Annual Report - First State Super · 2020-05-01 · ANNUAL REPORT 2 2016-17 Prepared and issued by FSS Trustee Corporation ABN 11 118 202 672, AFSL 293340 Level 21, 83 Clarence St

Annual Report2016-17

2ANNUAL REPORT 2016-17

Prepared and issued by FSS Trustee Corporation ABN 11 118 202 672, AFSL 293340 Level 21, 83 Clarence St Sydney NSW 2000 as trustee of the First State Superannuation Scheme ABN 53 226 460 365. MySuper Authorisation Number 53 226 460 365 073. Financial planning advice is provided by First State Super Financial Services Pty Ltd ABN 37 096 452 318, AFSL 240019 and State Super Financial Services Australia Limited, trading as StatePlus, ABN 86 003 742 756, AFSL 238430.

Issued November 2017

Contents

About usWe are one of Australia’s largest profit-for-member financial services organisations. Our goal is to provide our members with a better financial future through safe and secure superannuation and quality financial advice.

Our size allows us to invest in ways that make a positive impact on the economy, the environment and the communities in which our members live, work and retire.

The majority of our members work in occupations that care for our community such as nurses, midwives, teachers, police, firefighters and paramedics.

We believe that everyone deserves a dignified retirement. Through our financial planning services, we provide high quality, affordable advice for members and all Australians.

While we’re big enough to take advantage of our size and scale, we see our members as individuals. We understand the role we play in safeguarding their savings and working with them to provide a secure and comfortable financial future.

A message from our Chairman 3

Our guiding philosophy 4

\Our numbers at 30 June 2017 5

Our strategic plan 6

Investments 8

Our people 18

Our board and committees 20

Risk management 23

Our financial reports 24

Other information 29

3WEB firststatesuper.com.au CALL 1300 650 873 EMAIL [email protected]

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Our board and

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Other

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ChairmanA message from our

On behalf of the board, executive and staff of First State Super, I would like to thank you for trusting our team to look after your superannuation during this past year.

Neil Cochrane, Chairman

It’s been a very progressive period for the fund with strong investment returns, an increase in membership and expansion of member services.

Our Growth and Balanced Growth investment options earned an impressive 12.4% and 9.5% respectively for the twelve months, placing these two options near the top of the performance tables. Our income stream returns for these options had similarly high rankings.

The increase in our membership was particularly pleasing. With more people leaving than joining the workforce, many superannuation funds are losing members. Our increase in members came about primarily because of growth in the health care and public sectors.

Australia’s aging population is an ongoing challenge, not just for the superannuation industry but for our policy makers and the wider community. The large number of baby boomers entering or approaching retirement is placing big demands on our social security, health care and aged care systems.

The superannuation industry has an important role to play in contributing towards solutions, which is one of the reasons First State Super has taken a major shareholding in the Oak Tree Group of retirement villages. We have also appointed financial planners who specialise in the complex area of aged care advice.

Ensuring our members have access to high quality financial advice is an important objective for us. Our acquisition of financial planning business StatePlus late last year is not only a significant extension to our existing financial planning offering, it is also a profitable investment for our members.

Our combined financial planning group now has more than 200 planners, which makes it Australia’s largest member-owned financial planning business. This gives us the scale and reach we need to give members access to advice when and where they need it.

The expansion of our member service centres will also help the delivery of service and advice. We have opened new centres in metropolitan and

regional locations across NSW and Victoria over the last 12 months and now have seven permanent offices in prominent, easily accessible locations. Members can also arrange appointments in more than twenty serviced offices.

Our longstanding administrator, Pillar Administration, was purchased by Mercer Australia in late 2016. Mercer has a strong track record in super administration and we expect the assimilation of Pillar into Mercer will generate significant operating efficiencies and enhance your member experience.

Finally, I would like to thank my fellow board members, the executive team and all staff for their dedication and hard work over the last 12 months. With our industry in a state of constant change, it is indeed a challenge to meet our commitment to help make all members `feel future ready’. I am confident that our fund – under the leadership of our Chief Executive Officer, Michael Dwyer – is well placed to meet this commitment and in doing so, help our members look forward to a secure financial future.

It’s been a very progressive period for the fund with strong investment returns, an increase in membership and expansion of member services.

http://firststatesuper.com.au

ANNUAL REPORT 2016-174

philosophyOur guiding

For us, it’s all about our members. Their needs, goals and future. Our responsibility is to make our members ̀ feel future ready’. Our members first philosophy is at the heart of our culture; it guides every decision we make.

In practical terms, this means:

We listen, understand and respond to members’ needs

Members can talk to us online, over the phone or face-to-face via our network of member service centres and regional offices.

We help more members benefit from financial advice

From simple phone advice about their super at no additional cost through to fee-based comprehensive advice. Our investment in financial planning firm StatePlus demonstrates our belief in the value of financial advice.

We negotiate competitive fee deals on behalf of members

We use our scale to negotiate competitive fees with our investment managers and insurance provider, which means more of our members’ money is invested for their future.

We offer a range of investment options that can be mixed and matched to meet members’ needs

We offer pre-mixed and single asset class investment choices, including two socially responsible options.

We are open, transparent and informative

We keep members informed about super, investment markets, pension and retirement policy, and changes to legislation that are relevant to their super account.

We give members the support they need to make the right decisions

We provide useful articles, seminars, online tools and financial advice. We take pride in helping our members achieve a better financial future.

WEB firststatesuper.com.au CALL 1300 650 873 EMAIL [email protected] 5

numbers at 30 June 2017

67% 33%

Our

Advice

8,803 members received face-to-face advice

Member accounts

First State Super

Accumulation 739,761

Income Stream 26,154

Defined benefit/Lifetime pension 7,612

TOTAL First State Super 773,527

StatePlus1

Accumulation 23,476

Income Stream 51,962

Investment (non-super) 8,537

TOTAL StatePlus 83,975

1Some StatePlus members are included in more than one category

Funds under management

First State Super

Accumulation $55.1 bn

Income Stream $7.4 bn

Defined benefit/Lifetime pension $1.2 bn

TOTAL First State Super $63.7 bn

StatePlus

Accumulation $3.5 bn

Income Stream $13.7 bn

Investment (non-super) $1.0 bn

TOTAL StatePlus $18.2 bn

TOTAL First State Super and StatePlus $81.9 bn

Gender split Accumulation

Income StreamOne-year returns to 30 June 2017

Growth Balanced Growth

Accumulation 12.4% 9.5%

Income Stream 13.7% 10.4%

65% 35%

Average account balance

$74,479 accumulation $281,022 income stream

Online engagement

474,230 members (61%) have provided their email address

352,755 members (46%) have registered for online access

Seminars

228 seminars were held, attended by 9,526 members

Contributing employers

48,232 employers made SG contributions on behalf of employees

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The following numbers are for First State Super members



Strategic enablers

Our

strategic planOur strategic plan is the roadmap that helps us deliver on our purpose, promise and members first philosophy. We operate in a complex environment and our strategic plan helps clarify our future direction.

