Lump Sum Scheme Member guide - Product Disclosure Statement - Super SA
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Member guide Lump Sum Scheme Product Disclosure Statement Date of issue: 14 December 2020
Important Information
Disclaimer About this document
This Product Disclosure Statement (PDS) provides a general This Product Disclosure Statement (PDS) provides you with
summary to help you understand your entitlements in the a general description of the Lump Sum Scheme and its
Lump Sum Scheme. Super SA does its best to make sure the features. If you are seeking advice that takes into account
information is accurate and up-to-date. However, you need your objectives, financial situation or needs, you will need to
to be aware that it may not include all the technical details contact a licensed financial adviser.
relevant to the topic. For the complete rules of the Lump Sum The issuer of this PDS is the South Australian Superannuation
Scheme, please refer to the Superannuation Act 1988. The Act Board, established under Section 6 of the Superannuation
and accompanying Regulations set out the rules under which Act 1988, and conducting business under the name of the
the Lump Sum Scheme is administered and entitlements are Super SA Board. The Super SA office is the administrator of
paid. You can access a copy from the Super SA website. the Scheme and is a branch of the Department of Treasury
Super SA and the State Government disclaim all liability for and Finance of the Government of South Australia.
all claims, losses, damages, costs or expenses whatsoever Changes to Acts and Regulations are effective from the
(including consequential or incidental loss or damage), date specified in the legislation. Updates to this PDS will be
which arise as a result of or in connection with any use of, or available on the Super SA website at supersa.sa.gov.au. An
reliance upon, any information in this PDS. up to date version of this PDS will always be available to
download from the website. The website can be accessed at
any time to review information.
Super SA is an exempt public sector superannuation fund,
and is therefore not regulated by the Australian Securities
and Investments Commission (ASIC). However, we make
every effort to comply with the spirit of the financial services
regulations that are overseen by ASIC. We are an exempt
fund, and therefore do not hold an Australian Financial
Services (AFS) licence. As an exempt fund, we are not required
to produce a PDS, but have prepared this document so you
can understand your entitlements and options and the rules
of the Scheme.
2Contents
1. The scheme.................................... 4 6. Options for your lump sum
1.1 Welcome........................................................................................4 entitlement................................. 24
1.2 Understanding your super components...............................4
1.3 Your entitlements........................................................................4 7. Transition to Retirement............ 25
1.4 The Super SA Board................................................................... 5
7.1 Understanding Transition to Retirement........................... 25
1.5 Complaints resolution process............................................... 5
1.6 Funds SA....................................................................................... 5 8. Fees, costs and taxes.................. 26
1.7 Privacy........................................................................................... 5
8.1 Fees and costs summary........................................................ 26
2. Grow your super........................... 6 8.2 Annual administration fee .................................................... 27
8.3 Investment fees........................................................................ 27
2.1 Member contributions.............................................................. 6
8.4 Tax................................................................................................28
2.2 Salary sacrifice............................................................................ 8
8.5 Surcharge ..................................................................................29
2.3 Additional after-tax lump sum contributions into
Triple S .......................................................................................... 9
9. Member communication............ 30
3. Investment of funds................... 10
3.1 Converting your super dollars into units............................10
10. Additional information...............31
3.2 Switching options.....................................................................10 10.1 Commonwealth Government’s co-contribution
3.3 Investment Choice – your investment options.................10 scheme ........................................................................................31
3.4 Risk of investments....................................................................11 10.2 Superannuation and the breakdown of marriage
and de facto relationships..................................................... 32
3.5 Asset classes............................................................................... 12
3.6 Rates of return...........................................................................13 11. Glossary of terms....................... 33
4. Investment options.....................14
5. Member entitlements.................19
5.1 Retirement..................................................................................19
5.2 Resignation.................................................................................21
5.3 Targeted Voluntary Separation Package (TVSP)...............21
5.4 Retrenchment........................................................................... 22
5.5 Temporary disablement entitlements
(income protection)................................................................. 22
5.6 Permanent disablement entitlements................................ 22
5.7 Death entitlements.................................................................. 22
5.8 Leave without pay and your entitlements......................... 23
31. The scheme
1.1 Welcome Member Account
Superannuation is an important part of your financial Your Member Account is made up of the contributions
planning. It can play a significant role in helping you achieve you have made to the Lump Sum Scheme plus investment
the lifestyle and income that you want in retirement. earnings.
