EISS Annual Report 2010-2011

ANNUAL REPORT 2010 // 2011

EISS at a glance…

• Low administration fees • Direct access to personalised service from EISS staff • Financial advice over the phone, or referrals to professional financial planning services • Range of investment options and insurance benefits • You can stay with the Scheme when you retire • A not-for-profit fund • More than $700m in funds under management at 30 June 2011 • On-line access to up-to-date information on your benefits, insurance and investment options • Worksite visits and retirement planning seminars - we come to you!

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Welcome to EISS’s 2011 Annual Report

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Who looks after your money?

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As at the 30 June 2011, the Board members were:

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Who else works for your retirement?

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Statistics

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Investments

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What more do you need to know?

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Welcome to EISS’s 2011 Annual Report

What do you do if you have questions or concerns?

Contact us.

We can’t answer or fix what we don’t know about.

Phone 1300 307 844 Fax (08) 8100 9974 Email inquiries@electricsuper.com.au Web www.eiss.superfacts.com Address Level 2, 157 Grenfell St, Adelaide SA 5000 Postal Address GPO Box 4303, Melbourne VIC 3001 Please note that the EISS office is unattended at times. If you wish to discuss something with us, please ring first.

We may be able to sort it out over the phone. If not, we can make an appointment for a face-to-face chat. We can organise workplace or home visits if needed.

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The Electricity Industry Superannuation Scheme (EISS) is the super fund for people who supply electricity to South Australia. This annual report lets our members know what we have been up to on their behalf in the 2010/2011 financial year. This is a formal document and it is written in a formal way.

If you have any questions about anything you read here, give us a ring and we’ll try to answer them.

Members of this super fund continue to receive fantastic benefits that members of most funds can only dream about, such as: • Defined Benefit members have benefits linked to their salary, and are protected against poor investment returns.

• Accumulation members get their administration fees paid by their employer, and have a great choice of insurance benefits and investment options.

• All members have access to personalised service from the EISS staff, financial advice over the phone, referrals to professional financial planning advice, seminars delivered to your workplace, income streams in retirement, the option to voluntarily increase their super, and Trustees who work for you.

The EISS is overseen by a Board, who are required by law to work in the interests of members (within the rules of the EISS). The EISS office manages the fund on behalf of the Board, and is always available to answer questions that you might have on your super. There is more info on the Board and the office staff elsewhere in the report.

A lot of organisations work with the EISS to look after your money. These include your employer, the fund administrator, investment managers, auditors, lawyers, accountants, doctors, insurers, financial planners. A lot of expertise is called on to make sure that your retirement is looked after properly.

Who looks after your money?

Report from the Chairman and Executive Officer As we put the annual report together, financial markets are going through a difficult time. It is always interesting that as a result of financial market stress, we can get to the stage where the share price of companies can routinely change by 3-4% overnight. This sort of volatility is an obvious over reaction, but it shows the skittishness of investors at the moment.

Looking past this, the conservatism of the Electricity Industry Superannuation Scheme (EISS) Board and management has once again proven to be well founded. The investment returns to EISS members are never going to be top of the surveys, but neither are we likely to be bottom.

Our investment strategy is based on providing members and employers with balanced returns from a diverse range of investments. The return for the year to 30 June 2011 highlights this.

90% of members are with the default Balanced Growth Investment option and the return after fees and tax was 8.10% against the industry average (benchmark) of 8.20%. Although marginalIy behind the benchmark for the year, in light of the enormous volatility in financial markets we are comfortable with this result and it reflects the quality of our financial advisors and work undertaken by the scheme’s Investment Committee.

Superannuation Policy The Government has been consulting widely on its plans for Australian super funds, and a regulated low-cost option that members can access. This process has been somewhat convoluted, and we are currently waiting on the outcomes of the consultation to establish how best to consider responding to recommendations.

