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BT Funds Management LimitedABN 63 002 916 458 AFSL No. 233724 RSE Licence No. L0001090Westpac Banking CorporationABN 33 007 457 141
BT Super for Life
Annual Report
for the year ended 30 June 2016
The information in this Booklet is general information only and does not take into account your personal financial situation or needs. You should consult a financial adviser to obtain financial advice tailored to your personal circumstances.The PDS and this Booklet can only be used by persons receiving it (electronically or otherwise) in Australia and applications from outside Australia will not be accepted. The Trustee may accept or reject an application without giving reasons.An investment in BT Super is not an investment in, deposit with, or any other liability of, Westpac Banking Corporation ABN 33 007 457 141 (Westpac), or any other company in the Westpac Group. It is subject to investment risk, including possible delays in repayment, or loss of Income and principal invested. Westpac and its related entities do not stand behind or otherwise guarantee the capital value or investment performance of any Investment Options or any related assets of BT Super.Information in the PDS or this Booklet is subject to change from time to time and may be updated by us.Updated information, if it is not materially adverse, can be obtained by going to our website at bt.com.au, contacting the financial adviser for your BT Super account (your Financial Adviser) or by calling BT Customer Relations. You can request a paper copy of the PDS, this Booklet or any updated information at any time and this will be provided free of charge at bt.com.au or by calling us on 132 135.Contact usIf you have any questions about your super, please call BT Customer Relations on 132 135 from 8.00am to 6.30pm (Sydney time), Monday to Friday or email [email protected].
Contents
BT Funds Management Limited ABN 63 002 916 458, AFSL No.233724, RSE No. L0001090 (‘Trustee’, ‘we’, ‘our’ or ‘us’) is the Trustee of BT Super for Life which is part of Retirement Wrap ABN 39 827 542 991, RSE No. R1001327.
An investment in BT Super for Life is not an investment in, deposit with or any other liability of Westpac Banking Corporation ABN 33 007 457 141 (the Bank) or any other company in the Westpac Group. It is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. The Bank and its related entities do not stand behind or otherwise guarantee the capital value or investment performance of any investment option offered through BT Super for Life, including the BT Super for Life - Super cash investment option.
The investment managers are BT Investment Management (Institutional) Limited ABN 17 126 390 627, AFSL 316455 and Advance Asset Management Limited ABN 98 002 538 329, AFSL 240902. The Trustee may use other investment managers from time to time which are detailed within relevant disclosure material.
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. Past performance is not a reliable indicator of future performance. A Product Disclosure Statement (PDS) is available for BT Super for Life on this website: bt.com.au, or by calling 1300 653 553. You should obtain and consider the PDS before deciding whether to acquire, continue to hold or dispose of interests in BT Super for Life.
Retirement Wrap is a regulated superannuation fund under the Superannuation Industry (Supervision) Act 1993 (SIS) and is not subject to a direction under section 63 of SIS. BT Super for Life is governed by the terms of the BT Super for Life Trust Deed.
The tax position described is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice.
The Annual Report was prepared 30 November 2016.
Recent developments in superannuation 1
Changes to superannuation 3
Product changes 5
Understanding your investment 10
Performance information 13
Investments exceeding 5% 14
Other important information 16
Financial information 18
Recent developments in superannuation
1. 2016/17 superannuation thresholdsThe superannuation contributions caps and various other superannuation thresholds that apply for the current financial year are as follows:
Concessional contributions cap:
- Standard cap (under age 49 on 30 June 2016)
$30,000
- Aged 49 or over on 30 June 2016 $35,000
Non concessional contributions cap: $180,000¹
Capital Gains Tax (CGT) Cap (lifetime limit):
$1,415,000
Government Co-contributions
- Maximum co-contribution² $500
- Lower threshold $36,021
- Upper threshold (cut off) $51,021
Superannuation Guarantee (SG) rate³: 9.5%
Low rate cap $195,000
1 if you were under age 65 on 1 July 2017 you may be able to make up to $540,000 of non-concessional contributions over three financial years. Please refer to “changes to superannuation” for further information.
2 the maximum co-contribution payable is phased out by 3.333 cents for every dollar of total income over the lower threshold, until it reaches zero at the upper threshold.
3 The SG rate is currently 9.5% where it will remain until 30 June 2021. From 1 July 2021, the SG rate will increase to 10% and thereafter will increase by 0.5% each financial year until it reaches 12% at 1 July 2025.
2. Higher concessional contributions cap For 2016/17 financial year, the standard concessional contribution cap is $30,000 pa.
An increased concessional contribution cap of $35,000 pa (not indexed) is available for members aged 49 years or over on 30th June 2016
The Government has proposed that from 1 July 2017, the concessional contributions cap will reduce to $25,000 per year, irrespective of age. Please refer to “changes to superannuation” for further information.
3. Lost member accounts transferred to the ATO
If your account is considered to be lost*, the trustee may be required to transfer your account balance to the ATO if:
> your account balance is less than the small lost account threshold; or
> the trustee is satisfied that it will never be possible to pay an amount to you (because you cannot be identified based on the information reasonably available to the trustee).
From 31 December 2015, the small lost account threshold has increased to $4,000 (previously $2,000) and from 31 December 2016, it will increase further to $6,000.
If your account balance is transferred you will be able to reclaim it from the ATO. The ATO will pay interest on unclaimed super money amounts paid directly to eligible individuals for the period the money was held by the ATO after 1 July 2013. Any interest paid is tax free.
