2011-12 REPORT TO MEMBERS - NSW Government
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ABN: 29 239 066 746
REPORT
TO MEMBERS
2011–12
statesuper.nsw.gov.au
SSS/PSS
SSS AND PSS AT A GLANCE
SSS PSS
Contributors at 30 June 2011 15,689 1,889
Plus transfers 4
Less exits -2,273 -216
Contributors at 30 June 2012 13,420 1,673
Deferred benefit members at 30 June 2012 2,749 141
Pension members at 30 June 2012 49,048 6,521
Member contributions Members generally contribute on Members contribute 6% of
a rate for age basis for individual their salary.
pension units.
Approximately 74% of members Approximately 53% of members
contribute by salary sacrifice contribute by salary sacrifice
Type of benefits Mainly pension benefits, with a Mainly pension benefits, with a
lump-sum commutation option. lump-sum commutation option.
SSS was closed to new members PSS was closed to new members
in 1985. in 1988.
Legislation Superannuation Act 1916 Police Regulation
(Superannuation) Act 1906
SANCS – in addition to the SSS and PSS benefits outlined above, all members receive the lump-sum
basic benefit. The SANCS basic benefit is 100% employer funded and accrues at the rate of up to 3%
of either final average salary or final salary for each year of service from 1 April 1988 or employment
commencement date if later.
The SANCS scheme is governed by the State Authorities Non-contributory Superannuation Act 1987 and
was closed to new members in 1992.
Under the Superannuation Administration Act 1996, the SSS and PSS schemes are administered
by the SAS Trustee Corporation (STC). STC acts as Trustee and holds in trust all assets of the
Fund. The assets of the STC schemes are held in the Pooled Fund.
2 | Report to Members 2011–12 www.statesuper.nsw.gov.au
CONTENTS
Chairperson’s report 4
Chief Executive Officer’s report 6
Your Trustee Board 8
Investments
Investment performance 10
STC investment updates and changes for 2012–13 11
Investment policies at 30 June 2012 13
Investment managers at 30 June 2012 14
Member services 15
Accessing your benefits from age 65 17
Commonwealth changes affecting superannuation 20
University superannuation liabilities 22
Fees and charges 23
Financial reports at 30 June 24
Complaints and disputes, privacy 26
Compliance and legislative requirements 27
Contact details back cover
This report contains general information. Relevant information is subject to the Superannuation Act 1916, the Police Regulation
(Superannuation) Act 1906, the State Authorities Non-contributory Superannuation Act 1987 and the Superannuation
Administration Act 1996 that govern the schemes mentioned in this document and those Acts will prevail to the extent of any
inconsistency. In preparing the report, SAS Trustee Corporation (STC) has not taken into account your objectives, financial
situation or needs and you should consider your personal circumstances and possibly seek professional advice, before making
any decision that affects your future. To the extent permitted by law, STC, its Board members and employees do not warrant the
accuracy, reliability or completeness of the information contained in or omitted in this report. STC cannot guarantee any particular
rate of return and past performance is not a reliable guide to future investment performance.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 3CHAIRPERSON’S REPORT
Michael Carapiet
Chairperson since August 2011
The Fund
STC received $6.2 billion in employer contributions In this economic environment, asset allocation
in 2011–12, which included an extra $4.6 billion of continues to be the key driver of investment
contributions from the NSW Government. performance.
The additional contributions led to an increase in During the 2011–12 financial year, growth assets
State Super’s net assets, which stood at $34.4 such as shares significantly underperformed
billion at 30 June 2012. defensive assets such as bonds and cash.
A Towers Watson survey at 31 December 2011 As a result, the Growth Strategy returned 0.4% for
ranked State Super the 5th largest occupational the year to 30 June 2012 while the Conservative
superannuation fund in Australia and 102 out of Strategy delivered 4.6%, the Balanced Strategy
the largest 300 funds in the world. 2.6% and the Cash Strategy 4.2%.
The long-term nature of the scheme liabilities Returns from domestic and international assets
means that State Super remains a very significant are likely to be moderate at best until markets see
superannuation fund despite being closed to new a comprehensive solution to the European debt
members for over 20 years. problem, a sustainable recovery in the United
States and improved growth in China.
STC’s investment performance
Governance
During 2011–12, investment markets were
affected by continued weakness in the more STC’s response to these difficult economic and
developed global economies, with a series of debt market environments focused on further refinement
and currency crises in Europe. of investment processes. We added resources
to the areas of the organisation that drive better
Returns were also affected by concerns over returns for members and in order to improve
a faltering United States recovery and slower oversight of the Fund.
growth in China.
A key part of these efforts was the
The Australian economy performed relatively well re-establishment of the STC Investment
during the year; however, the market return from Committee. The role of this Committee is to
domestic equities, STC’s largest investment class, support the Board in its management of the
was negative over 2011–12. Fund’s assets.
4 | Report to Members 2011–12 www.statesuper.nsw.gov.auWe believe that the increased staff resources and
the Investment Committee should further enhance About your Chairperson
investment decision making over the long term.
As well as being Chairperson of SAS
STC’s investment teams have also been Trustee Corporation, Mr Carapiet is also
implementing a number of investment and asset Chairperson of the Safety, Return to Work
allocation changes to ensure that longer-term and Support Board that comprises the
investment returns can be improved. WorkCover Authority of NSW, Lifetime Care
and Support and Motor Accidents Authority.
Board changes He is a Director of Southern Cross Media
There were a number of Board changes during Limited and State Super Financial Services
the year. Australia Limited.
On behalf of the Trustee Board, I want to thank Mr Carapiet has more than 30 years
Anne De Salis for her valuable contribution to the experience in the financial sector and has
STC Board over the past six years. Karen Moses held a number of senior roles with the
was appointed to replace Anne De Salis as an Macquarie Group where he was a member
employer representative in March 2012. Karen’s of Macquarie’s Executive Committee
deep commercial and investment experience from 2005. Prior to his retirement in July
makes her well qualified to take on the trustee role. 2011, his roles included Global Head
of Advisory and Specialised Funds and
The 2012–13 financial year will also see the
Executive Chairman of Macquarie Capital
departures of Ian Blair and Nick Lewocki. Ian and
and Macquarie Securities. Mr Carapiet has
Nick have been on the Board since 1998 and both
a Master of Business Administration from
have made very significant contributions to STC
Macquarie University.
during their terms.