At this time, super funds are not required to offer a low-cost option, and as always, the Board will need to consider what is in the best interests of members. Of course, Division 5 members pay no administration fees at all at the moment, so you can’t get much lower cost than that.

Board strategy In early 2010, the Board considered a range of directions for the scheme. The outcome was that it was highly unlikely that the scheme would ever seek to open itself to the public. Nor was it likely in the short term to find another fund to join with that would satisfy the needs of the members to the extent that the EISS board and management does. So the outcome was to continue on as normal with an emphasis on ensuring that: • members funds were managed as effectively as possible • employer contributions were secure and • members were properly prepared for retirement.

To that end, we have been concentrating on education and advice for members. As an example, during late 2010 and early 2011, we set about ringing up every member over 50 (about 1,000 or so) to make sure that they had started planning for retirement. Some had, some hadn’t, but all appreciated the reminder that there were decisions ahead that needed to be made.

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We have also continued to build on our relationship with our two financial planning advice firms. Many financial planners don’t understand complex funds like EISS. We encourage members to use either Mercer or Tynan Mackenzie because they have both built up this understanding through previous work with fund members. If members don’t already have a financial adviser that they are comfortable with, then we can refer them to either firm to seek professional financial advice.

EISS staff are also visiting worksites wherever this can fit in with employer situations. Naturally if you want a visit to your worksite, please contact the fund and we will try to arrange it.

Administration Mercer has been with the scheme for many years and continues to grow and develop to be a very professional company that has been doing good work for members.

Board and Staff Julie Oakley resigned as an employer appointed trustee following staff changes at Alinta Energy.

We would like to thank Julia for her work during her time on the Board, and we welcome Rachel Salkeld of Alinta as her replacement.

As always, the Board and staff put in a lot of work for the EISS and the members. The Scheme is run by a group of thoughtful hardworking people, and we would like to thank them for making our jobs easier.

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Jon Holbrook Mark Day Chairman of the board Executive Officer

As at the 30 June 2011, the Board members were:

Mark Day

Patrick Makinson

Independent Chairman

Appointed by the Employers

Bob Donnelly

Kevin Taylor

Darryl Payne

Appointed by SA Unions

Paul Wight

Rachel Salkeld

Eric Linder

Janette Bettcher

Appointed by members

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All Board members are required by law to follow the rules of the EISS, as well as any laws that apply. If the Board has any discretion under the rules, then it has to consider the best interests of members when applying that discretion.

This is regardless of how they are appointed to the Board, so employer-appointed Board members have the same obligations as member-elected Board members. A decision of the Board requires two-thirds of the Board members to be in favour.

Training All Board members and staff undertake training to improve their knowledge and skills in areas that will be of benefit to the Scheme. The cost of this training is met by the Scheme.

Some examples of the training that has been taken are: • attending the national conference of the Association of Superannuation Funds of Australia (ASFA) • ASFA workshops and lunches • A one day course on the duties and responsibilities of super fund trustees • the Company Directors’ Course run by the Australian Institute of Company Directors • One day conferences on investments, superannuation issues and Public Sector superannuation funds

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Board meeting attendance Board Member

Number of meetings held 9

Number of meetings attended 9

Janette Bettcher

9

7

Bob Donnelly

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6 + 2 Alternate

Eric Lindner

9

7

Patrick Makinson

9

8

Julia Oakley

7

7

Darryl Payne

9

8

Rachel Salkeld

2

2

Kevin Taylor

9

9

Paul Wight

9

8

Mark Day

A quorum of 6 Board members was achieved at all Board meetings.

Subcommittees

Investment Subcommittee:

The Board has two Subcommittees, with the following members at 30 June 2011:

This committee oversees the Scheme’s investments, reviewing current managers as well as any possible new managers.

Mark Day

Patrick Makinson

Janette Bettcher

Corporate Governance Subcommittee This committee makes sure we have all the right controls and procedures in place, as well as reviewing the Scheme’s compliance with all regulations

Mark Day

Eric Linder

Paul Wight

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Who else works for your retirement?