* Your super account will generally be considered ‘lost’ if:
> no contributions or rollovers have been added to your account in the last year and either the trustee has never had an address for you or mail sent to you by the trustee has been returned unclaimed, or
> for default employer super plans, no contributions or rollovers have been added to your super account in the last five years.
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4. Low Income Super Contribution (LISC)From 2012/13, those with adjusted taxable income1 of up to $37,000 who have received concessional contributions during the year, may be eligible to receive a government super payment of up to $500 to help save for their retirement. This payment is called the low income super contribution (LISC).
The Government has abolished LISC payments from 1 July 2017. LISC payments will continue to be payable in relation to eligible individuals who made concessional contributions received in financial years 2012/13 to 2016/17 inclusive. Please refer to “changes to superannuation” for further information.
1 Adjusted taxable income is the sum of taxable income, adjusted fringe benefits, target foreign income, total net investment loss, tax-free pension or benefits and reportable superannuation contributions less deductible child maintenance expenditure.
5. Temporary Budget Repair Levy & Medicare Levy increase
A Temporary Budget Repair (TBR) Levy of 2% will apply to the amount of a person’s taxable income above $180,000 for 2014/15, 2015/16 and 2016/17 financial years only. The TBR Levy will also be reflected in a number of other tax rates that are currently based on the top marginal tax rate, for the same 3 year period. The TBR levy is due to cease on 1 July 2017.
The Medicare Levy also increased from the 2014/15 financial year from 1.5% to 2.0% and will remain at 2.0% to help fund the National Disability Insurance Scheme.
The TBR Levy and increased Medicare Levy impacts the tax withheld from some payments you receive from your pension and super accounts as outlined below.
6. Tax on payments
Income payments
For the 2016/17 financial year, the tax payable on income payments you receive from your pension will include the increased Medicare Levy and may also include the TBR Levy.
Lump sum payments
Tax withheld from lump sum payments you, or your non-dependant (tax) beneficiaries1, receive from your super account will include the increased Medicare Levy but will not include the TBR Levy. If you or your non-dependant (tax) beneficiaries1 receive a lump sum payment and have taxable income above $180,000 for Income payments
For the 2016/17 financial year, the tax payable on income payments you receive from your pension will include the increased Medicare Levy and may also include the TBR Levy. additional tax may be payable as part of the tax return process.
From 1 July 2016 if you are eligible to access your superannuation as a lump sum, the tax we are required to withhold will depend on your age and the tax components within your benefit, as shown in the table below.
Age Tax withheld on the Taxable component
Tax withheld on the Tax-free component
Under preservation age2
A rate of 22%
(including the Medicare Levy)
Nil
Preservation age2 to 59
Up to $195,0003: Nil
Above $195,0003: a rate of 17% (including the Medicare Levy)
Nil
60 or over Tax-free Nil
Death benefits paid on or after 1 July 2016 as a lump sum to a non-dependant for tax purposes¹ will have tax withheld in the following manner:
Component Tax withheld
Tax-free Nil
Taxable (taxed element)
Taxed at 17% Taxable (untaxed element)
Taxable (untaxed element)
Taxed at 32% (including the Medicare Levy)
1 Death benefits paid as a lump sum to your dependants (for tax purposes) are tax-free. A dependant for tax purposes includes your spouse or former spouse, your children under 18, a person who was wholly or substantially financially dependent on you at the time of your death and a person with whom you were in an interdependency relationship at the time of your death.
2 Your preservation age is between 55 and 60 depending on your date of birth.
3 This is the low rate cap which provides a lifetime limit of $195,000 for 2016/17, indexed to AWOTE rounded down to the nearest $5,000 in subsequent years.
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Changes to superannuation
The Federal Government announced a number of changes to superannuation in the 2016-17 Federal Budget.
These changes have now passed the Federal Parliament and are outlined below. Please note that most of these changes will commence on 1 July 2017.
Non-Concessional Contributions cap reducedFrom 1 July 2017, the non-concessional contributions cap will be reduced to $100,000. The existing “bring-forward” provisions will continue which allows members under age 65 to make non-concessional contributions of up to $300,000 over 3 years. Once your total super balance has reached $1.6 million, however, you will no longer be eligible to make non-concessional contributions. Eligibility will be based on an individual’s total super balance as at 30 June the previous financial year.
Concessional contributions cap reducedFrom 1 July 2017, the concessional (before-tax) contributions cap will reduce from $30,000 (or $35,000 for individuals over age 49) to $25,000 per year, irrespective of age.
From 1 July 2019, those with super balances less than $500,000 at the end of the previous financial year, will be allowed to make additional concessional contributions by utilising unused concessional cap amounts from the previous 5 years, however, this will only apply to unused cap amounts from 1 July 2018.
Transfer Balance capFrom 1 July 2017, the total amount of superannuation that can be transferred into retirement phase will be capped at $1.6 million, irrespective of when the income stream commenced. The cap will be indexed annually in $100,000 increments in line with increases in the consumer price index. Superannuation savings in excess of the cap can remain in a superannuation account in accumulation phase, where the earnings will continue to be taxed at the concessional rate of 15%.
This limit will also apply to existing pensions, where any excess above $1.6 million at 30 June 2017, will generally be required to be rolled back to the accumulation phase or withdrawn from the super system entirely.
Amounts in excess of the transfer balance cap that are retained in the retirement phase will be subject to additional tax.
