report 2014–15
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
week 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 ﬁ
nancial year (30 June)
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 ﬁ
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 ﬂ
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 speciﬁ
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 beneﬁ
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 ﬁ
nancial year ending 30 June 2015 and prior
periods.
Superannuation
Investment Option1 year
% p.a.
2 year
% p.a.
3 year
% p.a.
5 year
% p.a.
10 year
% p.a.
Return
since
inception
Inception
date
Return over
CPI since
inception
Balanced (default)
9.410.511.58.76.38.4 1 Jul 1988
^
9.4
Shares Plus
1213.915.810.86.65.41 Mar 200112
Growth
10.612.213.8n/an/a 12.214 Oct 201110.6
Conservative Balanced
7.38.19.27.9n/a 5.51 Jul 19887.3
Cash
2.72.72.93.73.84.51 Mar 2001 2.7
^
The composition of the Balanced option was fundamentally different prior to 1 July 1988.
Pension
Investment Option1 year
% p.a.
2 year
% p.a.
3 year
% p.a.
5 year
% p.a.
10 year
% p.a.
Return
since
inception
Inception
date
Return over
CPI since
inception
Balanced (default)
10.311.712.99.87.27.418 Mar 2005 10.3
Shares Plus
12.815.317.311.97.67.61 Jul 200512.8
Growth
11.9n/an/an/an/a 12.210 Aug 2013 11.9
Conservative Balanced
8.29.210.48.9n/a 6.31 Jul 20088.2
Cash
33.13.44.44.44.41 Jul 20053
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 perform
ance
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 proﬁ
le
and investment

timeframe.

8
First Super Annual Report 2014–15
THE RISK/RETURN PROFILE OF
THE MAIN ASSET CLASSES
This graph illustrates the relationship between higher returns and greater risk. It does not
re ﬂ
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 – shares, property, ﬁ
xed interest and cash – has different levels of risk and
different potential for returns.
Potential Return
Risk
0
Higher
Higher
L owe r
Fixed
Interest
Cash
Property
Shares

9
First Super Annual Report 2014–15
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
ﬁ
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
ﬁ
nancial planner to contact you.
* Financial planning is provided by Industry Fund Services Pty Ltd
(ABN 54 007 016 195 AFSL 232514)
INVESTMENT OPTIONS
For more information, read the Investing your super booklet
available at ﬁ
rstsuper.com.au.
YOUR INVESTMENT OPTIONS
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 signiﬁ
cantly affected how or
where First Super invests, only the names used.
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 proﬁ
le and your investment timeline.
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 ﬁ
ve investment options or you
can choose to invest in just one option.
The choice is yours.
The table below shows the old and new asset class names.
Old Asset class namesNew Asset class names
Australian EquitiesAustralian listed equities
International Equities (Unhedged)International listed equities

International Equities (Hedged)International listed equities

Australian Private EquityAustralian unlisted equities

International Private EquityInternational unlisted equities

Timber, Furniture and PulpOther

Australian InfrastructureAustralian unlisted infrastructure
International InfrastructureInternational unlisted infrastructure
PropertyAustralian unlisted property

Australian Broad Based BondsAustralian ﬁ
xed income
International Broad Based BondsInternational ﬁ
xed income
Floating Rate Debt50% Australian ﬁ
xed income/50% international ﬁ
xed income
CashCash

10
First Super Annual Report 2014–15
OBJECTIVES

>
Achieve an investment return (after tax and
investment expenses) that exceeds inﬂ
ation,as
measured by the Consumer Price Index, by at least

4.0% per annum over rolling ten year periods;

>
Conﬁ
ne the chance of the rate credited to members
falling below zero in any ﬁ
nancial year to less than
one in ﬁ
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 ﬁ
ve year periods.
INVESTOR PROFILE
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 PROFILE
The Shares Plus option is likely to provide a high

degree of volatility and ﬂ
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 ﬂ
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
SHARES PLUS
ASSET ALLOCATION AND RANGES
Asset Class Target %Range %
Cash 0.00 – 5
Australian ﬁ
xed income0.00 – 5
International ﬁ
xed income0.00 – 5
Australian listed equities42.030 – 60

