SUPER AND THE ELECTION P6

WHY RETIREMENT IS HARDER FOR WOMEN P8

A FUND FOR ALL THE FAMILY P14

THE BEST FUND P11

Super Informed

Most members looking at their 2018-19 statements should be reasonably pleased with what they see. Join us as we reflect on the financial year that was. Page 1

It's a good time to be with us

TH IS ISSUE

THE BEST FUND What it actually means to be the 2019 Chant West Super Fund of the Year. Page 11

GET TO KNOW PERSONAL ACCOUNTSSuper for your loved ones – find out what all the fuss is about. Page 14

If you’re reading this, it means you’re a member of Chant West Fund of the Year 2019! I’m thrilled that UniSuper was selected from a strong pool of highly-

regarded funds including AustralianSuper, Hostplus, Sunsuper, QSuper, First State Super and Rest. While winning awards isn’t our goal, it’s wonderful to celebrate when your Fund receives external recognition for the excellent value, services and investment strength it provides you and your family. You can read more about this on page 11.

We pride ourselves on providing great value and the fees that UniSuper’s members pay are some of the lowest in the country. And I’m pleased that, from 1 October, fees for some of our investment options will further decrease. You can read about these fee reductions on page 16.

Finally, 2018-19 was a year of ups and downs for markets. While many of you would have seen negative returns in your 31 December 2018 statement, strong returns in the second half of the financial year have led to positive returns for all of our investment options in the year to 30 June 2019. You can read more in our investments ‘year in review’ from page 1.

It's a good time to be with us. I hope you enjoy this edition.

“Strong returns in the second

half of the financial year

have led to positive returns

for all of our investment

options."

A word from our CEO

WHY RETIREMENT IS HARDER FOR WOMENBeat the odds and stay in charge of your financial future. Page 8

Despite the gyrations in financial markets over the last year, most UniSuper members looking at their 2018-19 statements

should be reasonably pleased with what they see.

REFLECTIONS ON THE PAST

FINANCIAL YEAR

INVESTMENTS

Kevin O'SullivanChief Executive Officer

1

32 Super Informed August 2019

Reflections on the past financial year

Most UniSuper members invest some or all of their super in our Balanced investment

option. If this is you, your return for the year will be just short of double digits (+9.9%), representing the 10th year in a row of positive returns. And this number is quoted after tax, so retired members paying no tax have actually cracked double digits with a return of +11.3%.

This type of outcome was looking near impossible in December 2018 when 12-month returns were close to zero, so the last six months have been quite remarkable—driven by developments that would have been considered highly improbable this time last year.

IMPROBABLE EVENTSHaving been in a rate tightening cycle for three years, in January 2019 the US Central bank (the ‘Fed’) signalled its intention to pause its rate hiking cycle. This sparked an immediate rally in share markets around the world. When it comes to having an impact on share markets, the Fed remains by far the most important player—even more important than the Donald.

In January 2019 Brazilian iron ore giant, Vale, announced the tragic collapse of a tailings dam and the temporary closure of a number of mines, taking about 70 million tonnes of supply out of the iron ore market. With Chinese demand still holding steady, the price of iron ore rocketed to over $112 per tonne after starting the year at around $60.

The Coalition’s May election victory led to a strong rally in our banks. Investors anxious about changes to the treatment of franking credits, capital gains and negative gearing suddenly found their fears allayed.

In June 2019 the Reserve Bank of Australia (RBA) cut interest rates to an all-time low. Only months earlier in November 2018, the RBA’s governor had signalled that the next rate move was more likely to be up than down. This move further underpinned the rally in shares, particularly those with sustainable yields such as our ‘fortress’ assets—Transurban, Sydney Airport, APA, and ASX.

BEST PERFORMING SHARES (OF SIGNIFICANCE TO UNISUPER) In a year that saw us receive Chant West’s ‘Best Fund: Investments’ award, we had more highlights than disappointments.