Transitional provisions provide an exception to existing pensions where the excess transfer balance at 1 July 2017 will be disregarded if it is less than $100,000. Members in this situation will have six months until 31 December 2017 to transfer or withdraw the excess amount.
Removal of the tax exemption for Transition to Retirement (TTR) income streamsFrom 1 July 2017, the tax exemption for earnings on the assets of a transition to retirement income stream will be removed, irrespective of when the income stream commenced. Instead, the earnings will be taxed at the same rate as a superannuation accumulation account.
Reduction of Division 293 tax thresholdThe threshold for Division 293 tax is being reduced from adjusted taxable income (ATI) of $300,000 per annum to $250,000 per annum from 1 July 2017.
Low Income Super Tax Offset (LISTO)The Government intends to introduce a Low Income Superannuation Tax Offset (LISTO) from 1 July 2017. The LISTO will compensate individuals earning $37,000 or less for the tax paid on their concessional contributions to super up to a maximum of $500 (a concessional contribution of $3,333). This effectively extends the Low Income Super Contribution (LISC), which ceases to apply after 30 June 2017.
3
Eligibility for Government co-contributionsFrom 1 July 2017, the government co-contribution only be available to individuals whose non-concessional contributions for the relevant income year do not exceed their non-concessional cap for that year.
Tax deductions for personal contributionsThe Government intends to allow anyone under age 75 to claim an income tax deduction for personal superannuation contributions made on or after 1 July 2017. Currently, this tax deduction is only available to persons who are not employees for the purposes of Superannuation Guarantee (compulsory superannuation) or who are substantially self-employed (those who earn less than 10% of their total income from employment related activities).
Extending the spouse tax offsetFrom 1 July 2017, the Government intends to extend eligibility for the spouse tax offset, of up to $540, to an individual making a contribution for an eligible spouse whose income is up to $37,000 (currently $10,800), There will be a phase out for spouse income between $37,000 and $40,000 (currently $10,800 and $13,800).
The tax offset is not available if the spouse’s total superannuation balance as at 30th June of the previous financial year has exceeded the transfer balance cap ($1.6 million).
Tax on Departing Australia Superannuation PaymentFrom 1 July 2017, the Government proposes to increase the tax applied to Departing Australia Superannuation Payments (DASP) to 95% for temporary residents who held working holiday visas (Subclass 417 and 462). The tax on DASPs for other temporary residents will not change.
4
Product changes
Investment ObjectivesFrom 1 July 2016, the investment objectives for the BT MySuper Lifestage Investment Options have changed. Please refer to the table below which outlines the changes.
BT MySuper Lifestage Fund
Investment Return Objective (over a 10 year period) net of fees and taxes
Existing Objective (p.a.) Objective from 1 July 2016 (p.a.)
1940’s Savings CPI + 1.5% CPI + 1.1%
1940’s Retirement CPI + 1.5% CPI + 1.7%
1950’s Savings CPI + 2.5% CPI + 1.3%
1950’s Retirement CPI + 2.5% CPI + 1.9%
1960’s CPI + 3.5% CPI + 2.1%
1970’s CPI + 4.0% CPI + 3.3%
1980’s CPI + 4.0% CPI + 3.3%
1990’s CPI + 4.0% CPI + 3.3%
2000’s CPI + 4.0% CPI + 3.3%
Strategic Asset Allocation and Neutral PositionThe strategic asset allocation (SAA) is the mix of growth and defensive assets set with the aim of achieving the investment return objective. The Neutral Position (NP) is the starting point for all the asset allocation decisions. The investment manager may adjust the exposure within the specified minimum and maximum ranges, based on investment reviews and decisions.
BT MySuper Lifestage Funds
From 1 July 2016, the SAA and NP for some of the BT MySuper Lifestage Funds have changed. Please refer to the table below for the changes.
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Existing SAA and NP
BT Mysuper Lifestage Fund
Asset Type (%) 1940’s 1950’s 1960’s 1970’s 1980’s 1990’s 2000’s
Equity – Australian Listed
Range
6
(0 – 21)
16
(2 – 32)
25
(10 – 40)
32
(16 – 46)
35
(18 – 48)
35
(18 – 48)
35
(18– 48)Equity – International Listed
Range
5
(0 – 19)
16
(0 – 30)
25
(9 – 39)
33
(16 – 46)
35
(18 – 48)
35
(18 – 48)
35
(18 – 48)Property
Australian Listed
International Listed
Australian Unlisted