Realise the ongoing benefit from the StatePlus acquisition

Improve our offer to members

Maintain relative scale

Build a differentiated brand position

Deliver competitive, value for money investment returns

Maintain and enhance stakeholder relationships

Continue to build and leverage enabling IT systems, processes and data ecosystems

The business enablers ensure the successful delivery of the themes.

Attract, retain and develop the best people

Ensure financial prudence and discipline

Enhance our current Risk and Compliance culture

Strategic themes

These are the key focus areas for our business as we move forward to navigate the external environment in which we operate.

Our PurposeTo provide a better

future for all Australians

Our PromiseWe provide members with a better financial future by providing safe and secure

superannuation and quality financial advice

Our PhilosophyMembers first


Our model for creating value

Contributions and savings We manage the super contributions and retirement savings for more than 750,000 members.

Products and services to help members ‘feel future ready’Our products and services are:

5 value for money

5 tailored to the age and stage of life of members

5 always developed in accordance with our members first philosophy.

Convenient access to advice and educationWe want all our members to be confident making decisions about their superannuation. We offer advice over the phone and in person, and we provide easy-to-understand education material on our website.

A dignified retirement for our membersOur primary purpose is to help our members accumulate sufficient savings for a comfortable and financially secure retirement. We want to be a source of trusted advice before and during retirement.

Our peopleOur team has the skills and knowledge to deliver an exceptional member experience, and our workplace culture is founded on diversity and inclusion.

Investments that consider more than returnsGood returns are our primary investment objective but we also consider the impact our decisions can have on the community and the environment.

Value for money insurance solutionsWe offer a range of low-cost, flexible insurance options including income protection, life cover and disablement cover.

Accessible and responsive customer serviceMembers have access to an experienced phone-based customer service team.

A better communityAs a large investor, we take our responsibility to the community and the environment seriously; and we are vocal advocates for positive social and environmental change. We want to improve the environment in which our members live, work and retire.

Our relationshipsOur business is driven by the quality of our relationships with key stakeholders including:

5 our sponsoring employers

5 Federal and State governments

5 our investment managers and insurers

5 our administrator

5 our custodian.

A trusted and responsible fundOur profile as a good corporate citizen, socially responsible investor and a trusted source of advice will help retain and attract members, employers and staff. These characteristics will also give us a point of differentiation in an increasingly competitive market.

Inputs

What we offer

Outputs

We have opened Member Service Centres in metropolitan and regional locations in NSW and Victoria, and we have offices in the ACT and Perth.

The protection of a robust risk management framework Our risk management framework protects the fund and its members by identifying, monitoring and managing the risks associated with our business operations, financial capacity, reputation and strategic plan.

A voice that speaks for membersWe seek to influence policy on behalf of members by participating in industry discussions and responding to proposals that will shape the future of the super industry.

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Our approachOur investment approach is founded on the principle of universal ownership. The investments made by very large funds, such as First State Super, have a real impact on prices, the environment, corporations and communities where the investments take place. Universal ownership is where funds take active responsibility for this investment footprint, to manage risks and opportunities on behalf of the members whose capital is being invested.

Active ownership means actively engaging with the companies we invest in. We want to make sure these companies make decisions that are in the best interests of our members. We want to ensure that issues like climate change, executive pay, worker safety and other environmental, social and governance (ESG) issues are properly addressed.

Other factors that drive our approach include our belief that:

5 getting the allocation to the different asset sectors right is the main driver of returns

5 high-quality research underpins and improves our investment decisions

5 there are niche or unique opportunities that we have access to that others don’t.

Most importantly, we want to use our influence as a large investor to improve the world that our members retire into – we’re conscious of the legacy we leave for future generations.

Growing your superannuationOur responsibility is to grow the value of your superannuation by delivering competitive returns while managing investment risk and volatility.

As one of Australia’s largest superannuation funds, we face a significant challenge generating competitive risk-adjusted returns.

InvestmentsTo meet this challenge, we focus on:

5 offering our members a mix of growth and income-generating investments

5 choosing investment managers who understand the importance of balancing the need for competitive returns with the need to invest sustainably.

Responsible investmentWe are committed to better ESG practices across all asset classes. This means considering investments that:

5 create long-term value;

5 promote stewardship of our natural resources; and

5 have a positive impact on the communities in which our members retire.

Our ESG team reviews and considers the long-term sustainability of our investments.

Over the last year, the team has:

5 actively reviewed our external managers’ approach to integrating ESG;

5 engaged with companies we invest in;

5 engaged in proxy voting;

5 researched governance issues such as executive remuneration, worker safety, approaches to climate change risks and opportunities, and long-term value creation.

Climate change Our Climate Change Adaptation Plan outlines how we build climate change resilience into our portfolio. During 2016-17, we began a review of assets to assess exposure to the physical impacts of climate change risk, and identified businesses to actively engage with. We also invested in renewable energy and technologies, including wind projects in Brazil.

Executive remunerationAs a large shareholder in many of Australia’s listed companies, we have a responsibility to ensure executive remuneration is set in a way that supports sustainable returns over the long term. Our active engagement with these companies helps achieve compensation outcomes that bring better alignment of the interests of both executives and shareholders.

ESG engagementWe talk to companies to influence their decisions, particularly about long-term risk management. In 2016-17, we spoke to over 40 listed companies on executive remuneration, climate change, board composition and diversity, and public disclosure.

VotingWe view voting as an important part of our ownership of both domestic and international companies. During 2016-17 we actively exercised our voting rights. While usually supporting resolutions, we occasionally voted against, for example on issues relating to remuneration, equity grants, director elections, and climate change disclosure.

Sustainable investments We look for investments that not only offer good returns, but are sustainable, generate jobs, foster innovation and contribute to a more productive economy. Our recent investments in the Sunshine Coast and Bendigo hospitals are good examples.

Policy advocacyWe participate in regulatory processes, industry working groups and public debate. In 2016-17, we advocated for better disclosure of climate-related information, diversity on corporate boards, the importance of culture in creating long-term value, and managing risks in unconventional oil and gas markets.


Investors enjoyed very strong performance from most asset classes for the year to 30 June 2017. Double-digit returns were generated in most equity markets, and alternatives such as infrastructure, direct property and private equity also delivered strong results. Consequently, most members in diversified (pre-mixed) options enjoyed the best overall returns for several years.

The year was dominated by the election of Donald Trump as US president. Trump’s rise to power defied the predictions of most commentators. He captured a groundswell of support based on returning jobs to middle America and restoring more favourable trade deals for the US. His victory captured the attention of the world at large, and investment markets certainly took notice. As the new president took power in January, the “Trump Trade” was in full swing, with a simultaneous surge in US equities, US bond yields, and the US dollar taking place in the months immediately after Trump’s election success.

This reaction from the US markets was in anticipation of the expansionary economic and political agenda that Trump had outlined in his election campaign.