As UniSuper is now around an $80 billion fund, our largest holdings are concentrated in large companies. While smaller companies typically have more downside and upside (and, by extension, are more likely to be the best- or worst-performing shares in the market) these do not have a significant impact on returns for UniSuper members. Therefore, for the purposes of this article, we’ll just look at companies in which we’ve invested at least $1 billion. Of those, here are our top three.

BHPAfter topping the table last year with an astonishing return of +52.2%, the ‘Big Australian’ managed another first place finish with +32.8%. This was driven in large part by the rise in the iron ore price. If sustained, every $5 increase in the price of iron ore equates to around $700 million in annual revenue to BHP. Furthermore, selling US shale assets allowed BHP to return about $10 billion in capital to shareholders via a special dividend and share buyback.

Other resource companies have also returned capital, and the market has welcomed the new-found discipline towards capital management (the resources industry has a history of being a serial squanderer).

ASXThe Australian Securities Exchange (ASX) ranked second in our performance tables (+32.2%), so it’s another case of back-to-back stellar performances. We cautioned last year that (at around $64) the shares looked a touch expensive and that a repeat performance was probably not on the cards. Hopefully nobody paid attention because it’s now trading around $83. And dare it be said again, but the shares do indeed look expensive so we are not expecting a repeat performance. Hopefully we are wrong again. Apart from being a solidly growing profit generator, the ASX share price also factors in some ‘upside’ from its adoption

of distributed ledger technology (‘blockchain’). Notwithstanding the ASX’s lofty share price, we’re unlikely to be selling it—it’s the classic ‘fortress asset’ that we look to acquire at a reasonable price, rather than opportunistically trade.

TransurbanComing in at third place was the perennial stable star, Transurban (+30.8%). Given the established, ‘fortress’ nature of its toll road assets in major cities, Transurban has benefited greatly from the sharp decline in bond yields as investors look for other ways to earn sustainable income. Transurban’s growth profile was also enhanced by two very large deals—the West Gate Tunnel project in Melbourne (which included a 10-year extension to the CityLink concession) and the WestConnex deal (which saw Transurban buy 25% of WestConnex from the NSW Government).

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A GOOD YEARIn a year that saw us receive Chant West’s ’Best Fund: Investments’ award, we had more highlights than disappointments.

THE ASX'S BIG MOVERSImprobable events over the last six months drove results that looked near impossible in December 2018.

Iron ore $60 per tonne

Fed signals pause in rate

hikes

Coalition wins Federal

Election

RBA cuts rates by 0.25%

Iron ore $112 per

tonne

THE ASX 200: 2018-19BEST

WORST

2018-19

PERFORMANCE

SNAPSHOT

54 Super Informed August 2019

The five toll roads involved come with a concession term of 42.5 years, compared to about 28 years that the company currently has. So not only is Transurban able to deliver an attractive, growing annuity stream, we expect it to do so for a very long time.

BEST PERFORMING INVESTMENT OPTION In a very close finish, Global Companies in Asia (GCA) was our top performing investment option (+14.9%). It just pipped Australian Equity Income (+14.6%) and Listed Property (+14.5%) at the post. Once again, these are after-tax figures, so retired members who invest in these options and pay no tax on the returns will be even better off.

To understand why GCA has been so successful, you only have to look at the types of companies and consumer behaviour the portfolio taps into. If, over the last year, you've used Google, purchased Nike or Adidas shoes, used a Mastercard or Visa for purchases, gone to a Marvel or Disney movie or dropped into Starbucks or McDonalds, you've contributed to GCA's returns. If you haven’t done any of those things, you may well have used products manufactured by Unilever (think Rexona or Dove), Pfizer (pharmaceuticals) or Roche (healthcare and research). The bottom line is that it’s almost impossible to avoid the big brands in this portfolio.

We're really proud of Global Companies in Asia. We manage it in-house (i.e. we don't outsource to external investment managers) and it's recorded a stellar +14.6% compound return since we launched it in January 2012.

WORST PERFORMER (OF SIGNIFICANCE TO UNISUPER) Pole position for worst performer goes to Scentre Group (Scentre), which owns and operates Westfield shopping centres.

