Short Product Disclosure Statement Dated November 2011
This Product Disclosure Statement (PDS) is prepared in accoradance with Subdivision 4.2B of Division 4 of Part 7.9 of the Corporations Regulations 2001. This PDS provides a summary of significant information you need to make a decision. It includes references to additional information which forms part of this PDS.
This additional information is important and you should read it before making a decision to invest in this product. The information in this document is general information and does not take into account your personal financial situation or needs. You may wish to consult a licensed financial advisor to obtain financial advice which is tailored to your personal circumstances. YMCA SUPER SHORT PDS NOV 2011
CONTENTS About YMCA Super How super works Benefits of investing with YMCA Super Risks of super How we invest your money Fees and costs How super is taxed Insurance in your super How to open an account
3 4 5 6 7 8 10 11 12
Issued by AUSTYMCA Nominees Pty Ltd , ABN 42 961 599 835, RSE Licence No. L0001274 1 Trustee of Australian YMCA Superannuation Fund
YMCA SUPER SHORT PDS NOV 2011
About YMCA Super YMCA Super was established to provide a way for you to save for your retirement. Membership of YMCA Super is open to all YMCA employees and their spouses. In addition to helping you save for your retirement YMCA Super can also provide a benefit to your beneficiaries in the event of your death or to you if you cease employment due to total and permanent disablement. YMCA Super can offer you the opportunity to grow your superannuation account during your working life and the ability to draw down an income stream over your retirement. YMCA Super offers an: • Accumulation Account; and an • Income Stream Account.
• • •
sending you a Newsletter in June each year, sending you an Annual Statement in September each year, publishing an Annual Report to Members on our website in October each year, and providing access to a range of additional information on our website www.ymca.org.au/ super
If you have any questions you may email us at firstname.lastname@example.org or call us on (03) 9693 9726 or fax us (03) 9690 2835 Send any correspondance to: YMCA Super Level 1 88 Market St Sth. Melbourne 3205
Further information about our income stream product is available in our Income Stream Product Disclosure Statement. If you would like a copy please contact us. The information in this booklet summarises the benefits and conditions of YMCA Super. It should assist you to understand how YMCA Super operates. You are encouraged to read this booklet and any additional information because it is important to your financial future that you understand how your superannuation works. As a YMCA Super member we will keep you informed by:
YMCA SUPER SHORT PDS NOV 2011
How Super Works Superannuation is a way of saving for retirement. YMCA Super will have an account in your name which will record: • each contribution we receive for you; • any investment earnings, both positive or negative • additional contributions or transfers into your account by you • any fees deducted, and • any payments made to you
You should be aware: • The Government has set limits to the amount of contributions you or your employer can make to your superannuation. If you exceed these limits tax penalties will apply to your contributions. • If you are a low income earner and you make a member contribution you may be eligible for a Government CoContribution.
Generally, if you are employed and earn more than $450 in any month, your employer must contribute 9% of your salary into a super fund for you. You are able to choose which super fund you would like your contributions paid to. If you don’t tell your employer where to pay your contributions they will pay them into a super fund that they have chosen. YMCA employers have chosen the YMCA Super fund as their default fund for this purpose.
Withdrawal of your Super Generally, you can’t access your super until you reach age 5560. Your superannuation benefits are designed to support you in retirement, or if you cease work due to total and permanent disablement, or to assist your dependents in the event of your death.
Contributions In addition to your employer contribution you can make extra contributions to your super account by: • asking your employer to deduct an extra amount from your pay before tax is taken out and paying this to your YMCA Super account (called salary sacrifice); • paying amounts you have saved into your YMCA Super account (member contribution); and • transferring super you have in another fund into your YMCA Super account.
There are some limited circumstances in which you may access all or part of your superannuation benefits prior to retirement. Taxation Superannuation, held in a regulated and complying superannuation fund like YMCA Super, enjoys the following tax concessions: • Investment earnings are taxed at a maximum rate of 15%. • Employer contributions made on your behalf are taxed at 15% provided you have advised your tax file number and you do not exceed contribution limits. • Generally no tax is payable on
your contributions from after tax income – provided you do not exceed contribution limits. Benefit payments to you will be taxed at low rates, and if you are over age 60 when you receive a benefit it will be tax free.