International Unlisted
Range
1
2
1
2
(0– 21)
1
3
1
2
(0– 21)
1
4
1
2
(0– 22)
1
4
1
2
(0– 22)
1
5
1
2
(0– 22)
1
5
1
2
(0– 22)
1
5
1
2
(0– 22)Commodities – International Listed 1 2 2 2 2 2 2Other – International Unlisted (Alternatives) 8 9 11 12 13 13 13Range (0 – 15) (0 – 18) (0 – 20) (0 – 21) (0 – 22) (0 – 22) (0 –22)Fixed Income – Australian
Range
29
(15 – 45)
19
(5– 35)
11
(0 – 19)
4
(0 – 17)
1
(0 – 16)
1
(0 – 16)
1
(0 – 16)Fixed Income – International
Range
33
(16 – 46)
23
(6 – 36)
12
(0 – 27)
5
(0 – 20)
2
(0 – 18)
2
(0 – 18)
2
(0 – 18)Cash – Australian
Range
12
(8 – 38)
8
(1 – 31)
6
(0 – 25)
4
(0 – 21)
3
(0 – 20)
3
(0 – 20)
3
(0 – 20)Total Growth Assets 24% 47% 67% 83% 90% 90% 90%
Total Defensive Assets 76% 53% 33% 17% 10% 10% 10%
SAA and NP from 1 July 2016
BT Mysuper Lifestage Fund
Asset Type (%) 1940’s 1950’s 1960’s 1970’s 1980’s 1990’s 2000’s
Equity – Australian Listed
Range
11
(0 – 26)
15
(0 – 30)
27
(12 – 42)
37
(22 – 52)
37
(22 – 52)
37
(22 – 52)
37
(22 – 52)Equity – International Listed
Range
8
(0 – 23)
13
(0 – 28)
27
(12 – 42)
39
(24 – 54)
39
(24 – 54)
39
(24 – 54)
39
(24 – 54)Property
Australian Listed
International Listed
Australian Unlisted
International Unlisted
Range
1
2
1
2
(0 – 21)
1
2
1
2
(0 – 21)
2
5
1
2
(0 – 25)
2
7
1
2
(0 – 27)
2
7
1
2
(0 – 27)
2
7
1
2
(0 – 27)
2
7
1
2
(0 – 27)Commodities – International Listed
Range
0
(0 – 5)
1
(0 – 6)
1
(0 – 6)
2
(0 – 7)
2
(0 – 7)
2
(0 – 7)
2
(0 –7)Fixed Income – Australian
Range
26
(11 – 41)
23
(8 – 38)
11
(0 – 26)
1
(0 – 16)
1
(0 – 16)
1
(0 – 16)
1
(0 – 16)Fixed Income – International
Range
29
(14 – 44)
25
(10 – 40)
13
(0 – 28)
1
(0 – 16)
1
(0 – 16)
1
(0 – 16)
1
(0 – 16)Other – Growth Alternatives
Other – Defensive Alternatives
Range
0
4
(0 – 9)
0
4
(0 – 9)
0
5
(0 – 10)
0
5
(0 – 10)
0
5
(0 – 10)
0
5
(0 – 10)
0
5
(0 – 10)Cash – Australian
Range
16
(0 - 31)
13
(0 - 28)
6
(0 -21)
3
(0 - 18)
3
(0 - 18)
3
(0 - 18)
3
(0 - 18)Total Growth Assets 25% 35% 65% 90% 90% 90% 90%
Total Defensive Assets 75% 65% 35% 10% 10% 10% 10%
6
Standard Risk Measure (SRM)The level of risk, or Standard Risk Measure, for each investment fund is based on an estimate of the number of negative annual returns that may be experienced over any 20 year period. The SRM for the following fund will change effective 1 July 2016. For more information about SRM’s including how they are calculated, please visit www.bt.com.au/help/standard-risk-measure.asp
Fund Name Existing SRM SRM from 1 July 2016
BT Super For Life – 1950’s Lifestage Fund 4 3
Performance FeesThe tables below outlines the change in performance fees effective 1 July 2016 for certain Lifestage Funds. A Performance fee (if applicable) is deducted from the assets of the investment option and reflected in the unit price on a daily basis when investment performance targets are met.
Fund NameExisting Performance Fee (% p.a.)
Performance fee from 1 July 2016 (% p.a.)
BT MySuper 1960's Lifestage Fund 0.02 0.01
BT MySuper 1970's Lifestage Fund 0.02 0.01
BT MySuper 1980's Lifestage Fund 0.02 0.01
BT MySuper 1990's Lifestage Fund 0.02 0.01
BT MySuper 2000's Lifestage Fund 0.02 0.01
*All figures based on performance fees paid for the previous 12 months ended 31 March 2016.
Minimum Investment TimeframesThe minimum investment timeframes have changed from 1 July 2016 for the below Lifestage investment options.
Minimum investment timeframe
Fund Name Existing Timeframe Timeframe from 1 July 2016
BT MySuper 1940's Lifestage Fund 3 4
BT MySuper 1970's Lifestage Fund 6 7
7
Benchmark ChangesPrior to 1 July 2016, the benchmarks for the Conservative Fund, Moderate Fund and Growth Fund were created from a blend of the indices detailed in the table below, based on the Funds’ exposure to different asset types. This is calculated by using the weighted average of the strategic asset allocation neutral position and the index returns for each asset type.
Asset type Benchmark indices
Australian shares S&P/ASX 300 Accumulation Index
International shares MSCI World ex Australia (Standard) Index (Net Dividends) in AUD
Australian property S&P/ASX 200 Property Accumulation Index
International property FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI
Australian fixed interest Bloomberg AusBond Composite 0+ Yr Index
International fixed interest JP Morgan GBI Global Traded Index (hedged AUD)
Alternative investments Bloomberg AusBond Bank Bill Index
Cash Bloomberg AusBond Bank Bill Index
From 1 July 2016, some of the benchmark indices have changes. The below table outlines the new benchmarks for these funds.
