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2011 Annual Report Towers Watson Superannuation Fund

Inside... Year in review


Five steps to smarter super


Your super returns


How your super is invested


Other investment information


How super is taxed


Fees and other costs


Other information


The Fund’s financials


How to contact us

back cover

Product Disclosure Statement (PDS) This is the Annual Report for members of the Towers Watson Superannuation Fund (ABN 93 268 215 348) for the year to 30 June 2011. It forms part of the PDSs for the Fund, along with the Fund’s Member Booklet for your category of membership and the Nomination of Beneficiaries brochure. This Report is issued by Towers Watson Superannuation Pty Ltd (ABN 56 098 527 256, AFSL 236049) as Trustee of the Fund. It outlines how the Fund has performed during the past 12 months, how your Fund is managed and includes some general news about super. The information in this publication is general information only and does not take into account your particular objectives, financial circumstances or needs. It is not personal or tax advice. Any examples included are for illustration only and are not intended to be recommendations or preferred courses of action. You should consider obtaining professional advice about your particular circumstances before making any financial or investment decisions based on the information contained in this document.

““Taking an active interest in your super gives you more confidence about the years ahead. After all, superannuation is your money for retirement”

Year in review Welcome to the Annual Report for members of the Towers Watson Superannuation Fund for the year to 30 June 2011. During the year we saw:

The Fund’s investment returns (at 30 June)

••Solid investment returns despite economic uncertainty, environmental disasters both in Australia and abroad, and political unrest in the Middle East.

Past performance is not necessarily a reliable indicator of future performance. 12.1%

•• Legacy Towers Perrin employees joined the Fund as Insurance Only members from 1 October 2010. As a result, these members now receive Death and Total and Permanent Disablement benefits in the Fund. ••The closure of the Fund’s Defined Benefit section to new members from 1 January 2011 and the introduction of a new Accumulation category from 1 January 2011 which is open to eligible new permanent employees as well as current Insurance Only members. Read more about this on page 13. ••Rose-Maree Bacon and Jason Langdon re-elected as member representatives on the Fund’s Policy Committee. ••The outsourcing of the Fund’s administration to Link Super. Read more about this on page 14. •• Minor proposals impacting super from the 2011 Federal Budget. These proposals were outlined in the November 2011 edition of Super News.

2011 5-year compound average net return (per year)


Note: Investment returns are net of tax and investment fees.

3.4% 0




Fund assets (at 30 June)



19,402,119 16,714,169

2011 2010






Membership (at 30 June) Number of members

••The replacement of the following fund managers: GMO Australia Ltd (Australian Equity Trust) and Barclays Global Investors (Total Return Multi- Opportunity Fund) with Northward Capital Pty Ltd (Australian Equities) and K2 Asset Management (Advisors Diversity Fund), respectively.







2011 2010




On page 4, take a look at our five steps to smarter super. Have you considered these simple steps to get the most out of your super? As Trustee of the Fund, our role is to manage the Fund for your benefit. See the back cover for details on how to contact us or obtain further information.

Towers Watson Superannuation Fund | 3

Five steps to smarter super Are you getting the most out of your super? It is important to do everything you can to optimise your membership in the Fund. By following our five steps to smarter super, you will have most bases covered.

Step 1 – Don’t let your super get away! Have you ever changed jobs or your address, and found that your previous super fund has lost contact with you? If this is the case, you can track down your lost super through the Australian Taxation Office (ATO). The ATO has a database of “lost” superannuation and can assist you to reclaim it. Do this by visiting and conducting an online search using the SuperSeeker tool. All you will need is your name, date of birth and Tax File Number. You can also contact the ATO by phone on 13 10 20. If your lost super is found, the ATO will tell you where the account is, and you can then make contact and arrange to roll it in to the Fund.

Step 2 – Consolidate your super Have you got super in a number of separate funds? By rolling your entire super into one fund, you may save money by paying fewer fees. If you would like to consolidate your super in to the Fund, you must obtain the Transfer Request Form from the Fund Administrator. Before doing so, check if your other funds will charge you any withdrawal fees, or whether you will lose any important benefits, such as insurance, should you leave.