Mr Carapiet replaced Dr Don Russell,
I would like to take this opportunity to formally
who was Chairperson until 31 July 2011.
welcome John Livanas as Chief Executive Officer
of STC. John was appointed in October 2011
and brings to the role over 25 years experience in
the superannuation and investment management
industries. Prior to joining STC, John was the CEO
of AMIST Super.
Michael Carapiet
Chairperson
www.statesuper.nsw.gov.au Report to Members 2011–12 | 5CHIEF EXECUTIVE OFFICER’S REPORT
John Livanas
Chief Executive Officer since October 2011
A challenging year for investments
As the Chairperson has noted in his report, 2011–12 The strategic asset allocation for the Growth
proved to be a challenging year for investors. Strategy has been adjusted to increase its
exposure to alternatives.
The global economy struggled to cope with the
uncertainty generated by the European debt The strategic asset allocation for the Balanced and
problems, a faltering United States recovery Conservative strategies (these strategies apply
and a threatened slowdown in China. These only to SASS) will also progressively increase their
macro-economic factors led to reduced returns, allocation to alternatives over 2012–13.
especially for growth assets such as shares.
STC has adopted the Standard Risk Measures
Part of our response to this difficult economic and developed by the superannuation industry to assist
market environment has been to review and further members assess the investment risk for each
refine our investment strategies and processes. investment strategy. This change is of particular
relevance to SASS members who have member
STC is appointing additional staff within the
investment choice for their personal contributions
Executive. These additional resources will be used
and deferred benefit.
to provide greater oversight of the Fund and to
improve our ability to manage and monitor the Improving services to members
asset consultants and investment managers.
and employers
Asset allocation changes STC is committed to providing a high level of
STC recently completed the annual review service to our members and assisting members to
of its investment strategies. To better reflect the maximise their benefits.
different roles played by the various asset classes, During 2011–12, STC continued to work with the
STC now groups assets into three categories scheme administrator, Pillar Administration, to
– liquid growth, alternatives and liquid defensive (see improve member services and the effectiveness of
page 12 for information on these asset categories). administration processes.
Alternative assets encompass a range of asset Another ongoing focus has been to enhance the
classes including property, infrastructure, corporate coordination of Pillar’s administration services
debt, inflation linked bonds, absolute return funds with State Super Financial Services (SSFS); for
and private equity. These assets are expected example, members who phone the Pillar contact
to produce strong returns and to also provide centre seeking financial advice can now be
downside protection when markets are turbulent. transferred directly to an SSFS staff member.
6 | Report to Members 2011–12 www.statesuper.nsw.gov.auSSFS provides a range of advice and investment Your feedback is important to us and we value any
information services that are likely to be of benefit comments you have about State Super’s services.
to all members, whether they are contributors, If you have any suggestions about topics and
deferred benefit members or pension members. articles of interest for next year’s report, or have
STC and SSFS will be working on a number of any other queries, please email State Super at
joint initiatives in the coming year to increase enquiries@stc.nsw.gov.au or call 1300 652 113.
members’ awareness of their scheme and how
SSFS services may assist members with the
decisions they face.
John Livanas
One of our major priorities for the upcoming year
Chief Executive Officer
is a more information-rich and easier-to-navigate
website. This will make it easier for members
to access information about their scheme. We About your CEO
encourage all members to register for online
account access to their scheme so they can view As Chief Executive Officer, Mr Livanas’s
and update their personal information. main focus is to ensure that the Trustee
Board receives expert professional advice on
The SuperViews newsletter will be mailed which to make its decisions. This includes
directly to members twice a year commencing monitoring the performance of funds
in April 2013. We are looking forward to management, custody and administration
communicating directly with members more service providers, and managing the STC
frequently. SuperViews will feature more Executive team. Prior to this appointment,
scheme- specific information so that members John was the Chief Executive Officer of
can better understand how to maximise their AMIST Super, and before that he was the
entitlements. General Manager of FuturePlus Financial
STC is also aware that its defined benefit schemes Services.
are administratively complex and, to reduce errors Mr Livanas has been a board member on
and processing delays, STC is working with Pillar a number of financial industry entities and
to improve the information resources and training has lectured in the actuarial studies program
available to employers. at the University of New South Wales. His
qualifications include a Master of Business
University superannuation
Administration, a Bachelor of Science in
liabilities Engineering and a Postgraduate Diploma in
University superannuation liabilities featured in Finance and Investments.
the media during the year and, to keep members Mr Livanas replaced Chris Durack, who was
informed, an update on the funding of these Chief Executive Officer until 7 October 2011.
liabilities is provided on page 22.
We appreciate your feedback
and suggestions
You will notice there is more scheme-specific
information in this report, which we hope you
find useful.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 7YOUR TRUSTEE BOARD
The Directors of the Trustee Board are appointed by the Minister of
Finance and Services. The Trustee Board consists of:
• An independent Chairperson
• Four employer representatives
• Four employee representatives, nominated by
Unions NSW.
Professional indemnity insurance is in place in respect of
the Trustee Board and each Director. Michael Carapiet*
Chairperson
Appointed Aug 2011
Employer representatives
Ian Blair Michael Lambert Karen Moses Paul Scully
Company Director Company Director Company Director Company Director
Appointed Sept 1998 Appointed Feb 2004 Appointed Mar 2012 Appointed Feb 2004
Employee representatives
Nick Lewocki Ron Davis Rod Harty Sue Walsh
Retired Secretary Full-time Advocate and President of the
of the Rail, Tram Board member Industrial Officer for Public Service
and Bus Union Appointed Jul 1996 the Police Association Association of NSW
Appointed Sept 1998 of NSW Appointed Mar 2011
Appointed Jan 2002
*Dr Don Russell resigned as Chairperson effective from 31 July 2011.
8 | Report to Members 2011–12 www.statesuper.nsw.gov.auSAS Trustee Corporation (STC) is the Trustee of Trustee Board Committees
the four closed NSW Public Sector superannuation
schemes known as the STC schemes. The STC has established a number of Board
Committees to assist with the performance of
The functions of the Trustee Board include its functions and to monitor the compliance of
the administration of the schemes, the
external service providers against their contractual
determination of disputes, payment of benefits,
requirements. The Committees and the Board
and the investment and management of the STC
member representatives as at 30 June 2012 are
schemes’ assets.
listed below.
