IAG & NRMA SupeRANNuAtIoN plAN ANNuAl RepoRt Report... · IAG & NRMA Superannuation plan Annual Report ... The IAG sub-plan for current and former employees and ... Taking into account

IAG & NRMASupeRANNuAtIoN plAN

ANNuAl RepoRtFoR the yeAR eNded 30 JuNe 2009

IAG & NRMA Superannuation Pty Limited (ABN 77 000 300 934) is the Trustee of the

IAG & NRMA Superannuation Plan (ABN 58 244 115 920) and the issuer of this Annual Repor t.

Phone: 1300 424 676 or 1300 IAG NRM. GPO Box 4303, Melbourne VIC 3001.

IAG & NRMASuperannuation plan

Annual ReportFor the year ended 30 June 2009

2 IAG & NRMA SupeRANNuAtIoN plAN | AnnuAl RepoRt 2009

IAG & NRMA SupeRANNuAtIoN plAN | AnnuAl RepoRt 2009 3

IAG & NRMA Superannuation Plan 09

About your planThe IAG & NRMA Superannuation Plan (“Plan”) is governed by a legal document called the Trust Deed which adopts a set of governing rules. The Trust Deed and Rules set out your rights and responsibilities as a Plan member, and the rights and responsibilities of IAG, NRMA and the Trustee. If there is any inconsistency between the Trust Deed and Rules and this Annual Report, the Trust Deed and Rules will be the final authority.

In this report, a reference to:

‘IAG’ means a company in the Insurance Australia Group;

‘NRMA’ means the National Roads and Motorists’ Association Limited and its related bodies corporate.

The Plan has two sub-plans, namely:

The IAG sub-plan for current and former employees and officers (and their eligible spouses) of companies in the Insurance Australia Group, and

The NRMA sub-plan for current and former employees and officers (and their eligible spouses) of the National Roads and Motorists’ Association and its related bodies corporate.

Generally, you belong to the accumulation section of the Plan if you joined the Plan after 1 January 1999, or if you have elected to transfer to this section. Otherwise, you belong to the defined benefits section (which has been closed to new members since 1 January 1999). Some members who transferred from the SGIC Staff Superannuation Fund, the RACV Superannuation Fund, the CGU Superannuation Fund or the CGU-VACC Pension Fund are also defined benefit members.

In this Annual Report, unless noted to the contrary all references to accumulation members cover reserved members, retained members, spouse members and retirement income stream members.

If you need more information about the plan…Contact the Trustee, call the IAG & NRMA Helpline on 1300 424 676 or visit the Plan’s website at www.iagnrma.superfacts.com

Be aware that the Trustee cannot provide you with any financial advice. For financial advice regarding superannuation, the selection of an investment option(s) and insurance options, you should speak to a licensed or appropriately authorised financial adviser. You can speak to a financial advisor by calling the IAG & NRMA Helpline on 1300 424 676.

Additional information is available on request from the Helpline:

the Plan’s Trust Deed and Rules

the Plan’s Product Disclosure Statement Plan (PDS)

the Plan’s Retirement Income Streams Product Disclosure Statement (Retirement Income Streams PDS)

the Plan’s Lifetime Pensions Product Disclosure Statement

the Trustee’s Risk Management Strategy and Plan

the Plan’s insurance policy for death and permanent disablement benefits

the Plan’s investment policy statement

extracts from actuarial reports

the latest audited Plan accounts

the Plan’s Privacy Policy Statement

the rules covering the appointment and removal of member representative Trustee directors and the independent Trustee director, and

the Plan’s inquiries and complaints procedures.

There is no charge for this additional information.

If you have a problem…The Plan has a process in place for dealing with enquiries and complaints. Additional dispute resolution is available to members through the Superannuation Complaints Tribunal.

Table of Contents

Section

01 A MeSSAGe FRoM the tRuStee page 05

02 the plAN At A GlANCe page 07

03 youR plAN’S INVeStMeNt page 09peRFoRMANCe

What happened in the investment markets over the last twelve months

Investment markets in more detail

The Plan’s investment strategy and objectives

How the Plan’s assets are managed

Use of derivatives

04 INVeStMeNt INFoRMAtIoN FoR page 13ACCuMulAtIoN MeMbeRS

Your benefit

Your investment purchases units

Recent investment returns

05 youR INVeStMeNt optIoNS page 15IN detAIl

Australian Shares

Shares

Growth

Balanced

Conservative

Cash

06 MeASuRING peRFoRMANCe page 22

Investment performance benchmarks

07 INVeStMeNt INFoRMAtIoN FoR page 23deFINed beNeFIt MeMbeRS

Comparison of rates of return (net and declared)

Members leaving - interim earning rate

08 the plAN’S FINANCIAl poSItIoN page 24

The Plan’s financial position

Statement of change in net assets

Statement of net assets

Sub-plan reporting

09 hoW youR plAN IS MANAGed page 27

The Trustee

Changes to the Trustee over the year

A chance to have your say

Indemnity insurance

Trust deed and rules

Concessional tax treatment

Management assistance

Insurance premiums

Administration fees

10 IF you leAVe the plAN page 29

Receiving your benefit

Eligible Rollover Fund and unclaimed money

Restrictions on when you can get access to your benefits

Preservation of disablement benefits

11 WhAt’S hAppeNING IN SupeR page 32

Co-contributions still valuable despite temporary reduction

Reportable employer superannuation contributions

Reduction in concessional contribution limit

Payment of excess contributions tax

Important – changes to rules on super for temporary residents and former temporary residents Same-sex relationships

12 MoRe INFoRMAtIoN page 34

Resolving disputes and complaints

Superannuation Complaints Tribunal

If you’d like more information

Questions?


A message from the Trustee 01 deAR MeMbeR,

The last two years have been the most difficult in decades for investors and super funds alike. Nevertheless, the Trustee has continued to work to deliver excellent superannuation benefits, services and features to our members.

our commitment to environmentally responsible communicationThis year our Annual Report will be primarily available to members online, reducing the demands of print production and paper usage. Wherever possible, we provide members with communication by email. If you haven’t provided your email address to the Plan, you can do this online by logging into your account, going to the ‘your personal details’ section and updating your details. Don’t forget to submit your changes to ensure they are updated in the system.

Stay with the IAG & NRMA Superannuation plan regardless of who you work forNow, even if you leave your employer, you don’t need to leave the IAG & NRMA Superannuation Plan. You can become a reserved member of the Plan and your current benefits continue unchanged, including your death and total and permanent disablement insurance cover if you have it. Salary Continuance Insurance ceases with cessation of employment.

As a reserved member, the Plan can accept employer contributions from any employer Australia wide. Simply complete a Standard choice form, which you can download from the IAG & NRMA website in the brochure: “When you’re on a good thing… make the most of it”, and give this to your new employer. We have also set up processes to make it easier for employers to contribute to the Plan using Employer SuperPay.

online convenience for your superYou can set up regular contributions from your own bank account into your super using BPAY. Simply log into your account using your member number and PIN, go to the BPAY page and generate your personal BPAY reference number, which you can use every time you make a direct deposit to your account using BPAY.

For convenience, if you have forgotten your PIN to sign into your IAG & NRMA account, you can now reset it online. Just use your member number and follow the prompts.

Remember to keep your personal details and nominated beneficiaries up-to-date. You can check your current details and beneficiaries and update them as you need online – there’s no need to worry about forms. Once you have updated your details, be sure to submit them using the button on the bottom of the page.

Investment performanceAdditional investment information is available to members on the Plan’s website through the Unit prices quick link from the homepage. You can view monthly investment returns, daily unit prices and check the long term movement of each option using the unit price graph.

In the year to 30 June 2009, investment markets experienced a period of extremes, moving from the most severe market downturn in decades over the first eight months to a stellar upswing from March through to the end of the year, which has continued into the current financial year.

The investment returns for the Plan’s investment options (except the Cash option) were all affected by the severe market downturn, delivering negative returns for most options. However, despite a difficult year, all the options other than the Australian Shares and Balanced options outperformed their benchmarks; with the Shares and Conservative options beating their benchmarks by 4.65% and 6.01% respectively for the year.

Taking into account the year’s challenges compounded with the performance of the previous year, when compared with its peers, the IAG & NRMA Superannuation Plan’s performance for the three years to 30 June 2009 was above average for all options bar the Balanced option, the performance of which was in line with the average of its peers.

All the options which have been available to members for five years posted positive compound returns for the five years ending 30 June 2009.

The declared rate of return for defined benefit members was 0.01% for the year ended 30 June 2009.