Past and present SA public sector employees enjoy the Rollover Account
benefits of being members of the Lump Sum Scheme.
Your super contributions invested with other schemes can be
The Lump Sum Scheme was established on 1 July 1988 and transferred to the Lump Sum Scheme. This is called “rolling
closed to new members on 3 May 1994. It is administered over” your funds. By rolling this super into the Lump Sum
under the provisions of the Superannuation Act 1988 and Scheme you can minimise the fees that you pay.
provides a lump sum entitlement on retirement with
To consolidate your super into the Lump Sum Scheme:
provision for entitlements in the event of death, total and
permanent disablement and upon resignation. 1. Log into your MyGov account and link to the Australian
Taxation Office (ATO)
The information in this PDS is designed to give you a better
understanding of the Lump Sum Scheme and the options and 2. Select the super funds you wish to transfer from and to
benefits that it offers. 3. Click to request the transfer.
We encourage you to read it and keep it as a reference. At Alternatively, you can roll in using a form:
the end you will find a Glossary, which explains many of the
terms used throughout the PDS. 1. Complete one Easy Roll In Form for each super account
you want to roll in. The Easy Roll In Form is available on
The contents of this PDS will continue to be updated the Super SA website
regularly, and the most up-to-date version is always
available to download from the Super SA website at 2. Send your form(s) to Super SA. We will request the roll
www.supersa.sa.gov.au. in from your other super fund(s).
If, after reading it, you have any questions or require further When we have received the roll in, we will write to you and let
information, contact Super SA on 1300 369 315. Super SA can you know.
also be contacted by email at supersa@sa.gov.au. You may wish to seek financial advice regarding rolling in
Additionally, a comprehensive range of fact sheets and other your funds and you should consider whether you will lose any
information is available on the website. features, such as insurance, if you roll over your other funds.
1.2 Understanding your super components Your Rollover Account comprises:
Your super is made up of an Employer Component and a – amounts you have rolled over from other schemes
Member Component. – investment earnings on rolled-over amounts.
Employer Component You will not be able to access any of these rollover funds
Your Employer Component is, in most cases, defined and while you are working for the SA Government. This includes
calculated according to the following criteria: any funds that are non-preserved. Once you have left your
employment with the SA Government, rollover funds are
– age at leaving the Scheme payable subject to Commonwealth preservation rules (see
– number of months of contributory membership Glossary of terms).
– elected contribution rate Lump Sum Scheme members will also have an account in
Triple S if they:
– proportion of time worked during your contributory
membership – make salary sacrifice contributions
– your Entitlements Superannuation Salary (ESS) – receive the Commonwealth Government’s co-
(See Glossary of terms). contribution
Public Sector Employee Superannuation Scheme – become a non-contributory member of the Lump Sum
Scheme
Some members may also have a Public Sector Employee
Superannuation Scheme (PSESS) entitlement, which forms – have more than one employer in the SA Government with
part of their Employer Component and is shown separately hours exceeding one full-time equivalent (FTE)
on the Annual Statement. – have a permanent position (FTE or less) plus a casual
The PSESS Scheme was introduced by the then State position in the SA Government.
Government on 1 January 1988 in lieu of a pay increase for
1.3 Your entitlements
SA public sector employees.
An entitlement is payable upon:
It represented a payment equal to 3% of your salary, which
was paid into your PSESS Account. PSESS closed on 30 June – Retirement
1992 and the balances were transferred to the Lump Sum – Resignation
Scheme.