However, the momentum of early 2017 that pushed US stock indices to

The year in reviewnew highs was not to last. As the new administration settled in, promised reforms – especially on tax, healthcare, and infrastructure – were slow to make progress. Various political wobbles also interrupted Trump’s momentum. In combination, these factors saw the Trump Trade begin to unwind.

Nevertheless, for the remainder of the year, the US equity market remained strong, underpinned by generally improved corporate performance. The S&P 500 finished up 15.5% for the year and close to record highs. Other major global share markets also finished on a strong note.

A noteworthy aspect of global share markets through the year was the general lack of volatility. Market indices rose in a relatively calm and steady fashion. This was a function of large capital flows, particularly from central bank bond buying programs, injecting massive liquidity into global markets. Despite this low volatility, share markets reached near record highs.

Australian equity performance was more subdued than global equities, but nonetheless the S&P/ASX 200 still finished the year up 9.3%. The market began strongly but fell back on a range of factors, including generally weak growth, pressure on the banks due to a new bank

Double-digit returns were generated in most equity markets, and alternatives such as infrastructure, direct property and private equity also delivered strong results. Consequently, most members in diversified (pre-mixed) options enjoyed the best overall returns for several years.

levy announced in the May budget, sub-par results from the retail sector, and weakness in key commodities, particularly iron ore.

Fixed income markets were challenging as US bond yields rose from record low levels which negatively impacted bond valuations. The US Federal Reserve signalled an unwinding of its balance sheet and a measured increase in interest rates, however progress has been slow and rate moves have been difficult to predict.

In Australia, the low interest rate environment persists, with the RBA having lowered the official cash rate by 0.25% in August 2016. This brought the cash rate down to a new all-time low of 1.5%. Global bond markets returned 0.54% for the year, while Australian bonds were more subdued at 0.25%. Emerging market returns, in contrast, were stronger, with yields in the vicinity of 5%.

Infrastructure investment continues to expand globally and, in particular, in Australia. Various government asset recycling programs have enabled proceeds of public asset sales to be reinvested in road, rail, port and other infrastructure developments, with varying degrees of private sector participation.

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Asset allocation range 23% to 43% Australian equities28% to 48% International equities14% to 34% Alternatives0% to 10% Fixed income1% to 15% Cash

Target asset allocation


Investment objective CPI+3.75% pa (accum); CPI+4.25% pa (income stream) over rolling 10-year periods net of tax and fees

Investor profileSeeking higher growth over the medium to long term from socially responsible investments; willing to accept fluctuations in returns and the possibility of negative returns over the short term

Risk label2

High



Investor profileSeeking higher growth over the longer term; willing to accept significant fluctuations and the possibility of negative returns over the shorter term

Risk label2

High

High Growth


Investor profileSeeking higher growth over the medium to long term; willing to accept fluctuations and the possibility of negative returns over the short term

Risk label2

High

Growth (Life Cycle3 option for members up to and including age 59)

Diversified Socially Responsible Investment


95% growth assets 5% income assets



1 The returns are compound average returns after allowance for tax (accumulation options only) and investment management expenses, but before deduction of administration fees. The objectives do not constitute a forecast or guarantee of future performance or the future rates of return of the investment option.

2 See page 15 for an explanation of risk label.3 For accumulation members, this is called the MySuper Life Cycle option.

NOTE: In August 2016, the following investment option name changes were introduced: Diversified to Growth; Balanced to Balanced Growth; Capital Guarded to Conservative Growth.


Net investment returns1

20%

15%

10%

5%

0%1 year

14.8%

Accumulation Income stream

3 years 5 years 7 years 10 years

16.3%

9.0%9.9%

12.5%13.8%

10.7%11.4%

5.8% 6.1%


20%

15%

10%

5%

0%1 year

12.4%



13.7%

7.9%8.7%

10.6%11.7%

8.8%10.1%

5.3% 6.2%


20%

15%

10%

5%

0%1 year

10.0%



11.1%

6.5% 7.3%

9.6%10.7%

8.6%9.5%

5.7%6.3%

Objectives and performance at 30 June 2017This section shows the objectives, asset allocation and returns for our accumulation and income stream investment options.

The ‘CPI-plus’ objectives for the income stream options are slightly higher than those for the accumulation options because there is no tax payable on investment earnings for income streams. For the same reason, the net returns for the income stream options shown in the graphs are slightly higher than the returns for the accumulation options.


Target asset allocationInvestment objective CPI+2.75% pa (accum); CPI+3.25% pa (income stream) over rolling 10-year periods net of tax and fees

Investor profileSeeking a balance of growth and income investments expected to deliver moderate returns over the medium term

Risk label2

Medium-high

Balanced Growth (Life Cycle3 option for members aged 60 and over)


Conservative Growth

Asset allocation range100% Australian equities



Investor profileSeeking an investment with a low to medium risk of capital loss over the short to medium term, and modest capital growth over the longer term

Risk label2

Low-medium

Investment objective To track the S&P/ASX 300 Index (dividends reinvested), after fees

Investor profileSeeking growth above inflation over the longer term from Australian shares; willing to accept significant fluctuations in returns and the possibility of negative returns over the short term

Risk label2

Very high

Australian Equities





100% growth assets


2 See page 15 for an explanation of risk label.3 For accumulation members, this is called the MySuper Life Cycle option.NOTE: In August 2016, the following investment option name changes were introduced: Diversified to Growth; Balanced to Balanced Growth; Capital Guarded to Conservative Growth.


20%

15%

10%

5%

0%1 year

9.5%



10.4%

6.7%7.4%

8.6%9.5%

7.6%8.8%

5.3% 6.2%


20%

15%

10%

5%

0%1 year

5.7%



6.3%

4.9%5.5% 6.0%

6.7%5.7% 6.6%

4.7%

5.6%


20%

15%

10%

5%

0%

1 year

13.4%



15.3%

7.0%8.1%

11.4%

12.8%

8.8%9.9%

4.4%

5.2%

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2 See page 15 for an explanation of risk label.