More retirement options for your superMembers who are looking to ease into their retirement have the option to purchase a transition to retirement income stream within the Plan. These members have a choice of four different investment options: Pension Growth; Pension Balanced; Pension Conservative and Pension Cash. These options have the same objectives and asset allocations as, respectively, the Growth, Balanced, Conservative and Cash options explained in detail in the section headed Your investment options. However, an important difference is that investment returns for assets supporting pensions are not taxed. Call the Helpline for more information or check the website for a copy of the Retirement Income Stream PDS.

listening to our membersWhat you think and understand about your superannuation is of key importance to the Trustee. To give us greater insight and knowledge of our members’ understanding, we are going to undertake an online survey, the Super Sentiment index. All members who have provided their email addresses to the Plan will be invited to participate. From the results we can benchmark our members’ attitudes and understanding against those of working Australians generally. We can also implement this survey in future years, which will allow us to measure improvements in member understanding and other changes.

Any questions?Please take the time to read this Annual Report as it gives you an update on the Plan’s performance and on what’s happening in super generally as well as financial information about the Plan.

If you have any questions about your benefits in the Plan, please contact the: IAG & NRMA Helpline on 1300 424 676 (1300 IAG NRM) or visit the website at www.iagnrma.superfacts.com

You can also contact the Plan Administrator (see the last page for contact details) or any of the Trustee directors (see page 27).

troy Maguire Manager, Superannuation IAG & NRMA Superannuation Pty Limited


The Plan at a glance 02plAN FACtS ANd FIGuReS

plAN MeMbeRShIp AS At 30 JuNe 2009

Accumulation members 9588

Defined benefit members 617

Lifetime Pension members 179

Reserved members 3073

Retirement Income Stream members 45

Net Plan assets as at 30 June 2009 were in excess of $914 million.

INVeStMeNt RetuRNS

The following is a summary of the investment returns for the year as well as the average returns over the last five years.

Accumulation members (excluding retirement income stream members)

INVeStMeNt optIoN

ANNuAl RetuRN¹ FoR the yeAR eNded 30 JuNe 2009 (% p.A.)

CoMpouNd AVeRAGe ANNuAl RAte oF

RetuRN¹ oVeR the lASt FIVe yeARS

(% p.A.)

Australian Shares -18.7 3.12

Shares -15.7 4.3

Growth -10.3 3.3

Balanced -5.2 4.4

Conservative 1.5 4.6

Cash 4.5 5.12

1 This return is the effective rate of net return after taxes and

investment expenses.

2 These options were introduced on 1 July 2005. Therefore, longer

term performance is not available. The average performance figures

shown reflect the average over the four years since inception for

these options.

Note: It is important to understand that while past performance is

useful as a guide in reviewing the historical investment returns, it

should not be relied upon as indicative of future performance and

does not guarantee such performance.

This section provides a brief summary of the operations of the Plan during the year. Further details are set out later in the report.


Accumulation (retirement income stream) members

INVeStMeNt optIoN


CoMpouNd AVeRAGe ANNuAl RAte oF RetuRN¹ SINCe

INCeptIoN (% p.A.)

Pension Growth -11.3 -11.7

Pension Balanced -6.0 -6.6

Pension Conservative 1.5 0.0

Pension Cash 5.1 5.9

1 This return is the effective net rate of return; which is the actual

rate of return after investment expenses (no tax is levied). These

options were introduced on 1 July 2007. Therefore, the longer term

performance is only available since that time.




does not guarantee such performance.

defined benefit members

INVeStMeNt optIoN


CoMpouNd AVeRAGe ANNuAl RAte oF

RetuRN¹ oVeR the lASt FIVe yeARS

(% p.A.)

Credited to member accounts 0.01 8.4

Earned on Plan assets -10.3 8.3

1 This return is the effective rate of net return for accumulation

balances of defined benefit members. The Trustee “smoothes”

annual returns from year to year by averaging the actual returns over

three years and using investment reserves within the Plan.




does not guarantee such performance

Note: Past performance is not an indicator of future performance.

INVeStMeNt MANAGeRS

The Trustee confers with its asset consultant in managing the Plan’s investments and selecting and reviewing the performance of investment managers.


thIS SeCtIoN ApplIeS to All MeMbeRS oF the plAN.

What happened in the investment markets over the last twelve months?Despite delivering some strong gains in the last three months of the 2008/09 financial year, share markets were unable to recover all the ground lost due to the impact of the Global Financial Crisis (GFC) over the previous three quarters. As a result, returns for the year were negative for most ‘growth’ asset classes (shares and property). Indeed, following the failure of some major global financial institutions and extreme chaos in the credit sector during the first quarter of the financial year, several countries or regions, including Europe, Japan and the US, announced that they had officially entered into recession.

In response to the GFC, central banks and governments around the world aggressively cut interest rates and pumped money into their economies through stimulus packages and rescue plans. Government measures paid off during the last quarter of the financial year when economic data showed signs of improvement, consumer confidence increased and share markets began to recover.

In contrast to share markets, the fixed income and cash markets posted positive returns as investors used these asset classes for a “flight to safety”. Both domestic and global bond yields fell sharply (enhancing the value of existing bonds) due to the large rate cuts by central banks and investors’ diminishing appetite for risk. However, since the start of the third quarter, bond yields have been trending upward because of concerns that governments will increase the quantity of bonds issued to fund the massive government spending policies implemented to counteract the GFC.

Asset class returns for the 2008/2009 financial year

H = Hedged UH = Unhedged REIT = Real Estate Investment Trust

Datasource: Thompson Financial Datastream; MSCI. Data provided ‘as is’

03 Your Plan’s Investment performance

10

0

20

30

40

11.5

Ret

urn

(%)

-20.3

25.7

-28.6

3.6

-16.2

16.5

-28.4

10.3

-12.6

15.8

-14.6

-6.2-12.4

16.2

-42.1

30.3

37.5

-1.4

-17.0

-1.3

10.8

0.2

11.5

0.85.5

-40

-50

-30

-20

-10

Australian Shares

Australian Small Caps

Overseas Shares (UH)

Overseas Shares (H)

Overseas Small

Caps (UH)

Emerging Markets

(UH)

Direct Property

Australian REITs

Global REITs (H)

Global Listed Infr.

(UH)

Australian Fixed

Income

GlobalFixed

Income (H)

Cash

June 2009 Quarter 12 Months to June 2009


Key developments during the yearThe main feature of the 2008/09 financial year was the significant change in the global financial landscape including the nationalisation of US mortgage giants, Fannie Mae and Freddie Mac, and the US government’s acquisition of an 80% stake in insurance giant, AIG. In addition, the 100-year-old investment bank, Lehman Brothers filed for bankruptcy and Merrill Lynch was acquired by Bank of America.

The US Federal Government introduced the $US 700 billion Troubled Asset Relief Program (TARP) in October and the $US 800 billion Term Asset-backed Loan Facility (TALF) in November to purchase troubled assets as well as agency and asset-backed debts to provide liquidity into the financial system.

The Reserve Bank of Australia (RBA) commenced its interest rate easing cycle by cutting the official cash rate to 7% per annum during September 2008. This was the first interest rate cut since December 2001. Further rate cuts ensued in the following months and during December the RBA slashed official interest rates to 4.25% making this cycle the most aggressive period of monetary easing since the 1991 recession.

February saw a further rate cut to 3.25% and in April, official interest rates hit a historical low of 3.00% per annum. During June, the RBA noted evidence of the global economy stabilising, improving confidence levels and better liquidity conditions in financial markets, but commented that “scope remains for some further easing of monetary policy, if needed”.

Central banks around the world continued their monetary easing through to the end of the financial year. The US Federal Open Market Committee maintained a Federal Funds target range of 0% to 0.25%.The Bank of Canada and European Central Bank brought their cash rates to 0.25% and 1.0% per annum, respectively. The Reserve Bank of New Zealand also cut rates.

Rounding out the year, US economic data was mixed. The US banking sector delivered some positive news to alleviate market concerns over the sector’s health.

In Australia, economic data were largely on the positive side. Australia managed to avoid a technical recession with first quarter gross domestic product (GDP) increasing by 0.4%, well above market expectations. The month of June saw consumer confidence bounce back, reflected in part by a rise in the number of building approvals. However, unemployment stayed at a five-year high of 5.7% and the trade balance recorded a deficit of A$0.9bn during April.

The price of oil soared up 40.7% in the June quarter to end the financial year at US$69.9/barrel. Gold finished the year at US$926.6/oz slightly up from its value of $921.78/oz as at 30 June 2008.

Australian sharesThe Australian share market recorded another massive loss in the 2008/09 financial year after a significant decline in the previous year. The GFC took a heavy toll in the domestic market over the September and December quarters, with the S&P/ASX 300 index returning -10.7% and -18.5% respectively in those quarters. Aggressive monetary easing policy coupled with announcements of generous stimulus packages, both in Australia and around the world, helped local markets stabilise in March, reflected by a strong quarterly return in June (+11.5%). In total, the S&P/ASX 300 index returned -20.3% for the financial year.

overseas sharesOverseas share markets underperformed the domestic market, with the MSCI World ex Australia Index returning -26.6% in local dollar terms over the year. The sharp depreciation of the Australian dollar against most major currencies resulted in a fully hedged investor seeing a return of -16.2%. Europe (-25.9% in local currency and -22.3% in A$) was the worst performing region.