– Resignation, where you receive a Targeted Voluntary
Member Component Separation Package
Your Member Component is made up of your: – Retrenchment
– Member Account – Temporary disablement
– Rollover Account (if any). – Total and permanent disablement
– Death
– Transition to Retirement.
4Your entitlements and financial hardship 1.7 Privacy
As a member of the Lump Sum Scheme you can only apply Your personal information and super details are confidential.
for an early release of superannuation on compassionate Under the Act, information about your entitlements can only
grounds and/or severe financial hardship from the Rollover be disclosed:
Account component of your scheme. An early release of – as required by, or under, any State or Commonwealth Act
benefit cannot be paid from your Member Account, PSESS
Account (if any) or Defined Benefit component. – to you, or to someone else, with your consent
You may wish to seek financial advice when considering your – to your employing agency
Lump Sum Scheme entitlements. If you’re looking for detailed – on application, to your spouse or former spouse, under
personal advice, you can choose your own financial planner the Family Law Act 1975
or you can take advantage of the commission-free financial
planning service available through Industry Fund Services. – to any other person for purposes related to the
administration of the Act
More information about financial planning is available on the
Super SA website. – as may be required by a Court of Law.
1.4 The Super SA Board
The Super SA Board is responsible for managing the Lump
Sum Scheme in line with the appropriate Acts and legislation.
The Super SA Board may use the services of professionals
such as auditors, administrators, lawyers, actuaries and
consultants to fulfil its responsibilities.
The Super SA Board comprises a presiding member, two
members appointed by the Governor and two members
elected by Scheme members.
1.5 Complaints resolution process
Super SA aims to resolve all matters through its internal
enquiry and complaints processes.
If you have any concerns with a product, service or decision
provided by Super SA and our Member Service Centre has
not been able to provide a satisfactory response, you can
escalate the matter by lodging a formal complaint with
Super SA. Complaints need to be in writing and may be
submitted in the following ways:
Online: Complete and submit the online Member Complaint
form.
Download from the website: Download, complete and send
the Member Complaint form to Super SA.
Mail: Complaints Officer, Super SA
GPO Box 48, Adelaide SA 5001.
Via email: supercomplaints@sa.gov.au
If the Complaints Officer cannot resolve the issue, you may
choose to refer your complaint to the Super SA Board or have
the matter investigated by the State Ombudsman.
An application to the Super SA Board to review a decision
must be lodged within three months of receiving notice of
the decision.
1.6 Funds SA
Funds deposited in the Lump Sum Scheme are invested by
specialist investment manager, Funds SA.
Funds SA is a statutory authority established by the State
Government to manage the investments of the State
public sector superannuation schemes. Funds SA develops
investment strategies for each of the schemes and
implements the strategies using a “manager of managers”
approach.
This means Funds SA engages a range of specialist investment
management firms to manage the funds. This provides a
high degree of diversification with respect to investment
categories, managers, markets and the underlying
investments. By focusing on diversification, Funds SA ensures
that funds are not excessively dependent on the performance
of one single asset category, manager, market or investment.
52. Grow your super
2.1 Member contributions Circumstances that can cause a shortfall in Points
As a member of the Lump Sum Scheme you contribute There are three circumstances that can cause your Points to
a percentage of your salary, which is deducted by your accrue at a lower than standard rate and therefore reduce
payroll office from your after-tax salary and credited to your your final Employer Component:
Member Account. You need to contribute at your standard 1. Averaging less than your standard contribution rate
contribution rate of 6% throughout your membership to during your contributory membership of the Scheme.
obtain your maximum entitlement. For most members the
standard contribution rate is 6%. You can elect to contribute 2. Being employed part-time during your membership of
either 3%, 4.5%, 6%, 7.5% or 9% of your salary to the Lump Sum the Scheme.
Scheme. 3. Having periods of membership when
Any variation from the 6% contribution rate may have an you do not contribute.
effect on your final entitlement, and you should contact 1. Averaging less than your standard contribution rate
Super SA to discuss your options. during your contributory membership of the Scheme.