Step 3 – Consider contributing Did you know you may be able to make additional contributions to your super to top up your balance? These contributions can be made from your before- tax or after-tax salary and may offer you some great benefits. ••Contributions from your before-tax salary are sometimes called “salary sacrifice contributions” or “concessional contributions”. These kinds of contributions may reduce the amount of income tax you pay, and could provide a tax effective way to build up retirement savings. ••Contributions from your after-tax salary can sometimes result in a payment to your super account from the Government. This is called a Government co-contribution, where the Government may match your contributions up to $1,000 if you qualify. For more information on the government co-contribution, refer to your Member Booklet. 4 2011 Annual Report | Towers Watson Superannuation Fund

Remember that the Government limits the amounts of super you can contribute before extra tax applies. Before making any contributions, seek the opinion of a licensed financial adviser. If you are a Defined Benefit member, you may be unable to make additional contributions without this potentially impacting on your caps. Contact the Fund Administrator or a licensed financial adviser for further information.

Step 4 – Keep your insurance up to date If you are eligible for death and total and permanent disablement insurance, consider whether your cover through the Fund will be enough should you, or your family, have to face the unexpected. This is especially true if your financial circumstances have changed recently. If you qualify, you may like to consider purchasing additional voluntary insurance to boost your cover, and don’t forget to keep your nomination of beneficiaries up to date!

Step 5 – Seek professional financial advice The previous steps to smarter super provide basic tips for managing your super, but it is important to seek the opinion of a licensed financial adviser before taking any action. This way, you will receive specific advice from qualified professionals who understand your personal circumstances. Towers Watson Australia Pty Ltd has arrangements in place to help you with your financial planning. If you are in Melbourne and would like to speak to one of Towers Watson licensed financial advisers, contact Susan Rio on (03) 9655 5222. If you are in Sydney, Towers Watson has engaged ipac securities ABN 30 008 587 595 to provide financial planning services. You can contact ipac on 1800 080 494. The Financial Planning Association (FPA) can also help you find a financial planner by referring you to one in your area. Call them on 1300 626 393 or visit the FPA’s website at

Your super returns About your returns ••The return is the amount that you earn on your accumulation accounts. ••Positive returns increase your money while negative returns decrease your money.

Consider this... The performance of your super might vary from year to year. In most cases though, super is a long- term investment. This means that returns over a longer term (like ten years, rather than one or two years) will be a better indicator of how your super is performing in general. Returns are shown here and on your Personal Statement of Benefits. The website at also has recent returns.

Returns to 30 June Past performance is not necessarily a reliable indicator of future performance.




Net investment return and declared rate
















AWOTE + 3%* Note: Investment returns are net of tax and investment fees. * AWOTE (Average Weekly Ordinary Time Earnings) + 3% is the Fund’s investment objective.


-6 -9 -12 -15 2011




What rate of return do I receive? For most members, your retirement benefit is a defined benefit and is generally not affected by investment returns. Your defined benefit is linked instead to your salary.


Five-year compound average return

The monthly investment returns that have applied since 30 June 2010 are: Month

Net investment return

July 2010


August 2010


Investment returns are applied to your additional voluntary contribution, rollover and surcharge accounts at the monthly declared rates shown to the right. The Trustee sets the declared rates at the end of the year after considering the net investment return for the year and its crediting rate policy. The current policy is to set the declared rate as equal to the net investment return earned by the Fund.

September 2010


Accumulation members, spouse members, employees working overseas and casual employees do not have a defined benefit. Instead, your benefit is dependent on the value of your accounts. Investment returns are applied to your accounts as described above.

October 2010


November 2010


December 2010


January 2011


February 2011


March 2011


April 2011


May 2011


June 2011


Full Year Return


Towers Watson Superannuation Fund | 5

The interim rate If you leave the Fund during the year, your accounts (if any) will receive an interim investment return based on the monthly investment returns (net of investment fees and taxes) for the period from the previous 1 July until the day your benefit is paid. The defined benefit component of your benefit (if any) will have investment earnings applied at the Fund’s bank account earning rate (net of tax) for the period from your date of leaving the Company (or the effective date if you choose an alternate fund) to the date of payment.