Most major developed countries saw -20% to -30% returns in local dollar terms for the whole year, with Japan (-30.0% in local currency) and Italy (-31.1% in local currency) being the hardest hit.

propertyThe worst effect of the GFC on the Australian market was seen in the REITs/listed property market, with the S&P/ASX300 Property Index returning -42.1% for the year. Direct Property (Mercer Unlisted Property Index) returned 0.0% for the year. Global property also saw massive selloff. The UBS Global Investors Hedged Index returned -42.5% over 12 months.

Fixed income and cashThe Reserve Bank of Australia slashed interest rates aggressively from 7.25% to a historical low of 3.00%, with a 2.75% rate cut in total occurring in the December quarter 2008. The September and December quarters witnessed the Australian bond market rally strongly as bond yields declined sharply and risk averse investors sought a ‘flight to quality’. The March and June quarters saw the domestic bond market first stabilise and then sell off with bond yields soaring up in the midst of record amounts of government spending and the market found resumed risk appetite as equity markets recovered. The UBSA Composite Bond index (All Maturities) delivered a positive return of 10.8% for the year.

Currency marketsDuring the year, the Australian dollar depreciated against most major currencies. The local currency returned -15.8% against the US dollar, -23.3% against the Yen and -5.4% against the Euro but appreciated 1.8% against the Pound. The local dollar returned -11.9% on a trade weighted basis.


INVeStMeNt peRFoRMANCe CoMpARISoN

The Plan’s investment performance is regularly monitored against that of its peers. Accumulation members can select the investment options in which their member account balances are invested. The options are compared and ranked against the Rainmaker SelectingSuper benchmark indices, which compare the performance of investment options across super funds. Each benchmark index is determined by compiling a comprehensive analysis of actual superannuation and retirement fund performance.

For 2008/09, all of the Plan’s options except Australian Shares and Balanced outperformed their peer benchmarks, with the Shares and Conservative options outperforming by over 4% and 6% respectively. Both the Shares and Conservative options were also in the top quartile compared to their peers over three years while the Shares option was also in the top quartile over five years.

These comparisons are after deduction of all fees and taxes.

the plAN’S INVeStMeNt StRAteGy ANd obJeCtIVeS

For each investment option, the Trustee has set an investment strategy and objectives. Please note that the objectives are not a forecast or guarantee of future performance.

The Trustee regularly monitors each investment option’s performance against its objectives. There are different levels of investment risk associated with each of the Plan’s investment options. Please refer to the Plan PDS or the Retirement Income Streams PDS for more information. You can obtain a copy by calling the IAG & NRMA Helpline on 1300 424 676 or you can download a copy from the Plan’s website, www.iagnrma.superfacts.com

Although the Plan offers investment choice for accumulation members and members receiving retirement income streams, the Trustee retains overall responsibility for the investment of the assets of the various options in line with their specific investment objectives. Accumulation members and members receiving retirement income streams can choose the investment option/s that suit their individual needs and preferences.

hoW the plAN’S INVeStMeNtS ARe MANAGed

Specialist investment managers appointed by the Trustee invest in securities such as Australian and overseas shares, listed property trusts, fixed interest securities, cash and short-term securities or any other investments in line with their appointment. This can be done directly or through trusts. Where the investment is through a trust, the list opposite includes the underlying managers.

The Trustee, through its asset consultants, monitors the activities and performance of all the external managers.

During the year, the Australian listed property portfolio managed by Goldman Sachs JB Were was terminated and replaced by an investment in the Invesco Wholesale Global Property Securities Fund.


hoW the plAN’S ASSetS ARe INVeSted

This table shows the proportion of Plan’s assets invested with each investment manager by asset class.

proportion of total assets as at 30 June

ASSet ClASS

INVeStMeNt MANAGeR 30 JuNe 2009 (%)

30 JuNe 2008 (%)

Cash IAGAM Cash Management Trust1

6.83 0.00

IAGAM CashPlus Trust1 0.00 6.83

JP Morgan 1.57 0.00

Sub-total 8.40 6.83

Fixed interest

IAGAM Fixed Interest Trust23.44 23.94

Sub-total 23.44 23.94

Australian shares

Northward Capital (ex IAGAM Research Fund)2

14.94 13.47

Orion Asset Management 3.46 3.90

BT Investment Management2 13.08 9.78

MIR –Investment Management2

5.08 6.88

Cooper Investors 3.01 3.36

Sub-total 39.57 37.39

Overseas shares

IAGAM World Equity Trust3

17.65 22.12

IAGAM Private Equity Trust4 0.99 1.65

IAGAM Sustainable Investments Trust

0.82 0.00

Generation IM Global Equity 2.07 0.00

Sub-total 21.53 23.77

Listed property

Perennial Investment Partners5

4.28 4.05

Invesco Global Property 2.78 0.00

Goldman Sachs JBWere5 0.00 4.02

Sub-total 7.06 8.07

total 100.00 100.00

Notes:

1. The IAGAM CashPlus Trust was closed down during the year.

2. Investment manager engaged by the Trustee to select and manage an

investment portfolio across a range of Australian equities investments.

3. IAGAM has appointed specialist international share managers

to manage assets of the World Equity Trust. These managers are:

AllianceBernstein, Arrowstreet Capital and T. Rowe Price Global

Equity Fund.

4. Horsley Bridge Partners has been appointed to manage the assets

of the Private Equity Trust.

5. Investment managers engaged by the Trustee to select and manage

an investment portfolio across a range of listed property investments.

6. Alternative investments were included in Overseas shares in the

2008 Annual Report.

large assets of the planThe IAGAM Cash Management Trust, the IAGAM World Equity Trust and the IAGAM Fixed Interest Trust each held more than 5% of the Plan’s assets at 30 June 2009. While BT Investment Management, MIR Investment Management and Northward Capital each manage more than 5% of the Plan’s assets, no individual underlying investment comprises more than 5% of the Plan’s total assets.

use of derivativesDerivatives are special contracts – e.g. futures and forward exchange rate agreements – which can be used to manage the risk of changes in the future value of investments. Investment managers are permitted to use derivatives in the management of the Plan assets. Derivatives are typically used for the following purposes:

Hedging - seeking to protect against adverse changes in the market value of assets and movements in currency exchange rates

to obtain prices that may not be available if assets are bought directly

to reduce the costs of buying and selling assets directly

to change the term of a fixed interest security

to manage cash flows efficiently

to manage asset weighting for the different asset classes.

derivatives may not be used for speculative purposes.The Plan held derivatives during the year ended 30 June 2009 in respect of its Australian shares, overseas shares and fixed interest investments. The Plan’s exposure to derivatives is limited to 20% of the market value of the assets of the Plan. Within each asset class, exposure to derivatives is limited to 20% of the market value of the asset class. The Plan also holds derivatives to hedge part of the currency exposure in relation to its investment in international shares. Derivatives are not used for speculative purposes.


youR beNeFIt

Your super benefit is your member account balance. Your member account is invested (after allowing for tax and expenses) according to your choice of investment option(s). So the amount you ultimately receive is directly linked to the investment performance of your selected option or mix of options.

youR INVeStMeNt puRChASeS uNItS

Your member account balance is applied to buy what are known as ‘units’ in your chosen investment option(s). The number of units bought depends on the unit price at the relevant time. For example, if your account balance is $1,000 and the unit price of your selected investment option is $1.00 at that time, then 1,000 units would be bought on your behalf.

Unit prices are generally calculated daily and fluctuate according to the investment performance of that investment option (i.e. the unit price for each option will reflect the value of the option’s underlying investments after making provision for tax on those investments and investment management fees and other fees).

The price of these units will go up and down as investment markets shift, affecting the value of your units and consequently the value of your investment. The value of your account balance at any time is simply the number of units you have multiplied by their unit price at that time.

Net returns on your chosen investment options (which may be positive or negative) will be reflected via changes in unit prices. If the net returns for the option are positive, the unit price will increase. If the net investment returns are negative (a loss), the unit price will decrease.

The effective rate of net returns for a given period can therefore be determined by the proportionate increase (if a positive return) or decrease (if a negative return) in the unit prices from the start to the end of the period. Daily unit prices are posted on the Plan’s website.

04 Investment information for accumulation members


ReCeNt INVeStMeNt RetuRNS

Accumulation members*The following table shows the relevant returns for each investment option for the year ended 30 June and the average returns for the past five years. The annual effective rate of net return is the actual earnings less associated taxes and investment expenses. However, you should note that for the year ended 30 June 2005, these taxes and expenses were only partially deducted due to an unintentional oversight. As a result, the total return over the 2005 year, for each option, was approximately 1.2% higher than it would have been if the taxes and expenses had been fully deducted.