You can only change your contribution rate on 1 July each If you choose to reduce your elected contribution rate at
year. Applications must be received by the preceding 30 April. any time, you accrue fewer Points. However, you are able to
The Change to Contribution Rate form can be downloaded from contribute at greater than your standard contribution rate to
the Super SA website. catch up your Points later on.
Points For example, if you are working full-time but only
To assist in working out your final Employer Component, contributing 3% of your salary instead of your standard rate
Points are allocated in line with your rate of contribution and of 6%, you will accumulate 0.5 of a Point each month instead
your hours of employment. of 1 Point.
The number of Points you accumulate, based on the actual You will be able to catch up Points at some time in the future
contributions you are paying, are known as your Accrued by contributing at 7.5% (1.25 Points per month) or 9% (1.5
Points. The number of Points you would accumulate if you Points per month).
contributed at the standard contribution rate for your hours
of employment are known as your Standard Points.
Example
As a general rule, if you are working full-time and making
after-tax contributions at the 6% standard contribution rate, Peter works full time but has chosen to contribute
you will accumulate one Point for each complete month that for one financial year at 3% instead of the standard
you are a contributory member of the Scheme. contribution rate of 6%. Therefore, he accumulates:
The maximum Employer Component is achieved after 420 12 months x 0.5 (ie 3%÷6%) Points per month
months (35 years) of contributory membership on cessation = 6 Points for the year
of employment, on or after, age 60.
If there is a shortfall in Points resulting from periods of If Peter had contributed at his standard contribution rate
contributing less than the standard contribution rate, of 6% his Points would have been:
your final Employer Component will be reduced. However, 12 months x 1 (ie 6%÷6%) Points per month
averaging more than your standard contribution rate = 12 Points for the year
throughout your public sector employment does not increase
your final Employer Component beyond the maximum For Peter to achieve a standard contribution rate of 6%
as described above. Instead, when you retire you will be over his total contributory membership, he can elect to
refunded the balance of your contributions, with investment contribute at 9% for one financial year. His Points would
earnings, as part of your Member Account. then be:
To work out your final entitlement, your Accrued Points are 12 months x 1.5 (ie 9%÷6%) per month
compared to your Standard Points. Any shortfall between = 18 Points for the year
your Accrued Points and your Standard Points reduces your
final Employer Component. During these two financial years, Peter has accumulated
If you are an Active Member, your Annual Statement shows 6 Points for the first year and 18 Points for the second
both your Accrued and Standard Points to help you keep year, accruing 24 Points over the two-year period. He
track of your Points. You can see if your Accrued Points are has, therefore, “caught up” in the second year the Points
at least equal to your Standard Points so that you remain required to meet his Standard Points.
eligible for your maximum achievable Employer Component.
You should always check with Super SA or your financial
adviser when considering altering your contribution rate to
ensure the amendment will have the desired effect on your
final Employer Component.
62. Being employed part-time during your Scheme If you choose to make personal after-tax or salary sacrifice
membership. contributions into your Triple S account during a period of
Part-time employment will reduce the number of Points that Non-Contributory Membership with the Lump Sum Scheme,
you accumulate each year compared to working full time and your Lump Sum Scheme entitlement will be preserved and
cannot be caught up. (Refer to the section about Points.) you will not be able to recommence active Lump Sum Scheme
membership.
If you have worked part-time you will accumulate part of a
contribution Point for each month, based on the percentage For more information on Triple S see the Triple S Product
of time that you have worked part-time and whether you Disclosure Statement, available on the Super SA website.
have contributed at your standard contribution rate or not. Extrapolated Points on disablement and death
If you are a contributing member and become permanently
disabled or die, you or your dependants will be entitled to an
Example entitlement based on extrapolated Points.