ScentreScentre recorded a -7.7% return for the year and has the dubious distinction of being our only major investment that recorded a negative return. Scentre was buffeted by the forces currently impacting the retail sector around the world—low wage growth, a cautious consumer and the threat of a paradigm shift in consumer habits from shopping in physical stores to online.

While one can never totally dismiss the signals of the marketplace, we’re confident that Scentre will survive the current cyclical (cautious consumer) and secular (online shopping) headwinds. Our thesis is that there’ll always be demand at both ends of the retail spectrum—the neighbourhood shopping centre anchored by a Coles or Woolworths, and the quality regional and CBD centres that can transition to ‘experience destinations’. It’s the middle of the spectrum that looks doomed to us. In terms of total sales, Scentre has ownership in 16 out of the top 25 centres in Australia, and four out of the top five in New Zealand. It has no problems filling its centres, with occupancy levels consistently around 99%. With a dividend yield of +6% and growth profile above inflation, we’re also comfortable with its valuation and are in no hurry to sell.

We started making a significant investment in Scentre around eight years ago and to date it’s returned over +10% per year, so it’s paid its way. One poor year does not make our long-term thesis wrong. But of course, it could be.

LOW RETURNS AND DISAPPOINTMENTS While our Cash option recorded the lowest return (+1.9%) for the year, it doesn’t qualify as the biggest disappointment because the return is about what one would expect with the RBA cash rate at historical lows. The Cash option is as close to a risk-free option as one can find. It’s there to preserve capital, not to grow it.

The real disappointment for the year was the general underperformance of our external managers of Australian share portfolios, with most of them failing to beat their benchmarks. At UniSuper, we manage most of our Australian exposures in-house, but we do outsource a significant component to external managers. Over a long period, this has proven to be a value-adding exercise and we expect that will continue to be the case. We did, however, run out of patience and terminated three of them (out of 14). The investment profession can be rewarding when things are going well, but tough when they aren’t.

"The saying 'time in the market is more important than timing the market' may well be a cliché. But it’s a cliché because it’s true."

The dangers of chasing winners and dumping losers

Past performance is not an indicator of future performance. This information is of a general nature only and may include general advice. It has been prepared without taking into account your individual objectives, financial situation or needs. UniSuper’s investment strategies will not necessarily be appropriate for other investors. Before making any decision in relation to your UniSuper membership, you should consider your personal circumstances, the relevant product disclosure statement for your membership category and whether to consult a licensed financial adviser. This information is current as at 4 July 2019. This is not intended to be an endorsement of any of the listed securities named above for inclusion in personal portfolios. The above material reflects UniSuper’s view at a particular point in time having regard to factors specific to UniSuper and its overall investment objectives and strategies.

Reflections on the past financial year

With regard to disappointments, there’s a potential silver lining given this ‘year in review’ article’s track record. In 2015, we identified Woolworths as our biggest regret, only to see it bounce back with over +20% p.a. for the past three years. Not only did we hold on to the shares we had, we actually acquired more at cheaper levels. In 2017, our poorest performing investment option was Listed Property (-3%), and those who switched out missed the ensuing rally, with the option placing in the top three last year (+14.5%). In 2018, our biggest disappointments were Aurizon (-15.3%) and Telstra (-34.4%), and both of them staged impressive bounces (+31.8% and +56% respectively) over the past year. Once again, we didn’t panic and in fact opportunistically increased our holdings in Aurizon at prices substantially lower than it is today. Note that we are no longer a substantial shareholder of Aurizon, as we took the opportunity to take profit. We also held on to our Telstra shares but couldn’t muster the conviction to buy more. The outlook still looks too challenging to take on a more significant stake in the company. Anyway, at least for the sake of Scentre shareholders, let’s hope history repeats.

The saying 'time in the market is more important than timing the market' may well be a cliché. But, as is so often the case—especially when it comes to investing your life savings—it’s a cliché because it’s true.

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6 Super Informed August 2019 7

Column

SUPER AND THE AUSTRALIAN ELECTIONWhat does the Coalition's win mean for super?