The STC Executive supports the Trustee Board • Actuarial Committee
in carrying out the day-to-day functions as well Paul Scully (Chairperson)
as managing the contracts with external service
R Davis, M Lambert, R Harty
providers.
• Disputes Committee
The Trustee Board membership and frequency of N Lewocki (Chairperson)
meetings are outlined below. I Blair, R Davis
• Human Resources & Governance
Meetings Possible
Committee
attended attendance
M Carapiet (Chairperson)
Mr M Carapiet* 9 9 I Blair, R Harty, S Walsh
Mr I Blair 8 10 • Investment Committee
M Carapiet (Chairperson)
Mr P Scully 8 10 M Lambert, P Scully, R Davis
Mr M Lambert 10 10 • Member Services Committee
Ms A De Salis** 4 5
R Harty (Chairperson)
R Davis, P Scully, M Lambert, S Walsh
Ms K Moses 3 4
• Risk, Audit & Compliance Committee
Mr R Davis 10 10 I Blair (Chairperson)
R Davis, M Lambert
Mr R Harty 10 10
• Police Superannuation Advisory
Ms S Walsh 8 10 Committee (PSAC)
Mr N Lewocki 8 10 R Davis (Chairperson); the PSAC also includes
nominees from the Police Association,
* Appointed as Chairperson of the Trustee Board on the Commissioned Officers’ Branch of
1 August 2011, following the resignation of Dr Russell. the Police Association, WorkCover NSW
** Completed Board appointed term. and the Minister for Police.
For more information about each of the
Trustee Board Committees, refer to the
2011– 12 STC Annual Report to Parliament,
which is available on the State Super website,
www.statesuper.nsw.gov.au
www.statesuper.nsw.gov.au Report to Members 2011–12 | 9CHAIRPERSON’S
INVESTMENT PERFORMANCE
REPORT
How is my benefit affected by investment performance?
For SSS and PSS members, your scheme benefits (other than the cash resignation benefit) are not
directly affected by investment returns as they are defined benefits calculated under the scheme
rules (generally payable as a lifetime pension). All of your member and employer contributions are
invested in the Growth Strategy.
The following table details the declared returns over the five years to 30 June 2012 for the Growth
Strategy, the investment strategy applicable to the SSS and PSS schemes.
Growth Strategy
Declared rate Median manager CPI
% p.a. % p.a. % p.a.
2011–12 0.4 0.5 1.2
2010–11 8.7 8.2 3.6
2009–10 9.2 10.0 3.1
2008–09 -10.3 -12.2 1.5
2007–08 -7.2 -7.6 4.5
Note: The figures above are after allowance for tax and investment management expenses. Past returns are no guarantee of
future returns. Median manager results are from the Mercer survey of superannuation funds.
Asset allocation
Generally, the proportions allocated to growth versus defensive assets are within plus or minus 5%
of the percentages shown. However, the Trustee may move outside the ranges where necessary to
accommodate specific circumstances.
Growth assets include equities, property and alternative assets.
Defensive assets include cash deposits, fixed interest securities and 50% of infrastructure.
*Alternative assets include unlisted equities, 50% of infrastructure, corporate debt, inflation-linked
bonds and absolute return strategies.
For up-to-date investment returns information, visit the State Super website at
www.statesuper.nsw.gov.au/investment_returns
10 | Report to Members 2011–12 www.statesuper.nsw.gov.auSTC INVESTMENT UPDATES AND CHANGES FOR 2012-13
Growth Strategy The Standard Risk Measures and
Investment objective: To maximise the methodology for calculating the
earnings rate subject to a greater than 50% risk of a negative return
probability of exceeding CPI+4.5% p.a. over
The Standard Risk Measures (SRMs) outlined in
rolling 10-year periods.
the table below show the investment strategy’s
Risk of negative return: Medium to high risk bands and risk labels. The SRMs are based on
(Risk Band 5: from 3 to less than 4 negative industry guidance and allow members to compare
annual returns estimated over any 20-year period). investment strategies that are expected to deliver a
smaller number of negative annual returns over any
Net asset value of Growth Strategy at
20-year period.
30 June 2012: $33,608 million.
The SRM for the Growth Strategy is medium
Strategic asset allocation at 30 June 2012
to high (Risk band 5).
Defensive Growth
assets assets
21.1% Risk Risk label Estimated number
78.9% band of negative annual
returns over any
20-year period
1 Very low Less than 0.5
Asset allocation as at Strategic Actual 2 Low 0.5 to less than 1
30 June 2012 % % 3 Low to medium 1 to less than 2
Australian equities 33.0 27.9 4 Medium 2 to less than 3
5 Medium to high 3 to less than 4
International equities 29.0 23.7
6 High 4 to less than 6
Property 9.0 8.6
7 Very high 6 or greater
Alternative assets* 15.0 13.1
Australian fixed interest 5.5 4.9 The estimated number of negative annual
returns over any 20-year period is calculated
International fixed interest 2.5 2.4 using Frontier’s (State Super’s asset consultant)
forward-looking capital market assumptions for each
Cash 6.0 19.4
asset class, applied to the strategic asset allocation
100.0 100.0 of the Growth Strategy.
Note: Annual negative returns can occur in consecutive years
and may exceed the estimated standard risk measure. For
Note: The return objectives for the Growth Strategy are
example, the Growth Strategy is estimated to experience
expected to be earned with reasonable likelihood over the
approximately 3 to 4 negative annual returns in any 20 years.
rolling period specified. However, annual returns may be
These negative annual returns can occur consecutively.
volatile and negative returns may occur in consecutive years.