How investment markets performed Over 2010/2011, the Australian economy continued to grow as it emerged from the Global Financial Crisis. Despite natural disasters and rising uncertainty in the global economy, the domestic market remained resilient. Following the Queensland and Victorian floods and Cyclone Yasi at the start of 2011, Gross Domestic Product (GDP) in Australia increased by 1.4% for the year to June 2011. In addition, inflation for the year to June was a manageable 3.6%, allowing the Reserve Bank of Australia to leave the official cash rate at 4.75% at June 2011. Australian unemployment levels decreased from 5.1% to 4.9% over the financial year. Globally, a number of pictures were presented. In the US, the rate of economic recovery was slower than expected – interest rates remained near zero and unemployment persisted at a rate of 9.2%. The prosperity of European markets was varied, with some economies (in particular, Germany and France) strengthening, while others such as Greece, Ireland, Spain and Portugal, struggled. The European Central Bank tightened monetary policy as interest rates rose to 1.25% in April, in an effort to control inflationary pressure. Meanwhile, China continued to experience strong growth, with GDP growing 9.5% over the financial year, and inflation rising to 6.4% in June 2011. Japan, following the natural disasters earlier in the year, faced challenges in both supply and demand yet the Bank of Japan has helped stabilise the situation.

6 2011 Annual Report | Towers Watson Superannuation Fund

The Australian share market faced a volatile 12 months, returning 11.9% over the fiscal year, as per the S&P/ASX 300 Accumulation Index. Despite a mainly positive performance, the market was set back by concerns over Greek debt in the last quarter. In addition, the rising Australian dollar – closing at 107.08 US cents after a historical high of 110 US cents in May 2011, resulted in a slowdown on foreign earnings. The domestic property market performed poorly on the S&P/ ASX 300 Property Accumulation Index when compared to last year’s return of 20.3%, delivering a much lower return of 5.9% in 2010/2011. However, the performance of the Australian fixed interest market was solid as measured by the Australian 90 Day Bank Bill Index and UBSA Composite Bond Index (All Maturities). Further afield, global share markets, as measured by the MSCI World ex Australia Accumulation Index, recorded a strong performance over the year. Whilst the market posted some strong gains over the year, concerns over Greek debt resonated with investors abroad. This resulted in some considerable losses in May and June. Note: This investment commentary does not constitute advice. All investment figures quoted relate to before-tax performance of the relevant industry benchmark.

How your super is invested Did you know?

Investment strategy

Most investments can be categorised as either return seeking assets or risk reducing assets.

The Trustee establishes a specific investment strategy for the Fund’s investments. This is the plan that the Trustee follows to achieve the Fund’s investment objectives.

Return seeking assets generally offer higher expected returns than other assets over periods of five years or more. They also usually carry a higher investment risk and investment returns can be significantly negative on occasions. Return seeking assets include shares, property, hedge/absolute returns funds, commodity futures and specialist credit. Risk reducing assets are lower-risk investments as returns are less likely to be negative. However, they also generally provide lower expected returns over the long term. Risk reducing assets include cash deposits and fixed interest investments, such as government bonds and corporate debt.

Investment objectives Investment objectives are specific goals that the Trustee sets for the performance of the Fund and each investment option. They are not intended as forecasts or guarantees of future investment returns. Generally, the Trustee aims to: ••Invest the Fund’s assets prudently as permitted by the Trust Deed and by superannuation law, ••Invest across a diverse range of assets, ••Ensure that the Fund is able to make benefit payments to members when they are due, and •• Monitor the performance of the Fund’s investment managers to ensure they exercise integrity, prudence and professional skill in fulfilling the investment tasks delegated to them.

The Fund’s investment strategy requires the assets to be invested across different types of investments or assets, specifically 80% in return seeking assets and the balance (20%) in risk reducing assets.