Australian unlisted equities5.00 – 20
International listed equities32.50 – 40

International unlisted equities0.50 – 5

Australian listed property0.00 – 20

Australian unlisted property10.00 – 20

International listed property0.00 – 20
International unlisted property0.00 – 20
Australian listed infrastructure0.00 – 10

Australian unlisted infrastructure5.00 – 10

International listed infrastructure0.00 – 10

International unlisted infrastructure5.00 – 10

Commodities0.00 – 5

Other 0.00 – 5

Total100.0

11
First Super Annual Report 2014–15
OBJECTIVES

>
Achieve an investment return (after tax and
investment expenses) that exceeds inﬂ
ation,as
measured by the Consumer Price Index, by at least

3.75% per annum over rolling ten year periods;

>
Conﬁ
ne the chance of the rate credited to members
falling below zero in any ﬁ
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

ﬁ
ve year periods.
INVESTOR PROFILE
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 PROFILE
The Growth option is likely to provide a high degree

of volatility and ﬂ
uctuations in returns. It has a lower
investment risk/return proﬁ
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.
GROWTH
STANDARD RISK
3.4 years
Risk band:
5
Risk label:
Medium to high
ASSET ALLOCATION AND RANGES
Asset Class Target %Range %
Cash2.00 – 20
Australian ﬁ
xed income6.50 – 20
International ﬁ
xed income6.50 – 20
Australian listed equities3325 – 45

Australian unlisted equities5.00 – 25

International listed equities26.50 – 45

International unlisted equities0.50 – 10
Australian listed property0.00 – 20
Australian unlisted property10.00 – 20

International listed property0.00 – 20

International unlisted property0.00 – 20

Australian listed infrastructure0.00 – 10

Australian unlisted infrastructure5.00 – 10

International listed infrastructure0.00 – 10
International unlisted infrastructure5.00 – 10
Commodities0.00 – 5

Other0.00 – 5

Total100
OBJECTIVES

>
Achieve an investment return (after tax and
investment expenses) that exceeds inﬂ
ation,as
measured by the Consumer Price Index, by at least

3.5% per annum over rolling ten year periods;

>
Conﬁ
ne the chance of the rate credited to members
falling below zero in any ﬁ
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

ﬁ
ve year periods.
INVESTOR PROFILE
This investment option is likely to appeal to
members seeking mid to long-term growth of their

superannuation along with diversiﬁ
cation across asset
classes.
RISK PROFILE
Designed to provide good growth over the mid to

longer term while reducing risk through diversiﬁ
cation.
Likely to slightly under-perform against the

First Super Shares Plus and Growth options over the

long term.
BALANCED DEFAULT OPTION
STANDARD RISK
2.1 years
Risk band:
4
Risk label:
Medium
ASSET ALLOCATION AND RANGES
Asset Class Target %Range %
Cash5.00 – 15
Australian ﬁ
xed income13.250 – 40
International ﬁ
xed income13.250 – 40
Australian listed equities2315 – 40

Australian unlisted equities5.00 – 25

International listed equities18.05 – 40

International unlisted equities0.50 – 5

Australian listed property0.00 – 20

Australian unlisted property10.00 – 20

International listed property0.00 – 20

International unlisted property0.00 – 20

Australian listed infrastructure0.00 – 10

Australian unlisted infrastructure5.00 – 10

International listed infrastructure0.00 – 10

International unlisted infrastructure5.00 – 10

Commodities0.00 – 5

Other2.00 – 5

Total100

12
First Super Annual Report 2014–15
OBJECTIVES

>
Achieve an investment return (after tax and
investment expenses) that exceeds inﬂ
ation,as
measured by increases in the Consumer Price

Index, by at least 3.0% per annum over rolling ten

year periods;