New – Conservative and Moderate Funds
Asset type Benchmark indices
Australian equities S&P/ASX 200 Accumulation Index
International equities MSCI World ex Australia (Standard) Index (Net Dividends) in AUD
MSCI ACWI ex Australia (Net Dividends) hedged to AUD
Australian property S&P/ASX 200 A-REIT Accumulation Index
International property FTSE EPRA/NAREIT Developed ex Australia hedged in AUD Net TRI
Australian fixed interest Bloomberg Ausbond Composite Bond 0+ Yr IndexSM
International fixed interest Barclays MSCI Global Aggregate Sustainability Index hedged to AUD
Alternatives Bloomberg AusBond Bank Bill IndexSM
Cash Bloomberg AusBond Bank Bill IndexSM
New – Growth Fund
Asset type Benchmark indices
Australian equities S&P/ASX 300 Accumulation Index
International equities MSCI ACWI ex Australia (Net Dividends) hedged to AUD
MSCI Emerging Markets (Standard) Index (Net Dividends) in AUD
MSCI World ex Australia (Standard) Index (Net Dividends) in AUD
MSCI World ex Australia (Standard) Index (Net Dividends) hedged to AUD
8
Advanced Terminal IllnessEffective 1 July 2016 the following definition has been included in the BT Super For Life – PDS and Additional Information Booklets.
Advanced Terminal Illness
Means:
> Two registered Medical Practitioners have certified, jointly or separately, that:
— you have a Sickness or Injury that will cause your death:
— the death is highly likely to occur within a period that ends no more than 24 months from the date of the certification; and
— the death will occur even if you were to receive reasonable medical treatment,
> At least one of the registered Medical Practitioners is the treating registered specialist Medical Practitioner;
> For each of the certificates, the 24 month period (from the date of certification) has not ended;
> The treating registered specialist Medical Practitioner provides a medical report as evidence; and
> The certification is confirmed by a registered Medical Practitioner of our choice.
Buy-sell spread changes impacting BT MySuper Lifestage Investment OptionsFrom 1 July 2016 the buy-sell spread for the BT MySuper Lifestage Investment Options changed to 0.40%. The cost
of the buy-sell spread will generally be incurred when you invest in the BT MySuper Lifestage Investment Options.
9
Understanding your investment
Investing in BT Super for LifeBT partners with some of the world’s leading fund managers to offer you a diversified range of asset types and investment management styles. You have two alternatives for investing your money:
Alternative 1
BT Super for Life — Lifestage Funds
Since the introduction of MySuper from November 2013 the default option is the Lifestage Funds, invested according to the decade of your birth. As you get closer to retirement, we invest the assets more conservatively than we would for someone who had longer years to wait until retirement. The Lifestage Funds invest across a mix of different asset classes including fixed interest, cash, shares and property. The funds are managed by Advance Asset Management and are invested through a Multi-manager approach, giving you access to a broad range of expert investment managers.
As time passes, the assets will continue to be invested more conservatively, to protect your investments from the ups and downs of the market and give you a more stable performance. You do not need to actively manage your Lifestage Fund, we do the adjusting for you.
Alternative 2
If you prefer to take a more active role in deciding how your money is invested, you can specify an investment mix yourself by making your own choice from the investment options we offer, suited to your own investment style.
You can select a mix from four different funds — Growth, Moderate, Conservative and Super Cash, deciding on what percentage you would like in each. These funds are managed by BT Investment Management, who also employ a range of investment managers who they determine to be the best in their field.
Changing your investmentYou can change how you wish your money to be invested at anytime online, by logging into your account. More information about these investment options can be found online at bt.com.au.
No transaction fee applies for switches between investment options, however a buy/sell spread may apply. There is no limit to the number of switches that you can perform on your account. You can switch between investment options online by logging in to internet banking.
For the investment objectives and strategies for each individual investment option, please refer to the Product Disclosure Statement and Additional Information Brochure on our website or call us on 1300 653 553 Monday to Friday 8.00 am to 6.30 pm Sydney time.
Changes to investment option detailsWe have the right to change the investment option objective and investment strategy (including the benchmark), asset allocation, target position, investment manager(s) and possible variation and currency strategy (if any), without prior notice in some cases. We will inform account holders of any significant material change to the investment option details in our next regular communication or as otherwise required by relevant law.
Net earningsThe earnings rate for investors in the investment option is reflected in the price of the units (except Super Cash), rather than being credited or debited against the accounts for investors. A change in the value of an investor’s unit price generally reflects the earnings of the supporting assets in the investment option (except Super Cash).
Method of allotment of earnings in all investment optionsAll income, including realised and unrealised capital gains and losses, and expenses for all investment options are brought to account and are fully reflected in the unit price of that option. Income tax as appropriate is provided for in the unit price or interest rate for each investment option.
10
Derivatives These are investments whose value is derived from other assets, such as shares, and may be used as part of the portfolio management process. Futures contracts and options are examples of derivatives.
Derivatives may be used to reduce risk and can act as a hedge against adverse movements in a particular market and/or in the underlying asset. Derivatives can also be used to gain exposure to assets and markets. While derivatives offer the opportunity for significantly higher gains from a smaller investment (because of the effective exposure obtained) they can also produce significantly higher losses, sometimes in excess of the amount invested.
The investment managers are required to have strict policies and procedures on the use of derivatives and generally are not permitted to use derivatives to gear the investment options unless otherwise stated.
How risk is measured The level of risk, or Standard Risk Measure, for each investment fund is based on an estimate of the number of negative annual returns that may be experienced over any 20 year period as shown in the table.
Standard Risk Measure Estimate number of negative annual returns over any 20 year period
Risk band Risk label
1 Very low Less than 0.5
2 Low 0.5 to less than 1
3 Low to medium 1 to less than 2
4 Medium 2 to less than 3
5 Medium to high 3 to less than 4
6 High 4 to less than 6
7 Very high 6 or greater
The Standard Risk Measure allows you to compare the level of risk of investment funds within BT Super for Life as well as other investment options available through other super funds.