The returns for all options other than the Cash and Conservative options were negative over the year. However despite the negative returns, the compound returns for five years are all positive, showing that, while there has been considerable variation in individual years over this time, the longer term return is usually a better indication of performance.

It is important to understand that past performance, for each investment portfolio option, should not be relied upon as indicative of future performance and does not guarantee such performance.

Each option bears a different level of risk, depending on the mix of asset classes that make up the portfolio. More information about the associated risks and allocation of asset classes for each option are detailed on the following pages of this report.

*For Retirement Income Stream Members – investment returns are untaxed – see further below.

Investment option effective rate of net earnings (% p.a.) Average compound rate of net return over the past five years (% p.a.) 2005-2009year ended 30 June 2005 2006 2007 2008 2009

Australian Shares1 n/a 23.0 24.2 -8.9 -18.7 3.1¹

Shares 16.9 22.0 18.7 -13.5 -15.7 4.3

Growth 12.4 15.6 13.8 -11.3 -10.3 3.3

balanced 11.3 12.1 11.7 -6.3 -5.2 4.4

Conservative 7.8 7.7 7.6 -1.5 1.5 4.6

Cash1 n/a 4.6 5.4 6.0 4.5 5.1¹

1 These options were introduced on 1 July 2005. Therefore, longer term performance is not available. The average performance figure is for the

four years since the options’ inception.

Investment returns for an investment option may be positive or negative. The value of your investment depends on the performance of your

chosen option(s).

Retirement Income Stream membersThe following table shows the relevant returns for each pension investment option available to retirement income stream members for the years ended 30 June 2008 and 2009 plus the average over the two years since the options were established.

It is important to understand that past performance for each investment portfolio option should not be relied upon as indicative of future performance and does not guarantee such performance.

Each option bears a different level of risk, depending on the mix of asset classes that make up the portfolio. More information about the associated risks and allocation of asset classes for each option are detailed on the following pages of this report.

INVeStMeNt optIoN eFFeCtIVe RAte oF Net RetuRN to

30 JuNe 2008 (% p.A.)

eFFeCtIVe RAte oF Net RetuRN to

30 JuNe 2009 (% p.A.)

AVeRAGe CoMpouNd RAte oF Net RetuRN oVeR the pASt

tWo yeARS (% p.A.) 2008-2009

Pension Growth -12.1 -11.3 -11.7

Pension Balanced -7.1 -6.0 -6.6

Pension Conservative -1.4 1.5 0.0

Pension Cash 6.7 5.1 5.9

Investment returns for an investment option may be positive or negative. The value of your investment depends on the performance of your chosen option(s).


INFoRMAtIoN IN thIS SeCtIoN ApplIeS to ACCuMulAtIoN MeMbeRS

you choose how your member account balance is invested. Choosing an investment option that suits your investment needs and timeframe could make a material difference to the size of your final account balance.

Each of the Plan’s options has a specific investment objective and strategy set by the Trustee. The objectives are not a forecast or guarantee of future performance. Each option has a different risk profile and the Trustee’s aim is to achieve the best possible returns relative to the level of risk associated with investing in that option.

Be aware that the investment returns for any option may be positive or negative, depending on volatility of investment markets and the performance of the underlying asset classes.

The performance of each asset type is measured against a benchmark set by the Trustee who reviews this performance regularly.

Your future contributions and existing balances can be respectively split across any number of the options in any whole percentages to total 100%. There is no restriction on the number of switches you can make in a year and you may change your investment options at any time. You won’t be charged any fees for switching your investment options. If you do not make an investment choice, your super will be invested in the Growth Option, as the default option.

The target asset allocation for each of the Plan’s investment options reflects its particular risk and return characteristics. The higher the proportion of growth assets included (such as shares and property), the greater the potential for higher returns but also the higher the associated risk.

The target asset allocation for each option is the proportion of that option that would ideally be invested in each asset class if the Trustee had no particular view that one asset class was likely to outperform any other asset class. However, within the ranges specified in this Annual Report, the Trustee may decide to invest more than the target allocation in an asset class it expects to outperform and less in one expects to underperform.

The aim is to maintain the asset allocations for each investment option within the target ranges stated in this Annual Report. Nevertheless, from time to time, market movements and/or cash flows into or out of an option may cause the actual allocation temporarily to fall outside the target ranges. This will normally be addressed at the next available rebalancing opportunity.

05 Your investment options in detail


optIoN 1 – AuStRAlIAN ShAReS

StrategyAims to invest 100% of assets in Australian shares.

Investment objectiveThis option aims to achieve a rate of return (net of fees but before tax) that outperforms the S&P/ASX 200 Accumulation Index over rolling 3 year periods.

level of risk - highLikelihood of a loss in any one year period is approximately 2 in 7.

Because shares are market driven investments which respond quickly to changes in market conditions, shares are highly volatile and investors can expect performance to show periods of significantly high growth, as well as periods of poor or even negative returns. Over a longer period of time, shares generally can be expected to produce higher returns than any other asset class.

The performance of the Australian Shares Option is measured against a benchmark portfolio, which consists of the target asset allocation as shown below. Each asset class within the benchmark portfolio is assumed to earn investment returns based on an appropriate index as shown in the table on page 22.

tARGet ASSet AlloCAtIoN beNChMARK RANGe

Australian shares 100% 90-100%

Cash 0% 0-5%

* Member investment transactions which occurred in June 2009

resulted in this option being above the target range for cash as at 30

June. This position was rectified during July.

As at 30 June 2009, the Australian Shares Option had investment assets of $23.5M

Recent investment returnsThe annual effective rate of net return (i.e. actual investment returns less tax and expenses) for the year ended 30 June for the past four years was:

peRIod eNdING 30 JuNe RAte oF RetuRN (% p.A.)

2006 23.0

2007 24.2

2008 -8.9

2009 -18.7

Compound average effective net rate of return since inception (1 July 2005)

3.1


Australian Shares: 86.8%

Cash: 13.2%


optIoN 2 - ShAReS

StrategyAims to invest in a mix of Australian and overseas shares. By sharing the asset allocation, this portfolio is not completely exposed to either Australian or overseas market forces, giving the advantage of some diversification.

Investment objectiveThis option aims to achieve a rate of return (net of fees & tax) of at least 5.0% p.a. above inflation (as measured by the Consumer Price Index) over rolling 10 year periods.

level of risk - highLikelihood of a loss in any one year period is approximately 1 in 4.

Because shares are market driven investments which respond quickly to changes in market conditions, shares are highly volatile and investors can expect performance to show periods of significantly high growth, as well as periods of poor or even negative returns. Over a longer period of time, shares generally can be expected to produce higher returns than any other asset class. Exposure to overseas shares means that there is also a currency risk.

The performance of the Shares Option is measured against a benchmark portfolio, which consists of the target asset allocation as shown below. Each asset class within the benchmark portfolio is assumed to earn investment returns based on an appropriate index as shown in the table on page 22.


Australian Shares 65% 55-75%

Overseas Shares 35% 25-45%

Cash 0% 0-5%

The asset consultant may vary the actual asset allocation at any time either up or down within the above ranges.

Where the assets were invested as at 30 June 2009

* Member investment transactions which occurred in June 2009

resulted in this option being above the target range for cash as at 30

June. This position was rectified during July.

As at 30 June 2009, the Shares Option had investment assets of $62.1M.

Recent investment returnsThe annual effective rate of net return (i.e. actual investment returns less tax and expenses) for the year ended 30 June for the last five years were:


2005 16.9

2006 22.0

2007 18.7

2008 -13.5

2009 -15.7

Five year compound average effective net rate of return

4.3



Overseas Shares: 32%

Cash: 5.6%


optIoN 3 - GRoWth (deFAult optIoN)

StrategyAims to invest the majority (70%), in growth assets such as Australian and overseas shares and listed property trusts, and the remaining (30%) in less volatile assets such as fixed interest and cash.


level of risk – medium to high Likelihood of a loss in any one year period is approximately 1 in 5.

While a large portion of the assets is invested in the more volatile share markets, this is partially offset by the stability of the fixed interest and cash components of the portfolio. For this reason, the Growth Option can be expected to show some fluctuation from year to year, however this fluctuation is not expected to be as great as for the Australian Shares and the Shares options.

The Growth Option is also the default option. This means that this option will apply to your superannuation investment if you do not choose an investment option.

The Trustee has chosen the Growth Option as the default option because the Trustee views superannuation as a long-term investment. However, it’s important that you individually assess your own situation and retirement planning strategy (for example, if you are near to retirement age), as the default option may not be appropriate for you. You are encouraged to make your own choice between the available options.

The performance of the Growth Option is measured against a benchmark portfolio, which consists of the target asset allocation shown below. Each asset class within the benchmark portfolio is assumed to earn investment returns based on an appropriate index as shown in the table on page 22.




