In our August 2019 bulletin, we explained the Government’s Protecting Your Super reforms which came into effect from 1 July 2019. Later in 2019, the Government’s “Putting Members’ Interests First” reforms were passed. ANZ STAFF SUPER NEWSLETTER JANUARY 2020 LATEST CHANGES TO SUPER LAWS – PUTTING MEMBERS’ INTERESTS FIRST REFORMS These reforms will introduce additional rules in relation to the provision of insurance in superannuation funds from 1 April 2020. These new rules require that members under the age of 25 and members with account balances under $6,000 can only be offered insurance through their super fund on an “opt in” basis. There are some exceptions for members working in dangerous occupations. These reforms are intended to help ensure that: • Members have insurance through their super that’s right for them; and • Members are not paying premiums from their super for insurance cover they don’t want, which could inappropriately reduce their retirement savings. Members aged under 25 years If you join a super fund before 1 April 2020 and you are under age 25, you will retain your existing insurance cover, as long as you have at least $6,000 in your account and a contribution or rollover has been made to your account in the last 16 months. From 1 April 2020, if a member is under age 25 when they join a super fund, they will not be provided with automatic death and Total and Permanent Disablement (TPD) insurance cover when they join unless they opt in. Members with an account balance less than $6,000 If you had an account balance of less than $6,000 as at 1 November 2019, we contacted you before 1 December 2019 to advise that your cover would • Latest changes to super laws – Putting Members’ Interests First • Understanding your insurance options • Investment returns to 31 December 2019 • Socially responsible investing WHAT’S INSIDE: SUPER DIRECTIONS be cancelled from 1 April 2020 if your account balance remains below $6,000 and you have not let us know that you’d like to keep cover (i.e. opt in). This won’t apply to members who have already “opted-in” to keep their insurance – including inactive members who opted in under the Protecting Your Super reforms in 2019. If a member’s account balance reaches $6,000 after 1 November 2019 but subsequently falls below this threshold, their insurance cover will not be cancelled on 31 March 2020.
Transcript
In our August 2019 bulletin, we explained the Government’s Protecting Your Super reforms which came into effect from 1 July 2019. Later in 2019, the Government’s “Putting Members’ Interests First” reforms were passed.
ANZ STAFF SUPER NEWSLETTER
JANUARY 2020
LATEST CHANGES TO SUPER LAWS – PUTTING MEMBERS’ INTERESTS FIRST REFORMS
These reforms will introduce additional rules in relation to the provision of insurance in superannuation funds from 1 April 2020.
These new rules require that members under the age of 25 and members with account balances under $6,000 can only be offered insurance through their super fund on an “opt in” basis. There are some exceptions for members working in dangerous occupations.
These reforms are intended to help ensure that:
• Members have insurance through their super that’s right for them; and
• Members are not paying premiums from their super for insurance cover they don’t want, which could inappropriately reduce their retirement savings.
Members aged under 25 years
If you join a super fund before 1 April 2020 and you are under age 25, you will retain your existing insurance cover, as long as you have at least $6,000 in your account and a contribution or rollover has been made to your account in the last 16 months.
From 1 April 2020, if a member is under age 25 when they join a super fund, they will not be provided with automatic death and Total and Permanent Disablement (TPD) insurance cover when they join unless they opt in.
Members with an account balance less than $6,000
If you had an account balance of less than $6,000 as at 1 November 2019, we contacted you before 1 December 2019 to advise that your cover would
• Latest changes to super laws – Putting Members’ Interests First
• Understanding your insurance options
• Investment returns to 31 December 2019
• Socially responsible investing
WHAT’S INSIDE:
S U P E R D I R E C T I O N S
be cancelled from 1 April 2020 if your account balance remains below $6,000 and you have not let us know that you’d like to keep cover (i.e. opt in).
This won’t apply to members who have already “opted-in” to keep their insurance – including inactive members who opted in under the Protecting Your Super reforms in 2019.
If a member’s account balance reaches $6,000 after 1 November 2019 but subsequently falls below this threshold, their insurance cover will not be cancelled on 31 March 2020.