The Standard Risk Measure is not a complete assessment of all forms of investment risk, for example it does not detail what the size of the negative return may be or the potential for a positive return to be less than the return you require to meet your investment objectives. It also does not take into consideration the impact of fees and tax on investment returns. You should ensure you are comfortable with the risks and potential losses associated with the investment funds you choose to invest in.
11
Types of risksThere will always be the risk of fluctuations in the value of an investment. Investment risk can be managed and even minimised but it cannot be completely eliminated. It is important to understand that not all risks are foreseeable. There is always the chance that you may lose money on any investment you make.
Some common types of investment risks are outlined in the table below.
Risk type Description
Security specific risk An investment in, or exposure to, a company or managed fund that may be affected by unexpected changes in that company’s or managed fund’s operations (due to quality of management, use of technology etc.) or its business environment.
Market risk Markets are affected by a multitude of factors including economic and regulatory conditions, market sentiment, political events and environmental and technology issues. These could have a negative effect on the returns of all investments in that market and this may affect investments differently at various times.
Currency risk If an investment is held in international assets, a rise in the Australian dollar relative to other currencies may negatively impact investment values or returns.
Interest rate risk Changes in interest rates can have a negative impact either directly or indirectly on investment value or returns of all types of assets.
Derivatives and gearing risk
Underlying funds may use derivatives and gearing (borrowing). The value of derivatives is linked to the value of the underlying assets and can be highly volatile. Potential gains and losses from derivative transactions can be substantial.
Alternative investments risk
Underlying funds may invest in ‘alternative investments’. Alternative investments is a category that includes a range of sophisticated investments including hedge funds, venture capital, private equity, leveraged and management buyouts, commodities and futures trading funds. Like shares, property, fixed interest and cash, alternative investments are subject to certain risks that may include periods of large market falls, high volatility or reduced liquidity (ie the ability to sell investments immediately). Certain alternative investments carry significant risk. In addition, losses may arise due to other factors, including poor judgement, misconduct or fraud. Some investment strategies are reliant on key individuals. Some alternative investments may be based in countries where the level of regulatory supervision is lower than in Australia.
Credit risk There is always a risk of loss arising from the failure of a debtor or other party to a contract to meet their obligations. This potentially arises with various investments including derivatives and fixed interest and mortgage securities.
Liquidity risk This is the risk that an investment may not be easily converted into cash with little or no loss of capital and minimum delay because of either not enough buyers in the market for the particular investment or disruptions in the marketplace. Securities in small companies in particular may, from time to time and especially in falling markets, become less liquid.
Legal and regulatory risk
Changes are frequently made to superannuation law, which may affect your ability to access your investments. Changes can also occur in the taxation of superannuation, which may affect the value of your investment.
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Performance information
How we calculate performancePerformance figures are calculated in accordance with the Financial Services Council standards. Fund performance is calculated after management fees and before tax. The administration fee is not taken into account. Total returns are calculated:
> Using withdrawal prices appropriate for the month end for BT Super for Life – Savings investment options only, taking into account earnings tax up to a maximum of 15% plus withholding tax paid on foreign income (if any);
> For BT Super for Life – Retirement investment options, no allowance is made for tax you may pay as an investor other than withholding tax on foreign income (if any).
The latest performance information is available from our website at bt.com.au or by calling BT Customer Relations on 1300 653 553.
Investment returns shown are historical. Investment returns can go up and down and past performance is not a reliable indicator of future performance. Future performance is not guaranteed.
Advance Asset Management Advance Asset Management is a specialist asset management business within the BT Financial Group. Advance is one of the largest and fastest growing multi-managers in the Australian market, and a member of the Westpac Group. Advance stands distinct from its peers for its independent approach and thinking, ensuring industry leading risk management with consistent delivery of returns.
Our focus is on asset allocation, manager selection and risk management and our Funds are built around long-term strategic asset allocations, which ensure they are positioned to achieve their objectives taking into account future market conditions.
BT Investment Management The Growth, Moderate, Conservative and Super Cash Investment Options are managed by BT Investment Management (Institutional) Limited (‘BTIM’) and a number of external managers with complementary capabilities. BTIM offers investors a range of investment choices including Australian shares and listed property, fixed income and cash, absolute return investments, international shares and property. To complement its in-house expertise, BTIM partners with leading global and domestic investment managers.
Performance as at 30 June 2016For actual performance of your account in BT Super for Life, for the year ended 30 June 2016, please refer to your Annual Statement which was issued to you in August 2016. For more recent performance information, you may access this at our website at bt.com.au or call BT Customer Relations on 1300 653 553, Monday to Friday 8.00am to 6.30pm (Sydney time).
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The following investment options have a holding of 5% or more in any one asset and the details of that holding at August 2016 are shown below. Investment options that do not have holdings exceeding 5% are not shown.