Investment managers The Trustee appoints professional investment managers to manage the Fund’s investments. These managers and their products may be changed from time to time without prior notice to, or consent from, members. The Fund’s investment managers at 30 June 2011 were: ••Aberdeen Investment Management Australia Limited (Inflation Linked Bond Fund) ••AMP Capital Investors (Global Property Securities Fund) ••Apostle Asset Management (Apostle Loomis Sayles Credit Opportunities Fund) ••BNP Paribas Asset Management (Australia) Limited (MFS Fully Hedged Global Equity Trust) ••BT Financial Group (Global Return Fund) ••K2 Asset Management (Advisors Diversity Fund) ••K2 Asset Management (Australian Absolute Return Fund) ••Northward Capital Pty Ltd (Australian Equities) ••Perpetual Investments (Wholesale International Share Fund)

The specific investment objectives for the Fund’s investments are to:

••PIMCO Australia Pty Ltd (Global Commodity Real Return Fund)

••Achieve a return (after tax and expenses) that is at least 3% per year more than Average Weekly Ordinary Time Earnings over moving five year periods, and

Since June 2010, Barclay Global Investors (Total Return Multi-Opportunity Fund) was replaced by K2 Asset Management (Advisors Diversity Fund) and GMO Australia Ltd (Australian Equity Trust) was replaced by Northward Capital Pty Ltd (Australian Equities).

••Limit the probability of a negative annual return to one year in five.

Towers Watson Superannuation Fund | 7

International specialist credit


Australian inflation linked bonds

19% Alternatives



Hedge funds


Global property



International shares (unhedged)


Other investment information International shares (hedged) Australian shares

Investment mix 30 June 2011

30 June 2010 International specialist credit






Australian inflation linked bonds


14% 8%

12% 10%









13% 10%


Asset allocation

 Australian shares  International shares (hedged)  International shares (unhedged) Hedge funds  Global property Global property funds  Hedge  Commodity futures International shares (unhedged)  Australian inflation linked bonds  International specialist credit International shares (hedged) Alternatives




Australian shares

Investment managers are required to have risk management processes in place in relation to the use of derivatives and the purposes for which they are used. Each year, the Trustee obtains confirmation from the managers that they have complied with their processes.

The Fund’s assets are invested in various asset classes. The Trustee places limits or ranges on the Fund’s exposure to each asset class and nominates a neutral or benchmark position for the Fund. The asset allocation ranges for each investment option are AILB shown below. Socially responsible investments 10% The Trustee does not take into AFI account social, ethical Australian shares 15.7% to 19.7% 17% or environmental considerations, or labour standards International shares A 11.4% to 15.4% when selecting, retaining or realising the Fund’s 19% (hedged) investments. investment managers 14%When the Fund’s HF International shares were selected, the Trustee did not consider whether 11.4% to 15.4% (unhedged) the managers took these factors into account. GP 8% Global property 6.0% to 10.0% 12% Actuarial review IS(UH) 10% Hedge funds 8.0% to 12.0% 10%Fund’s financial position is reviewed by the The Commodity futures 5.5% to 9.5% actuary at least every three IS(H) years. The actuary then International makes a recommendation to the Company on the 8.0% to 12.0% AS specialist credit appropriate level of future contributions needed to maintain members’ benefits. Australian inflation 18.0% to 22.0% linked bonds The most recent review was completed effective

Derivatives The managers of the Fund’s investments in absolute return funds (K2 Australian Absolute Return Fund), hedge funds (BT and K2 Advisors Diversity Fund), specialist credit (Loomis) and commodity futures (PIMCO) may make use of derivatives to assist in achieving their return and risk objectives. This represents approximately 37% of the Fund’s assets. The Fund’s other investment managers only use derivatives for risk-control purposes or to more efficiently shift asset allocations. 8 2011 Annual Report | Towers Watson Superannuation Fund

30 June 2010. The review showed that the Fund was in a satisfactory financial position. The Company continues to contribute in line with the actuary’s recommendations.

Reserves This is a defined benefit fund, so the Trustee does not maintain formal reserves.

How super is taxed Super taxes include: ••Contributions tax, ••Tax on investment earnings, ••Tax on benefits, although your super payout is generally tax free after age 60, and ••Tax if you exceed annual limits or caps on the amount of contributions made to your super.

How are my contributions taxed?

Did you know?

When concessional contributions are paid into the Fund, a contributions tax of 15% applies. If the Fund does not have your Tax File Number, this tax increases to the top marginal personal tax rate plus 1.5%.