Reinstatement/recommencement of insurance cover
If your insurance cover is cancelled on 31 March 2020 as a result of these reforms:
1. you will be able to apply to have your cover reinstated but we should receive your election by 31 May 2020; or
“New events” cover (i.e. you will not be covered for any pre-existing conditions) will apply until you have been “at work” for 30 consecutive days and it will then convert to “full cover”.
2. your death and TPD insurance cover will restart when your account balance reaches $6,000 and a contribution or rollover has been paid to your account in the last 12 months (assuming you are aged 25 or more).
Initially this will be “new events” cover only (i.e. you will not be covered for any pre existing condition) for at least 12 months, but it will be converted to “full cover” when you have been “at work” for 30 consecutive days on or after the expiry of that 12 month period.
If you join ANZ Staff Super as a new employee of ANZ, you will generally be provided with three blocks of death and TPD cover [which are based on your Total Employment Cost (TEC) or Superannuation Salary if you don’t participate in salary packaging] unless your cover would exceed $1 million. This is referred to as “automatic” insurance cover.
From 1 April 2020, new members won’t be provided with automatic insurance cover until:
• they are aged 25 or more,
• their account balance reaches $6,000, and
• their account has been active in the last 16 months (i.e. a contribution or rollover has been made to their account during this period).
Members will still be able to opt out of insurance cover if they choose.
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LIFE CAN THROW YOU SOME UNEXPECTED CURVE BALLS. Insurance through your super can help keep you covered and ANZ Staff Super offers a great range of flexible options for death, total and permanent disablement and salary continuance cover with competitive premiums.
Taking a few minutes to watch the latest release on insurance in our educational video series is a great way to find out about the different types of insurance available through ANZ Staff Super.
Check it out on the website at ANZStaffSuper.com/educational-videos.html
Under our insurance policy, your cover can continue for a period of up to 5 years if you are an Australian citizen working overseas. This 5 year period applies from the later of the date you leave Australia and 2 March 2015. If you’d like to retain your cover beyond 5 years, you’ll need to apply in writing before the 5 year period expires.
Your cover can also continue if you are a New Zealand citizen working in New Zealand – no time limit applies in this case.
ARE YOU LIVING OVERSEAS AND STILL HAVE DEATH AND TPD COVER THROUGH ANZ STAFF SUPER?
UNDERSTANDING YOUR
INSURANCE OPTIONS
If you need advice about how much insurance cover you may need, call us on 1800 000 086 to speak to an ANZ Staff Super financial adviser* at no extra cost.
For more information about your insurance cover options, see the Product Disclosure Statement and In Detail booklet for your membership section. These booklets are available at www.anzstaffsuper.com
If you’re an Australian citizen working overseas and you’d like to apply to retain your cover for more than 5 years, please contact us.
Please also contact us if you have any queries about your ongoing eligibility for cover while you are overseas. It can be complicated and we’d like to make sure there are no issues if anything happens.
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Investment returns for ANZ Staff Super’s options performed strongly in 2019. Aggressive Growth and Balanced Growth delivered outstanding returns for both super and pension accounts for 2019. While ANZ Staff Super’s options perform well consistently over the long term, the returns for 2019 were the highest since 2013 for the Aggressive Growth option and since 2009 for the Balanced Growth and Cautious options. This is a very pleasing result given the economic uncertainty and volatility over 2019.
Investment returns to 31 December 2019 are shown in the tables below for super and pension accounts.
Important notes:
1. Investment returns are shown after investment management costs and tax on investment income are deducted. Past performance is not necessarily a guide to future performance.
2. Returns for Account Based Pensions differ because the investment income earned on these accounts is exempt from tax.
Employee, Personal & Partner Section Members & Transition to Retirement Pensions
To 31 December 2019Aggressive
GrowthBalanced
GrowthCautious Cash
1 year 20.9% 16.7% 8.8% 1.4%
3 years 10.4% p.a. 8.6% p.a. 5.5% p.a. 1.5% p.a.
5 years 9.1% p.a. 7.6% p.a. 5.0% p.a. 1.7% p.a.
10 years 8.7% p.a. 8.2% p.a. 6.0% p.a. 2.6% p.a.