Investment objective To outperform a combined index, namely the FTSE EPRA/NAREIT Developed Rental Index (hedged) and CPI + 5% over rolling 5 years, after fees

Investor profileSeeking high growth above inflation over the medium to long term from property investments; willing to accept fluctuations in returns and the possibility of negative returns over the short term

Risk label2

High

Investment objective To outperform the S&P/ASX 200 Index (dividends reinvested) over rolling 5 years, after fees

Investor profileSeeking growth above inflation over the longer term from socially responsible Australian shares; willing to accept significant fluctuations in returns and the possibility of negative returns over the short term

Risk label2

Very high

Australian Equities Socially Responsible Investment

Investment objective To track the MSCI World Index ex-Australia Net Dividends Reinvested (unhedged in Australian dollars), after fees

Investor profileSeeking growth above inflation over the longer term from international shares; willing to accept significant fluctuations in returns and the possibility of negative returns over the short term

Risk label2

Very high

International Equities

Property



Asset allocation range 100% Australian equities

Asset allocation range 100% International equities

Asset allocation range 100% Property investments


20%

15%

10%

5%

0%1 year

10.1%



11.2%

5.9%6.6%

10.7%

12.0%

7.9% 8.7%

N/A


20%

15%

10%

5%

0%1 year

14.1%



15.4%

10.0%11.0%

14.8%

16.5%

11.1%12.4%

4.1%4.7%


20%

15%

10%

5%

0%1 year

5.8%



6.2%

10.6% 11.4%10.5%

11.4%

9.5%10.5%

3.6%3.9%

100% growth assets

100% growth assets

100% growth assets



20%

15%

10%

5%

0%1 year

0.3%



0.2%

4.3%5.0%

4.2%4.8% 4.9%

5.8% 5.6%6.6%

Target asset allocationInvestment objective To track the Bloomberg AusBond Composite 0 + Yr Index, after fees

Investor profileSeek a moderate risk investment with relatively stable returns above inflation from Australian fixed income markets, over the medium term

Risk label2

High

Australian Fixed Interest

International Fixed Interest

Asset allocation range A combination of bank deposits and/or short-term income-producing securities

Investment objective To track the Bloomberg Barclays Global Aggregate Float Adjusted Index fully hedged to Australian dollars, after fees

Investor profileSeeking a low-risk investment with relatively stable returns above inflation from international fixed income markets, over the medium term

Risk label2

Medium-high

Investment objective To track the Bloomberg AusBond Bank Bill Index, after fees

Investor profileSeeking a very low-risk short-term investment with very stable but low expected returns

Risk label2

Very low

Cash



Asset allocation range 100% Australian fixed income securities

Asset allocation range 100% International fixed income securities


2 See page 15 for an explanation of risk label.


20%

15%

10%

5%

0%1 year

0.3%



0.3%

3.7%4.3% 4.1%

4.8%5.1%

5.9% 5.5%6.4%


20%

15%

10%

5%

0%1 year

1.9%



2.1% 2.1% 2.4% 2.4%2.7% 2.9% 3.4% 3.4% 4.0%

100% income assets

100% income assets

100% income assets

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Investment fees Investment fees reflect a broad range of fees and costs associated with the purchase/sale and ongoing management of investments of the fund and underlying investment vehicles. This includes fees paid to investment managers, as well as amounts paid to a variety of third parties such as our custodian, brokers and government authorities. These amounts are paid from the assets of the investment option before we calculate the unit price and are not deducted directly from your account.

The investment fees for each of the pre-mixed investment options (i.e. the High Growth, Growth, Diversified SRI, Balanced Growth and Conservative Growth investment options) also include the trustee’s charge of 0.04% per year. This is a component of ’Other fees and costs’. Investment fees may vary from year to year and cannot be precisely calculated in advance.

Important: The investment fees shown below are indicative only and are based on the fees and costs for each investment option for the 12 months to 30 June 2017, including several components which are estimates only. The actual amount you’ll pay in future years will depend on the actual fees, costs and taxes incurred by the trustee in managing the investment option.

Estimated investment fees (% per year)

Investment optionInvestment

management costsPerformance-related costs

Explicit transaction costs

Other fees and costs

Total investment fees

High Growth 0.37% 0.14% 0.07% 0.11% 0.69%

Growth1 0.35% 0.14% 0.06% 0.11% 0.66%

Diversified Socially Responsible Investment 0.40% 0.12% 0.10% 0.13% 0.75%

Balanced Growth1 0.32% 0.14% 0.05% 0.11% 0.62%

Conservative Growth 0.28% 0.13% 0.04% 0.10% 0.55%

Australian Equities 0.06% 0.00% 0.00% 0.02% 0.08%

Australian Equities Socially Responsible Investment 0.36% 0.00% 0.12% 0.03% 0.51%

International Equities 0.06% 0.00% 0.00% 0.03% 0.09%

Property 0.81% 0.23% 0.21% 0.09% 1.34%

Australian Fixed Interest 0.06% 0.00% 0.00% 0.03% 0.09%

International Fixed Interest 0.06% 0.00% 0.00% 0.06% 0.12%

Cash 0.04% 0.00% 0.00% 0.01% 0.05%

1 The fees shown are the same for MySuper and Choice members.

For more information about investment fees and costs, see the Member Booklet Supplement: Fees and costs available on our website and from customer service.

Investment reservesWe have determined that no investment earnings will be placed in an investment reserve to smooth the member investment returns. All investment earnings or losses in the various investment options, after providing for taxes and investment expenses, are reflected in our current unit prices.


HedgingThe pre-mixed investment options use currency hedging to hedge offshore market exposures where practicable:

5 for international equities, the default position will be to hedge 50% of the developed market exposure

5 for all other offshore market exposures, the default position will be 100% hedged, where practicable.

The single asset class investment options hedge offshore market exposures as follows:

5 for international equities, the default position will be to hedge none of the exposure

5 for international fixed income, the default position will be to hedge 100% of the exposure

5 for all other offshore market exposures, the default position will be 50% hedged.

The hedging position may be varied due to market conditions. The exact level of the hedge will be determined by a range of factors, including an assessment of market conditions generally and the liquidity needs of the fund.

Use of derivativesDerivatives are investment products whose value is derived from other assets, liabilities or indices (the underlying asset). They include a wide assortment of instruments such as futures, options, swaps, forwards, warrants and other related instruments.

At First State Super, we do not consider the use of derivatives in isolation but rather as part of the overall investment strategy of the fund and investment options.

Derivatives may be used:

5 to manage risk (e.g. hedge against changes in foreign currency)

5 as a way to implement investment positions efficiently, and

5 for asset allocation purposes and other tactical investment reasons.

The derivatives charge ratio did not exceed 5% of the total market value of the fund’s assets at any time during the reporting period.

ConsultantsWe appoint asset consultants to advise on appropriate asset allocation for each of the investment options and provide research on managers in each of the asset sectors, including an evaluation of the manager’s investment style and its suitability to complement other current and potential managers.

We also engage specialist consultants as required to assist in providing the trustee board with specific advice relating to various asset sectors.

CustodianOn 1 November 2016, State Street Australia Limited was appointed as our custodian. Generally, the custodian values the fund’s investments on each business day, and monitors each investment manager’s daily activity. Previously, our custodian was JP Morgan Chase Bank.

Risk labelAn investment option’s risk label is determined by an industry standard risk measure (SRM). The SRM allows you to compare investment options that are expected to deliver a similar number of negative annual returns over any 20-year period. The SRM also denotes an option’s corresponding risk band from very low to very high (Band 1 to Band 7). Additional information regarding the application of the standard risk measure is available on our website firststatesuper.com.au/investmentandrisk.

How are the returns calculated?Investment returns can be positive or negative depending on the performance of investment markets, which is reflected in unit price movements. At the end of each NSW

business day (with the exception of the NSW Bank Holiday), we value the assets in each of the investment options. Tax and investment fees (but not administration fees) are deducted which gives us the net value for each investment option. This figure is divided by the number of units issued for that investment option, which gives us the unit price. We multiply the number of units you have by that day’s unit price to determine the daily value of your account.