>
Conﬁ
ne the chance of the rate credited to members
falling below zero in any ﬁ
nancial year to less than
one in ﬁ
fteen; and

>
Achieve an investment return (after tax and
investment expenses) that exceeds the median of

the SuperRatings Conservative Balanced (41 – 59)

Option Survey over rolling ﬁ
ve year periods.
INVESTOR PROFILE
Members investing for the short to medium term
who want a more secure option with less chance of

ﬂ
uctuations than the Shares Plus, Growth or Balanced
options and/or members looking for lower risk options

for their superannuation savings.
RISK PROFILE
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.
CONSERVATIVE BALANCED
STANDARD RISK
1.1 years
Risk band:
3
Risk label:
Low to medium
ASSET ALLOCATION AND RANGES
Asset Class Target %Range %
Cash22.55 – 25
Australian ﬁ
xed income13.755 – 45
International ﬁ
xed income13.755 – 45
Australian listed equities17.010 – 30

Australian unlisted equities0.00 – 5

International listed equities13.05 – 20

International unlisted equities0.00 – 5
Australian listed property0.00 – 20
Australian unlisted property10.00 – 20

International listed property0.00 – 20

International unlisted property0.00 – 20

Australian listed infrastructure0.00 – 10

Australian unlisted infrastructure5.00 – 10

International listed infrastructure0.00 – 10
International unlisted infrastructure5.00 – 10
Commodities0.00 – 5

Other0.00 – 5

Total100
OBJECTIVES

>
Achieve an investment return (after tax and
investment expenses) that exceeds inﬂ
ation,as
measured by increases in the Consumer Price

Index, by at least 1.0% per annum over rolling ﬁ
ve
year periods;

>
Conﬁ
ne the chance of the rate credited to members
falling below zero in any ﬁ
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

ﬁ
ve year periods.
INVESTOR PROFILE
Members investing for the short term and/or those
who want a secure option with a low chance of

investment ﬂ
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 PROFILE
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.
CASH
STANDARD RISK
0.0 years
Risk band:
1
Risk label:
Very low
ASSET ALLOCATION AND RANGES
Asset Class Target %Range %
Cash100.0 100%
Australian ﬁ
xed income0.00
International ﬁ
xed income0.00
Australian listed equities0.00

Australian unlisted equities0.00

International listed equities0.00

International unlisted equities0.00

Australian listed property0.00

Australian unlisted property0.00

International listed property0.00

International unlisted property0.00

Australian listed infrastructure0.00

Australian unlisted infrastructure0.00

International listed infrastructure0.00

International unlisted infrastructure0.00

Commodities0.00

Other0.00

Total100

13
First Super Annual Report 2014–15
INVESTMENTS HELD BY THE FUND

14
First Super Annual Report 2014–15
30 June 2015
($,000)
Australian Equities
Eley Grifﬁ
ths Aust Equity Small Companies
Mandate
37,586,204
IFM Enhanced Index Aust Equity Mandate*161,700,301
Invesco Small Cap Aust Equity Fund31,796,212
Allan Grey Australian Equity Fund102,783,744

Perpetual Aust Equity Mandate*162,975,011
Total Australian Equities496,841,473

Australian Infrastructure

IFM Aust Infrastructure Fund83,922,911

PW Hastings UTA14,549,608

Total Australian Infrastructure98,472,519
Australian Private Equity
First Trust Portfolio91,687,550

Frontier Pty Ltd330,000

ME Bank Ltd29,924,387

Industry Super Holdings12,743,522

ROC Partners Trust 417,025,049

ROC Partners Trust 39,384,196

PW Quay Australia 3 Fund3,656,936
PW Quay Australia 4 Fund1,978,664
Super Beneﬁ
ts Administration Pty Ltd1,280,959
The New Daily2,000,000

Total Australian Private Equity170,011,264

Cash & Capital Guaranteed

IFM Specialised Cash Fund10,774,991

Short Term Cash Account* (Term deposits)157,143,422
ME Bank – Cash59,398,095
Total Cash227,316,508