Further negative annual returns may also be experienced
after these negative returns and within the same 20-year
time frame.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 11Asset allocation of the Growth Liquid defensive represents asset classes that
tend to do well when markets are turbulent. These
Strategy from 1 July 2012
asset classes provide capital protection when most
Effective 1 July 2012, the Trustee has adopted a other strategies are not performing well, but they
different classification within the asset allocation. are not expected to generate CPI+4.5% over the
Rather than allocating asset classes into two long term.
categories (growth and defensive), the Trustee now
allocates the asset classes into three categories Strategic asset allocation:
— liquid defensive, liquid growth and alternatives Growth Strategy
— to more closely reflect the role of each category
Effective from 1 July 2012, the strategic asset
within the portfolio.
allocation of the Growth Strategy was revised to:
Category Asset classes Asset Asset
Liquid growth Australian equities class (%) category (%)
International equities Australian equities 31.0
Alternatives Property International 23.0
Infrastructure equities
Other (includes corporate Liquid growth 54.0
debt, inflation-linked bonds, Property 8.0
absolute return strategies Infrastructure 9.0
and private equity).
Other alternatives 13.5
Liquid defensive Australian fixed interest
Alternatives 30.5
International fixed interest
Australian fixed 5.5
Cash interest
International fixed 2.5
Liquid growth is expected to make a large interest
contribution to long-term returns, but returns
Cash 7.5
are likely to be highly volatile. The allocation to
liquid growth, as well as the allocation between Liquid defensive 15.5
Australian equities and international equities within TOTAL 100.00 100.00
the liquid growth category, may be changed from
time to time depending on market opportunities.
The allocation to the Australian and international
Alternatives serve a dual purpose. Some of equity asset classes within the liquid growth
the asset classes in this category are expected category can vary +/- 21.0% from their respective
to generate returns in line with or higher than strategic asset allocation. The alternatives category
CPI+4.5%, which is the objective for the can vary by +/- 8.0%. Importantly, because this
Growth Strategy. Other asset classes within the category is illiquid and transactions take time, a
alternatives category are expected to have a portion of this category may include uninvested
dual objective of providing CPI+4.5%, but with funds which are temporarily invested in cash within
the ability to provide downside protection when the liquid defensive category. A minimum of 10.0%
markets are turbulent. exposure is required to liquid defensive.
12 | Report to Members 2011–12 www.statesuper.nsw.gov.auINVESTMENT POLICIES AT 30 JUNE 2012
Investment reserves Currency hedging policy
The Trustee Board has determined that The Trustee’s policy for currency hedging at
investment earnings will not be placed in an 30 June 2012 was:
investment reserve. Consequently, all available • international equities are hedged from
investment earnings or losses, after providing for 0% to 64% into Australian dollars
tax and investment expenses, are distributed to
• international property, infrastructure and
employers and members based on a declared
alternative assets are hedged from
rate which is determined monthly.
0% to 100% into Australian dollars
Where applicable, members exiting the schemes • international fixed interest assets (sovereign
receive a daily interim rate applicable since the last and corporate debt) are hedged 100% into
monthly rate was determined. Australian dollars.
Derivatives Passive rebalancing
Derivatives, including futures and options, can be The Pooled Fund passively rebalances the
used by investment managers. However, each tradeable asset classes in the portfolio in a
manager’s investment mandate clearly states disciplined manner in order to ensure the portfolio
that derivatives may only be used to facilitate conforms to the target asset allocation. Each day,
efficient cashflow management or to hedge the after the portfolio is valued, the index manager
portfolio against market movements, and cannot – State Street Global Advisors, Australia, Limited –
be used for speculative purposes or gearing the reviews the asset allocation for each strategy.
investment portfolio.
For the Growth Strategy, if an asset class has
During the year to 30 June 2012, the managers deviated outside a set range relative to the target
made limited use of derivatives, except for the asset allocation, the manager reallocates funds
passive rebalancing program, which makes between asset classes to return allocations within
extensive use of index futures. the agreed range. This rebalancing process may
involve the use of derivatives.
Master custodian
The Trustee Board has appointed JPMorgan Large investments
Chase Bank, NA, as master custodian to hold During the year, no individual investment directly
the Pooled Fund’s assets. The master custodian held by the Pooled Fund exceeded 5% of the
also values the Fund daily and monitors each Fund’s total investments.
investment manager’s daily activity to ensure
compliance with its investment mandate.
Asset consultant
The Trustee Board’s investment consultant,
Frontier Investment Consulting Pty Limited, advises
the Board on strategic asset allocation and fund
manager selection. The performance of each
investment manager is monitored throughout the
year and managers may be added or replaced.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 13INVESTMENT MANAGERS AT 30 JUNE 2012
Australian equities Property
AllianceBernstein Investment Management DEXUS Funds Management Limited
Australia Limited EG Funds Management Pty Ltd
BlackRock Investment Management LaSalle Investment Management via Equity
(Australia) Limited Trustee Limited
BT Investment Management (RE) Limited Franklin Templeton Investments Australia Limited
Ellerston Capital Limited SG Hiscock & Company Limited
Lazard Asset Management Pacific Co LaSalle Investment Management (Securities) L.P.
Macquarie Investment Management Limited State Street Global Advisors, Australia, Limited
Maple-Brown Abbott Limited Vanguard Investments Australia Ltd
Northcape Capital
Perennial Value Management Limited Australian fixed interest and cash
Platypus Asset Management Pty Ltd Deutsche Asset Management (Australia) Limited
State Street Global Advisors, Australia, Limited State Street Global Advisors, Australia, Limited
Wallara Asset Management Pty Limited
International fixed interest
International equities
State Street Global Advisors, Australia, Limited
(and currency)
AllianceBernstein Investment Management Alternative assets
Australia Limited Access Capital Advisers Pty Ltd
Altrinsic Global Advisors LLC Deutsche Asset Management (Australia) Limited
AQR Capital Management, LLC GMO Australia Limited
Arrowstreet Capital L.P. Kaplan Funds Management Pty Limited
AXA Rosenberg Investment Management Macquarie Investment Management Limited
Asia Pacific Ltd New South Wales Treasury Corporation
Axiom International Investors LLC Pareto Investment Management Limited
Capital International, Inc Propel Investments Pty Ltd
Fidelity International Limited RARE Infrastructure Limited
Genesis Asset Managers LLP Siguler Guff & Company
Lazard Asset Management Pacific Co State Street Global Advisors, Australia, Limited
Pareto Investment Management Limited
RealIndex Investments Pty Limited
State Street Global Advisors, Australia, Limited
Trilogy Global Advisors, LP
14 | Report to Members 2011–12 www.statesuper.nsw.gov.auMEMBER SERVICES
Seminars Keep track of your scheme
State Super offers retirement planning seminars. benefits online
See page 16 for more details. It couldn’t be easier to keep track of your scheme
benefits online via the Member’s Login Area.