POL ICY

Written by Benedict DaviesPublic Policy Manager

BETTER INCOMES: RETIREMENT INCOME POLICY INTO THE NEXT CENTURYThe Hawke/Keating government’s statement on retirement income established a 'twin pillars' policy of the Age Pension and super—and in doing so, rejected the option of a National Superannuation Scheme.

SUPERANNUATION GUARANTEEThe Hawke/Keating government introduced a Superannuation Guarantee, initially at 3% of an employee’s ordinary time earnings.

SIMPLIFIED SUPERThe Howard government's plan to streamline super. Among other things, it significantly simplified tax on super benefits.

SUPER SYSTEM (COOPER) REVIEWCommissioned by then Treasurer, Wayne Swan, the review looked into the governance, efficiency, structure and operation of Australia’s super system. Two key outcomes were the introduction of MySuper products as well as SuperStream, which streamlined the way contributions are made.

PRODUCTIVITY COMMISSION REVIEWSCommissioned by then Treasurer, Scott Morrison, the Productivity Commission was tasked with assessing the efficiency and competitiveness of the super system and developing a formal competitive process for allocating default fund members to products.

ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRYThe Royal Commission investigated whether any conduct of financial services entities might have amounted to misconduct, and whether any conduct, practices, behaviour or business activities fell below community standards and expectations. Its final report was released in February and contained 76 wide-ranging recommendations covering banking, insurance, super and financial advice.

Key policy developments over the past 30 years

1992

1989

2007

2010

2018

2018

The election on 18 May 2019 saw a return of the government led by Scott Morrison. Josh Frydenberg continues as the Treasurer but will be supported by new Treasury ministers, including a new Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume.

Soon after the election, the Treasurer outlined the Government’s superannuation priorities for the 46th parliament. A major priority would be to act on the recommendations of the Hayne Royal Commission. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has been a time of concern and reflection for the financial services industry, and also for the millions of Australians who trust the companies within the industry to do the right thing. The final report was tabled in Parliament in February and at the heart of the report’s recommendations is a firm focus on the industry to be fair and honest, not to mislead or deceive and provide services that are fit-for-purpose, with a tighter, more transparent accountability framework.

The Treasurer also flagged plans for a principles-based review of the retirement income system. While a formal announcement hasn’t been made, an independent inquiry into the retirement income system was one of the recommendations of the Productivity Commission (PC). The PC recommended the Government review the

role of compulsory super as well as the broader retirement incomes system, including the net impact of compulsory super on private and public savings, interactions between super and other sources of retirement income, the impact of super on public finances and the super guarantee eligibility threshold.

Superannuation peak bodies broadly welcomed the new

“... at the heart of the report’s recommendations is a firm focus on the industry to be fair and honest, not to mislead or deceive and provide services that are fit-for-purpose ..."

treasury team, highlighting key issues facing the industry over the next three years:

A timelines for implementing the recommendations of the Royal Commission;

A resolving some implementation issues with the Protecting Your Super package; and

A communicating with members holding unnecessary multiple accounts.

There are also some policies from the last term in Parliament that the Government remains keen to pursue, including additional changes to insurance within super. The Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 would prevent super funds from offering insurance to members on an ‘opt-out’ basis for death and TPD insurance if they:

A have a balance of less than $6,000; or

A are under 25.Currently, many funds offer default insurance from which you may opt-out; these rules, if legislated, are likely to see many funds developing new opt-in rules for younger members. It's important to note these proposals would not apply to defined benefit members and it remains unclear when or if these measures will be passed by the Parliament.

9

Women and super

WHY RETIREMENT PLANNING IS HARDER FOR WOMENA recent report estimated the average woman will retire with 34% less in super than the average man.1 Career breaks, the gender pay gap and age-related factors contribute to this disparity and make retirement planning for women tricky. While there’s no easy solution, it’s worth having strategies in place to keep you in charge of your financial future.