Account Based Pensions
To 31 December 2019Aggressive
GrowthBalanced
GrowthCautious Cash
1 year 23.5% 18.9% 10.1% 1.7%
3 years 11.2% p.a. 9.4% p.a. 6.1% p.a. 1.7% p.a.
5 years 9.8% p.a. 8.3% p.a. 5.6% p.a. 2.0% p.a.
10 years 9.4% p.a. 9.0% p.a. 6.8% p.a. 3.0% p.a.
TO 31 DECEMBER 2019INVESTMENT RETURNS
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MANAGING ESG IN OUR ACTIVELY INVESTED ASSETS
Actively invested assets are ones where the investment managers used by ANZ Staff Super implement strategies to deliver above market returns allowing for their assessments of risk and potential returns. As at 30 September 2019, these accounted for 49% of our total funds under management (FUM) – see breakout box right.
We’re continually looking at ways we can use our influence to improve sustainable investment practices across our active investments.
Approximately 75% of our property portfolio is placed in unlisted funds with AMP Capital and Barwon Investment Partners. Both have a strong ESG focus and a commitment to creating enduring value that goes beyond the financial. The same can be said of our largest infrastructure manager, Palisade Investment Partners, which has a focus on workplace gender equality through improved career opportunities for women and also invest in renewable energy assets.
CARE ABOUT INVESTING RESPONSIBLY? WE DO.
WHAT MATTERS TO MEMBERS MATTERS TO US
Our prime purpose in investing is to protect and grow your retirement savings, so you can live the life you want when you stop paid work. We also know how we invest matters too. We aim to improve our overall risk-adjusted returns by considering environmental, social and governance (ESG) risks alongside other financial risks.
ESG considerations are taken into account when making investment decisions and monitoring performance. Making sure ESG factors are considered starts before we make an investment and continues for as long as we keep it, whether we’re investing directly ourselves or through external managers.
ACTIVELY INVESTED ASSETS as at 30 September 2019 (% of Total FUM)
Australian Shares
International Shares
Property
Global Credit
Diversity - Multi Asset
Infrastructure
Fixed Income
INVESTINGSOCIA LLY RESPONSIBLE
2%
8%
3%7%4%
5%
12%
A STRONG SUSTAINABLE FUTURE FOR ALL ANZ Staff Super is mindful the transition to a low carbon global economy is likely to lead to both risks and opportunities in relation to our investments. Together with our asset consultant, we have modelled a variety of climate scenarios across all our portfolios and asset classes to understand the economic and capital market impacts that climate change could have on our assets and on our members.
Our focus is on embedding ESG across all of our investments to ensure sustainabilty for both ANZ Staff Super and our planet.
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FUNDING CLEAN, GREEN, CARBON NEUTRAL SHOPPING CENTRES AND OFFICES
AMP Capital invests in major shopping centres and corporate offices and has committed to:
FUNDING IMPROVED MENTAL HEALTH AND SUSTAINABLE DEVELOPMENT
Barwon invests in healthcare properties and recently partnered with others to develop a private mental health facility in Canberra, due to open by late 2020 / early 2021. The new facilities will help address the lack of private mental health options in the ACT, currently causing heavy patient pressure on the public system for those with mental illnesses.
More broadly, Barwon is implementing solar initiatives across the portfolio and is committed to ensuring all future developments are completed sustainably.
FUNDING RENEWABLE ENERGY FROM SOLAR, WIND AND GEOTHERMAL
Palisade’s portfolio of infrastructure assets includes solar and wind farms across Australia. Currently a $280 million wind farm is being developed on a cattle farm on Tasmania’s west coast, where it will tap into the region’s famous roaring forties winds that blow in from the Southern Ocean.
ANZ Staff Super’s investment with Ancala Partners, a European infrastructure manager, includes a 50% interest in HS Orka, Iceland’s largest private electricity generator. HS Orka operates a large scale, geothermal platform with significant growth potential in Iceland’s renewable energy sector.
through phasing out fossil fuels, running on 100% renewable energy and making their buildings highly efficient and resilient.
CO2
by providing appropriate recycling resources and encouraging retail tenants to choose reusable and compostable options
that directly matches the physical footprint of assets on the land.