Personal interview service
Registering for online access enables you to:
As part of member services, free personal
interviews are available for current and deferred • update your contact details
benefit members. Members are provided with • view and download your last Annual Benefit
general advice about scheme and superannuation Statement
information. Please see the back cover for details • request an online benefit quote
about the locations where free personal interviews
• and much more!
are conducted.
Most importantly, the Member’s Login Area is
Visit the State Super website secure. You have your own personal login and
www.statesuper.nsw.gov.au password, which means you are the only one who
can access your information.
to find:
To register for online access to your scheme,
• information about your scheme
simply go to the State Super website,
• fact sheets for all schemes www.statesuper.nsw.gov.au, click on the Member’s
• update your personal details Login Area link for your scheme and complete the
• information about seminars new user registration details.
• investment performance information
• salary-sacrifice calculators Key statistics
• FAQs. The following is a summary of the services
provided to State Super members during
Fact sheets 2011–12:
Details about the rules, benefit entitlements and • 2,143 personal interviews conducted
membership conditions of the STC schemes are
• 8,486 letters received
provided in a series of fact sheets. For copies, visit
the STC website or contact Customer Service. • 10,373 emails received
• 111,242 telephone calls received
Access to retirement planning • 3,292 members attended a retirement
advice seminar.
Financial planning services are provided by State
Super Financial Services Australia Limited (SSFS)
for current and former members of the State Super
schemes and their relatives. See page 19 for
more details.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 15MEMBER SERVICES (CONTINUED)
Direct mailing of SuperViews
from 2013
From 2013 onwards, we will be mailing the
SuperViews newsletters directly to you twice
a year. You will receive the first edition in April
and another edition in October, along with
your annual statement mailing pack.
Nanda Fraser Mailing SuperViews to members will allow
Manager, Seminar Services STC to communicate directly to members
on a more regular basis. It will also help
Retirement planning seminars ensure that all members are appropriately
Retirement planning seminars are designed to ensure updated with any scheme changes or
that you understand the important benefits of your significant events that may be occurring in the
scheme membership. superannuation industry.
Schedule of SSS retirement From October 2013, SuperViews will replace
planning seminars the Report to Members in your annual
statement mailing pack. An online version of
Location Date Time the Report to Members will be available on
the State Super website. If you would like to
Albury 7 November 4.30pm – 8.30pm
receive a hard copy of the Report, you may
Deniliquin 8 November 4.30pm – 8.30pm request a printed copy by sending an email to
Penrith 13 November 4.30pm – 8.30pm enquiries@stc.nsw.gov.au
Parramatta 20 November 4.30pm – 8.30pm
Sydney 6 December 9.00am – 1.00pm
Sydney 14 January 9.00am – 1.00pm
Wollongong 17 January 4.30pm – 8.30pm
Newcastle 24 January 4.30pm – 8.30pm
Member seminars are free to attend, however
bookings are essential.
To reserve your place, call 1300 130 095 or email
stcseminars@statesuper.nsw.gov.au
16 | Report to Members 2011–12 www.statesuper.nsw.gov.auACCESSING YOUR BENEFITS FROM AGE 65
If you’re 65 or older, you can If you remain an employee at age 70, you have
the option to commute all or part of your pension
receive your benefits without
to a lump sum and defer the lump sum within the
ceasing your current employment scheme as long as you work a minimum of 30
Once you reach age 65, you can exit your SSS hours each week.
or PSS scheme and receive the benefits you’re
entitled to while you continue to work.
Important commutation
considerations for SSS members
There are a number of payment options. You may
choose to either: If you keep working and contributing to your
SSS scheme after reaching age 65, your scheme
• receive your benefit as a pension
benefits will continue to increase in response to
• receive your benefit as a lump sum any increases in your salary (and, in the case of the
• receive part of your benefit as a pension and basic benefit, due to longer service).
part as a lump sum.
However, if you were considering commuting
In addition to your SSS and PSS benefits, you are (exchanging) all or part of your pension entitlement
also entitled to the SANCS basic benefit, which is for a lump sum, you should be aware that the
only payable as a lump sum. commutation factor that is used to calculate your
lump-sum benefit will progressively reduce from
If you elect to exchange all or part of your pension
age 65.
to a lump sum, you can defer the lump sum in the
scheme for payment at a later date or roll it over to
a complying superannuation fund of your choice.
This ‘deferred lump sum’ will be adjusted for
investment earnings and management charges up
to the date of payment.
If you choose to access your benefit by leaving
the scheme and continue to work, your employer
will still be required to pay superannuation
contributions to another complying superannuation
fund for the period that you continue working.
If you choose the deferred lump-sum option, you
should be aware that if you’re between 65 and 70
the deferred benefit will automatically be paid to
you if you stop work altogether or are working less
than 10 hours per week.
From age 70
Once you reach age 70, SSS and PSS cannot
accept any further contributions. Benefits will stop
accruing and you must commence to be paid the
pension that you are entitled to on retirement at
that age.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 17ACCESSING YOUR BENEFITS AT AGE 65 (CONTINUED)
The following examples illustrate the final lump-sum factors that will be used if a SSS member applies for
a pension after age 65.
Example 1 Example 2
Gerald is aged 65 and although he is still Michael is aged 67 and although he is still
working, he decides to access his scheme working, he decides to access his scheme
benefits and commute his SSS pension to a benefits and commute all of his SSS pension
lump sum. to a lump sum.
His pension commences six months after his His pension commences on Michael’s 67th
65th birthday, with the election to commute birthday, with the election to commute being
being effective the same date. The lump-sum effective six months after this date. The
factor (i.e. the amount Gerald receives for lump-sum factor (i.e. the amount Michael
each $1.00 of fortnightly pension exchanged) receives for each $1.00 of fortnightly pension
would be reduced by 2.3 cents per day for exchanged) would be reduced by 2.3 cents
each day from Gerald’s 65th birthday. per day for each day from Michael’s 65th
birthday.