Fixed Interest

IFM Specialised Credit Fund64,480,618

Blackrock Indexed Aust Bond Fund112,375,350

Blackrock Overseas Bond Index48,605,800
IFM Credit Opportunities Mandate33,602,276
Pimco DFI Unit Trust*205,620,243

Timber Industry S/Sc – Sup Bus Loans7,000,056

Westbourne Yield Fund No 136,227,432

Total Fixed Interest507,911,775
* These assets represent 5% or more of the Fund.
30 June 2015
($,000)
International Equities (Unhedged)
BGI Unhedged World Ex Aust Equities Index39,619,290

Capital Int Global Equities Unhedged*130,220,877

Global Thematic Fund88,701,940

Orbis Global Equity Fund
*
125,864,919
Total International Equities (Unhedged)384,407,026
International Equities (Hedged)

Blackrock Hedged World Equities Index*117,388,907

Total International Equities (Hedged)117,388,907

International Infrastructure

IFM International Infrastructure91,939,692

Total International Infrastructure91,939,692

International Private Equity
IFM Global Unit Trust2,101,471

Wilshire Pooled Superannuation Trust11,302,012
Total International Private Equity13,403,483

Property

AMP Property Income Fund133,577

Industry Super Property Trust No 1*123,198,947

PW Fortius Active Property 17,795,089
PW Franklin International Real Estate 23,435,486

QIC Property Fund73,770,877
Total Property208,333,977
Total Investments
$2,316,026,623
Listed below are the investment funds employed by First Super and the direct investments made for the
ﬁ
nancial year ending 30 June 2015.

15
First Super Annual Report 2014–15
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 $2.3 billion in funds

under management and overseeing its

investments on behalf of over 70,000

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.
$170,686,034
The value of contributions made to First Super
member accounts for the 2014-15 ﬁ
nancialyear.
THE TRUSTEE BOARD
The First Super Trustee Board is comprised of ﬁ
ve member representatives, ﬁ
ve
employer representatives and two independent directors.
Directors are appointed to the Board following consideration of a nominee’s suitability
and qualiﬁ
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 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

committees) is commissioned.

16
First Super Annual Report 2014–15
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 2015 were as follows:
Member representativeCommittee representation
Michael O’Connor

(Co-Chair)
Member since 2008
Administration & Marketing
Audit & Compliance

Investment (Chair)

Nominations

Remuneration
Denise Campbell-Burns
Member since 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 representativeCommittee 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
Mike Radda
Member since 2008
Investment
Julie George
Member since 2015
Administration & Marketing
Independent directorCommittee representation
Bob Smith
Member since 2008
Audit & Compliance (Chair)
Nominations (Chair)

Remuneration (Chair)
Candy Broad
Member since 2015
Audit & Compliance
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 2015, First Super

used the following advisors and service providers:
Actuary
Mercer (Australia) Pty Ltd
Administrator
Super Beneﬁ
ts Administration Pty Ltd*
External Auditor
PwC
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
National Australia Bank Ltd
Tax Advisor
EY
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 ﬁ
nancial
planning services available to you.
For more information about First Super’s Coordinators call
1300 360 988
.
$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

$1,000,000
Funds Under Management ($’000)
2009201020112012201320142015

17
First Super Annual Report 2014–15
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 satisﬁ
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 & 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.
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

each meeting and is published on the First Super website.