You should read important information about ‘How Super Works’, including contributions, withdrawals and taxation, before making a decision. Further information is available in the Reference Document for Accumulation Product Disclosure Statement brochure, or at www.ymca.org.au/super/ pdsadditional.
The material relating to ‘How Super Works’ may change between the time when you read this Statement and the day when you sign the application form. The material relating to ‘How Super Works’ forms part of the Product Disclosure Statement dated June 2011. YMCA SUPER SHORT PDS NOV 2011
Benefits of investing with YMCA Super YMCA Super will help you maximise your retirement savings by offering: • competitive fees (refer to section 6 for more on our fees); • a track record of competitive investment returns (see our website for investment performance information), • flexible contribution options, allowing you to make voluntary contributions as well as employer contributions; • choice of investment options (refer to section 5 for further information); • insurance options to look after you and your family (refer to section 8 for further information)
government benefits, particularly to low income earners, combine to make super an attractive savings option. You may be able to get death, total and permanent disablement or salary continuance insurance through your YMCA Super account which means you’re paying for the insurance out of your before-tax income. You should read all sections of this document to understand all the features and benefits of investing with YMCA Super.
Generally once you commence employment, earning more than $450 per month, a percentage of your income must be paid into a super account in your name. The longer you save the easier it may be to reach your retirement goals. You can start with YMCA Super and remain with us throughout your working life and during your retirement. If you are employed by a non YMCA employer at any time that employer is able to make contributions into YMCA Super on your behalf. As a complying regulated fund YMCA Super enjoys tax concessions on to superannuation earnings and members receive tax concessions on retirement payments. Other
YMCA SUPER SHORT PDS NOV 2011
Risks of Super All investments have some level of risk. Risk simply means the chance that the actual investment return (amount of money earned on your investment) will be different (higher or lower) from the expected investment return, particularly over the short to medium term. YMCA Super invests in a wide range of asset classes – Australian and international shares, property, fixed interest and cash – which all have different levels of risk. Generally different asset classes usually perform differently at different times. The risk presented by each asset class can be reduced by diversifying your investments across a wide range of asset classes. Different investment strategies carry different levels of risk depending on the assets which are part of the strategy. When choosing your investment strategy you should identify what level of investment return you need to achieve your objectives and balance this with how much risk you are comfortable taking. Assets with potentially the highest return over the longer term (such as shares) also have the highest risk of losing money in the shorter term. The right investment strategy for you will: • Change as your personal situation changes over time. • Give consideration to your investment timeframe. For example, from your first job till you retire could easily be 30 – 40 years, with perhaps a further 20 – 30 years in retirement. • Recognise that living standards and the cost of living are both likely to rise over the long term.
Recognise that your investment strategy will influence how much income you will have to retire on. The appropriate level of risk for you will depend on: • Your age. • Your investment time frame. Are you investing for the long term or for a shorter period? • Where other parts of your wealth are invested. Investment risk can be minimized by investing across a broad range of asset classes. • How comfortable you are at the possibility of losing some of your super in some years. Some asset classes will produce negative returns some years. The frequency of negative returns will depend on the asset class. Once you have read all the available information in relation to investment choice you should understand that: • the value of your superannuation investment will vary depending on your investment strategy; • investment returns are not guaranteed and depending on your investment strategy you may lose some money from time to time; and • investment returns vary overtime and future returns may differ from past returns. The value of your superannuation savings may not be enough to provide adequately for your retirement and will depend on: • the amount of your contributions; • the length of time you have been making contributions; • investment returns over the time of
your investment; and your retirement savings needs and expectations.
You should also be aware that laws affecting your superannuation may change in the future. You should read important information about ‘Risks of super’ before making a decision. Further information is available in the Reference Document for Accumulation Product Disclosure Statement brochure, or go to www.ymca.org.au/super/ pdsadditional If you require help to understand your investment risk and to design an investment strategy that is right for you please seek help from a financial advisor.