8 Super Informed August 2019

CAREER BREAKSWe know women generally take more career breaks throughout their life than men—whether it’s to raise a family, take care of a parent or return to study—so it’s important to consider the impact these breaks will have on your super.

Career breaks can last months or years, and with time away from the workforce it’s likely you won’t receive super from your employer.

These missed contributions, together with years of investment returns (and compound interest), can have a significant effect on your balance at retirement.

If you’re planning a career break or are worried about the impact of a past one, the following strategies may help keep your super on track.

You may not be able to spare much, but a little can go a long way:

A Make salary sacrifice contributions before you go on leave. This is an arrangement between you and your employer, where your employer agrees to put an additional portion of your before-tax salary into your super.

A Make voluntary contributions while you’re on your career break. These are after-tax contributions you make directly to your super account.

1 Women's Index 2018 economic progress slowest in years. Financy. https://bit.ly/2XsSxzr

“The average woman will retire with 34% less super than the average man."

10 Super Informed August 2019

If you have a partner, you can also take advantage of the following schemes:

A Contribution splitting allows you to split certain super contributions with your spouse. For example, if you’re on maternity leave, your spouse may be eligible to split up to 85% of their concessional (before-tax) contributions, giving you more financial security for your retirement.

A Spouse contributions enable your spouse to make non-concessional (after-tax) contributions to your account on your behalf, for which they may receive a tax offset of up to $3,000 if you earn $40,000 or less a year.

GENDER PAY GAPWomen also have the additional challenge of the gender pay gap.

The gender pay gap is the difference between the average of all male and female earnings, expressed as a percentage of male earnings. It’s usually calculated on full-time weekly earnings before tax. The Government’s Workforce Gender Equality Agency estimates that Australia’s gender pay gap is currently 14.1%.2

As your employer super contributions are based on a percentage of your income (e.g. 9.5%), the gender pay gap affects super too. And with women generally retiring earlier and living longer, whatever super you have in retirement really needs to go the distance. Understanding how your investment options work and your attitude towards risk can help you choose the most suitable investment options for your retirement needs.

RETIREMENT ADEQUACY We want to help women tackle the challenges of financial security in retirement. We've developed a dedicated resource hub with tools and information for women who are keen to make changes to improve their retirement outcome.

It's never too late to make a difference. Visit unisuper.com.au/women for more information.

NEED HELP PLANNING YOUR RETIREMENT?UniSuper Advice can help you achieve your best possible retirement outcome. Call us on 1800 823 842.

“Women also have the additional challenge of the gender pay gap. The gender pay gap is the difference between the average of all male and female earnings, expressed as a percentage of male earnings"

Women and super

2 Australia's Gender Pay Gap Statistic. WGEA. https://bit.ly/2WClRzbSource: Women in Super, https://bit.ly/2RJb599

FAST FACTSRetirement planning dilemmas for women include:

5 yearsThe average time women take out of the workforce to care for their children or family members

43% of women work part-time

8.5% of women between the ages of 65 and 74 have a mortgage

5 yearsThe average number of years that women live longer than men

11

THEBESTFUND

Our position as one of the best performing super funds in the country has been cemented. This recognition confirms we're delivering on our purpose of greater

retirement outcomes for our members.

FEATURE

13

Feature story

At the Chant West Super Fund Awards 2019, we were up against some of the biggest and most reputable

names in the industry including AustralianSuper, HESTA, Sunsuper, Hostplus, QSuper and Rest ( just to name a few), so we’re pretty chuffed to have received the following awards:

A Super Fund of the Year 2019 A The Best Fund: Investments 2019 A The Best Fund: Advice Services

2019.These awards not only recognise excellence among super and pension funds, but showcase industry best practice, to help all funds improve member outcomes.1

Chant West awards carry considerable weight in the super industry—based on more than 20 years of researching funds and a rigorous tested methodology, which enables funds and individuals to compare super and pension products on an ‘apples with apples’ basis.

WHAT IT MEANS TO BE SUPER FUND OF THE YEARSuper fund of the year is ‘all about the members’. The top fund must demonstrate their focus on investments, member services, advice services, insurance and fees—everything that impacts members. In a super fund there are lots of moving parts, but the best funds are those that align all these components to achieve the best outcomes for their members.