18
First Super Annual Report 2014–15
BOARD FEES
The fees for the Directors of First Super have not increased since they were ﬁ
rst established in 2008. The Directors’ fees for the year
ended 30 June 2015 are as follows:
Role/ActivityFees and Allowances
Co-Chairpersons
$1,500 per calendar month or part thereof
Co-Chairpersons
and Directors
Board Meetings and Strategic Planning
Day(s)
$3,000/meeting
(plus $1,000 for Interstate Allowance Rate where applicable)
Committee Meetings, Ad-Hoc Committee
and Sub-Committee meetings and AGM
$1,500/meeting
(plus $1,000 for Interstate Allowance Rate where applicable)
Associate
Directors
Board Meetings and Strategic Planning
Day(s)
$2,250/meeting
(plus $1,000 for Interstate Allowance Rate where applicable)
Committee Meetings, Ad-Hoc Committee
and Sub-Committee meetings and AGM
$1,125/meeting
(plus $1,000 for Interstate Allowance Rate where applicable)
Workshops/Training Courses
(Co-Chairs, Directors and Associate Directors)
$1,100/day
(plus $1,000 for Interstate Allowance Rate where applicable)
Domestic Conferences
(Co-Chairs and Directors)
$1,100/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 proﬁ
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
201415 A
TTENDANCE AND REMUNERATION
Listed below are Directors’ meeting attendance and remuneration (including GST where applicable) for the year ending 30 June 20
15:
DirectorCommittee Board (4 held)Total PD HRsFees paidFees Paid to
Denise Campbell-Burns 5/54/48$22,660CFMEU – FFPD
Candy Broad *2/21/11$5,600Candy Broad

Julie George **3/32/2170$26,170Busi Culture

David Kirner9/94/412$36,597CFMEU – FFPD

Martin Lewis12/133/423.75$51,227Kylken Pty Ltd

Lisa Marty6/74/424$33,330Lisa Marty
Alex Millar4/62/430
$15,180
CFMEU – FFPD
Lindsay Morling †3/41/28$16,610Business Machines ﬁ
nance Co
Michael O’Connor17/184/418.5$73,425CFMEU – FFPD

Mike Radda6/63/426$22,220UCI Projects Pty Ltd

Bob Smith12/123/415$81,037Robert Patrick Smith

Allan Stewart19/194/468$122,012Allan Stewart and Associates Pty Ltd

Frank Vari9/104/47.5$29,700CFMEU – FFPD

$535,768
* Candy Broad became a Director from 21 April 2015.
† Lindsay Morling resigned as Director from 1 February 2015.

** Julie George became a Director from 1 February 2015.

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 2015 was $280,310.

19
First Super Annual Report 2014–15
FEES AND CHARGES
ACCUMULATION FEES AND CHARGES
Type of feeAmountHow and when paid
Investment feeNilNot 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 spreadNilNot applicable.

Switching feeNil for the ﬁ
rst two switches, $30 for any
subsequent switch in the year.
Deducted from your account when the switch is
processed.
Exit fee$75.00 for full or partial withdrawals.
Nil for retirement beneﬁ
ts, pension payments,
death and disablement beneﬁ
ts, ﬁ
nancial
hardship and compassionate payments.
Deducted from your account when processed.
Advice fees – relating to
all members investing in

a particular product or

investment option.
NilNot applicable.
Other fees and costs*
Indirect cost ratioShares Plus 0.86%
Growth 0.69%

Balanced 0.61%

Conservative Balanced 0.42%

Cash 0.06%
Indirect Cost Ratio is deducted from investment earnings
before investment returns are declared. See ‘Indirect

Cost Ratio’ in the PDS for further information.
ALLOCATED PENSION FEES AND CHARGES
Type of feeAmountHow and when paid
Investment feeNilNot applicable
Administration fee0.38% per year of account balance, capped at
$1,750 p.a.
Calculated and deducted from accounts at the end of
each month based on average account balances during

the month. This fee is capped at $1,750 p.a.
Buy-sell spreadNilNot applicable.

Switching feeNil for the ﬁ
rst two switches, $30 for any
subsequent switch in the year.
Deducted from your account when the switch is
processed.
Exit feePension payments: Nil
Lump sum withdrawals: First withdrawal is
free, each subsequent withdrawal is $75.00.
Termination: Nil
Not applicable.
Deducted from your account at the time of the
withdrawal.
Not applicable
Advice fees – relating to
all members investing in

a particular product or

investment option.
NilNot applicable.
Other fees and costs*
Indirect cost ratioShares Plus 0.95%
Growth 0.72%

Balanced 0.81%

Conservative Balanced 0.59%

Cash 0.08%
Indirect Cost Ratio is deducted from investment earnings
before investment returns are declared. See ‘Indirect

Cost Ratio’ in the PDS for further information.
* 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.
The fees and costs charged in the 2014-15 Financial Year are set out below.