So the value of your account goes up and down depending on whether the unit price has gone up or down that day. You can view the current and historical unit prices for all the fund’s investment options on the unit prices page under Investments and performance/Performance/Unit prices on our website.

Holdings over 5% of total fund assetsAt 30 June 2017, our exposure to the Commonwealth Bank of Australia (including a combination of ordinary shares, cash and other short-term deposits, and fixed income securities) represented 6.87% of total fund assets.

More informationOur Member Booklet Supplement: Investments (for accumulation members) and the Member Booklets (for income stream members) have more information about the risk profile for each option. These documents are available on our website under Forms & publications or you can call us on 1300 650 873 for a paper copy free of charge.

We do not guarantee the performance of the investment options and the value of your account balance can go up or down. Past performance is not a reliable indicator nor is it a guarantee of future performance.

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We have a panel of investment managers chosen for their expertise and track record managing particular asset sectors. The table shows the investment managers as at 30 June 2017.

Who manages your super?

Note: Our investment team performs a cash flow and portfolio re-balancing function for the pre-mixed investment options.

Australian equities 5 Vanguard Investments Australia Limited

5 Eley Griffiths Group Pty Ltd

5 Hyperion Asset Management Ltd

5 Northcape Capital Pty Ltd

5 Vinva Investment Management Ltd

5 Redpoint Investment Management Pty Ltd

5 Adam Smith Asset Management Pty Limited

5 Airlie Funds Management Pty Ltd

5 Selector Funds Management Limited

Property 5 Franklin Templeton Investments Australia Ltd

5 Altis Property Partners

5 Brookfield Asset Management Inc

5 Resolution Capital Limited

5 Lend Lease Investment Management (Australia) Pty Ltd

5 Goodman Funds Management Australia Limited

5 GPT Funds Management Limited

Private capital* 5 Solace Capital Partners, L.P.

5 AE Industrial Partners, LLC

5 Castik Capital Partners GmbH

5 Updata Partners

5 Odyssey Private Equity Pty Limited

5 Warburg Pincus & Co

5 GHO Capital Partners LLP

5 Adamantem Capital Manager Pty Ltd

5 FTV Management Co LP

5 BlackBird Ventures Inc

Socially responsible Australian equities

5 AMP Capital Investors Limited

International equities 5 Vanguard Investments Australia Ltd

5 Veritas Asset Management LLP

5 Baillie Gifford Overseas Ltd

5 Sanders Capital LLC

5 Neuberger Berman Australia Pty Ltd

5 Ardevora Asset Management LLP

5 Southeastern Asset Management, Inc.

Infrastructure and real assets 5 Brookfield Asset Management Inc

5 Morgan Stanley Investment Management Ltd

5 Industry Funds Management

5 Blue Sky Water Pty Limited¹

5 Equis Funds Pty Ltd

5 Capella Capital¹

5 Orion Energy Partners LLC

Other alternatives 5 Schroder Investment Management Australia Limited

5 Bridgewater Associates, Inc.

5 K2 Advisors¹

5 Chatham Asset Management¹

5 Emso Asset Management Limited¹

5 Elementum Advisors LLC¹

5 GMO LLC¹

5 Insight Investment Management (Global) Ltd

Socially responsible international equities

5 Hermes Investment Management Ltd

Fixed interestPre-mixed options

5 Ardea Investment Management

5 Vanguard Investments Australia Ltd

Australian & International single asset class options

5 Vanguard Investments Australia Ltd

Diversified Socially Responsible option

5 Amundi Asset Management Australia Ltd

Credit income 5 Quadrant Real Estate Advisors

5 Intermediate Capital Group (ICG)

5 Westbourne Credit Management Ltd

5 Bain Capital Credit, LP

Cash 5 First State Super Trustee Corporation

5 Colonial First State Asset Management (Australia) Ltd

Currency management 5 State Street Global Advisors, Australia, Limited

¹ Indicates managers that are applicable to the Diversified Socially Responsible Investment (SRI) option for the relevant asset class.

* Largest 10 investment managers by commitment amount.


Actuarial review We are required to maintain the defined benefit fund in a satisfactory financial position. The fund’s defined benefit asset value must be at a level sufficient to cover the value of vested benefit liabilities of members as they fall due.

At least once a year, our actuary reviews the financial position of our defined benefit fund and makes a recommendation about the required level of future employer contributions. The fund is considered to be in a satisfactory financial position if the fund’s defined benefit asset value is at least 100% of vested benefit liabilities.

We have set the shortfall limit at 98% because we expect a shortfall of this amount can be recovered through normal market movements within one year. However, if the defined benefit asset value of the fund falls below the 98% shortfall limit, we will notify members and set out a restoration plan to return the fund to a satisfactory financial position.

We received the actuarial report for the year to 30 June 2017 on 31 August 2017. The report shows that the fund was in a satisfactory financial

The defined benefit fund

position with assets of $1,155.2 million exceeding the vested benefits liabilities by $49.4 million (4.5%). The actuary also found that current employer contribution rates meet the recommended level for the defined benefit fund.

Investment objectives and strategy The investment objectives for the defined benefit fund are to:

5 maintain a ratio of assets to vested benefit liabilities at a minimum target level of 110% over the long term;

5 maintain a balance between reducing the long-term cost of the benefits and reducing the volatility of the required employer contribution rate; and

5 generate sufficient liquidity to provide for the cash flow requirements of the fund.

Investment returns for defined and deferred benefit membersMember benefit entitlements are determined by a formula in the trust deed based on salary and length of

service and as such, investment returns do not generally affect a defined benefit entitlement. There are some limited instances where benefit entitlements are calculated with reference to investment returns. Members should refer to the explanatory notes in their 2016-17 annual statement pack for information about returns that may be relevant to their benefits. Employers bear the risk of negative investment performance affecting the financial position of the fund.

How the defined benefit pension growsWe adjust the defined benefit lifetime pension and (pre-1988) transition to retirement pension twice a year in accordance with movements in the Consumer Price Index (CPI). The update is reflected in the first pension payment in June and December each year. The defined benefit lifetime pension and (pre-1988) transition to retirement pension do not have investment returns allocated to them in the same way as other superannuation products, which are based on the performance of the underlying assets in which the product is invested.

Strategic asset allocation at 30 June 2017

12% Australian equities

12% International equities

26% Alternatives

33% Fixed income

17% Cash

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peopleOur

At First State Super, we believe that to deliver on our promise to our members, we must attract, retain and develop the best people. To ensure that we remain focused on our employees, one of the core enablers in our Corporate Strategic Plan is dedicated to them.

Our people are a strategic priority for us. We are focused on creating a workplace for all our employees that is dynamic, rewarding and growing. Our People Strategy encompasses all aspects of the employee life cycle and this is reflected in a number of our achievements over the past year.