In this example, $245.81 as a lump sum
would be payable for each $1.00 of fortnightly In this example, $229.02 as a lump sum
pension payable. This is calculated as would be payable for each $1.00 of fortnightly
$250.00 reduced by 182 days @ 2.3 cents pension payable. This is calculated as $250.00
per day ($4.19) = $245.81. reduced by 912 days @ 2.3 cents per day
($20.98) = $229.02.
Assuming Gerald is entitled to receive $1,680.00
pension per fortnight, the total lump sum Assuming Michael is entitled to receive
amount payable is $1,680.00 x 245.81 = $1,680.00 pension per fortnight, the total lump
$412,961.00 sum amount payable is $1,680.00 x 229.02=
$384,754.00
As you can see from the examples above, the amount of the lump sum received for each $1 of
fortnightly pension exchanged is progressively reduced, as though the pension had begun on
the member’s 65th birthday.
SSS reversionary benefits and commutations
If you decide to exchange all or part of your pension for a lump sum, the spouse or de facto pension
entitlement is not affected.
Under the scheme rules, a reversionary beneficiary is entitled to a pension at the rate of two-thirds of
the pension the deceased member would have been receiving at the time of their death. The pension
entitlement is payable regardless of whether the member commuted their pension.
18 | Report to Members 2011–12 www.statesuper.nsw.gov.auImportant information for PSS The SSFS website has a number of calculators
and educational tools which can assist you with
members and reversionary benefits
your financial decisions. These include:
As a member of PSS, a pension is payable to an • budget and savings calculator
eligible spouse or de facto partner when you die.
• loan reduction calculator
If you choose to receive your benefit at or after age • investment property purchase calculator
65 and commute a portion of your pension, your
• basic advice series videos which cover a
spouse or partner’s pension entitlement will be
range of topics.
reduced on a proportional basis.
You can contact SSFS on:
Similarly, a pension will not be paid to your spouse
or de facto partner if you exchanged the whole Telephone: 1800 620 305
of your pension entitlement for a lump sum. Website: www.ssfs.com.au
This rule has long-term implications and needs
to be considered when choosing how to access
your benefit.
Advice – more important than ever*
As you can see, it is important you think carefully
about when and how you want to access your
State Super Financial Services Australia Limited (SSFS) is
benefit. If you are unsure, you should speak to a the holder of Australian Financial Services Licence 238430,
financial adviser. ABN 86 003 742 756 and is a member of the Association
of Superannuation Funds of Australia (ASFA); the Financial
State Super Financial Services Australia Limited Services Council (FSC) and is a Financial Planning Association
(SSFS) provides financial planning and investment of Australia (FPA) Professional Practice. To the full extent
advisory services to State Super members and permitted by law, neither the SAS Trustee Corporation nor
their relatives. SSFS is wholly owned by STC. the Australian or NSW Government take any responsibility for
information or services offered by SSFS, and nor do they or
*The following information outlines the services provided by SSFS guarantee the performance of any product provided
State Super Financial Services Australia Limited. Please note by SSFS.
the disclaimer on this page.
Members can access over the phone general and
personal advice on selected information such as:
• changes to superannuation and tax law
• salary-sacrifice strategies
• pension and lump-sum options.
This service is free of charge for SSS and
PSS members and their relatives. Access to
face-to-face interviews and comprehensive
advice is also available.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 19COMMONWEALTH CHANGES AFFECTING SUPERANNUATION
The Commonwealth Government However, this applies only to concessional
contributions made to SSS or PSS. Any
has introduced a number of
concessional contributions made to other
changes that may impact some superannuation funds will not be covered by the
SSS and PSS members. deeming provision and will be added to your SSS
or PSS concessional contributions.
Changes to the concessional
If the total of your reported concessional
contributions cap for members contributions to your SSS or PSS scheme and any
aged 50 years and over other superannuation funds exceeds $25,000, the
The concessional contributions cap for members excess concessional contribution amount will be
aged 50 years and over has reduced from taxed at a higher rate.
$50,000 to $25,000, effective 1 July 2012. If your SSS or PSS concessional contributions are
Concessional contributions are generally known below the capped amount for the financial year,
as pre-tax contributions. we will report the actual amount of concessional
As a member of SSS and PSS, your concessional contributions to the ATO.
contributions will include the notional amount
Introduction of the low income
of employer contributions made to finance your
employer-financed benefit and any salary-sacrifice superannuation contribution (LISC)
contributions you make to SSS or PSS. Your From 1 July 2012, if you earn less than $37,000 a
concessional contributions will also include any year and concessional (before-tax) contributions
employer or salary-sacrifice contributions made to are made into your superannuation scheme, you
any other superannuation funds. may be eligible to receive a payment of up to $500
directly into your superannuation account.
Special deeming provisions for
defined benefit schemes This payment is called the low income
superannuation contribution (LISC). It is calculated
Defined benefit funds such as SSS and PSS at a rate of 15% of the total eligible concessional
are treated differently when it comes to the contributions for the year, up to the maximum
concessional contributions cap. of $500. For eligible members, this payment
Under superannuation regulations, members effectively returns tax paid on superannuation
of these schemes are covered by a deeming contributions made to their account.
provision which means that if you exceed the For SSS and PSS members, the LISC will be
annual concessional contributions cap, your excess deposited to your SANCS co-contribution account.
contributions will be deemed to be within the cap
and will be reported to the Australian Taxation
Office (ATO) as the capped amount of $25,000.