The material relating to ‘Risks of super’ may change between the time when you read this Statement and the day when you sign the application form. The material relating to ‘Risks of super’ forms part of the Product Disclosure Statement dated June 2011. YMCA SUPER SHORT PDS NOV 2011
How we invest your money YMCA Super offers a choice of two distinct investment strategies to invest your super: a) a Growth option, and b) a Cash Plus option. Each investment option has a different level of risk and potential level of returns. You can choose to be 100% in either option or you can select a mix of each option to create an investment strategy which suits your needs. You should consider the likely investment return, risk and your investment time frame when choosing which option to invest in. Your YMCA Super account will increase with positive investment returns and decrease if there are negative investment returns. If you don’t make a choice, your super will be invested in the Growth Option, which is summarised in the table below. You can change your investment choice, or rebalance your account to your selected choice, up to four times a year – once each quarter. You should read important information about ‘How we invest your money’ before making a decision. Further information is available in the Reference Document for Accumulation Product Disclosure Statement brochure, or go to www. ymca.org.au/super/pdsadditional.
The material relating to ‘How we invest your money’ may change between the time when you read this Statement and day when you sign the application form. The material relating to ‘How we invest your money’ forms part of the Product Disclosure Statement dated June 2011. Investment Return Objective The investment return this option will seek to achieve after fees and taxes is: • Inflation + 3% – 4.5% per year over the long term, 6 to 10 years. For example, if the objective for an investment option is inflation + 3% and the inflation rate is 3.1% then the objective return would be 6.1%.
Mix of Asset Classes Australian Shares Overseas Shares Property Fixed Interest Private Equity Cash
20% - 50% 10% - 40% 0% – 15% 10% - 50% 0% - 3% 1% - 20%
Description of Option This option is designed for members who want moderate to high level of returns over the long term. Growth portfolios can be subject to substantial fluctuations in investment returns. Minimum Suggested Time Frame Medium to long term – 6 to 10 years Summary Risk Level • Medium to high • May result in high returns • Some risk of losing money sometimes
Asset Class Distribution Example *example shown is a guide only
Australian Shares Overseas Shares Property Fixed interest Private Equity Cash YMCA SUPER SHORT PDS NOV 2011
Fees & 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 (www. moneysmart.gov.au) has a superannuation calculator to help you check out the effect of fees and costs on account balances. This document shows fees and management costs that you will be charged and how they are paid. You should read all the information about fees and costs because it is important to understand how they impact your investment.
Fees and costs for Growth Option The information in the table below can be used to assist you to compare costs between different superannuation products.
Type of Fee or Cost
Fees when your money moves in or out of the fund Establishment fee
$50 per withdrawal*
The fees and costs for managing your investment
Administration fee = $60 per annum* • Calculated on a pro rated daily basis if you are not a member for a full year.
+ Indirect management costs as a percentage of your account balance** • Over the past 5 years indirect costs have ranged from 0.56% to 1.06% * Fees deducted directly from your super account at 30 June each year or on withdrawal. **Fees deducted from the pool of assets prior to declaring investment returns.
YMCA SUPER SHORT PDS NOV 2011
Fees & Costs
Example of fees and costs for Growth Option This table gives an example of how fees and costs in the growth investment option for this product can affect your superannuation investment over a year period. Use this table to compare this product with other superannuation products. Example of Balanced Growth Investment Option
Balance of $50,000 with contributions of $5,000 during the year
+ Management Costs
$60.00 + a percentage of indirect management costs (0.56% for the year ended 30 June, 2010)
$60 + $280
= Cost of Fund
The percentage used in the example above is based on the previous year indirect management cost percentage. It is an estimate only and should be used as a guide. When you cease membership with the Australian YMCA Superannuation Fund a termination fee of $50.00 will be deducted from to your account balance. Additional service fees Investment switch fee You may change your investment choice each quarter. Your first investment switch in each financial year is free, subsequent changes in the same financial year incur a $50 fee. Family Law The fee for splitting a member’s superannuation interest to satisfy a payment split under a court order or superannuation agreement is $50, and is payable from the member’s account at the time of the split.
Extras explained Fee Changes The Withdrawal Fee and the Administration Fee reflect the costs of operating YMCA Super. From time to time the Trustee may need to change these fees to reflect changes in operating costs. The Trustee will provide you at least 30 days’ notice before a fee change becomes effective. Protecting small accounts If your super account balance is less than $1,000 Government regulations limit the fees and charges that can be deducted from your account. Please note, however, that such protection does not apply to tax or insurance premiums.