How are investment earnings taxed in the Fund? Investment earnings are generally taxed at the rate of 15%. This rate reduces if deductions and imputation credits are available to the Fund’s investment managers.

How is my super benefit taxed? The tax payable on benefits depends on a number of factors, including: ••The type of benefit being paid (retirement, disability or death), ••Who receives the benefit, ••Whether you were an Australian citizen or permanent resident when the benefit was paid. Higher tax applies to benefits paid to temporary residents who permanently leave Australia, and ••How you receive the benefit (e.g. lump sum amount or pension) and your age. If you are age 60 or over, generally all lump sum payments and pensions paid to you from a taxed super fund (such as this Fund) will be tax free.

Limits on contributions The Government has set limits or caps on the amount that can be contributed to super each year before extra tax applies. What is the annual limit? How much tax applies if I exceed the limit? What tax applies if my contributions are within the cap?

Concessional contributions $25,000 if under age 50 $50,000 if age 50* or over 46.5% (including the 15% contributions tax) 15% contributions tax

Non-concessional contributionss $150,000**

Concessional contributions include contributions made by your employer plus any amounts they contribute to pay insurance premiums or management expenses. They also include any contributions you make from your before-tax salary (by salary sacrifice). Contributions you make from your after-tax salary are an example of non-concessional contributions. Others include contributions made for you by your spouse and excess concessional contributions.

46.5% Nil

* The Government proposes this limit will remain in place from 1 July 2012, provided the total value of your super is less than $500,000. Under current law, this cap is due to drop to $25,000 (indexed) per year. It also proposes to freeze the indexation of the cap for the 2013/2014 year. ** Members under age 65 can bring forward two years of caps to make total non-concessional contributions of up to $450,000 over three years.

If you exceed the limits, the ATO will forward you a tax assessment. For excess concessional contributions, you can either pay the extra tax directly to the ATO or arrange for it to be debited from your benefit. For excess non-concessional contributions, the extra tax must be paid from your super fund. The tax cannot be paid from any defined benefit super you may have.

Towers Watson Superannuation Fund | 9

Arrangements for defined benefit members Special arrangements are in place to determine the amount of concessional contributions that count toward the cap in respect of your defined benefit. The Fund’s actuary determines a “notional” employer contribution using a formula set by the Government. It is not necessarily the actual amount your employer pays to the Fund. The notional employer contribution rate is shown on your Personal Statement of Benefits. Any other concessional contributions you make (such as additional voluntary salary sacrifice contributions) also count towards the cap, in addition to the “notional” amount. Under certain circumstances, if your “notional” employer contribution is greater than the concessional contributions cap, you may be entitled to have your “notional” contribution deemed equal to the cap. This is called defined benefit grandfathering and (if applicable) means that your defined benefit alone cannot cause you to exceed your concessional contribution cap. For more information, contact the Fund Administrator (see the back cover for contact details).

Flood Reconstruction Levy In the wake of Cyclone Yasi and the devastating floods in Queensland and Victoria, the Government has introduced a Flood Reconstruction Levy that is intended to help pay for reconstruction in the affected areas. The Levy applies for the 2011/2012 financial year only, and is calculated as follows depending on your taxable income: Taxable income $0 to $50,000 $50,001 to $100,000 Over $100,000

Flood Reconstruction Levy on this income Nil Half a cent for each $1 over $50,000 $250 plus 1c for each $1 over $100,000

The Levy will also apply to any lump sum or pension payments you receive in cash from the Fund during the year if you are under age 60 when you receive the payment. The Fund will deduct the Levy at the time of payment. People who were affected by Cyclone Yasi or the floods do not have to pay the Levy, regardless of their taxable income. A form is available on the Australian Taxation Office website ( which can be used to advise your employer or super fund not to deduct the Flood Reconstruction Levy from your payment.

The MySuper® website at has resources to help you manage your super.Why not visit today?

® Registered to Towers Watson Australia Pty Ltd (ABN 45 002 415 349). 10 2011 Annual Report | Towers Watson Superannuation Fund

Fees and other costs Did you know? Small differences in both investment performance and fees and costs can have a substantial impact on your long-term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fund or your financial adviser.