Listed Property 10% 0-20%

Fixed Interest 25% 10-40%

Cash 5% 0-20%



As at 30 June 2009, the Growth Option had investment assets of $671.2M. This includes the assets in respect of defined benefit members as explained on page 23.

Recent investment returns for Growth (see page 14 for pension Growth)The annual effective rate of net return (i.e. actual investment returns less tax and expenses) for the year ended 30 June for the last five years were:


2005 12.4

2006 15.6

2007 13.8

2008 -11.3

2009 -10.3


3.3



Overseas Shares: 25.1%

Listed Property Trusts: 8.3%

Fixed Interest: 24.7%

Cash: 3.0%


optIoN 4 – bAlANCed

StrategyAims to have 50% of the portfolio in growth assets, which will participate in the higher returns expected from shares, but will be cushioned from the associated high volatility by an equal allocation (50%) to defensive assets.

Investment objectiveThis option aims to achieve a rate of return (net of fees & tax) of a least 3.0% p.a. above inflation (as measured by the Consumer Price Index) over rolling 5 year periods.

Level of risk - medium

Likelihood of a loss in any one year period is approximately 1 in 6.

With greater levels of diversification and reduced risk, this portfolio is not expected to experience as high a level of year-on-year volatility in investment returns as the Australian Shares; Shares or Growth options. The performance of the Balanced Option is measured against a benchmark portfolio, which consists of the target asset allocation as shown below.

Each asset class within the benchmark portfolio is assumed to earn investment returns based on an appropriate index as shown in the table on page 22.


Australian Shares 27.5% 17.5-37.5%


Listed Property 7.5% 0-15%


Cash 15% 0-30%


Where the assets were invested as at 30 June 2009:

As at 30 June 2009, the Balanced Option had investment assets of $66.4M.

Recent investment returns for balanced (see page 14 for pension balanced)The annual effective rate of net return (i.e. actual investment returns less tax and expenses) for the year ended 30 June for the last five years were:


2005 11.3

2006 12.1

2007 11.7

2008 -6.3

2009 -5.2


4.4






Cash: 16.2%


optIoN 5 – CoNSeRVAtIVe

StrategyInvests mainly in fixed interest, inflation linked bonds and cash, which are stable investments producing a more predictable return that can be expected to be lower than those of Australian Shares; Shares; Growth and Balanced options in the longer term. The growth component of this portfolio is achieved by a relatively small investment in shares and property.


level of risk – medium to lowLikelihood of a loss in any one year period is approximately 1 in 12.

Investment returns are expected to remain more stable in the short-term than the returns of the all the other options except the Cash Option.

The performance of the Conservative Option is measured against a benchmark portfolio, which consists of the target asset allocation as shown below. Each asset class within the benchmark portfolio is assumed to earn investment returns based on an appropriate index as shown in the table on page 22.




Listed Property 5% 0-10%


Cash 30% 5-55%



As at 30 June 2009, the Conservative Option had investment assets of $32.4M.

Recent investment returns for Conservative (see page 14 for pension Conservative)The annual effective rate of net return (i.e. actual investment returns less tax and expenses) for the year ended 30 June for the last five years were:


2005 7.8

2006 7.7

2007 7.6

2008 -1.5

2009 1.5


4.6






Cash: 24.6%


optIoN 6 – CASh

StrategyInvests solely in cash, which includes deposits in banks, bills of exchange, promissory notes and other short term securities. Cash is the most stable investment with virtually no risk of negative returns over the short term. However, the long term performance of cash is historically lower compared with the other investment options available under the Plan, particularly during periods of high inflation.

Investment objectiveThis option aims to provide capital stability and capital preservation, and match or slightly outperform the cash benchmark as measured by the UBS Bank Bill Index.

level of risk – lowLikelihood of a loss in any 1 year period is close to nil.

Investment returns are expected to remain more stable in the short term. As this option is invested only in cash, its performance will be measured by the UBS Bank Bill Index, which is the index for cash.


Cash 100% 100%

Where the assets were invested as at 30 June 2009:

As at 30 June 2009, the Cash Option had investment assets of $47.4M.

Recent investment returns for Cash (see page 14 for pension Cash)The annual effective rate of net return (i.e. actual investment returns less tax and expenses) for the year ended 30 June for the past four years was:


2006 4.6

2007 5.4

2008 6.0

2009 4.5

Compound average effective net rate of return since inception (1 July 2005)

5.1


Cash: 100%


Measuring Performance06 The investments are reviewed regularly to monitor how they are performing against investment objectives. Below are the benchmarks used by the Trustee to measure the performance of each asset class. For the asset classes the Trustee invests in, these performance benchmarks are:

ASSet ClASS beNChMARK

Australian Shares Composite S&P/ASX Accumulation Index *

International Shares MSCI World ex Australia Accumulation Index (50% hedged; 50% unhedged)

Private Equity MSCI World ex Australia Index (unhedged)

Listed Property 60% of the S&P/ASX200 A-REIT Accumulation Index and 40% of the FTSE EPRA/NAREIT Global REIT Index (net dividends reinvested) hedged to AUD

Fixed Interest UBS Australia Composite Bonds Index (all maturities)

Alternatives UBS Australia Bank Bill Index

Cash UBS Australian Bank Bill Index

* A composite of the managers’ benchmarks is used. These benchmarks are the S&P/ASX 200 Accumulation Index, the S&P/ASX 300

Accumulation Index, the S&P/ASX 200 Accumulation Index (ex LPTs ex IAG) and the S&P/ASX 300 Accumulation Index (ex LPTs ex IAG).

The comparison of the investment performance of the Plan against the benchmarks is regularly reported in the newsletters distributed by the Trustee each year.


INFoRMAtIoN IN thIS SeCtIoN ApplIeS to deFINed beNeFIt MeMbeRS

Some of your benefits may be based on your account balances in the Plan. Accumulation balances of defined benefit members were credited with a declared earning rate of 0.01% per annum for the year ended 30 June 2009. The earning rate historically reflects the performance of the Growth Option* averaged over the last three years in accordance with the Trustee’s approach of “smoothing” returns, however, given recent performance the Trustee has elected to place a floor under the earning rate for the year to 30 June 2009. As a result, the declared earning rate is higher than the rate that would have reflected the performance of the last 3 years.

Comparison of annual effective rates of net return and declared rates 2005 – 2009The Plan’s annual effective rate of net investment returns (i.e. actual investment returns less tax and expenses) and declared earning rates since 2005 for accumulation balances of defined benefit members are as follows:

yeAR eNded 30 JuNe

eFFeCtIVe RAte oF RetuRN (% p.A.)

deClARed eARNING RAte (% p.A.)

2005 12.4 8.5

2006 15.6 13.9

2007 13.8 14.0

2008 -11.3 6.0

2009 -10.3 0.01

Five year average rate of return

3.3 8.4

Note: past performance is not an indicator of future performance

deFINed beNeFIt MeMbeRS leAVING duRING the yeAR

For defined benefit members leaving the Plan during the year, before a final earning rate is available, benefits are calculated using an interim rate. The Trustee sets interim rates each quarter. The interim rates have historically been based partly on the recent actual investment performance of the Growth Option* and partly on an assumed rate based on the ten year Government Bond Rate (less a 10% allowance for tax) as explained below.

The interim rate applying from 1 July 2009 to 30 September 2009 is based on:

the actual investment performance for the two year period from 1 July 2007 to 30 June 2009, and

an assumed rate for the one year to 30 June 2010.

On 30 September 2009, the Trustee recalculates the interim rate based on:

the actual investment performance for the two years and three months period to 30 September 2009, and

an assumed rate for the nine months to 30 June 2010 and so on for each subsequent quarter.

For the year ending 30 June 2009, the interim rates were calculated on a similar basis, however, the Trustee has applied a minimum earning rate of 0.01% p.a.

*Further details of the investment performance, investment objective

and strategy of the Growth Option are set out on page 18.

07 Investment information for defined benefit members


the plAN’S FINANCIAl poSItIoN

The Plan consists of separate sub-plans for IAG and NRMA. Each sub-plan holds a segregated pool of assets which provides for the benefits of the members of each sub-plan.

The Plan’s actuary determines how much each employer needs to contribute to ensure that the respective sub-plans have sufficient assets to pay defined benefit entitlements in the future. The required level of employer contributions will vary over time depending on how the value of defined benefit members’ entitlements compares with the assets in each sub-plan.

For the IAG sub-plan, the market value of the sub-plan’s assets as at 30 June 2009 covered 97.6% of the value of benefits that would have been paid to members if all members had left employment on that day. For the NRMA sub-plan the corresponding percentage coverage was 96.9%. A percentage coverage of less than 100% means that both sub-plans were in what is known as an “unsatisfactory financial position” within the meaning of superannuation law. This is a situation common to most defined benefit superannuation funds in Australia at the present time. In order to restore the financial position to a satisfactory level, both employers have increased their contributions to the Plan.