Investments exceeding 5%
Investment Option APIR Code Direct Asset % Indirect Asset %BT Super for Life - Super Cash - Savings
BTA0297AU BT Medium Term Income Fund
100% ME BANK 90 DAYS 11AM 85 BPS 10.95%NAB 366 DAYS 11AM 16.97%NCD - BANK OF QUEENSLAND 12.55%NCD - COMMONWEALTH BANK OF AUS 9.54%NCD - COMMONWEALTH BANK OF AUS 7.42%NCD - SUNCORP METWAY LTD 5.36%
BT Super for Life - Conservative Fund - Savings
BTA0294AU BT Sustainable Conservative Fund
98.02% BT Institutional Liquidity Management Trust 37.78%BT Wholesale Australian Sustainable Share Fund 24.90%
BT Super for Life - Moderate Fund - Savings
BTA0296AU BT Sustainable Balanced Fund
100% AMP W/S Responsible Leaders Intl Share Fund 20.94%
BT Institutional Liquidity Management Trust 12.56%BT Wholesale Australian Sustainable Share Fund
37.69%
BT Super for Life - Growth Fund - Savings
BTA0295AU BT Classic Investment Funds - BT Split Growth Fund
100% BT Dynamic Global Equity Fund 11.95%BT Institutional Core Australian Share Sector Trust
19.68%
BT Institutional Core Global Share Sector Trust 53.48%BT Wholesale Core Hedged Global Share Fund 7.85%
BT Super for Life - 1940s Lifestage Fund - Savings
BTA0288AU 1940's Lifestage Fund - A
100% Accumulator 94%
Protector 6%
BT Super for Life - 1950s Lifestage Fund - Savings
BTA0289AU 1950's Lifestage Fund - A
100% Accumulator 78%Protector 22%
BT Super for Life - 1960s Lifestage Fund - Savings
BTA0290AU 1960’s Lifestage Fund - A
100% Accumulator 63%Protector 37%
BT Super for Life - 1970s Lifestage Fund - Savings
BTA0291AU 1970's Lifestage Fund - A
Accumulator 92%100% Protector 8%
BT Super for Life - 1980s Lifestage Fund - Savings
BTA0292AU 1980's Lifestage Fund - A
100% Accumulator 96%Protector 4%
BT Super for Life - 1990s Lifestage Fund - Savings
BTA0293AU 1990's Lifestage Fund - A
100% Accumulator 96%Protector 4%
BT Super for Life - 2000s Lifestage Fund - Savings
BTA0442AU 2000's Lifestage Fund - A
100% Accumulator 96%Protector 4%
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Investment Option APIR Code Direct Asset % Indirect Asset %BT Super for Life - Super Cash - Retirement
BTA0286AU BT Medium Term Income Fund
100% ME BANK 90 DAYS 11AM 85 BPS 10.95%NAB 366 DAYS 11AM 16.97%NCD - BANK OF QUEENSLAND 12.55%NCD - COMMONWEALTH BANK OF AUS 9.54%NCD - COMMONWEALTH BANK OF AUS 7.42%NCD - SUNCORP METWAY LTD 5.36%
BT Super for Life - Conservative Fund - Retirement
BTA0283AU BT Sustainable Conservative Fund
97.53% BT Institutional Liquidity Management Trust 37.78%BT Wholesale Australian Sustainable Share Fund
24.90%
BT Super for Life - Moderate Fund - Retirement
BTA0285AU BT Sustainable Balanced Fund
99.80% AMP W/S Responsible Leaders Intl Share Fund
20.94%
BT Institutional Liquidity Management Trust 12.56%BT Wholesale Australian Sustainable Share Fund
37.69%
BT Super for Life - Growth Fund - Retirement
BTA0284AU BT Classic Investment Funds - BT Split Growth Fund
99.94% BT Dynamic Global Equity Fund 11.95%BT Institutional Core Global Share Sector Trust
53.48%
BT Institutional Core Australian Share Sector Trust
19.68%
BT Wholesale Core Hedged Global Share Fund
7.85%
BT Super for Life - 1940s Lifestage Fund - Retirement
BTA0281AU 1940's Lifestage Fund - B
100% Protector 93%Accumulator 7%
BT Super for Life - 1950s Lifestage Fund - Retirement
BTA0282AU 1950's Lifestage Fund - B
100% Protector 62%Accumulator 38%
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Temporary residentsA temporary resident is a holder of a temporary visa under the Migration Act 1958.
From 1 April 2009, if you are, or were, a temporary resident and are not an Australian citizen, New Zealand citizen or permanent resident of Australia, or a holder of a retirement visa (Subclass 405 or 410), you can generally only access your preserved super benefits if you become permanently incapacitated, have a terminal medical condition, or have departed Australia permanently and your visa has ceased, or your beneficiaries may access your benefits if you die. You may also be able to access your benefit if you satisfied another condition of release under superannuation law before 1 April 2009.
The Australian Government also requires us to pay temporary residents’ unclaimed super to the ATO after at least six months have passed since the later of:
> the date a temporary resident’s visa ceased to be in effect; and
> the date a temporary resident permanently left Australia.
Applications to claim your benefit can be made using the ATO Departing Australia Superannuation Payment (‘DASP’) online application system. To access this system and full information regarding DASP procedures and current tax rates visit ato.gov.au.
We are permitted under, and rely on, ASIC relief under Class Order CO 09/437 to not notify or provide an exit statement to a non-resident in circumstances where we pay unclaimed superannuation to the ATO under Division 3 of Part 3A of the Superannuation (Unclaimed Money and Lost Members) Act 1999.
Non-residents have the right to make an application to the Commissioner of Taxation to claim unclaimed superannuation under Division 4 of Part 3A of the Superannuation (Unclaimed Money and Lost Members) Act 1999.
Eligible Rollover FundCurrently your benefit may be transferred to an Eligible Rollover Fund (‘ERF’) in the following circumstances:
> If you request to transfer your benefit to another fund and that request cannot be processed due to insufficient information or the other fund returns the money to BT Super for Life because they have been unable to process the request;
> If circumstances under ‘Cooling-off’ apply;
> In any other circumstances permitted under superannuation law.