To find out more If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( has a superannuation fee calculator to help you check out different fee options. Please note that while the reference above to ASIC’s fee calculator is included as required by law, this calculator does not apply to defined benefits.

This section shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the Fund assets as a whole. Taxes and insurance costs are set out in the notes overleaf. You should read all of the information about fees and costs because it is important to understand their impact on your investment. Type of fee or cost


How and when paid

Establishment fee: The fee to open your investment.


Not applicable.

Contribution fee: The fee on each amount contributed to your investment – either by you or your employer.


Not applicable.

Withdrawal fee: The fee on each amount you take out of your investment.


Not applicable.

Termination fee: The fee to close your investment.


Not applicable.

0.69% ($6.90 per $1,000)

Deducted from the investment return before it is applied to your accumulation accounts.


Not applicable.

Fees when your money moves in or out of the Fund

Management costs The fees and costs for managing your investment.

Service fees1

Investment switching fee: The fee for changing investment options. 1

Details of other service fees are described in the “Additional explanation of fees and costs” on the following page.

Towers Watson Superannuation Fund | 11

Additional explanation of fees and costs 1. Management costs

••Additional tax if you have not provided your TFN to the Fund by the end of the financial year.

Any management costs not covered by the allowance in the table on the previous page are met by additional Company contributions to the Fund.

••Any surcharge tax assessed by the ATO as being applicable to you is applied to a Surcharge Account in your name when the assessment is received by the Fund. The Surcharge Account reduces all of your benefits in the Fund. The surcharge tax was abolished with effect from 1 July 2005. However, assessments may still be received for you for previous years.

2. Investment fees

4. Other service fees

These costs include administration, consulting, audit, legal and other fees incurred by the Fund. The fees shown in the table on the previous page are gross of tax.

The investment fees shown in the table on the previous page are deducted from the investment returns before they are applied to your accounts. This means that the returns shown on page 5 of this Annual Report have been reduced by these fees and taxes. The investment fees shown include performance- based fees which are payable to K2 Australian Absolute Return and K2 Advisors Diversity Fund. K2 Australian Absolute Return’s fee is 20.5% of performance in excess of 6% p.a. K2 Advisors Diversity Fund’s fee is 15% of performance in excess of the UBSA Bank Bill + 1% p.a. The estimated performance fee component of the total fees shown in the previous table is 0.03%. The actual performance- based fees charged during the year to 30 June 2011 are allowed for in the “Other Management Costs” shown in your Personal Statement of Benefits.

If you, or your spouse, require information on your benefit in relation to a Family Law matter, a fee of $228 will be charged for each date at which information is required. You, or your spouse, are required to pay this fee at the time of any request for information – it is not deducted from your accounts. In addition, if your super is split under a Family Law agreement or Court Order, a fee of $206 will apply for the splitting of your super and the payment of an amount to your former spouse. These fees are normally shared evenly between you and your former spouse. The fees may be paid by you and your spouse by cheque, or otherwise will be deducted from the applicable benefits.

5. Fee changes Details of the fees that applied to you for the year ending 30 June 2011 are shown on your Personal Statement of Benefits.

Tax is deducted from the Fund’s investment earnings at the rate of 15%, less any applicable deductions and imputation credits available to the investment managers or the Fund.

The fees charged may depend on your employment status or category of membership in the Fund. If you change categories, you will be advised of any changes to the fees that apply to you.

3. Taxes and insurance premiums

Further details of the fees and taxes paid by the Fund can be found in the Fund’s Financial Statements. A summary is included on page 15, or a copy can be obtained from the Fund Administrator (see the back cover for contact details).

The following taxes and premiums are deducted from your accounts in the Fund: ••The cost of your voluntary insurance cover (if any) based on the amount of your insurance cover at 1 July and an age-based scale. A copy of the scale is included in your Member Booklet which is available from the Fund Administrator (contact details are on the back cover) or from the Fund’s website at ••Contributions tax at the rate of 15% from any salary sacrifice contributions (also known as concessional contributions) to your accounts. ••Excess contributions tax if your contributions exceed the concessional or non-concessional contributions caps and you request to have the excess tax deducted from your benefit.