As required by superannuation law, this situation has been notified to the Australian Prudential Regulation Authority (APRA), which is the prudential regulator of superannuation funds. The Trustee, together with the Plan’s Actuary, continues to carefully monitor the Plan’s financial position on an ongoing basis.

The Trustee confirms that employer contributions have been paid into the Plan as recommended by the actuary.

the plAN’S FINANCIAl StAteMeNtS

A summary of the Plan’s audited accounts for the 2009 and 2008 years are shown below. Copies of the audited accounts and the auditor’s report are available by contacting the IAG & NRMA Helpline on 1300 424 676 – see the back page for further contact details.

The Plan’s financial position 08


Accounts as at 30 June

StAteMeNt oF ChANGe IN Net ASSetS

2009 ($,000)

2008 ($,000)

Net ASSetS At StARt oF yeAR 977,040 1,068,011

Plus

Contributions 104,850 98,528

Transfers from other funds 13,635 13,371

Insurance proceeds and rebates 1,394 1,355

Investment income 40,289 49,840

Realised investment gains (losses) (56,559) (15,510)

Unrealised investment gains (losses) (92,492) (156,411)

total revenue 11,117 (8,827)

Less

Benefits paid 63,395 80,172

Administration expenses 4,546 2,737

Insurance expense 2,736 2,734

Contribution surcharge tax 33 17

Income tax expense (benefit) 2,779 (3,516)

total expenses 73,489 82,144

Net ASSetS At eNd oF yeAR 914,668 977,040

StAteMeNt oF Net ASSetS

2009 ($,000)

2008 ($,000)

Net ASSetS At StARt oF yeAR 977,040 1,068,011

Statement of net assets Investments

898,303

972,900

Investment income receivable 4,156 6,225

Other receivables 982 537

Deferred tax asset 18,025 3,579

total assets 921,466 983,241

Less

Liabilities

Benefits payable 0 369

Provisions for income tax 6,271 5,185

Other (including share creditors) 527 647

total liabilities 6,798 6,201



2009 Sub-plAN RepoRtING

In accordance with the Plan’s Trust Deed, from 1 December 2003, the Plan has been administered as two sub-plans, the IAG sub-plan and the NRMA sub-plan.

The following secondary sub-plan report has been prepared for the financial year to 30 June 2009. In accordance with the Plan’s Trust Deed, the actuary for the Plan attributed net assets and benefits of the Plan as at 1 December 2003 to the two sub-plans.

IAG Sub-plAN ($,000)

NRMA Sub-plAN ($,000)

Net ASSetS At StARt oF yeAR 847,562 129,478

Plus

Inter sub-plan transfers 3,231 (3,231)

Plus

Contributions 92,941 11,908

Transfers from other funds 11,862 1,774

Investment revenue and changes in net market value of investments (95,298) (13,464)

Insurance proceeds and rebates 1,183 211

total revenue 10,688 429

Less

Benefits paid 55,662 7,733

Administration expenses 4,009 537

Contribution surcharge tax 30 3

Insurance premiums 2,490 246

Income tax expense 2,645 134

total expenses 64,836 8,653


Statement of net assetsTotal assets

802,671

118,795

Less

Total liabilities 6,026 772



the tRuStee

The Trustee, IAG & NRMA Superannuation Pty Limited, manages the Plan.

The Trustee has nine directors. Two directors are appointed by Insurance Australia Group Services Pty Limited. Two directors are appointed by National Roads and Motorists’ Association Limited. Four directors are elected by members of the Plan for a period of three years. One member representative director is elected by NRMA Road Service Patrols and three directors are elected by other employees who are members of the Plan. Currently, there is also one independent director who is appointed by the other Trustee directors.

The directors of the Trustee company as at 30 June 2009 were:

Chair and Independent directorSusan Ryan AO

Company-appointed directorsDianne Day - NRMA

Lisa Bray - NRMA

Dennis Fox - IAG

Nola Watson - IAG

Member-representative directorsGraeme Adams - IAG

Christopher Hutchinson - IAG

Nicholas Mowat - NRMA

Jonathan Street - NRMA - Road Service Patrol

ChANGeS to the tRuStee oVeR the yeAR

There were two changes to the Company-appointed directors during the year. Lisa Hunt left the Board on 28 May 2009 and was replaced by Lisa Bray. Anthony Coleman left the Board on 31 December 2008 and was replaced by Dennis Fox.

Joseph Gonzalez, a member-representative director since July 1995 left the Board on 29 August 2008 and was replaced by Nicholas Mowat according to the Plan’s rules for filling casual vacancies for member-representative directors.

The Trustee sincerely thanks Lisa Hunt, Anthony Coleman and Joseph Gonzalez for their time and contribution to the management of the IAG & NRMA Superannuation Plan during their terms of office.

A ChANCe to hAVe youR SAy

As member representative directors are elected by the members of the Plan, you get the chance to nominate and vote for representatives on the Trustee Board. The Plan has a specific set of rules applying to the appointment and removal of member elected directors and the filling of casual vacancies. These rules are available by calling the IAG & NRMA Helpline on 1300 424 676 or 1300 IAG NRM.

INdeMNIty INSuRANCe

The Trustee and its directors may be reimbursed and indemnified out of the Plan for all liabilities which they properly incur in administering the Plan including liabilities that arise as a result of an ‘honest mistake’. To protect the assets of the Plan against certain losses arising from the conduct of the Trustee and its directors and administrators, the Trustee has taken out trustee indemnity insurance cover.

09 How your Plan is managed


tRuSt deed ANd RuleS

The Trust Deed and Rules may be amended from time to time.

During the year to 30 June 2009 two sets of amendments were made to the Plan’s Rules:

The first set of amendments:

allowed insurance cover to continue for members on ceasing employment with IAG or NRMA (These members are called reserved members.). The amount of insurance maintained is the amount held on ceasing employment. This amount tapers to Nil between the ages of 55 and 65. Similar arrangements were also introduced for members when they become retained members.

provided for the Funeral Expenses Benefit to continue for members (other than retained members) to age 75.

enabled contributions to be made by, or in respect of, reserved members.

The second set of amendments brought the Rules into line with legislation changes concerning de facto (including same sex) couples.

CoNCeSSIoNAl tAX tReAtMeNt

In order to qualify for concessional tax rates, funds have to be classified as ‘complying superannuation funds’ under the income tax laws. To be eligible, funds must report regularly to the Australian Prudential Regulation Authority (APRA) and demonstrate their compliance with superannuation laws and APRA guidelines.

The Plan is classified as a complying superannuation fund and the Trustee is not aware of any matter that would cause the Plan to lose its complying status.

AdMINIStRAtIoN FeeS

IAG sub-plan accumulation membersIAG sub-plan accumulation members pay administration fees at the rate of $177 per year, which is deducted on a pro-rata basis from member accounts.

NRMA sub-plan membersNational Roads and Motorists’ Association Limited continued to pay the administration fee for its accumulation category members from NRMA sub-plan defined benefit assets until 28 February 2009. Similarly, NRMA sub-plan defined benefit members were credited with an additional prorated contribution of $360 for first eight months of the 2008/09 year on the same basis as has occurred since 1 July 2002. From 1 March 2009, the administration fee has been deducted from member accounts at the rate of $177 per year, on a pro-rata basis.

INSuRANCe CoStS

IAG sub-plan accumulation membersInsurance costs for accumulation members of the IAG sub-plan are generally deducted in full from members’ accounts, based on the amount of cover and age of each member.

NRMA sub-plan membersUp until 28 February 2009, National Roads and Motorists’ Association Limited continued to pay the cost of basic insurance cover (two units of death and disability cover; and salary continuance with a 12 week waiting period) for NRMA sub-plan accumulation members, with members only having costs deducted in relation to any higher levels of cover. After this date, insurance costs for accumulation members of the NRMA sub-plan are generally deducted in full from members’ accounts, based on the amount of cover and age of each member.

MANAGeMeNt ASSIStANCe

The Plan is administered by Mercer (Australia) Pty Ltd. The administrator performs such functions as determining member benefits, processing and allocating contributions and ensuring all membership data is correct. Contact details for Mercer can be found on the last page of this report.

The Plan’s compliance status was monitored by Glenda Pagacs, Compliance Manager, Superannuation throughout the year.

The Trustee is assisted by a number of professionals who provide advice and assistance in the administration of the Plan. These include:

Superannuation, Actuarial and Communication ConsultingMercer (Australia) Pty Limited - Mercer

AuditorKPMG

InsurerColonial Mutual Life Assurance Society Limited - CommInsure

Investment ConsultingMercer (Australia) Pty Ltd – Mercer Investment Consulting

SolicitorsMacKenzie Thomas

CustodianJPMorgan


On ceasing service with IAG or NRMA, you will be asked for payment instructions for your benefit. Your superannuation is an important investment and you are encouraged to consider carefully how you wish to receive it and/or where you want to invest it.