The material relating to ‘Fees and Costs’ may change between the time when you read this Statement and day when you sign the application form. The material relating to ‘Fees and Costs’ forms part of the Product Disclosure Statement
You should read important information about ‘Fees and costs’, including fees and costs for the Fixed Interest investment option, before making a decision. Further information is available in the Reference Document for Accumulation Product Disclosure Statement brochure, or go to www. ymca.org.au/super/pdsadditional. YMCA SUPER SHORT PDS NOV 2011
How Super is Taxed There are a number of ways that super is taxed. If you don’t tell us your tax file number, you may pay extra on your contributions or when you later access your benefit, or not be able to make some types of contributions. It will also be more difficult to trace different super amounts in your name so that you receive all your super benefits when you retire. The following tax rules apply except if you exceed the before or after-tax contribution limits. If you exceed the contribution limits for super you will pay extra tax.
You should read important information about ‘How super is taxed’ before making a decision. Further information is available in the Reference Document for Accumulation Product Disclosure Statement brochure, or go to www. ymca.org.au/super/pdsadditional.
The material relating to ‘How super is taxed’ may change between the time when you read this Statement and day when you sign the application form. The material relating to “How super is taxed’ forms part of the Product Disclosure Statement dated June 2011.
YMCA Super will pay the tax applying to your account, for contributions and withdrawals, directly to the Australian Tax Office and deduct this tax from your account balance. Contributions into your super that are made before tax is taken out of your pay are taxed at 15%. Contributions into your super made from your after-tax savings are not taxed. Withdrawals from your account may be taxed if you are aged less than 60. Once you turn 60, generally no tax will apply to withdrawals. Tax on investment earnings is generally paid from the asset pool prior to declaring a rate of return on your investment. Investment earnings are generally taxed at a maximum of 15%.
YMCA SUPER SHORT PDS NOV 2011
Insurance in your Super When you join YMCA Super you meet the following criteria: a) you work full time or part time provided you work 15 hours per week or more; and b) you are aged 60 or under; you are eligible for a) death and total and permanent disablement (TPD) cover; and b) salary continuance insurance. A unit of insurance equals $50,000 Premium for a unit of insurance From $44.00 per annum at age 18 to $672.50 per annum at age 64. As long as you are at work on the day you commence employment you are automatically insured. If you do not request to change or cancel your cover, the cost of cover will be deducted from your YMCA Super account. Employment with YMCA employer
2 units = $100,000
1 unit = $50,000
Nil, you may apply for death cover.
A premium is deducted from your account for the cost of your insurance cover. The premium you pay for death and TPD insurance will depend on the amount of cover you have and your age. The premium you pay for salary continuance insurance is based on percentage of your salary.
You should read important information about ‘Insurance in your super’ before making a decision. Further information is available in the Reference Document for Accumulation Product Disclosure Statement brochure, or go to www. ymca.org.au/super/pdsadditional.
If you make an insurance claim, we and the insurance company will determine whether you are entitled to be paid based on the terms of the policy, the fund’s rules and the law.
The material relating to ‘Insurance in your super’ may change between the time when you read this Statement and day when you sign the application form. The material relating to ‘Insurance in your super’ forms part of the Product Disclosure Statement dated June 2011.
You can request to change, or cancel, your cover at any time. You must do so in writing to the address listed on the cover of this PDS. If you have previously been declined insurance cover you may reapply for cover. You must do so in writing to the address listed on the cover of this PDS.
YMCA SUPER SHORT PDS NOV 2011
How to open an account You are eligible to become a YMCA Super member when you commence employment with a YMCA employer. Your spouse and direct family members are also eligible to join YMCA Super. If you are employed by multiple YMCA employers only one membership will be maintained for you. To commence membership with YMCA Super we request that you: a) Read this PDS and the additional important information referred to in the PDS.
We will send you a Welcome Letter to confirm your membership details. Please check all the information on this letter carefully and advise us if any details need to be amended. You should read important information about ‘How to open an account’ before making a decision. Further information is available in the Reference Document for Accumulation Product Disclosure Statement brochure, or go to www. ymca.org.au/super/pdsadditional.
The material relating to ‘How to open an account’ may change between the time when you read this Statement and day when you sign the application form. The material relating to ‘How to open an account’ forms part of the Product Disclosure Statement dated June 2011.
b) Complete the Application for membership form provided with this PDS or available from www.ymca. org.au/super. and return the form to your employer. c) You or your employer can then start to make contributions to your account.
YMCA SUPER SHORT PDS NOV 2011