Andrew works part-time at 80% of full-time hours and What are Extrapolated Points?
is contributing at his standard contribution rate of 6% To “extrapolate” means to estimate a future figure based
for one financial year. This means he will accrue 0.8 of a on known data, assuming that the estimated figure follows
Point per month instead of 1 Point per month. logically from the known data.
His total Points for the year will be: In the case of working out your disablement or death
12 months x 0.8 Points per month = 9.6 Points for the entitlement, Extrapolated Points take into account your
Accrued Points and then assume you would have continued
year.
accruing Points in the Scheme on the same basis as you
This is the maximum number of Points Andrew can were prior to your disablement or death. For a disablement
accumulate during his part-time employment and cannot entitlement your Extrapolated Points equal your Accrued
be caught up to the full-time equivalent. Points plus the number of months from the date of the
disablement to age 55. For a death entitlement before age
55, your Extrapolated Points equal your Accrued Points plus
If you change your working hours after 31 March and the number of months between the date of death and age 60.
before 30 June in any year and you or your employer notify Extrapolated Points are adjusted for part-time service (if any).
Super SA of this change, your contributions will be adjusted
accordingly from July. General information about your Points
If you change on or after 1 July and you are still working the Remember:
revised hours on the following 31 March, your contributions – Accrued Points are the number of Points that you have
will change accordingly from July in the following year. actually accumulated
– Standard Points are the number of Points that you need
Example to accumulate to be eligible for your maximum Employer
Component.
Rachel works part-time at 50% of full-time hours and
If the information on your Annual Statement shows that your
is contributing at her standard contribution rate of 6%,
Accrued Points equal your Standard Points, then you are
meaning she accrues 0.5 of a Point each month.
heading towards reaching your maximum Points and your
On 2 July, Rachel begins working at 100% of full-time maximum Employer Component on retirement.
hours. Rachel will continue to accrue 0.5 of a Point per If your Accrued Points are less than your Standard Points
month until 1 July in the following year, at which time, due to periods when you have contributed at less than your
provided she is still working 100% of full-time hours at standard contribution rate, you can contribute at a higher
31 March in that year, the Points accruing will increase to level than your standard contribution rate to close the gap
1 Point per month. as described above. As long as your final Accrued Points are
within one Point of your Standard Points, you will receive
your full Employer Component.
3. Having periods of membership when you do not
contribute. If you have more Accrued Points than the required number of
If you reduce your contribution rate to 0%, or cease Standard Points, you can either continue to contribute at your
contributions due to leave without pay (LWOP), you will not current contribution rate or you can reduce your contribution
accrue any Points during this period. This is called Non- rate. Your Employer Component will be calculated using your
Contributory Membership and you cannot catch up the Standard Points, not your Accrued Points in this case.
Points that you have missed.
The effect of periods of zero contribution As already explained, you cannot make up the
Points you have lost through periods of part-time
Reducing your contribution rate to 0% has an adverse effect employment, periods of 0% contribution or LWOP.
on your entitlements. Additionally, if you die or become
disabled during a period when you are not contributing, only
your accrued entitlement will be paid. If you wish to change You are able to track your Points on your Annual Statement
your contribution rate to 0%, you should contact Super SA to see your current position so that you remain eligible for
for information about the implications on your current and your maximum achievable Employer Component.
future entitlements.
If you want to know more about your Points contact
During periods of zero contribution you will become a Super SA on 1300 369 315, or email supersa@sa.gov.au.
member of Triple S, as the State Government is required to
meet its Commonwealth Superannuation Guarantee (SG)
obligations. The SG contribution of 9.5% will be paid into an
Employer Account in Triple S on your behalf.