Over the past five years, our employee numbers have grown from less than 100 to over 500 at 30 June 2017. This growth ensures that we build a business that continues to serve our members by:

5 building our presence away from the traditional CBD locations and into regional areas, with over 65 staff employed outside of our Sydney and Melbourne offices

5 insourcing our phone-based customer service team into our Melbourne office, employing over 100 people to enable direct contact with our members.

5 integrating and growing our financial advice network with employees dedicated to the provision of trusted financial advice to our members

5 building an investment team that employs 54 staff focused on ensuring the best possible returns to our members.

Diversity and inclusionThis year we were awarded the Employer of Choice for Gender Equality by the Workplace Gender Equality Agency, only one of 106 employers in Australia to receive this award.

We strive to create a workplace that creates opportunities for both men and

Employer group Total Male % Female %

FTC Board 13 7 54% 6 46%

FTC Executive Team 9 6 67% 3 33%

FTC Management 91 52 57% 39 43%

FTC Staff 405 208 51% 197 49%

women to succeed, with 49% of non-management employees and 43% of all employees in management roles being female. We have recently conducted a Gender Pay Equity analysis which highlighted that, when we compare ourselves with the general employment market, we have no overall pay gap between male and female employees in comparable roles.

In 2016, to recognise the super gap between men and women, we introduced additional super payments for employees on parental leave, providing super payments of up to 38 weeks to the primary care-giver over and above our 14 weeks of parental leave payments.

Gender split at 30 June 2017

We are focused on creating a workplace for all our employees that is dynamic, rewarding and growing.


Employee engagementWe believe that it's important to measure how we are performing as an employer so we can maintain our strengths and bridge our gaps. Each year we conduct an employee engagement and alignment survey using independent consultants to see how our employees support our culture, and to make sure they know how their work is aligned to our strategy so we can maintain our strengths and identify development areas.

This year, we continued our positive results by increasing our employee engagement score from 75% to 76% and our employee alignment score from 66% to 69%. Our employee engagement score places us in the top quartile of all employees in the survey database and we were delighted to nudge into the top 10% of all companies for employee alignment.

Employee initiativesWe continue to provide an environment that focuses on the community and employee wellbeing by supporting our employee involvement in a number of initiatives including:

5 RUOK? Day which highlights the importance of addressing mental health in the workplace. We provide `2 for 1’ coffee cards to employees to stimulate conversations on this important topic.

5 White Ribbon Day which focuses on the pervasive topic of family violence. In 2016, we introduced special leave for our employees which provides up to ten days of paid special leave a year for anyone experiencing family violence.

5 Our Refugee Internship program which provides 12-week work experience internships and an introduction to the Australian workplace for refugees recently arrived in Australia.

5 Bring Your Kids to Work Day is an initiative that recognises the importance of work-life balance and gives children an opportunity to see what their parents do at work.

5 Our flexible work policy cultivates an environment that meets the needs of our people and our business. We believe work-life balance and a flexible work environment can increase productivity and engagement.

April 2016 May 2017

Long term direction 68% 72%

Senior leadership 58% 57%

Team leadership 77% 77%

Team effectiveness 62% 67%

Performance focus 74% 76%

Investment in people 58% 62%

Investment in systems 61% 60%

Alignment 66% 69%

Engagement 75% 76%

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Our engagement and alignment results May 2017

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Our strong governanceTo safeguard the benefits of our members and clients, we aim to achieve best practice in all areas of governance. To achieve best practice, we have developed and apply a governance framework that is highly regarded by all our stakeholders and, most importantly, the industry regulators.

Our governance framework meets all requirements of the primary industry regulator, the Australian Prudential Regulation Authority (APRA). The framework includes policies and procedures that ensure our board has the appropriate skills, structure and composition to properly oversee and exercise its authority in relation to the activities of the fund.

FSS Trustee Corporation is the trustee of the First State Superannuation Scheme. The board of the trustee consists of an independent chairman, Neil Cochrane, together with six employer representative directors and six member representative directors. The board is the highest governance body at First State Super and its responsibilities are outlined in the First State Superannuation Scheme Trust Deed and Rules and the constitution of FSS Trustee Corporation.

Board appointmentsNominating entities representing both employers and employees must consider the requirements of our Fit and Proper Policy when assessing a person’s eligibility for appointment as a director to the board. This board–approved policy determines the skills and qualities a person must possess to hold the position of director.

Appointed jointly by the Secretary of the Department of Premier and Cabinet of NSW and the Secretary of the Treasury of NSW.


Appointed by Unions NSW.

Sue Carter Employer representative

Jocelyn Furlan Employer representative

board and committeesOur

Rod Harty Member representative

Indemnity The fund, the trustee and the directors and officers of the trustee are covered by professional indemnity insurance. The trustee holds all fund assets in trust and is required by law to act in the best interests of members.

Disclosure Legislation requires super funds to disclose certain information on their website, including how directors are appointed and removed, board meeting attendance and the remuneration details of their directors and executive officers. This information can be found on our website at firststatesuper.com.au/about/people.

Appointed by the employer and employee board representatives.

Neil CochraneIndependent director and chairman of the board.

21WEB firststatesuper.com.au CALL 1300 650 873 EMAIL [email protected]

Appointed by the Victorian Healthcare Association Limited.

Appointed by the Australian Nursing and Midwifery Federation (Victorian Branch).

Appointed by Health Services Union.




Appointed by Leading Age Services Australia (LASA National).



Lisa Fitzpatrick Member representative

Ralph Kelly Employer representative

Mark Lennon Member representative

Bob Lipscombe Member representative

Trevor Carr Employer representative

Naomi Steer Member representative

Gary Thomas Employer representative

Dr Rosemary Kelly Member representative

Philippa Smith AM Employer representative

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Board committee Members during the year to 30 June 2017

Investments Committee Trevor Carr (chair), Neil Cochrane, Rod Harty, Dr Rosemary Kelly, Ralph Kelly, Mark Lennon

Member Services Committee Bob Lipscombe (chair), Lisa Fitzpatrick, Ralph Kelly , Philippa Smith, Naomi Steer, Gary Thomas

Disputes Committee Philippa Smith (chair), Lisa Fitzpatrick, Jocelyn Furlan, Dr Rosemary Kelly

Audit and Compliance Committee Sue Carter (chair), Jocelyn Furlan, Rod Harty, Bob Lipscombe, Gary Thomas

Risk Committee Ralph Kelly (chair), Sue Carter, Jocelyn Furlan, Bob Lipscombe, Gary Thomas

Remuneration and Human Resources Committee

Dr Rosemary Kelly (chair), Trevor Carr, Rod Harty, Naomi Steer

Nominations Committee Neil Cochrane (chair), Trevor Carr, Dr Rosemary Kelly, Naomi Steer, Gary Thomas

CommitteesThe board has set up a number of committees to review and implement policy decisions.