Jon, Mark, Lyndall and Karen work for the Board, and make sure that the Scheme is run in line with the Board’s decisions and policies.

Jon Holbrook Executive Officer

Mark Elliott Deputy Executive Officer

Lyndall Carpenter Operations Manager

Karen Davey Project Officer

Service providers The Board obtains specialist help and advice from the following companies and people:

Actuary & Administrator: Mercer Human Resource Consulting Pty Ltd Accountant: Sharyn Long Chartered Accountants Investment adviser: JANA Investment Advisers Pty Ltd Legal advisers: DMAW Lawyers | Mercer Legal Pty Limited Taxation adviser: KPMG Auditor: Auditor-General Insurer: MetLife Medical advisers: Dr Gary Hopkins and Dr Grant Tschirn

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Statistics

Membership Statistics

Contributions

During the year, the membership increased:

The EISS receives contributions from members (from both after tax salary and by salary sacrifice) and from employers. The total contributions received during the year were:

Division Members at 30 June 2010

2

3

4

5

Total

762

295

200

1,899

3,156

204

204

Entrants during the year Exits during the year Members at 30 June 2011

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17

13

124

168

748

278

187

1,979

3,192

This includes members who have left their jobs, but have kept their super in the EISS. This is a fairly typical year, with the growth in Division 5 members outweighing the retirements among the older defined benefit members.

The EISS also paid pensions to 150 members, who have retired and are receiving a regular income from the Scheme. A pension option is available to all members.

Employer

$56.8m

Salary Sacrifice member

$14.5m

Post tax member TOTAL

$2.3m

$73.6m

The employers are paying all the contributions that the Board asks for. The Board has to aim to have enough money in the EISS to pay all benefits. This money is invested separately to the employers, and is held by the Board to pay for your retirement.

There was also $3.7m rolled into the Scheme from other super funds. You can save money by combining your super, especially as you pay very little in administration fees in EISS.

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Benefits The Scheme also paid out a lot of benefits during the year, both as lump sums and pensions.

The amounts were:

Lump sum benefits

$17.2m

Disability pensions

$0.2m

Retirement pensions

$6.0m

TOTAL

$23.4m

By way of comparison, during the 2009/2010 year, benefits totalling $13.1m were paid.

Member Queries Phone queries from members are handled by the Helpline (run by our administrator), and the Scheme office. The Helpline can help you on all matters, as well as provide financial advice on simple matters over the phone. They have access to the EISS administration data and can resolve most questions very quickly. The Helpline takes about 80% of all queries, and answers 90% of them on the spot.

They will get help from the EISS office or the administrators (who know the EISS really well) if need be. However, if you want to talk to Jon, Mark, Lyndall or Karen just ask.

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You are also welcome to send us an email at inquiries@electricsuper.com.au. We will try to answer it within two days, though we may need more time if it is a complicated question.

Over the year, the Scheme office and the Helpline received 3,187 queries.

This means that, on average, every EISS member (or their financial adviser) rang, or emailed, or wrote in about their super. This doesn’t include: • contributions (over 100,000 separate amounts were recorded) • benefit payments (168 exits from the Scheme) • outgoing calls made and letters and emails written This adds up to a lot of activity to keep your super ticking over.

Investments

Summary

Investment Philosophy

The Board aims to get the best return that it can, while keeping track of the risk that is being taken.

Background

The Board sets investment objectives and a strategy with a long-term view in mind. This strategy involves using ‘growth’ assets like shares and property as well as ‘defensive’ assets such as fixed interest and cash.

The value of investments can move up and down with investment markets. We try to reduce the movements as much as we can, but we can and do get negative returns sometimes.

The Board selects professional fund managers to invest the assets of the Scheme. Each manager is a specialist in the relevant investment sectors, for example Australian shares, and is selected after taking into account advice received from the Scheme’s investment adviser.