PROVIDING YOU WITH ONE OF THE VERY BEST IN INVESTMENT PERFORMANCE, FEES AND MEMBER SERVICESWe’ve been a very strong performer over all periods and are the only fund to be in the top five MySuper Growth options (our Balanced option, which the majority of members are invested in) over every period from one to 15 years to March 2019.2 In fact, we’re also the best performer for both one year and the last 10 years!

The focus of our member services is an on-campus network of consultants and advisers who provide easy access to advice and support when you need it. About 50% of members who move to a pension receive comprehensive advice when approaching retirement.

OUR INVESTMENTS GET AN EXTRA BIG TICK TOOQuality investments are perhaps the most important aspect of superannuation. Chant West assesses funds on their investment processes and resources as well as their ability to deliver strong returns. They look closely at investment governance, including the experience of the Investment Committee, the internal investment team and those responsible for making decisions.

Ultimately, the aim is to deliver the best possible results for members after fees and tax.

According to Chant West, of the top long-term performing funds, UniSuper stands out for its low allocation to unlisted assets (only about 7%).

Leveraging off our experience in direct investing, our strategy is to gain the bulk of our exposure to real assets through large investments in high quality listed companies at attractive prices.

1 UniSuper Picks Up Three Chant West Awards. Chant West. https://bit.ly/2VOfet22 Chant West Multi-Manager Survey (2019, March). Chant West.3 Why award-winning UniSuper says yes to toll roads, no to hedge funds. The Age.

https://bit.ly/2xnyu6VFor further information about the methodology used by Chant West, see www.chantwest.com.au. This article discusses UniSuper’s investment performance and investment decisions, which may not be appropriate for you personally. We’re not suggesting you should make the same decisions. Consider your situation and read the relevant product disclosure statement before making personal decisions about your investments or UniSuper membership. Past performance is not an indicator of future performance.

GOOD INVESTMENT RETURNS ARE THE CORNERSTONE OF PROVIDING GREATER RETIREMENT OUTCOMES FOR THE FUND'S 400,000 MEMBERSOur Chief Investment Officer John Pearce leads an investment management team of about 50 and assets of approx. $80 billion. His expertise and that of his team, gives us confidence to manage assets internally, with in-house management now representing over 65% of total assets.

John Pearce says his investment management team does not invest in ‘frontier’ markets like Africa, for example, or in some emerging markets, like Eastern Europe, as they’re too risky. “And we avoid highly leveraged, complex structures; we don't invest in hedge funds, for example.”

But risk management looms large for Pearce and his team as they’re responsible for members’ life savings and “would not invest the money anywhere that we would not have our parents’ money”.

“Sustainability of returns is everything,” Pearce says. The aim is not to be first over shorter periods of time but to have returns that are sustainable, which is the best way to maximise returns for members over the long term.

As well as winning Super Fund of the Year and Best Fund for Investments we also picked up Best Fund for Advice Services. We were also a shortlisted finalist in five other award categories and, over the past few years, have won Chant West Pension Fund of the Year in 2017 and 2018.

BE CONFIDENT YOU’RE IN THE RIGHT PLACEHelping you, our members, enjoy exceptional outcomes in retirement underpins everything we do. We hope being recognised for our commitment to providing great value, strong long-term performance and genuine care, gives you confidence and comfort that your super is in good hands.

“Super fund of the year is ‘all about the members’. The top fund must demonstrate their focus on investments, member services, advice services, insurance, and fees."

“We hope being recognised for our great value, strong long-term performance and genuine care, gives you confidence and comfort that your super is in good hands."

12 Super Informed August 2019

SUPER FUND OF THE YEARCriteria include excellence across investments, member services, fees, insurance and organisational strengths.

INVESTMENTS BEST FUND Assesssed on investment processes and rescources and whether they're likely to produce strong returns.

ADVICE SERVICES BEST FUNDEvaluated on the variety, relevance and accessibility of advice services offered to members.