To achieve best practice, we apply a governance framework that is highly regarded by all our stakeholders and, most importantly, the industry regulators.


managementRisk

At First State Super, we consider the management of risk to be an integral part of the organisation. We are committed to embedding risk management practices to support the achievement of our business objectives and fulfil our regulatory obligations.

Our board-approved enterprise-wide Risk Management Framework supports the proactive management of risk. The framework is aligned to the Australian/New Zealand Standard on Risk Management (AS/NZ ISO 31000:2009) and APRA SPS 220 and CPS 220 Standards on Risk Management.

The objective of our Risk Management Framework is to protect the fund and its members by identifying, monitoring and managing the risks associated with our business operations, financial capacity, reputation and strategic plan.

The framework includes:

5 our Risk Appetite Statement, which outlines the different categories of risk we face and our tolerance levels for managing these risks; and

5 our Risk Management Strategy, which describes the key elements of our Risk Management Framework and documents the systems used to identify, assess, manage, mitigate and monitor our material risks.

Instilling a strong risk culture is also a core element of our Risk Management Framework.

We also recognise the importance of a dedicated risk management function, which is headed up by the Chief Risk Officer (CRO). The CRO is responsible for assisting the board, its committees and senior management to develop and maintain the Risk Management Framework.

We regularly monitor and review processes to ensure the Risk Management Framework remains adequate, appropriate and effective. We recognise that risk is dynamic and continually evolving so reviews also consider emerging risks due to:

5 strategic, project or operational initiatives; and

5 changes in the external risk environment.

Risk management responsibilityWhile primary responsibility for risk management rests with the board, the Risk Management Framework is largely overseen by the board, Risk Committee, Chief Risk Officer and Executive Risk Group.

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The tables contain information extracted from the fund’s audited financial statements. You can view a copy of the audited financial statements and auditor’s report on our website under firststatesuper.com.au/reports. A hard copy can be obtained free of charge by calling us on 1300 650 873.

Statement of financial position as at 30 June 2017

reportsOur financial

2017 $m

2016 $m

Assets

Cash and cash equivalents 426 326

Receivables 514 301

Financial assets 64,762 56,197

Plant and equipment 8 8

Deferred tax assets 209 255

Total assets 65,919 57,087

Liabilities

Benefits payable 54 50

Accounts payable 608 252

Financial liabilities 257 528

Income tax payable 59 15

Deferred tax liabilities 1,121 888

Total liabilities excluding member benefits 2,099 1,733

Net assets available for member benefits 63,820 55,354

Defined contribution member liabilities 62,291 53,993

Defined benefit member liabilities 1,097 1,069

Total member liabilities 63,388 55,062

Net assets 432 292

Equity

Reserves 387 219

Defined benefit surplus 45 73

Total equity 432 292


2017 $m

2016 $m

Investment revenue

Interest – investments carried at fair value 374 441

Interest – bank deposits 5 5

Dividends 954 783

Distributions from unit trusts 705 608

Securities lending income 15 19

Other income 28 14

Changes in fair value of investments 4,982 (617)

Total revenue 7,063 1,253

Investment expenses (201) (170)

Administration expenses (143) (138)

Total expenses (344) (308)

Operating result before income tax expense 6,719 945

Income tax benefit/(expense) (479) 86

Operating result after income tax expense 6,240 1,031

Net benefits allocated to defined contribution member accounts

(5,975) (944)

Net change in defined benefit member accounts (97) (43)

Operating result 168 44

Income statement for the year ended 30 June 2017

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Statement of changes in member benefits

Defined contribution member benefits

$m

Defined benefit member benefits

$mTotal $m

Opening balances as at 1 July 2015 50,898 1,093 51,991

Employer contributions 3,975 23 3,998

Member contributions 722 – 722

Transfers from other superannuation funds 971 – 971

Superannuation co-contributions 30 – 30

Income tax on contributions (539) (2) (541)

Net after tax contributions 5,159 21 5,180

Benefits to members (2,664) (114) (2,778)

Insurance premiums charged to members’ accounts (344) – (344)

Transfer (to)/from reserves – – –

Net benefits allocated to members 944 43 987

Net change in member defined benefits – 26 26

Closing balances as at 30 June 2016 53,993 1,069 55,062

Opening balances as at 1 July 2016 53,993 1,069 55,062

Employer contributions 4,073 20 4,093

Member contributions 1,216 – 1,216

Transfers from other superannuation funds 1,085 – 1,085

Superannuation co-contributions 21 – 21

Income tax on contributions (564) (1) (565)

Net after tax contributions 5,831 19 5,850

Benefits to members (3,195) (115) (3,310)

Insurance premiums charged to members’ accounts (313) – (313)

Transfer (to)/from reserves – – –

Net benefits allocated to members 5,975 97 6,072

Net change in member defined benefits – 27 27

Closing balances as at 30 June 2017 62,291 1,097 63,388


Statement of changes in equity/reserves

Unallocated income

$m

Operational risk financial requirement

reserve1 $m

Administration reserve2

$mTotal $m

Opening balances as at 1 July 2014 19 66 34 120

Operating result (5) 51 9 55

Transfer to defined contribution member accounts – – – –

Transfer to defined benefit member accounts – – – –

Closing balances as at 30 June 2015 15 117 43 175


Operating result 8 25 11 44





Operating result 89 18 61 168




1 The Operational Risk Financial Requirement Reserve is an unallocated reserve which is maintained separately to the unitised assets of the fund for use by the trustee in accordance with the requirements of Superannuation Prudential Standard 114 Operational Risk Financial Requirement and the fund’s Operational Risk Financial Requirement Reserving Policy.

2 The Administration Reserve is an unallocated reserve which is maintained separately to the unitised assets of the fund for use by the trustee in accordance with the Trust Deed.

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Statement of cash flows for the year ended 30 June 2017

2017 $m

2016 $m

Cash flows from operating activities

Investment income 2,081 1,870

Investment expenses (201) (177)

Administration expenses (143) (122)

Income tax paid (321) (38)

Net inflows from operating activities 1,416 1,533

Cash flows from investing activities

Purchase of investments (76,735) (70,419)

Proceeds from sale of investments 73,024 66,892

Net outflows from investing activities (3,711) (3,527)

Cash flows from financing activities

Contributions received 6,015 5,024

Benefits paid (3,307) (2,765)

Insurance premiums paid (313) (344)

Net inflows from financing activities 2,395 1,915

Net increase/(decrease) in cash held 100 (79)

Cash at the beginning of the financial year 326 405

Cash at the end of the financial year 426 326


Inactive accounts and small balancesWe may transfer your benefit to an eligible rollover fund (ERF) if the balance of your account is less than $1,000 and either:

5 your employer has advised us that your employment has been terminated; or

5 no contributions have been received into your account for six months.