It is ultimately the Board’s responsibility to make all decisions relating to the investments of the scheme.

The Scheme has a mix of defined benefit and accumulation liabilities.

For accumulation liabilities, the investment risk is carried by the member. This means that if investment returns are poor, the member’s balance is directly affected. The Scheme provides a mix of investment options to allow members to choose the risk profile that best suits their circumstances.

However, for defined benefit liabilities, the investment risk is carried by the employers. If returns are poor, then the employers have to contribute more to pay for the benefits. The Board has sought the employers’ views on the investment risk profile for the assets backing the defined benefit liabilities and will seek reaffirmation of employer views every five years.

Currently the majority of the liabilities are defined benefit. The sections of the Scheme providing defined benefits are closed to new members, and hence the timeframe over which these benefits will be paid is shortening.

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Board philosophy - Default and Defined Benefit Investment Pool In light of its role as custodian for assets supporting benefits for members, the Board considers it appropriate to take an approach to investing the scheme’s assets aimed at lowering investment volatility while maintaining an exposure to growth assets.

The Board will diversify investments, both across asset classes and managers, within any constraints imposed by the asset size of the Scheme.

Use of gearing The Board may invest in funds that use gearing and leverage, where appropriate.

Asset Allocation The asset allocations for the Balanced Growth option (which is also where the assets supporting the defined benefits are invested) at 30 June 2010 and 30 June 2011 were

Benchmark (%)

Asset Allocation at 30 June 2010 (%)

Asset Allocation at 30 June 2011 (%)

Australian Shares

30.00%

28.7%

29.0%

Overseas Shares

21.00%

18.7%

20.0%

Property

13.00%

12.6%

12.1%

Total Growth Assets

64.00%

60.0%

61.1%

Alternatives

16.00%

17.7%

16.3%

Australian and Overseas Fixed Interest

15.00%

15.4%

15.1%

5.00%

6.9%

7.5%

36.00%

40.0%

38.9%

Asset class

Manager Configuration The Board has no deliberate bias towards any style of investment management, but will select managers on their perceived ability to add investment value. Manager configuration is determined within, rather than across asset classes, having regard to: • any decision reached on active vs passive management • the merits of using a particular manager • the need for adequate manager diversification • the managers’ particular skills in the asset class in question

Cash Total Defensive Assets

• the ability to monitor managers effectively and efficiently

The changes in the asset allocation during the year were due to:

Use of derivatives

• different returns from the different asset classes (for example, shares had a good year, and property not so good)

The Board does use foreign exchange instruments to manage the risk of fluctuations in the Australian dollar for the scheme’s overseas investments. In addition Investment managers employed by the scheme are permitted to use futures, options and other derivative instruments in accordance with their particular Risk Management Statements. The Board expects that over the longer term the use of these instruments will enhance the returns and/or reduce the risk of the Scheme.

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• investment of contributions into shares and alternatives • reclassification of a couple of investments from fixed interest to alternatives

Objectives The investment strategy has three objectives against which the Balanced Growth Portfolio’s investment performance is measured. The objectives and the results are as follows:

Objective

Balanced Growth Portfolio Return 3.1% pa

Objective return 5.9% pa

Not met

Exceed median return in the Super ratings survey over rolling 3-year periods.

1.5% pa

1.0% pa

Met

Exceed indexed benchmark portfolio over rolling 3-year periods (before tax).

1.6% pa

2.2% pa

Not met

Exceed the Consumer Price Index by 3% pa over rolling 5-year periods.

The EISS did not meet two of its three objectives to 30 June 2011. The last 3 years have been an unusually difficult time on investment markets, with the global financial crisis affecting all assets.

Unfortunately we were not immune from this, though the EISS returns have been more stable than many other funds.