20
First Super Annual Report 2014–15
The following is an abridged version of First Super’s Financial Statements for the ﬁ
nancial year ending
30 June 2015. A copy of the audited Financial Statements is now available to download at
ﬁ
rstsuper.com.au
.
Statement of ﬁ
nancial position 30 June 2015 ($)30 June 2014 ($)
Assets
Investments 2,316,026,6232,132,610,911
Other Assets
6,104,7135,462,340
Total Assets2,322,131,3362,138,073,251
Liabilities
Trade and other payables(5,957,105)(7,129,257)
Beneﬁ
ts payable (776,540)(685,714)
Current tax liabilities(13,660,342)(11,715,097)
Total Liabilities(20,393,987)(19,530,068)
Net assets2,301,737,3492,118,543,183
Represented by liability for accrued beneﬁ
ts
Member funds 2,284,778,1792,090,414,734

Reserves
16,959,17028,128,449
Liability for accrued beneﬁ
ts2,301,737,3492,118,543,183
Operating statement 30 June 2015 ($)30 June 2014 ($)
Revenue from investments196,407,705241,096,641
Revenue from contributions170,686,034161,241,201

Other revenue18,156,68517,100,900

Total revenue385,250,424419,438,742

Total expenditure(31,331,976)(30,317,881)

Beneﬁ
ts accrued before tax353,918,447389,120,861
Tax expense (25,305,842)(29,690,087)
Beneﬁ
ts accrued after tax328,612,605359,430,774
FINANCIAL INFORMATION
$195,182,979
The amount of earnings distributed to member
accounts for the 2014-15 ﬁ
nancialyear.

21
First Super Annual Report 2014–15
Schedule for increasing the Super Guarantee rate
PeriodSuper guarantee (%)
1July 2015 – 30June 20169.5
1July 2016 – 30June 20179.5

1July 2017 – 30June 20189.5

1July 2018 – 30June 20199.5

1July 2019 – 30June 20209.5
1 July 2020 – 30 June 20219.5

1 July 2021 – 30 June 202210

1 July 2022 – 30 June 202310.5

1 July 2023 – 30 June 202411

1 July 2025 – 30 June 2026 and onwards12
CONTRIBUTION LIMITS FOR
THE
2015/16
FINANCIAL YEAR:
Concessional Contributions
(Before-tax contributions)
Including employer, salary
sacriﬁ
ce and personal
contributions for which a tax

deduction is claimed.
$30,000 for those aged under 49 on the last day
of the previous ﬁ
nancial year.
$35,000 for those aged 49 or more on the last
day of the previous ﬁ
nancial year.
Non-Concessional
Contributions (After-tax

contributions)
Including personal contributions
made from after-tax pay and

spouse contributions.
$180,000*
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

ﬁ
rst ye a r.
If you brought forward your contributions in
2015-16 ﬁ
nancial year, it would be
3 x $180,000 = $540,000.
* Individuals over age 65 and satisfying the ‘work test’ can make non-concessional
contributions of up to $180,000 per year.
SUPERANNUATION UPDATE
4,281
Number of
new members

for 2014-15.
Want to know more?
For the latest information
on changes that affect

superannuation, go to

the Australian Taxation

Ofﬁ
ce website at
www.ato.gov.au

22
First Super Annual Report 2014–15
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 ofﬁ
ce
will apply a 15% tax offset to account for

the contributions tax that has already

been paid by your Superannuation Fund.
You may elect to withdraw up to 85% of
the excess concessional contributions

from your superannuation 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

superannuation an amount equal to their

superannuation 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 superannuation fund.
GOVERNMENT CO
CONTRIBUTION THRESHOLD