ReCeIVING youR beNeFIt AS A luMp SuM

If you leave employment before you reach your preservation age, part or all of your superannuation benefit will be subject to preservation and cannot be paid directly to you. When requested for payment instructions, you will have 90 days in which to advise the Trustee how you want your benefit paid, or to nominate a complying superannuation entity to which you want to roll over your benefit.

If your account balance is more than $5,000, you can remain a member of the IAG & NRMA Superannuation Plan in the reserved category. If you don’t give the Trustee instructions as to where to transfer your super, you will automatically remain a member of the Plan as a reserved member.

If you were an accumulation member before becoming a reserved member, you will continue to have investment choice.

If you were a defined benefit member before becoming a reserved member, you will not have investment choice; rather investment returns will be determined at the Plan’s net rate of return. However, you may make an irreversible election to have investment choice in the same way as an accumulation member rather than have investment returns determined at the Plan’s net rate of return.

Additionally, if you are a reserved member and are now employed with another employer, by exercising your right to choose your super fund, you may be able to have your employer contributions made to the IAG & NRMA Superannuation Plan. You can also make personal contributions (both before and after-tax) and rollovers to the Plan. To do this, you must complete a Standard choice form and return this form to your new employer. Your new employer can contribute to the Plan via BPAY on the Plan’s website www.iagnrma.superfacts.com or by completing the Employer remittance form and sending the Plan a cheque.

These forms are available from the website at: www.iagnrma.superfacts.com or contact the IAG & NRMA Helpline on 1300 424 676 (1300 IAG NRM)

You can transfer your entitlement to another approved superannuation entity, including an eligible rollover fund, superannuation fund, deferred annuity, approved deposit fund, retirement savings account or account based pension. See page 31 for details on preservation.

ReCeIVING youR beNeFIt AS A RetIReMeNt INCoMe StReAM

If you leave employment after you reach your preservation age and provided your benefit in the Plan is at least $50,000 then you can choose to receive you benefit from the Plan as a retirement income stream.

Please see the Plan’s Retirement Income Stream Product Disclosure Statement (RIS PDS) for more information. You can request a copy of the PDS by calling the Plan’s Helpline on 1300 424 676.

ReCeIVING youR beNeFIt AS A lIFetIMe peNSIoN

Certain categories of Defined Benefit members may be entitled to a Lifetime Pension or to a Deferred Pension (a Lifetime Pension that commences at a future date) on ceasing employment. If this is the case, you will be informed about your pension options.

Other members can request the Trustee to provide them with a pension in lieu of their lump sum entitlements. In this case the terms of any pension offered are at the discretion of the Trustee in conjunction with advice from the Plan’s actuary.

10 If you leave the plan


elIGIble RolloVeR FuNd ANd uNClAIMed MoNey

If you do not tell the Trustee within 90 days how you want your benefit paid and your account balance in less than $5,000, it will automatically be transferred to an eligible rollover fund (ERF). An ERF is a fund approved by APRA to receive benefits payable to members who cannot be located, or who do not advise how and where their benefit is to be paid. The ERF currently used by the Trustee is SuperTrace Eligible Rollover Fund (SuperTrace). Its contact details are:

the Senior Administrator SuperTrace Eligible Rollover Fund Locked Bag 5429 Parramatta NSW 2124 Tel: 1300 788 750

If you have reached Government pension age when you leave your employer and you have not given the Trustee instructions regarding the payment of your benefit from the Plan, and you cannot be contacted, your benefit may be treated as ‘unclaimed money’ according to superannuation law. In this instance, your benefit will be placed with the Australian Tax Office.

If your benefit is transferred to an ERF or treated as unclaimed money, you will no longer be a member of the Plan. However, you have rights to claim your benefit from the ERF or the relevant Government body as the case may be.

About SupertraceSet out below is a summary of some of the more significant features of SuperTrace.

The assets of SuperTrace are invested in an investment policy (the SuperTrace Policy) issued to Colonial Mutual Superannuation Pty Ltd by The Colonial Mutual Life Assurance Society Limited (CMLA). The SuperTrace Policy is invested solely in the Capital Stable Fund in CMLA’s No. 2L Statutory Fund. There is no investment choice available to members.

The investment objective of the Capital Stable Fund is to provide medium-term moderate rates of return while aiming to minimise the occurrence of negative shorter term returns.

The investment strategy for the assets in the Capital Stable Fund is to invest in a range of assets including Australian and international equities, property, fixed interest securities and cash, with a heavier weighting towards fixed interest investments.

Investment returns are credited to members’ accounts as an annual crediting rate effective 30 June. The crediting rate is derived from the earning rate of the SuperTrace Policy which is net of tax on investment earnings, less any asset charge. The crediting rate is not guaranteed and the rate applied can be negative.

the following fees and charges apply in Supertrace: an asset charge of 1.55% p.a. (actual cost net of tax) is deducted from the earnings of SuperTrace prior to the crediting rate being declared.

SuperTrace is unable to accept contributions from members or their employers; however rollovers from other superannuation funds are permitted.

SuperTrace does not provide insurance cover.

Once your super is transferred to SuperTrace, you will no longer have any rights under IAG & NRMA Superannuation Plan and if you have any enquiries, you will have to deal directly with SuperTrace. Please note that investment returns earned in SuperTrace may be less than returns from other funds.

You can check to see if SuperTrace holds any benefit on your behalf or find out further information about this Eligible Rollver Fund by accessing their website at www.supertrace.com.au

ReStRICtIoNS oN WheN you CAN Get ACCeSS to youR beNeFItS

preservation rulesSuperannuation is a long-term investment and the Commonwealth Government has placed restrictions on when a person can have access to benefits. These restrictions are known as ‘preservation’. When you leave the Plan, some or all of your benefit may have to be preserved. This means you may not be able to take all your benefit (less tax) in cash when you leave the Plan. Your benefit statement shows how much of your benefit is preserved.

Preserved benefits must generally be kept in the superannuation system until you:

retire permanently at or after your preservation age (see below)

leave your employer at or after age 60

reach age 65

become permanently incapacitated or suffer a terminal medical condition as defined by Superannuation Industry Supervision (SIS) law (see below), or

die.


your preserved amount is shown on your benefit statement.Your preservation age depends on your date of birth according to the table below:

dAte oF bIRth youR pReSeRVAtIoN AGe

Before 1 July 1960 55

1 July 1960 to 30 June 1961 56

1 July 1961 to 30 June 1962 57

1 July 1962 to 30 June 1963 58

1 July 1963 to 30 June 1964 59

After 30 June 1964 60

preservation of disablement benefitsIn some cases it is possible that, even though you may have qualified for a total and permanent disablement from the Plan, the benefit may not be paid to you in cash until you have satisfied one of the above payment triggers. This is due to the difference in definitions between the terms ‘Total and Permanent Disablement’, as defined in the Trust Deed and the definition of the term ‘permanent incapacity’ in SIS.

For preservation purposes, ‘permanent incapacity’, in relation to a member who has ceased to be gainfully employed, means ill-health (whether physical or mental), where the Trustee is reasonably satisfied that the member is unlikely, because of the ill-health, ever again to engage in gainful employment for which the member is reasonably qualified by education, training or experience.


Co-contributions still valuable despite temporary reductionThe Government has temporarily reduced its popular superannuation co-contribution, a payment available to low income and some middle income Australians. Even though the amount of the co-contribution has been reduced, it is still a valuable benefit which can increase your super savings.

From 1 July 2009, the Government will contribute $1 for each $1 contribution you make from your after-tax income. The maximum co-contribution is $1,000 a year if your income* is less than $31,920 a year. The co-contribution reduces gradually for those earning up to a maximum of $61,920.

*Your income includes your assessable income, reportable

fringe benefits and reportable employer superannuation contributions

(see below).

The Government co-contributions are expected to increase to $1.25 for each $1 member contribution (maximum $1,250) from 1 July 2012, and then revert back to the previous level of $1.50 for each $1 member contribution (maximum $1,500) from 1 July 2014.

Reportable employer superannuation contributionsFrom 1 July 2009, employers are required to report details of employees’ reportable employer superannuation contributions on the payment summary given to you by your employer each year so that you can include it in your tax return.

Generally, your reportable employer superannuation contributions include any salary sacrifice contributions you make and any voluntary employer contributions over which you have some control.

Even though you will need to show this figure in your tax return for the year ending 30 June 2010 (and subsequent years going forward), it will not form part of your taxable or your assessable income for income tax purposes. However, it will impact on your eligibility for a number of tax offsets and other government benefits which are subject to income tests. It may also increase your obligations to pay the Medicare levy surcharge and to make child support payments.

For example, your reportable employer superannuation contributions will be taken into account in assessing your eligibility for various benefits including Government superannuation co-contributions, the eligible spouse superannuation contribution tax offset, mature age worker tax offset and certain Centrelink benefits.