Recent Returns The returns from the Balanced Growth option over the last 4 years tell the story of how returns have been affected by the poor returns in 2008 and 2009, despite the recovery in the Australian market this year:

Year

07/08

08/09

09/10

10/11

Over Last 5 Years

Over Last 10 Years

Australian Shares (before tax)

-13.7%

-20.3%

13.1%

11.9%

2.4%

7.2%

Overseas Shares (in $A, before tax)

-20.8%

-15.7%

7.3%

3.2%

-4.6%

-3.2%

EISS Balanced Growth option (after tax)

-3.8%

-11.8%

9.7%

8.2%

3.3%

4.9%

The investment earnings that are allocated to your account will depend on the division of the Scheme that you are in, which account you are looking at and in some cases, when you joined the Scheme. This is because each division has different rules about what is deducted from the declared rates in terms of administration fees and tax. The declared rates that apply to you are shown on your statement.

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2010/11 Financial Year – The Year in Review The last financial year was characterised by a large amount of volatility, with economic conditions generally on the weak side in developed market economies (DM), contrasting with most of the emerging economies (EM) where conditions were on the whole much stronger.

Inflation has also begun to surge on the back of higher food and energy prices, with the US quantitative easing program feeding through to higher asset prices and aggriavating inflation in the already strong EM. As a consequence many of the EM countries have been raising interest rates as a counter-measure, while the DM central banks have held rates at record low levels through most of the year with the expectation that the poor state of the economy will offset food and energy and keep inflation under control.

Sentiment in bond markets has fluctuated wildly at times, with temporary signs of recovery causing bond yields to sell-off, followed by renewed buying of safe harbour bonds, while the bonds of debt laden peripheral European markets (including Greece, Portugal and Ireland) have been consistently sold through the year as European authorities dithered about the best means to support them. The big fear is that defaults by these countries will force a crisis for the European banking system which is a holder of large volumes of these countries’ sovereign debt. The ratings agencies have reacted by downgrading these to below investment grade, and in the case of Greece the current rating of CCC is only one notch above ‘default’.

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Outside of Europe economic conditions have also been tough, with the earthquake, tsunami and nuclear plant triple whammy causing the Japanese economy to shift into reverse in the first quarter of 2011, while Australia was beset by the massive floods in Queensland and Victoria. Both of these events have resulted in negative GDP growth rates for the first quarter, and expectations of a slow recovery in the second quarter. The Australian economy currently enjoys a low rate of unemployment compared to most other DM economies, but despite this consumer confidence remains at very low levels with an emphasis on reducing debt levels at the expense of spending.

This trend has led to a two paced economy, with the mining states of Western Australia and Queensland growing strongly, while the nonmining states have been lagging.

In the markets, Australian shares finished the year up 11.9%, whilst Global shares also ended the year in positive territory. Global share markets in local currency terms rose by nearly 27%.

Over the 12 months, the Australian dollar rose against all currencies to record post-float highs, boosted by high interest rates, high commodity prices, and a much improved balance of trade.

This currency strength offset a large part of the gains, and resulted in unhedged global equity investors returning only 3.2% for the year. Despite economic conditions deteriorating through the year, share earnings were solid especially in the USA and Germany where increased exports to emerging countries supported sales. However domestic based securities did not fare as well with high levels of unemployment weighing on consumer sentiment as well as their desire to spend. Resource stocks continued to benefit from the high growth rates in China and prices rose by 18.2% over the year compared to Industrial stocks which rose by 9.2%.

In the Property sector Listed Property Trusts (LPTs) again underperformed Unlisted Property Trusts. Listed Property Trusts returned 5.8% over the year, whilst Unlisted Property delivered a more stable return, adding 9.1% over the year, with stable capitalisation rates, and valuations increasing only on the back of rental increases.

Hedged Global bonds returned 6.9% over the year, whilst Australian bonds returned 5.6%.