15

Five things

14 Super Informed August 2019

5 STRONG INVESTMENT

RETURNSSuper is a powerful investment that needs to deliver healthy returns to support your retirement. Our strong long-term investment returns have regularly exceeded industry benchmarks and averages.2

1 IT’S HOW YOUR FAMILY CAN JOIN

UNISUPERAs long as they’re living in Australia and are either related to a UniSuper member, a former member wanting to re-join, or working in an honorary or affiliate role with a university, they can open a Personal Account.

2 EVEN YOUR KIDS CAN JOIN

Relatives aged 15 or more can open a Personal Account. So if your kids are starting their first job, you can be confident their super is being looked after by a Fund you know and trust.

4 IT’S VALUE FOR MONEY

Personal Account fees are amongst the cheapest in the industry, regardless of account balance. Chant West’s December 2018 fee survey ranked our default investment option—Balanced—the lowest-fee option in its category for balances under $250,000, and second and third lowest for $50,000 and $25,000 respectively.

What makes us good value? A We’re a profit-for-members fund

so we’ve never paid our advisers commissions or shareholder dividends, and never charged entry or exit fees.

A Our insurance offering is extremely competitive because we’re able to negotiate premiums at bulk rates. So for those who want insurance, we’ve got you covered!

3 A GATEWAY TO UNISUPER

PENSIONSPersonal Accounts give retiring family members access to our award-winning pensions. In 2017 and 2018, Chant West named us Pension Fund of the Year and our Flexi Pension has a 10-year Platinum Performance rating from SuperRatings.1

1 Go to www.superratings.com.au for details of its rating criteria.2 Past performance doesn’t guarantee future performance.Chant West has consented to the inclusion of the references to Chant West in the context in which they are included.

FIVE THINGS YOU SHOULD KNOW ABOUT PERSONAL ACCOUNTS

Did you know, you don't have to work in higher education or research to access our award-winning fund? We can offer

membership to your loved ones too. Since launching Personal Accounts in 2017, thousands of new members are enjoying the

same benefits as you. So what’s all the fuss about?

SUPER

14 Super Informed August 2019

LOOKING FOR A FUND FOR SOMEONE IN YOUR FAMILY?It’s easy to join online at unisuper.com.au/personal.

Once through our starting checklist, it should take under 10 minutes to set up.

Important updates

16 Super Informed August 2019 17

ABOUT THIS PUBLICATION UniSuper Management Pty Ltd is the Administrator of the Fund and is licensed to provide financial advice, which is provided under the name of UniSuper Advice—a service dedicated to UniSuper members, former members and their families. This information has been prepared to provide members with general information only and includes general advice. Any advice in this newsletter has been prepared without taking into account your individual objectives, financial situation or needs. Before making any decision in relation to your UniSuper membership, you should consider your personal circumstances, the relevant product disclosure statement for your membership category, and whether to consult a qualified financial adviser. For a copy of the PDS relevant to your membership category, visit unisuper.com.au/pds or contact us on 1800 331 685. For more information about UniSuper Advice, visit unisuper.com.au, access the Financial Services Guide and, for any further enquiries, contact us on 1800 823 842. Any views expressed by third parties are those of the third party and not UniSuper. UniSuper is referred to as UniSuper or the Fund. UniSuper Ltd is referred to as UniSuper or the Trustee.

Issued by: UniSuper Management Pty Ltd (ABN 91 006 961 799), AFSL No. 235907 on behalf of UniSuper Limited, ABN 54 006 027 121, AFSL No. 492806, the Trustee of UniSuper (ABN 91 385 943 850) the Fund. MySuper Authorisation No. 91385943850448.

Level 1, 385 Bourke St, Melbourne Vic 3000.

CHANGES TO SUPERUniSuper update

CHANGES TO FEES FROM 1 OCTOBER 2019Following our annual fee review, we’ll be reducing our investment switch fee from $11.10 to $9.85 for your second and subsequent switches each financial year (the first switch is free).