Reduction in concessional contribution limitThe amount of concessional contributions that can be paid towards your super at the concessional tax rate of 15% has been reduced to $25,000 a year for those who are under age 50 at the end of the 2009/2010 financial year, and $50,000 for those over age 50. The new limits apply from 1 July 2009. The higher limit for those over age 50 will only apply until 30 June 2012.

Concessional contributions include any contributions made by your employer, salary sacrifice (before-tax) contributions and any administration fees and/or insurance premiums paid on your behalf by your employer (and for those who are self-employed, any contributions for which you are able to claim a tax deduction). Certain other less common contributions are also treated as concessional contributions. You can see a list of these on the Australian Taxation Office’s (ATO) website at www.ato.gov.au

An additional tax of 31.5% (more in some cases) will apply to any contributions in excess of the new limits. You can avoid this additional tax by monitoring the contributions being paid for you and adjusting these where necessary or possible.

The limit of $150,000 a year for non-concessional contributions has not been changed. This includes any contributions you make from your after-tax income together with any excess concessional contributions (above the limit) as well as some less common types of contributions. If you are under age 65 at any time during a financial year, you maybe able to contribute up to $450,000 in the year provided that your non-concessional contributions plus those in the following two years do not exceed $450,000.

What’s happening in super 11


An additional tax of 46.5% (more in some cases) will apply to any contributions in excess of these limits. To avoid this additional tax, it’s advisable to keep an eye on your non-concessional contributions throughout the year and adjust these where necessary.

payment of excess contributions taxMost members will not exceed the above concessional and non-concessional contribution limits. However, if you do, the ATO will send you a special tax assessment together with a release authority which you will be able to give to the IAG & NRMA Superannuation Plan to authorise us to pay the tax on your behalf. The Plan can only do this from an accumulation account (it cannot be paid from any defined benefits that you might have).

If your assessment is for excess concessional contributions tax, you will only have 90 days to give your release authority to the Plan if you want us to pay the tax to the ATO – or reimburse you for any tax if you have paid it yourself. It is not compulsory to arrange for us to pay this tax.

If your assessment is for excess non-concessional contributions tax, you will receive a “compulsory release authority” which you must provide to the Plan within 21 days so that we can pay the tax or reimburse you.

If you receive an assessment you will need to read it carefully to understand the actions you must take and the timeframes that must be met.

Important – changes to rules on super for temporary residents and former temporary residents

The Government has made a number of changes to the treatment of superannuation for members who are, or have previously been, temporary residents of Australia. The changes may have a significant effect on temporary and former temporary residents.

Broadly, the changes do not apply to members who are Australian or New Zealand citizens, permanent residents or holders of a Subclass 405 (Investor Retirement) or Subclass 410 (Retirement) visa. If you do not fit into these exempt classes and you hold or have held a temporary visa in the past, the following changes may apply to you.

If you have left Australia, the ATO will require the IAG & NRMA Superannuation Plan to transfer your superannuation benefit to the ATO unless you have previously claimed it from us. This will not occur until at least six months after the later of your departure from Australia and the date your visa ceased to have effect. The ATO will not require the transfer if it is aware that you have lodged a valid application for permanent residency. The first transfers occurred in June 2009.

You will no longer be able to leave your benefit in the Plan until age 60 and then take it tax-free. You will also generally not be able to take any type of pension from the Plan. Payments on account of death, permanent incapacity and terminal medical condition may still be possible if these occur before the benefit is transferred to the ATO.

If you leave Australia and your benefit is transferred to the ATO, you will lose any insurance cover you might have in the IAG & NRMA Superannuation Plan. Further, whilst the ATO will maintain an account for you, it will generally not add interest to your account. You will be able to claim it any time subject to withholding tax of 35% being withheld from the taxable component.

de Facto and Same-sex relationshipsThe Government has passed legislation that will remove some discrimination against de facto and same-sex couples and their children. The main impacts are as follows:

death benefits:Same-sex spouses, together with children of a de facto spouse (whether a same-sex or opposite-sex spouse), can now be considered as potential beneficiaries of any death benefits. Previously they could only be considered if they were financially dependent on, or had an interdependency relationship with, the deceased. If you have a de facto spouse, you may wish to review any death benefit nominations you have made to take these changes into account.

Contribution splittingGenerally, up to 85% of your employer’s contributions in the previous year (or current year if exiting the Plan) can be transferred to the superannuation account of your spouse. You can now split contributions made on or after 1 July 2008 with a same-sex spouse.

Spouse contribution tax offsetYou can claim a tax offset for after tax contributions you make directly to your spouse’s superannuation account. The maximum rebate is $540 a year (or 18% of contributions of up to $3,000). The rebate phases out if your spouse earns over $10,800 a year (including reportable fringe benefits and reportable employer superannuation contributions) and ceases if your spouse’s income exceeds $13,800. From 1 July 2009, you will be able to claim these tax offsets in respect of contributions you make for a same-sex spouse.

Family law splittingFrom 1 March 2009, it has generally been possible for de facto couples (including same-sex de facto couples) to split their superannuation when their relationship ends. This will bring the superannuation treatment of de facto couples in line with that of legal marriages which break down. South Australia or Western Australia did not initially follow this path. If you are currently separating from your de facto partner or intend doing so in the future, you should seek legal advice on this issue.


ReSolVING dISputeS ANd CoMplAINtS

If you have a question about your benefits in the Plan, please contact the IAG & NRMA Helpline on 1300 424 676. Most inquiries can be dealt with over the phone. If not, you may be asked to put your enquiry in writing and provide a contact address for the reply. Inquiries will generally be answered within 28 days.

If you have a query or a problem, which is not resolved to your satisfaction, you should send a written complaint (including all relevant details) to:

the Complaints officer IAG & NRMA Superannuation Plan Pty Limited Level 25 388 George Street Sydney NSW 2000

The matter will be investigated by the Complaints Officer and, where necessary, the Risk Management and Compliance Committee on behalf of the Trustee. You will be advised of the Trustee’s decision as soon as possible and within 90 days of your complaint being received or within 30 days of the Trustee’s decision, whichever is earlier.

Please remember to include an address to which the response can be mailed.

If the Trustee has not responded to your complaint within 90 days, or you are not satisfied with the Trustee’s decision you may be able to take the matter to a special government body called the Superannuation Complaints Tribunal.

While the Trustee has a process in place to deal with complaints from members, the Trustee’s objective is to avoid complaints by providing a good level of service to members, and if complaints do occur, to resolve them to the satisfaction of all concerned.

A copy of the Trustee’s dispute resolution procedures is available on request from the IAG & NRMA Helpline on 1300 424 676 (1300 IAG NRM).

SupeRANNuAtIoN CoMplAINtS tRIbuNAl

The Tribunal is an independent body set up by the Federal Government to provide a low-cost, informal forum for resolving most superannuation disputes. Before the Tribunal can consider a complaint, it must be satisfied that the matter has been referred to the Trustee under the procedure set out above.

Any complaints must be lodged with the Tribunal within certain time limits. In particular, there is a two year time limit on complaints about total and permanent disablement claims. For more information about requirements and time limits, you can call the Superannuation Complaints Tribunal on 1300 780 808.

If the Tribunal accepts your complaint, it will try to help you and the Trustee reach a mutual agreement through conciliation. If conciliation is unsuccessful, the Tribunal can make a determination, which is binding.

IF you’d lIKe MoRe INFoRMAtIoN

For accumulation members, full details of the benefits provided by the Plan are set out the Plan’s Product Disclosure Statement, which is available on the Plan’s website or from the Helpline.

For defined benefit members, full details of the benefits provided by the Plan are set out in a member’s booklet.

As a member of the Plan, you can inspect other Plan documents by contacting the Helpline. These documents are listed on the inside front cover.

QueStIoNS?

If you have questions about your superannuation benefits, please call the IAG & NRMA Helpline on 1300 424 676.

Alternatively, you can write to the Plan Administrator, Mercer, at:

IAG & NRMA Superannuation plan po box 4303 Melbourne Vic 3001

More Information 12

dISClAIMeR

This Annual Report has been prepared by the Trustee to meet its legislative obligations under the Corporations Act. The information contained in this Annual Report does not take account of the specific needs, personal or financial circumstances of any persons. Readers should obtain specialist advice from a licensed or appropriately authorised financial adviser before making any changes to their own superannuation arrangements or investments. You should also read carefully the applicable product disclosure statement available from the Plan.

The terms of your membership in the Plan are set out in the Plan’s Trust Deed, and should there be any inconsistency between this Annual Report and the Plan’s Trust Deed, the terms of the Plan’s Trust Deed prevail. While all due care has been taken in the preparation of this report, the Trustee reserves its right to correct any errors and omissions.

This document contains general information about investments and investment performance. Please remember that past performance is not necessarily a guide to future performance.

Issued by:IAG & NRMA Superannuation pty limited AbN 77 000 300 934

as Trustee of the IAG & NRMA Superannuation plan AbN 58 244 115 920

G010282 11/09

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