Australian government bonds underperformed global bonds, as the RBA raised rates further to combat incipient inflation. Global bonds returns were also boosted by the ‘carry’ as Australian money market rates remain substantially higher than global money market rates. The outlook for non-government bonds (credit) continued to improve with very low defaults, and spreads contracted further in the first half of the year, before reversing course in 2011 under the influence of nervousness regarding the Greek debt crisis, as well as weaker economic data.

These issues also contributed to a strong rally in the price of government bonds that rallied to exceptionally low levels as investors sought the safety and liquidity of Us and German government bonds.

Despite 12 months having passed since the last annual comments were made, surprisingIy little has changed. Equity markets are considered to be cheap based on forward earnings, and once again the mood in the markets has been cautious, with the recovery in the developed markets seemingly stalled, and with the authorities in a number of key emerging markets such as China, Brazil and India trying to slow the rate of growth and reduce inflation which has been rising at an uncomfortable rate. Additional government regulatory change and financial reform is also of concern. There is also focus on the ability of governments in debt laden economies in Southern Europe to implement appropriate austerity measures, The most recent measures to aid some of the countries under most stress may defuse some of the concern as these allow for a faster response by European authorities to future debt crises. Hopefully these may help soothe investor nervousness.

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Investment Managers The Scheme used the following investment managers during the year, each of which is invested in a particular investment sector. The figures shown are the percentages of total assets invested with each manager at 30 June.

Australian Shares: Concord Capital Cooper Investors Dimensional Fund Advisors Mellon Solaris Tribeca Investment Partners Overseas Shares: Marathon JANA Wellington Direct Property: AMP Dexus Lend Lease Alternatives: Aurora Investment Management Bentham GMO Macquarie Aurora Fauchier JANA Wellington Australian & Overseas Bonds: AFIF Colonial First State JANA Cash: Bank Deposits ING Perennial Macquarie

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2011 5.4% 9.7% 2.5%

2010 5.8% 9.5% 3.8%

9.2%

9.2%

2.3% 3.1%

3.1%

14.7%

15.3%

2.1% 4.5%

4.7%

4.5%

4.5%

3.1%

3.3%

2.7% 4.4%

4.3%

2.5%

2.7%

1.1%

3.7% 2.8%

2.9%

2.5%

2.8%

1.6% 2.4%

4.4%

3.1%

4.3%

2.9%

6.4%

6.7%

0.7%

1.7% 5.0%

5.5% 1.2%

1.3%

Growth

Investment options These are the options that your accounts can be invested in.

These aren’t generally available for your employer defined benefit.

Defensive

Defensive

Cash

Conservative Growth

Objective

Objective

This option aims to exceed the consumer price index and similarly invested funds over rolling annual periods.

This option aims to exceed the consumer price index by 2% pa over three years, and to exceed the return on its benchmark portfolio over 3 years.

Strategy

Strategy

This option is fully invested in short term fixed interest investments, and has a very conservative investment risk profile.

This option is around 30% invested in growth investments, and hence has a moderately conservative investment risk profile.

Investment Risk

Investment Risk

Generally a secure way to invest. However cash investments tend to earn the lowest rate of return in the longer term.

Conservative investment strategy with expected stable, but low returns.

Investment Timeframe: No minimum timeframe.

Risk Profile Very low; not likely to have a negative return.

This option is most suited to Members seeking to minimise their investment risk over the short term.

Management Fees 0.2% (deducted from the returns credited to your account).

Investment Timeframe: 1-3 years.

Risk Profile Low; the chance of a negative return is 2 in 20 years and returns are not expected to show large swings.

This option is most suited to Members who prefer stable but moderate returns over the short to medium term.

Management Fees 0.4% (deducted from the returns credited to your account).

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Defensive Growth

High Growth

Balanced Growth

High Growth

Objective

Objective

This option aims to exceed the consumer price index by 3% pa over five years, and to exceed the return on its benchmark portfolio over three years.