20 | Report to Members 2011–12 www.statesuper.nsw.gov.auGovernment co-contribution The Commonwealth Government recently enacted
legislation to gradually increase the SG rate from
If you are eligible and make personal after-tax 9% to 12% from 1 July 2013 to 1 July 2019.
contributions to your super, the Commonwealth
Government will match your personal after-tax STC schemes measure the employer-financed
contributions with a co-contribution up to a certain benefit payable, including the basic benefit, against
limit. the SG that would have accrued. If the
employer-financed benefit payable from the scheme
In the 2012–13 Budget, the Commonwealth is lower than the SG amount payable, an additional
Government announced proposed reductions to payment representing the difference is also paid.
the co-contributions scheme. From 1 July 2012, This amount will be represented on your annual
the matching rate will be halved to 50%, with benefit statement as the Superannuation Guarantee
the maximum co-contribution entitlement to be shortfall amount.
reduced from $1,000 to $500. The higher income
threshold has also been reduced from $61,920 Would you like more information?
to $46,920. To find out if you are eligible for the
The following publications provide further
Government co-contribution, please visit
information about the recent Commonwealth
www.ato.gov.au
Government changes:
Increase in the Superannuation • SuperViews August 2012
Guarantee • SSS Fact Sheet 23 – Concessional
Contributions Cap
The Superannuation Guarantee (SG) legislation
sets minimum levels of superannuation • PSS Fact Sheet 16 – Concessional
contributions that an employer must make on Contributions Cap
behalf of their employees. Under SG, defined • STC Fact Sheet 13 – Information about the
benefit schemes such as SSS and PSS must Commonwealth Government’s superannuation
ensure the employer-financed benefit, is equal to co-contributions.
or worth more than an entitlement under the SG.
These publications are available on the
State Super website at www.statesuper.gov.au
www.statesuper.nsw.gov.au Report to Members 2011–12 | 21UNIVERSITY SUPERANNUATION LIABILITIES Universities in NSW have many current and former employees who are longstanding members of the State Super schemes. The Trustee is aware that some members have been concerned that the universities need to make additional employer contributions to cover their State Super liabilities. The actuary for the State Super schemes has estimated that, without additional contributions, the separate university employer reserves in the fund are likely to become exhausted over the period from 2015 to 2022. The Trustee has written to each university to obtain agreement to a funding plan for additional employer contributions from 2013–14 onwards. The funding plans are intended to ensure that each university’s reserves in the Fund will remain sufficient to meet the entire cost of the State Super benefits payable. From a practical perspective, the Trustee is aware that the ability of the universities to agree to a funding plan and budget for the additional contributions is dependent on the outcome of negotiations currently underway between the NSW and Commonwealth governments. The purpose of the negotiations is to determine each government’s share of the superannuation funding required by the universities. Both governments have indicated that they are seeking to settle the funding issue as soon as possible. At the time this report was written, the negotiations had not been finalised. As further information becomes available, the Trustee will provide updates on the State Super website, www.statesuper.nsw.gov.au. 22 | Report to Members 2011–12 www.statesuper.nsw.gov.au
FEES AND CHARGES
Direct fees Indirect fees
Management charge Investment management costs
Generally, the direct fees and costs associated Investment management expenses are deducted
with SSS and PSS are met by the employer. from investment gains or losses before determining
the declared rate, and are borne indirectly by
Deferred benefit members with a deferred SANCS
members by way of a reduced rate of investment
benefit are subject to an annual administration fee
return. For further details, please refer to the
of $20.
State Super website www.statesuper.nsw.gov.au/
Family law fees investments.
A fee of $275 ($110 for deferred benefit members) For contributory members, investment gains or
is charged for all requests for information from a losses affect the balance of the following accounts:
member or spouse of the member in regard to • the personal account and the reserve units
family law matters. account for SSS members
A fee of $1,347.50 is charged for splitting a • the Commonwealth Government
benefit, with half being deducted from the benefit co-contribution account.
of the non-member spouse. The member’s share For deferred benefit members, investment gains
of the fee is payable by cheque if the member is or losses affect the amount of the:
not entitled to a benefit payment at the time of the
• immediate lump sum
family law split. If a benefit payment is due to the
member at the time of the family law split, the fee • deferred lump sum
can be deducted from the member’s benefit. • SANCS basic benefit
• Commonwealth Government co-contribution
account.
For PSS and SSS members, the indirect fees and
costs are not borne by members who receive a
retirement benefit from the scheme, as retirement
benefit calculations do not directly rely on the
balance of the accounts mentioned previously.
Indirect cost percentage
Investment management expenses shown in
the annual benefit statements are calculated by
multiplying the average balance in applicable
accounts over the year by an indirect cost
percentage. The actual indirect cost percentage
for the Growth Strategy for 2011–12 was 0.34%
and it is estimated that this will be the rate
for 2012–13.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 23FINANCIAL REPORTS AT 30 JUNE
The following tables provide abridged financial information about STC schemes for the last two
financial years. The financial statements for the year to 30 June 2012 are currently being audited by the
Auditor General and will be available on the STC website after STC’s Annual Report has been tabled in
the NSW Parliament.
Statement of net assets
2012 2011
($ million) ($ million)
Investments
Short-term securities 7,106.6 2,789.1
Australian fixed interest 1,767.4 2,678.5
International fixed interest 839.8 1,382.2
Australian equities 9,513.1 10,171.2
International equities 7,992.3 8,201.5
Property 3,044.6 3,105.6
Alternatives 4,565.6 3,665.4
34,829.4 31,993.5
Other assets
Cash and cash equivalents 2.1 1.5
Receivables 415.9 400.0
Plant and equipment 0.4 0.2
Current tax asset – 6.4
Deferred tax asset 64.7 40.9
483.1 449.0
Total assets 35,312.5 32,442.5
Liabilities
Reserve units 1.5 1.9
Payables 271.6 261.2
Current tax liability 687.5 –
Total liabilities 960.6 263.1
Net assets available to pay benefits 34,351.9 32,179.4
24 | Report to Members 2011–12 www.statesuper.nsw.gov.auStatement of net assets
2012 2011
($ million) ($ million)
Net assets available to pay benefits at beginning of financial year 32,179.4 30,743.2
Contribution revenue
Employer contributions 6,144.9 1,494.7
Member contributions 503.5 522.4
6,648.4 2,017.1
Transfers
Scheme mobility transfer 0.6 2.3
Other 0.5 –
1.1 2.3
Investment revenue
Short-term securities 36.5 4.6
Australian fixed interest 97.9 107.0
International fixed interest 24.9 29.4
Australian equities 479.7 457.4
International equities 213.2 247.2
Property 175.7 158.6
Alternatives 260.7 226.9
1,288.6 1,231.1
Changes in net market values of investments (1,240.2) 1,780.1
48.4 3,011.2
Investment expenses (85.8) (86.4)
Net investment revenue (37.4) 2,924.8
Other revenue 5.0 2.0
Total revenue 6,617.1 4,946.2
Benefits paid (3,689.2) (3,384.1)
Scheme administration expenses (34.9) (32.1)
Superannuation Contributions surcharge 6.9 5.9
Other expenses (0.4) (0.5)
Total expenses (3,717.6) (3,410.8)
Change in net assets before income tax 2,899.5 1,535.4
Income tax benefit/(expense) (727.0) (99.2)
Change in net assets available to pay benefits 2,172.5 1,436.2
After income tax
Net assets available to pay benefits at end of financial year 34,351.9 32,179.4
www.statesuper.nsw.gov.au Report to Members 2011–12 | 25COMPLAINTS AND DISPUTES, PRIVACY
Complaints and disputes Privacy
If you have a question about your account As a NSW Government body, the Trustee Board
or benefits, you should initially contact must comply with relevant legislation, including the
Customer Service. If you are dissatisfied with Privacy and Personal Information Protection Act
an administrative action, you may lodge a 1998 (the Privacy Act) and the Health Records and
complaint with the scheme administrator (Pillar Information Privacy Act 2002 (HRIP Act).