The ERF currently selected for BT Super for Life is:
Super Trace Eligible Rollover Fund Locked Bag 5429 Parramatta NSW 2124
If your benefit is transferred to Super Trace:
> you will cease to be a BT Super for Life account holder and any insurance cover provided will also cease on the date of transfer or at the end of the continuation period that may apply, if later;
> you will need to contact the Super Trace Administrator on 1300 788 750 in order to claim your benefit back or deal with your benefit;
> you will not be able to make contributions to the ERF;
> you will not have investment choice – the Trustee of the ERF will nominate the investment strategy that will apply;
> the ERF will normally ensure that your benefits will not be eroded by administration fees and charges, however, other fees may apply. Please refer to the ERF’s product disclosure statement for more information.
Other important information
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Complaints resolutionComplaints resolution is a priority for us. If you have any concerns or complaints with the financial products or services we provide, please contact us and we will do our best to resolve it quickly and fairly through our internal dispute resolution process.
As a first step, please contact us by calling BT Customer Relations on 1300 653 553. Alternatively, you can contact us at: [email protected].
We will let you know that we have received your complaint and a Complaints Officer will work with you to try to resolve your complaint within 30 days of receipt.
If you are not satisfied with our response, or have not received a response within 90 days, you can refer your complaint externally by contacting the Superannuation Complaints Tribunal (Tribunal) by calling 1300 884 114 or writing to Locked Bag 3060, GPO Melbourne VIC 3001. The Tribunal is an independent body established by the government to help members of superannuation funds resolve complaints. The Tribunal will attempt to resolve your complaint through conciliation, helping you and the Trustee to reach an agreement. If your dispute cannot be resolved through conciliation, the Tribunal may ask for submissions and make a binding determination.
Superannuation Contributions SurchargeIf you are liable for superannuation contribution surcharge the amount will be deducted from your account.
Indemnity insuranceThe Trustee is indemnified by a policy of insurance in respect of its duties as Trustee of the Plan.
ReservesBT Super for Life does not maintain any reserves.
Financial informationAs permitted under the Corporations Act, audited fund accounts and the auditor’s report have not been included with this Annual Report. Copies of complete audited financial statements and the auditor’s report will be available from
BT Funds Management Limited Level 20, 275 Kent Street Sydney NSW 2000
or by calling BT Customer Relations on 1300 653 553, Monday to Friday 8.00am to 6.30pm (Sydney time).
CommitteesThe Board delegated committees are:
> Board Audit, Risk and Compliance Committee;
> Board Investment Committee;
Further informationYou are welcome to call us at any time if you have any questions regarding this report or require further information about BT Super for Life. Details of how we can be contacted are at the end of this report.
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Financial information
BT Super for Life
Statement of net assets as at 30 June 2016
As at30 June 2016 30 June 2015
$000 $000
AssetsInvestmentsCash and cash equivalents 162,369 163,594Margin accounts - -Derivatives 156 -Term deposits - -Equity securities - -Fixed interest securities - -Unlisted unit trusts 14,688,914 10,003,874Life policies 825,281 748,069
15,676,720 10,915,537Other assetsReceivables 841,986 525,568Other assets - -Tax refund due - -Deferred tax asset 40,136 -
882,122 525,568
Total Assets 16,558,842 11,441,105
LiabilitiesMargin accounts - -Derivatives liabilities 10,879 31,704Payables 41,913 9,744Income tax payable 145,173 40,316Deferred tax liability - 126,664Total liabilities 197,965 208,428
Net assets available to pay benefits 16,360,877 11,232,677
This annual report contains unaudited abridged financial information for the financial year ended 30 June 2016 in relation to BT Super for Life as part of Retirement Wrap (Fund). The full Retirement Wrap’s audited financial statements and auditor’s report are available on request by contacting 1300 653 553.
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BT Super for Life
Statement of changes in net assets for the year ended 30 June 2016
Year ended30 June 2016 30 June 2015
$000 $000
Net assets available to pay benefits at the beginning of the year
11,232,677 9,529,994
Investment incomeInterest income 930 833Dividend income 43,259 46,118Distribution income 952,823 573,667Changes in the net market value of investments (855,814) 241,028Other investment income 2,278 2,637
143,476 864,283Contributions revenueMember's contributions 112,123 127,372Employers' contributions 958,024 971,964Transfers from other funds 588,225 773,284
1,658,372 1,872,620Other revenueProceeds from insurance policies 22,950 18,314Other revenue 5,990 3,287
28,940 21,601
Benefits paid 930,529 795,904
General administration expensesTrustee's fees 28,969 22,107Adviser fees - -Account keeping fees - -Insurance premiums 20,063 32,512Other expenses 22,212 25,675
71,244 80,294
Changes in net assets before income tax 829,015 1,882,306Income tax expense/(benefit) 114,010 179,623
Changes in net assets after income tax 715,005 1,702,683
Net assets available to pay benefits atthe end of the year
11,947,682 11,232,677
This annual report contains unaudited abridged financial information for the financial year ended 30 June 2016 in relation to BT Super for Life as part of Retirement Wrap (Fund). The full Retirement Wrap’s audited financial statements and auditor’s report are available on request by contacting 1300 653 553.
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bt.com.au [email protected]
1300 653 553 Monday to Friday 8.00am to 6.30pm (Sydney time)
For more information
BTx1456A-1216px