This option aims to exceed the consumer price index by 4% pa over five years, and to exceed the return on its benchmark portfolio over five years.

Strategy

Strategy

This option is around 70% invested in Growth assets, and hence has a moderately aggressive investment risk profile.

This option is fully invested in growth investments, and has a very aggressive investment risk profile.

Investment Risk This option follows an investment strategy which has a balance of risk and return.

Investment Timeframe: 5 years(minimum) Risk Profile High; the chance of a negative return is 5 in 20 years and returns may show large swings in the short term.

This option is most suited to Members who want reasonable medium term returns and can put up with large variations in the short term.

Management Fees 0.8% (deducted from the returns credited to your account)

Investment Risk This option has more volatility than the Balanced Growth option and is designed to produce higher return over the long run. However the increased variation in returns is also likely to produce the occasional negative return.

Investment Timeframe: 5 to 7 years (or more).

Risk Profile High; the chance of a negative return is 6 in 20 years and returns may show large swings in the short term.

This option is most suited to Members who want higher returns in the long term and can put up with large variations in the short term.

Management Fees 0.9% (deducted from the returns credited to your account).

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What more do you need to know?

What are the benefits?

Account-based Pensions

Scheme members belong to one of five sub-Schemes.

Lump sum benefits can be transferred to an account-based pension on retirement.

Open to new members

Insurance Benefits

The Accumulation Scheme (Division 5) Provides benefits based on contributions plus investment earnings. Members can choose the level of their insurance cover.

All members are eligible for benefits on death or disability, that can help you or your dependants if anything goes wrong. The Scheme office can help if you have any questions. More information can be found in your member booklet.

Closed sub-Schemes

What do members contribute?

The Lump Sum Scheme (Division 2)

The level of member contributions is flexible. Generally, members can choose any multiple of 1.5% of salary. Members can also choose to temporarily stop contributing.

Provides lump sum benefits based on both investment earnings and salary levels.

The Pension Scheme (Division 3) Provides lifetime pensions based on final salary and indexed with CPI. A lump sum may be paid on voluntary separation or retrenchment. Provident Account A (also part of Division 3) provides lump sum benefits based on investment earnings.

The RG Scheme (Division 4) Provides lump sum benefits based on both investment earnings and salary levels.

Full benefits from Divisions 2, 3 and 4 are achieved by contributing, on average, the standard contribution rate. This is, generally, 6% of salary, but can be between 5% and 6% in Division 3. Any voluntary contributions (AVCs) are returned to you with interest in addition to the other benefits.

Division 5 members are not required to contribute, but may make contributions if they wish.

Contributions are deducted from members’ salaries each pay day.

The Scheme is also able to accept salary-sacrifice member contributions. These contributions are made from members’ salaries before income tax is paid. However, not all employment arrangements allow salary-sacrifice - members need to check with their employer.

Contributions can also be made for a member’s spouse, which may have tax advantages.

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What do you do if you have questions or concerns?

Contact us.

We can’t answer or fix what we don’t know about.

Phone 1300 307 844 Fax (08) 8100 9974 Email inquiries@electricsuper.com.au Web www.eiss.superfacts.com Address Level 2, 157 Grenfell St, Adelaide SA 5000 Postal Address GPO Box 4303, Melbourne VIC 3001 Please note that the EISS office is unattended at times. If you wish to discuss something with us, please ring first.

We may be able to sort it out over the phone. If not, we can make an appointment for a face-to-face chat. We can organise workplace or home visits if needed.

How are the benefits paid for?

The money to pay for benefits comes from member contributions, employer contributions and investment earnings.

Member contributions are set by the member according to their wishes.

Employer contributions are set by the Board after receiving advice on the amounts required to pay for the benefits. Employers are required to pay contributions under the Rules of the EISS. These contributions are monitored by an independent actuary (an expert in these matters). The actuary projects the likely benefit payments, salary growth and investment returns to estimate employer contributions, and reviews this annually or as required.