“0”
THIS IN IT IATIVE PROMOTES A PATHWAY FOR WOMEN TO STUDY AND BE EMPLOYED IN TRAD IT IONALLY MALE-DOMINATED CAREERS, SUCH AS ENG INEER ING AND AGR ICULTURE .
CURRENTLY A $280 MILL ION WIND FARM IS BE ING DEVELOPED ON A CATTLE FARM ON TASMANIA’S WEST COAST
FUNDING WORKPLACE GENDER DIVERSITY AND IMPROVED OPPORTUNITIES FOR WOMEN
As part of its focus on diversity, Palisade has launched a Regional Women’s Undergraduate Scholarship Program. This initiative promotes a pathway for women to study and be employed in traditionally male-dominated careers, such as engineering and agriculture.
Led by Palisade’s operational management services team, a scholarship program has been established for regional women looking to complete a degree in one of these disciplines.
Up to 10 scholarships across six universities throughout Australia will be on offer in 2020. Each scholarship will provide one student with up to $7,000 per annum for the duration of their 4-year degree. The program will also include the opportunity for each scholarship recipient to undertake work experience at Palisade.
ZERO NET CARBON
BY 2030MINIMAL WASTE TO
LANDFILL AND KEEPING
PLASTIC POLLUT ION
OUT OF THE OCEAN
A BIODIVERS ITY
CONSERVAT ION
RESERVE
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Passively invested assets are ones where ANZ Staff Super appoints an investment manager to invest broadly tracking a specific index, for instance the ASX300 or MSCI World index, with the aim of matching, or slightly exceeding, the investment performance of the relevant market. As at 30 September 2019, these made up 51% of our total FUM – see breakout box right.
Apart from cash, which is invested wholly by ANZ, our passively invested assets are spread across:
• BlackRock Investment Management (International Shares and Fixed Income)
BlackRock, Macquarie and Vanguard are all signatories to the UN’s Principles for Responsible Investing (PRI).
The PRI are based on the belief that ESG issues, such as climate change and human rights, can affect the performance of investment portfolios and need to be considered alongside more traditional financial factors. Signatories commit to including ESG factors in the decisions they make about what to invest in and the role they play as asset owners and creditors.
1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.
THE UN PR INC IPLES FOR RESPONSIBLE INVESTING Signatories to the PRI apply these six principles to align themselves with the broader objectives of society and promote social good.
PASSIVELY INVESTED ASSETS as at 30 September 2019 (% of Total FUM)
Australian Shares
International Shares
Fixed Income
8%14%
30%
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Important information:
Any advice contained in this newsletter is of a general factual nature only, and does not take into account the personal needs and circumstances of any particular individual. Before acting on any information contained in this newsletter, you should take into account your own financial circumstances, consider the relevant Product Disclosure Statement, and seek professional advice from a licensed, or appropriately authorised, financial adviser if you are unsure of what action to take. Our Product Disclosure Statements are available at www.anzstaffsuper.com or by calling us on 1800 000 086.
#ANZ Staff Superannuation (Australia) Pty Ltd, the Trustee of the Scheme, has entered into an agreement with Australia and New Zealand Banking Group Limited (ANZ) under which ANZ’s financial advisers have been engaged to provide ANZ Staff Super members with general or limited personal financial advice about options available within ANZ Staff Super over the phone for no extra charge. If you require more complex personal advice, you’ll be given the option of receiving comprehensive personal advice from an ANZ financial adviser and ANZ will charge you a fee for this advice. These financial planning services are provided by ANZ’s financial advisers under AFSL 234527. Any advice provided by ANZ’s financial advisers is not provided or endorsed by the Trustee and is not provided under the Trustee’s AFSL.
Issued by ANZ Staff Superannuation (Australia) Pty Limited ABN 92 006 680 664 AFSL 238268 as Trustee of the ANZ Australian Staff Superannuation Scheme ABN 63 810 127 567.
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CONTACT DETAILS
Write toANZ Staff Super GPO Box 4303 Melbourne VIC 3001
Phone1800 000 086 or +61 3 8687 1829 from overseas