INCREASE
The income threshold for eligibility for a
Government co-contribution increased to

$50,454
(up from $49,488) for the 2015/16
ﬁ
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, reﬂ
ecting the additional 2% budget repair levy and the
increase in the Medicare levy.
AGE PENSION QUALIFYING AGE
Period within which a person was bornPension age
1 Jan 1949 – 30 June 195265 years
From 1 July 1952 to 31 December 195365 years and 6months

From 1 January 1954 to 30 June 195566 years

From 1 July 1955 to 31 December 195666 years and 6months

From 1 January 1957 onwards67 years
DEEMING TO APPLY TO ACCOUNTBASED PENSIONS
From 1 January 2015, the deeming rules that apply to ﬁ
nancial investments were
extended to account-based income streams, also known as allocated pensions and

account based pensions.
“Deeming” is used to calculate income for age pension, beneﬁ
t and allowance
payments.
This change ensures that people with similar ﬁ
nancial assets will be treated
consistently under the income support system. The total income will then be used to

work out how much pension, beneﬁ
t or allowance is paid.
Here is how this change will affect individuals:
If youChanges
Are receiving a pension or allowance
and already hold an account-based

income stream product on

31 December 2014
No change for the products you already
hold on 31 December 2014. The deemed

income from any new products you

purchase from 1 January 2015 will be

used to assess your entitlement.
Began or resume receiving income
support from 1 January 2015
Your account-based income stream
products will be assessed under the

new rules, even if you were previously

assessed under old rules.
Are receiving a pension or allowance
and change or buy a new account-

based income stream product from

1January2015
Your account-based income stream
products will be assessed under the

new rules, even if you were previously

assessed under old rules.
Have a partner who holds a
superannuation account-based income

stream product and they are not

receiving income support payments
The deeming rules apply to their product
and are used when calculating your

entitlement.

23
First Super Annual Report 2014–15
BENEFITS
Beneﬁ
ts paid by the First Super Accumulation Division
WITHDRAWAL BENEFIT
When you leave First Super, we will pay a
Withdrawal Beneﬁ
t, which is the balance
of your member account. You do not have

to take a Withdrawal Beneﬁ
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.
RETIREMENT BENEFIT
When you reach your preservation age,

you can receive a Retirement Beneﬁ
t.
Your Retirement Beneﬁ
t can be taken as
multiple drawdowns. You may be able

to draw on your Retirement Beneﬁ
t if
you are aged 56 or over and still working

by using a Transition to Retirement

strategy. Otherwise, to begin drawing your

Retirement Beneﬁ
t, you must generally
reach:

>
your preservation age, and
permanently retire from the workforce;

>
age 60 or over and cease gainful
employment with an employer; or

>
age 65.
Your Retirement Beneﬁ
t can be taken as
multiple drawdowns.
DEATH BENEFITS
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 beneﬁ
t may also
become payable provided the Insurer

admits a claim made for payment. Who

will receive your Death Beneﬁ
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

beneﬁ
t to your dependants or estate
or, if neither exists, to another person

(see page 24 for the meaning of

‘dependant’);
(ii) Make a Binding Nomination of
Beneﬁ
ciary (see page 24 for more
information); or
(iii) Make a Non-binding Nomination of
Beneﬁ
ciary (see page 24 for more
information).
You do not have to
take a Withdrawal

Beneﬁ
t if you
leave your current

employer; you can

keep your money in

First Super.

24
First Super Annual Report 2014–15
Binding Nomination of Beneﬁ
ciary
This allows you to provide a written
instruction to the Trustee about who

you wish to receive your beneﬁ
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

beneﬁ
t is paid. A Binding Death Beneﬁ
t
nomination is valid for three years and

overrides any Non-binding Nomination of

Beneﬁ
ciary nomination you have made.
A Binding Nomination of Beneﬁ
ciary
may be appropriate if your personal

circumstances are stable.
Non-binding Nomination of
Beneﬁ
ciary
This allows you to nominate the people
you would prefer to receive your Death