12 2011 Annual Report | Towers Watson Superannuation Fund

Other information Here you can find out about: ••Management of the Fund, ••Arrangements when you leave the Fund, and ••The procedure for enquiries and complaints.

New Accumulation category Some changes have been made to the Fund in the past year, following the merger of Towers Perrin and Watson Wyatt. Last year, with the introduction of common insurance benefits for eligible employees, permanent legacy Towers Perrin employees joined the Fund as members of the Insurance Only category. This category provides Death and Total & Permanent Disablement benefits for legacy Towers Perrin employees and any eligible employees who have chosen another superannuation fund under Choice of Fund. Salary Continuance Insurance is provided to you by Towers Watson outside of superannuation. On 1 January 2011, the Fund introduced a new Accumulation category which is open to eligible new permanent employees. If you are currently an Insurance Only member, you have the option to join this new Accumulation category. This may allow you to reduce the number of funds you have and the amount of paperwork you have to manage. Further details on the Accumulation category are in the Fund’s Product Disclosure Statement which is available on the website:

How your Fund is managed The Trustee A Trustee company, Towers Watson Superannuation Pty Ltd (ABN 56 098 527 256, AFSL 236049) is responsible for managing the Fund. They have been approved and licensed to act as a Trustee by the Australian Prudential Regulation Authority (APRA), the main regulator of super funds in Australia. Directors of the Trustee Company as at 30 June 2011 were Andrew Boal, Pauline Durant, Brad Jeffrey and David McNeice.

Towers Watson Superannuation Pty Ltd is a subsidiary of Towers Watson Australia Pty Ltd (ABN 45 002 415 349, AFSL 229921), who also acts as Administrator (via an outsourced arrangement), actuary and secretary to the Fund. See under “Advisers to the Fund” on page 14 for more information.

Policy Committee A Policy Committee ensures that the interests of members and the Company are represented in the management of the Fund. The Committee comprises four members, with half appointed by the Company and half elected periodically by members. In March 2011, a Policy Committee election was held. As a result of the election, Rose-Maree Bacon and Jason Langdon were re-elected as member representatives on the Policy Committee, for an additional term of three years.

Quick fact! If you don’t provide the Fund Administrator with payment instructions when you leave the Fund, your benefit may be rolled into an Eligible Rollover Fund. Read page 14 for more details.

At 30 June 2011, members of the Policy Committee were: Company-appointed Andrew Boal Brad Jeffrey Member elected Rose-Maree Bacon Jason Langdon

Indemnity insurance The Trustee is currently covered by a Trustee Professional Indemnity insurance policy that protects the Fund’s assets from a legal liability to the extent allowed by law and the policy conditions.

Towers Watson Superannuation Fund | 13

Advisers to the Fund

Establishing proof of identity

The following organisations provide specialist services to the Trustee.

Before you withdraw a benefit from the Fund, you may need to establish your identity by providing certified copies of certain documents. The Trustee may also need to obtain additional identification information and to verify your identity from time to time.

Consultant and actuary

Towers Watson Australia Pty Ltd


In November 2011, the Fund Administrator, Towers Watson Australia Pty Ltd, outsourced administration services to an external provider. The Fund is now administered by Link Super Pty Limited (ABN 68 146 993 660) a Corporate Authorised Representative (No. 401938) of Pacific Custodians Pty Limited (ABN 66 009 682 866, AFSL 295142).

Investment consultant

Towers Watson Australia Pty Ltd


WHK Horwath


Hannover Life Re of Australasia

Arrangements when you leave the Fund If you leave your employer or choose another super fund, the Fund Administrator will ask you how you want to receive your super benefit. The Trustee may roll your benefit over to an Eligible Rollover Fund (ERF) if: ••You fail to give the Fund Administrator instructions within 90 days of receiving details of your benefit, or ••The Fund you nominate won’t accept your benefit. The ERF is: AUSfund The Administrator Level 2 Casseldon Place, 2 Lonsdale Street Melbourne VIC 3000 Phone 1300 361 798 Website Once your benefit is transferred to the ERF, you stop being a member of the Fund and no longer have any rights under the Fund. You will then need to contact the ERF directly about your benefit. You can also obtain the ERF’s Product Disclosure Statement using the contact details above. The investment and crediting rate policy of the ERF may be different to those that applied in the Fund. Also, the ERF may not offer any insurance cover. You should seek advice from a licensed financial adviser about whether the ERF is a suitable investment for you.