At the end of each financial year, we update our investment fee and indirect cost disclosures for the financial year. We incorporate the updated figures into our product disclosure statements around October to reflect the actual costs incurred. These figures represent an estimate of our investment fees and indirect costs for the coming year.

From August 2019, the investment fees and indirect costs incurred for the financial year ended 30 June 2019 will be available at unisuper.com.au/investments. However, it’s important to remember the amount you’ll be charged in subsequent financial years will depend on the actual fees, costs and taxes incurred in managing each investment option.

Normally, these figures would be the best estimate for the financial year ended 30 June 2020. Due to internal changes, these estimates may be up to 0.06% lower for some investment options.

Administration feesWe won’t be indexing administration fees for the following products this year:

A Defined Benefit Division (DBD) A Flexi Pension A Defined Benefit Indexed Pension, and A Commercial Rate Indexed Pension.

NEW INSURANCE PREMIUMSEarlier this year, we notified members about changes to insurance premiums from 1 July 2019.1 You can view the updated premiums in the Insurance in your super booklet at unisuper.com.au/pds.

CHANGES TO UNISUPER’S REGULATIONS FROM 1 JULY 2019We’ve updated our Regulations (which govern how we operate) to reflect the way we now calculate DBD temporary incapacity and disablement benefits, and the date upon which they commence. The updates were required because of changes we made to the way our Trust Deed sets out the waiting periods for these benefits. We explained the Trust Deed changes in the February 2019 edition of Super Informed, which is available on our website.

Legislative update

ACTS PASSED BY PARLIAMENT IN FEBRUARY 2019The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 2 contains:

A A cap on administration and investment fees (and some indirect costs) for accounts with balances of $6,000 or less at the end of the financial year. The cap is 3% of the account balance.

A A ban on funds charging exit fees. A A requirement for funds to transfer all inactive

accounts with balances below $6,000 to the ATO. The ATO will be able to reunite ATO-held accounts with a person’s active super account.

A New insurance rules affecting members with inactive accounts. These rules prevent funds from providing insurance such as death, total and permanent disability or income protection insurance on an opt-out basis where the member’s account hasn’t received a contribution or rollover for 16 months.3

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 1) Act 2019 applies to all APRA-regulated super funds (e.g. retail, industry, corporate and public sector funds).

It aims to ensure that the super system focuses solely on delivering outcomes for Australians and includes a raft of new measures, including requiring funds to:

A conduct an annual ‘outcomes assessment’ to ensure that the outcomes they’re delivering promote their members’ financial interests, and

A hold annual ‘members’ meetings’ to give members an opportunity to discuss and ask questions about fund performance and operations.

The Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Act 2019 amends social services legislation to:

A expand Centrelink’s Pension Loans Scheme A increase and expand the Centrelink Pension

Work Bonus, and A introduce new means testing for lifetime

retirement income stream products (i.e. UniSuper Commercial Rate Indexed Pensions) purchased on or after 1 July 2019. These rules won’t affect UniSuper Defined Benefit Indexed Pensions, Flexi Pensions or Commercial Rate Indexed Pensions purchased before 1 July 2019.

1 These changes don’t apply to inbuilt benefits for Defined Benefit Division members.2 The first, third and fourth points don’t apply to Defined Benefit Division members.3 You can prevent your insurance being cancelled by making regular contributions or completing the Electing to keep your

insurance form at unisuper.com.au/forms.

OTHER UPDATESWork test exemption for recent retirees Effective 1 July 2019, if you’re aged between 65 and 74 and your total super balance is under $300,000, you can make voluntary contributions for 12 months from the end of the financial year in which you last met the work test. You can only claim the exemption for one financial year.

ATO launches new online servicesThe ATO has launched a number of online services to help you keep track of your super.

Reminder: if you have an inactive, low-balance super account, the ATO may automatically consolidate it into your active super account—so make sure the ATO has your correct details. Visit www.my.gov.au for more information.

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Check out the Money Confident KidsSM program of games and tips for children. Presented by T. Rowe Price, it’s available to use for free in the Resources section of your online account.

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