Beneﬁ
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 Beneﬁ
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 Beneﬁ
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

ﬁ
rstsuper.com.au
, by contacting us on
1300 360 988
or by emailing us on
mail
@
ﬁ
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 ﬁ
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 Beneﬁ
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 BENEFIT
If you are diagnosed as having a terminal

illness whilst you are a member of

First Super, an amount equivalent to

your Death Beneﬁ
t may become payable
while you are still alive, provided that the

Insurer accepts your claim for payment.
Total & Permanent Disablement
Beneﬁ
t
If you become totally and permanently
disabled (TPD), the balance of your

First Super account may become payable.

In addition, any insured TPD Beneﬁ
t
may also become payable if the Insurer

accepts your claim for payment.
Income Protection Beneﬁ
t
Income Protection Beneﬁ
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 beneﬁ
t of up to 85%
of your salary if you are unable to work

due to temporary illness or injury.
Financial Hardship &
Compassionate Beneﬁ
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 beneﬁ
ts are
summarised below. To be eligible for a

Financial Hardship Beneﬁ
t, you must
have:

>
been in receipt of a speciﬁ
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 Beneﬁ
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 Beneﬁ
t,
please contact the Australian Prudential

Regulatory Authority at www.apra.gov.au.
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

lo s t .

25
First Super Annual Report 2014–15
Beneﬁ
ts paid by the First Super Allocated Pension Division
First Super offers two allocated pensions:
• An Allocated Pension, and

• A Transition to Retirement Allocated Pension.
THE ALLOCATED PENSION
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 – and 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 are 56 years of age or older, a Transition to Retirement
Pension can help you ease your way into retirement without

sacriﬁ
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 sacriﬁ
ce arrangement, you may increase your
retirement savings.

>
Pay less tax.

If you are between 56 and 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.
When you permanently retire, your Transition to Retirement
Pension will convert to an Allocated Pension – but 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 Accumulation Account.
Call us on
1300 360 988
or visit
ﬁ
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 Payments, 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.
AgeAnnual percentage of account balance
55–644
65–74 5

75–846

85–9410
95+14
The Government has announced a temporary 75% reduction in
the minimum drawdown amount that members must take. This

arrangement may change again without notice.
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 superannuation into

regular income in retirement.

26
First Super Annual Report 2014–15
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 JuneReserve balance ($)
201510,372,114
201410,092,202

20137,740,026
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 speciﬁ
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 ﬁ
nancial year. Though initially invested in cash and ﬁ
xe d
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 2015 was

$6,276,559.
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 managers’ Risk 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 $2000* or less to be transferred

to the ATO instead of an ERF. However, being transferred to

AUSFund or the ATO may affect your beneﬁ
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 beneﬁ
ts in the
event of death or disability and may have a different investment

strategy to First Super. If your beneﬁ
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.
*This ﬁ
gure will change in the future.
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.
Trust Deed
The Trust Deed contains the rules of First Super.
No changes were made to the Trust Deed for the

ﬁ
nancial year ending 30 June 2015.

27
First Super Annual Report 2014–15
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 conﬁ
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 Ofﬁ
ce r
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 satisﬁ
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 ﬁ
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 Ofﬁ
ce r
PO Box 666

Carlton South VIC 3053

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 ar
e
located in the Trust Deed and relevant law. In the event of inconsistency between this report and the rules, the rules of the F
und
prevail. This report was prepared without taking into account your objectives, ﬁ
nancial situation or needs. You should consider the
appropriateness of the material in light of your own objectives, ﬁ
nancial situation or needs before making any decisions. You can
obtain a copy of the Product Disclosure Statement by contacting us. Facts and ﬁ
gures appearing in this report were accurate at
October 2015 but may change without notice.
Contact us
If you require more information or assistance with your First Super account, please contact our Service Centre today.
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
@
ﬁ
rstsuper.com.au
Website
ﬁ
rstsuper.com.au

The Firstonline member portal will be offline

FirstSuper_AnnualReport2015

Print content