Administration).
The Trustee Board has developed a Privacy
If you feel you have been unfairly treated or are Management Plan (Plan) and, with the assistance
disadvantaged by a decision of the scheme of the scheme administrator, Pillar Administration,
administrator relating to a benefit entitlement, you has implemented the Plan’s policies and
may lodge a notice of dispute with the Trustee procedures. A Privacy Statement is available to
Board within two years of being notified of the members explaining how the Trustee Board deals
decision. Send the notice to: with members’ personal and health information
that may be collected and used in the course of
The Manager
administering STC schemes.
Disputes and Appeals
SAS Trustee Corporation The Privacy Statement details how STC and
PO Box N259 Pillar Administration comply with the requirements
Grosvenor Place NSW 1220 of the Privacy and HRIP Acts.
You may then be requested to clarify certain The Trustee Board must also ensure its records
details relating to your dispute and to provide of members’ personal details are up to date
additional supporting evidence. Your dispute will and accurate. Therefore it may be necessary to
then be referred to the Disputes Committee for disclose members’ personal information to third
consideration. parties. The Trustee Board takes steps to ensure
there is no unauthorised use or disclosure of
You will be notified of the outcome of the Disputes
members’ information by those third parties.
Committee review.
The Privacy Statement is available on request and
If you are dissatisfied with the review of that
from the State Super website.
decision, you may lodge an appeal with the
Industrial Court of New South Wales within
six months of being notified of the outcome of
the review, or within a further time allowed by
the Court.
The Commonwealth Superannuation Complaints
Tribunal does not action STC scheme member
complaints.
26 | Report to Members 2011–12 www.statesuper.nsw.gov.auCOMPLIANCE AND LEGISLATIVE REQUIREMENTS
(Government Information Compliance
Public Access Act 2009) STC schemes are exempt public sector
The Trustee must comply with relevant NSW superannuation schemes under the
legislation, including the NSW Government Commonwealth Government’s Superannuation
Information (Public Access) Act 2009 (the GIPA Act). Industry (Supervision) Act 1993 (SIS). The
SIS legislation treats exempt public sector
Under the GIPA Act, all government agencies superannuation schemes as complying
must make certain information, known as ‘open superannuation funds for concessional taxation
access information’, publicly available, unless there and Superannuation Guarantee purposes.
is an overriding public interest against disclosure.
Generally, open access information must be Under a Heads of Government agreement,
available on an agency’s website, and at least one the NSW Government undertakes to ensure
method of access must be free of charge. STC schemes conform with the principles of the
Commonwealth Government’s retirement incomes
STC publications that can be obtained free of policy relating to preservation, vesting, reporting to
charge from the State Super website include: members and adequate protection of members’
• policy documents and procedure manuals benefits.
• STC’s publication guide, which describes the The Superannuation Administration Act 1996
structure and functions of the Trustee enables the NSW Government to prudentially
• a disclosure register of formal applications that monitor and audit the STC schemes and Trustee
have been made by members requesting open Board activities in a manner consistent with the
access information prudential controls of the SIS legislation. These
• a register of STC’s contracts with private provisions are in addition to other legislative
sector organisations that are worth more than obligations on the Trustee Board and internal
$150,000 processes that monitor the Trustee Board’s
adherence to the principles of the retirement
• documents that have been tabled in Parliament incomes policy.
by or on behalf of STC.
STC will also publish on its website details about
open access information that may not be disclosed
due to an overriding public interest.
Please contact Customer Service to confirm that
no other avenue for gaining information exists
before deciding to apply under the GIPA Act.
For further information, please refer to the STC All
Schemes Fact Sheet 9 Government Information
(Public Access) Act & Privacy, which is available on
the State Super website.
www.statesuper.nsw.gov.au Report to Members 2011–12 | 27CONTACT DETAILS
Customer Service Personal interview service
For an interview appointment in Sydney, call
State Superannuation Scheme
(02) 9238 5540.
(SSS) 1300 130 096
Police Superannuation Scheme You can also arrange interviews at:
(PSS) 1300 130 097 Newcastle 1800 807 855
Pension members 1300 652 113 Parramatta 1800 626 000
Deferred benefit members 1300 130 094 Port Macquarie 1800 676 839
Wollongong 1800 060 166
8.30am to 5.30pm, Monday to Friday for the cost
of a local call (except from a mobile or pay phone). Fax service
Need help with English? (02) 4253 1688
For members who need help with English, Mailing address
Customer Service can make arrangements
For Customer Service and Pillar Administration:
for information to be translated through the
Government Interpreter Service. PO Box 1229
Wollongong NSW 2500
Arabic
For SAS Trustee Corporation (the Trustee Board)
and the Office of the Full-time Board member:
PO Box N259
Chinese Grosvenor Place NSW 1220
Website
www.statesuper.nsw.gov.au
Greek
Email
enquiries@stc.nsw.gov.au
Financial planning advice
Italian
Per i contribuenti che hanno difficoltà nel
comprendere l´inglese il servizio clienti può
provvedere alla traduzione dei dati informativi.
State Super Financial Services Australia Limited
Vietnamese Telephone: 1800 620 305
Weekdays: 8.45am – 5.15pm
statesuper.nsw.gov.au
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