14 2011 Annual Report | Towers Watson Superannuation Fund

In some cases, the Trustee may have to disclose information about you to the Australian Transaction Reports and Analysis Centre (AUSTRAC), the regulator of this legislation. Due to the sensitive nature of the information, the Trustee is not permitted to inform you if this happens.

Enquiries and complaints When you first have an enquiry or complaint, you should contact the Fund Administrator (see the back cover for contact details). Privacy-related enquiries should also be directed to the Fund Administrator. The Trustee has a formal process for reviewing enquiries and complaints if you are not satisfied with the response you receive. To make a formal enquiry or complaint, please obtain an Enquiry or Complaint form from the Fund Administrator. The Trustee will respond to you within 90 days. If you are not happy with the Trustee’s handling of your enquiry or complaint, you may then contact the Superannuation Complaints Tribunal. The Tribunal is an independent body set up by the Federal Government to deal with certain enquiries or complaints that the Trustee has not dealt with to your satisfaction. You can contact the Tribunal on 1300 884 114 or by email to There are some complaints that the Tribunal cannot consider, such as those relating to the management of the Fund as a whole. Time limits also apply to certain complaints relating to total and permanent disability claims and to complaints about objections to the payment of death benefits. If your complaint is in relation to one of these areas, please contact the Fund Administrator or refer to the Tribunal’s website on as soon as possible for further information. For privacy-related matters, the Federal Privacy Commissioner may review your complaint. You can contact the Privacy Commissioner on 1300 363 992.

The Fund’s financials Here is a summary of the Fund’s audited financial accounts for the year to 30 June 2011. The full audited financial accounts and auditor’s report are available on request from the Fund Administrator (see the back cover for contact details).

Change in net assets during the year


Net assets at the start of the year Plus income




Rollovers Less outgoings


Net investment income


Benefit payments


Insurance premiums


Tax due


Audit fees and government regulator levies


Net assets at the end of the year 2010 $

2011 $

Aberdeen Inflation Linked Bonds Fund



AMP Global Property Securities Fund



Apostle Loomis Sayles Credit Opportunities Fund



Net assets at the end of the year Investments

BGI Total Return - Multi-Opportunity Fund


BT Global Return Fund




GMO Australian Equity Trust K2 Advisors Diversity Fund


K2 Asset Management (Australian Absolute Return Fund)



MFS Fully Hedged Global Equity Trust



Northward Capital Australian Equities








Benefits payable



Taxation payable






Perpetual Wholesale International Share Fund PIMCO Global Commodity Real Return Fund Current assets Current liabilities


Net assets at the end of the year

16,714,169 19,402,119

Current assets include amounts in the Fund’s bank account. All contributions due at 30 June 2011 have now been paid to the Fund.

Towers Watson Superannuation Fund | 15

How to contact us Looking for more information?

General enquiries and complaints Ann Tse or Pam Crabb Link Super PO BOX 1442, Parramatta, NSW 2124 Phone Fax Email Website

1800 127 953 (02) 8571 6222

Issued by Towers Watson Superannuation Pty Ltd (ABN 56 098 527 256, AFSL 236049), as Trustee of Towers Watson Superannuation Fund (ABN 93 268 215 348). 13 December 2011.

Copyright Š 2010 Towers Watson. All rights reserved.

Other information is available if you are interested. For information about your benefits such as your choices for contributions and insurance arrangements, refer to your Member Booklet. Members, former members and their dependants are also able to request copies of the Trust Deed, the actuarial review summary, Risk Management Plan and audited accounts.


2011 Annual Report Towers Watson Superannuation Fund How super is taxed 9 Fees and other costs 11 The Fund’s financials 15 Product Disclosur...


2011 Annual Report Towers Watson Superannuation Fund How super is taxed 9 Fees and other costs 11 The Fund’s financials 15 Product Disclosur...