What insurance does the Scheme have?

The Board takes out insurance against the death and invalidity of Scheme members to protect the Scheme against those risks. Also the Scheme pays for insurance to protect the Board and the Scheme against the financial effects of any “honest mistakes” that might occur in the running of the Scheme.

How is personal information handled?

The Scheme holds personal information about members, such as name, address, date of birth, salary, tax file number and so on in order to provide member super benefits. Members should realise that this personal information may be disclosed, when necessary, to the Scheme Administrator and professional advisers, insurers, Government bodies, employers and other parties.

The Board has adopted a Privacy Policy that sets out in more detail the way members’ personal

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information is handled. For a copy of the Privacy Policy please contact the Scheme’s Privacy Officer on 1300 307 844 or fax (08) 8100 9974 or email inquiries@electricsuper.com.au.

Minimum Benefits All benefits paid from the Scheme are checked to make sure that they are at least equal to the minimum required under the Superannuation Guarantee legislation. Members will always receive their mandatory 9%. However, this is a minimum, not in addition to other benefits.

Generally in Division 2, 3 and 4 benefits are worth a lot more than 9% of salary.

What Information Is available To Members?

The first stop for information on the Scheme should be the website at www.eiss.superfacts.com Current information available to members includes: • Annual Member Statements • Annual Reports to Members • Member’s Booklets.

Members are also entitled to access the Scheme Rules, the Annual Report to the Treasurer (which includes the full statistics, financial statements and the auditor’s reports), the actuary’s reports and the investment policy statement.

Information sheets and brochures are available on a number of subjects. The Board is currently updating both the Member Booklets and the information sheets.

The Board also issues newsletters to keep members up-to-date.

If members would like to receive any of these documents, or need more information about the Scheme or benefits, please refer to the Scheme’s website. If you can’t find what you need there, please contact the Scheme Office.

How Do You Make A Complaint?

Most queries and problems can be sorted out over the phone. We aim to get back to you within 2 working days (though it may be to ask for more time). We are happy to provide a written response if you want one via email or letter.

If you are not satisfied with the response to a query you have made to the Scheme, you need to send complaints (in writing) to:

Financial Details The tables below summarise the Scheme’s main financial transactions for the year ended 30 June 2011. The audit of the Scheme is expected to be completed in October 2011 and no qualifications are expected to be imposed by the auditor.

The Complaints Officer Electricity Industry Superannuation Scheme Level 2, 157 Grenfell Street, ADELAIDE SA 5000 The Board will examine all written complaints within 5 weeks of receipt and make a decision within 90 days. Please be assured that all written complaints will be passed to the Board.

Complaints not dealt with to your satisfaction can be referred to the Superannuation Complaints Tribunal (SCT). The SCT is the government body created to resolve disputes in the superannuation industry, and can be contacted on 1300 780 808.

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Change In Net Assets Over The Year

$'000 Net market value of assets available to pay benefits as at 1 July 2010 PLUS Income Member contributions Employer contributions Transfers from other funds Net investment income Other income

640,878

TOTAL

134,380

2,358 71,189 3,708 56,684 441

LESS Expenditure Benefits paid, etc Insurance premiums Other expenses Taxation TOTAL

22,992 721 1,948 10,449

36,110

EQUALS Net market value of assets available to pay benefits as at 30 June 2011

739,148

Balance Sheet

Assets Investments Other assets

737,901

TOTAL

741,305

3,404

LESS Current Liabilities Benefits payable Other liabilities

2,157

TOTAL

2,157

0

EQUALS Accumulated funds as at 30 June 2011

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739,148

contacting the scheme web // www.eiss.superfacts.com

email // inquireis@electricsuper.com.au

fax // 08 8100 9974

phone // 1300 307 844

postal address // GPO Box 4303, Melbourne VIC 3001

street address // Level 2, 157 Grenfell Street, Adelaide SA 5000