Before transferring a benefit, we will advise you in writing. Unless you advise us within one month that you wish your benefit to be rolled over to another complying superannuation fund, we will transfer your benefit to the fund’s nominated ERF, AUSfund. AUSfund has consented to the inclusion of statements which relate to their services. AUSfund is operated by Industry Funds Investments Limited (ABN 17 006 883 227, AFSL 229881) as trustee of AUSfund, Australia’s Unclaimed Super Fund (ABN 85 945 681 973). AUSfund satisfies APRA’s enhanced prudential standards for ERFs.

If your benefit is rolled over to AUSfund, any insurance cover you may have will cease, and you will also cease to be a member of First State Super.

Lost and unclaimed super is paid to the ATOIn addition, the trustee is required by law to report and pay unclaimed member accounts under $6,000 and accounts that have been inactive for a certain period of time to the Australian Tax Office (ATO). This includes inactive accounts of members aged 65 and over, those who are uncontactable or unidentifiable, and death benefits and family law splits that cannot be paid. See the Member Booklet Supplement: About First State Super on our website for more information.

informationOther

InsuranceDeath, total and permanent disablement (TPD) and income protection insurance cover offered to First State Super personal and employer-sponsored members is provided under insurance policies issued to the trustee by TAL Life Limited.

Temporary residentsIf you are a temporary resident, you can usually receive your super when you permanently depart Australia. If you intend to claim your superannuation benefit upon permanently departing Australia, you should request from Australian Customs, a port and date stamp for your passport, when departing Australia.

We must treat your super as unclaimed money and forward it to the ATO if:

5 you are a departed temporary resident

5 at least six months have passed since the later of your visa expiring or your departure from Australia

5 you are not currently the holder of a temporary, permanent or prescribed visa

5 you are not an Australian or New Zealand citizen and have not made a valid application for a permanent visa.

Relying on relief provided by the Australian Securities and Investments Commission (ASIC), the trustee is not obliged to notify or give an exit statement to a member who was a temporary resident where we transfer their superannuation to the ATO following their departure from Australia. You can claim your super from the ATO by calling 13 28 65 or visiting ato.gov.au.

AdministratorMercer Administration Services (Australia) Pty Limited is responsible for overseeing the daily operations of the fund. Mercer manages the processing of member and employer contributions, maintaining member records, and paying benefits. Mercer is also the custodian for the fund’s Australian trust bank accounts.

ComplianceThe First State Superannuation Scheme (ABN 53 226 460 365) is a resident regulated superannuation fund within the meaning of the Superannuation Industry (Supervision) Act (SIS) and a complying superannuation fund for the purposes of the Income Tax Assessment Act.

We can accept transfers and rollovers under First State Super’s trust deed and rules and the fund is authorised under MySuper legislation. Upon receipt of the transfers and rollovers, we will maintain and preserve the benefits in First State Super to the extent required by SIS and its regulations.

SurchargeThe contributions surcharge tax, which was payable by high-income earners on employer contributions and termination payments, was abolished from 1 July 2005. We may be able to receive further assessments for the 2004-05 financial year and earlier years if a member, who has rolled over money into First State Super before the surcharge was deducted in the member’s previous super fund. Any surcharge will be debited from the member’s superannuation account.

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Tax file numbers

How to provide your TFNYou can provide your TFN directly to the fund by contacting customer service and following the TFN prompts, or completing the section in your application or member details form. You can also download and complete the Tax file number collection form from our website. Your completed form should be sent to First State Super, PO Box 1229, Wollongong NSW 2500.

Alternatively, you can quote your TFN to your employer when starting employment and it will automatically be taken to be quoted for superannuation purposes. Your employer is obliged to give your TFN to the superannuation fund within 14 days of the TFN being quoted. You can check if your employer has provided your TFN by referring to your welcome letter or most recent benefit statement, or by calling us.

What can we do with your TFN?Under the Superannuation Industry (Supervision) Act 1993, the fund is authorised to collect your TFN, which we will only use for lawful purposes in the administration of your superannuation benefit. These purposes may change in the future as a result of legislative change.

We may disclose your TFN to another superannuation provider, when your benefits are being transferred, unless you request in writing that your TFN is not to be disclosed to any other superannuation provider. We may also disclose your TFN to our administrator and the Commissioner of Taxation in order to provide all of the services required in the administration of your account.

We may also use your TFN to identify multiple accounts within the fund and consolidate them when permitted under law.

You don’t have to provide your TFN, but there are advantages if you do:

5 the fund will be able to accept all types of contributions to your account (including superannuation guarantee contributions, and any before-tax and after-tax contributions)

5 the tax on contributions to your account will not be increased

5 no additional tax (that is, beyond that which ordinarily may apply) will be deducted when you start drawing down on your superannuation benefits

5 it will make it easier to trace different superannuation accounts in your name and match your accounts in the fund so you receive all of your superannuation benefits when you retire.

For more information about the tax that may apply to super, visit the Australian Tax Office (ATO) website, ato.gov. au. Our fact sheet Super taxes, caps, payments, thresholds and rebates also has information on tax and super.

You can provide your TFN directly to the fund by contacting customer service and following the TFN prompts, or completing the section in your application or member details form.


When it comes to financial advice, everyone has different needs. Some people’s circumstances are quite straightforward, while others are more complex.

Whatever your needs, we can help connect you to advice that will help you achieve your objectives. The right advice can make a big difference to the way you manage your money and plan your life.

Choosing the right adviceWe offer two levels of advice depending on your goals and objectives, and the complexity of your financial circumstances. Your answers to a few simple questions will help you understand your advice needs.

Simple advice Comprehensive advice

What type of advice would you like?

Advice on your First State Super account.

Advice on more complex financial matters that take your personal situation, lifestyle and financial goals into account. An ongoing review service is available.

How would you like to receive advice?

Prefer to speak with someone over the phone.

Prefer to meet with a financial planner face to face at a location near you.

How much does it cost? There is no additional cost for advice relating to your First State Super account as this is included in your membership fee.

Your first appointment is no cost, no obligation. If you decide to proceed, a fee will be payable for the plan and any ongoing review.

Our ongoing review service gives you access to a dedicated financial planner who will answer your questions and regularly review your plan for changes to your personal circumstances.

Call us on 1300 650 873 or go to our website for more information.

Financial advice to help you make good decisions

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Service and advicePhone 1300 650 873 Fax 1300 722 072Email [email protected] firststatesuper.com.auPost PO Box 1229, Wollongong NSW 2500

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This is general information only and does not take into account your specific objectives, financial situation or needs. General advice is provided by FSS Trustee Corporation (FTC) ABN 11 118 202 672, AFSL 293340, the trustee of the First State Superannuation Scheme (First State Super) ABN 53 226 460 365. You should consider the Member Booklet (Product Disclosure Statement) for the product you hold or intend holding before making any decisions. Call us on 1300 650 873 for a copy, free of charge, or visit firststatesuper.com.au.



Documents

Annual Report - First State Super · 2020-05-01 · ANNUAL REPORT 2 2016-17 Prepared and issued by FSS Trustee Corporation ABN 11 118 202 672, AFSL 293340 Level 21, 83 Clarence St