72. Grow you super (continued)
2.2 Salary sacrifice Salary sacrifice facts
Lump Sum Scheme members are able to make additional If you choose to make salary sacrifice contributions:
contributions to their super through salary sacrifice. Salary – Contributions are not considered part of your taxable
sacrifice means making contributions to your super from income so your PAYG tax may be reduced.
your before-tax, or gross salary. By sacrificing cash salary
and directing it into your super, you may reduce the amount – Contributions are credited to an Employer Account in
of Pay As You Go (PAYG) tax that you pay and increase your Triple S, and will be taxed when you withdraw them from
final super entitlement when you retire. the Scheme. In most circumstances, this means that
they will be taxed at the concessional super rate. See the
If you choose to salary sacrifice you will become a member Triple S Reference Guide available on the website for more
of Triple S and your salary sacrifice contributions will be information.
credited to Triple S. Your normal after-tax contributions will
continue to be credited to the Lump Sum Scheme. – Contributions are preserved until you reach age 55
and resign from the SA public sector, unless you die or
To find out more about Triple S, see the Product Disclosure become permanently disabled.
Statement (PDS) on the Super SA website.
– Your death and total and permanent disablement
How to make salary sacrifice contributions entitlements will continue to be provided through the
You can choose between making contributions through your Lump Sum Scheme. You can also purchase voluntary
payroll office or through Maxxia. Death and Total and Permanent Disablement (TPD)
Insurance through Triple S. For more information see the
Maxxia
Triple S Death & TPD and Death Only fact sheet.
Maxxia is the only approved salary sacrifice provider for SA
– Salary sacrifice contributions do not reduce your income
Government employees. It charges an annual fee to salary
used in determining eligibility for the Government
sacrifice to your super. Contact them on 1300 123 123 for
co-contribution or other Commonwealth government
further information.
benefits.
Your payroll office
– Contributions to taxed funds will take into account
Your payroll office will charge a fee to establish or change a contributions to untaxed funds when being assessed
salary sacrifice arrangement. against the concessional cap for taxed funds.
To contribute through your payroll office, download and – Currently there is no concessional contribution
complete a Salary Sacrifice – Employees with a Triple S cap (applicable to employer and salary sacrifice
Account form or Salary Sacrifice - Employees without contributions) for untaxed super schemes.
a Triple S Account form, available to download from the
Please note that your Lump Sum Scheme entitlements are
website, or contact us to request one. To cease salary
based on your full-time equivalent salary before any salary
sacrificing please complete the Cancel Salary Sacrifice form
sacrifice contributions are deducted.
from the Super SA website.
You will need to sign and forward a Financial Advice
You will also need to sign and forward a Financial Advice
Certification (Form 9) to your employer, acknowledging that
Certification to your employer acknowledging that any
any financial advice required before entering into any salary
financial advice required before entering into a salary
sacrifice arrangement is your sole responsibility. This form is
sacrifice arrangement is your sole responsibility. This form is
attached to the salary sacrifice form.
attached to salary sacrifice forms on the Super SA website.
If you are already salary sacrificing through your employer
Costs and decide to stop, you need to obtain a Termination of salary
You will also be charged the normal Triple S administration sacrifice of superannuation agreement (Form 8). Both of the
fee. See the Triple S PDS on the Super SA website for more forms mentioned above are available on the Super SA website.
information.
If you are salary sacrificing through Maxxia and decide to
Investment options stop, you need to contact Maxxia.
Salary sacrifice contributions paid into Triple S are passed
on to Super SA’s specialist funds manager, Funds SA, for NOTE: It is important to note that any concessional
investment. The same investment options are available contributions made to Lump Sum Scheme will be
through the Triple S and Lump Sum schemes. counted towards your concessional contributions
These are: cap where you also receive concessional
– High Growth contributions to a taxed super fund. Although
you will not exceed your concessional cap under
– Socially Responsible Commonwealth Law as a result of concessional
– Growth1 (default) contributions made to Lump Sum Scheme, any
– Balanced (default after 3 February 2021)1 additional concessional contributions made to a
taxed fund may result in you exceeding the cap.
– Moderate
– Conservative
Maintaining your contributions to the Lump Sum Scheme
– Capital Defensive
It is important to maintain your usual after-tax contributions
– Cash. to the Lump Sum Scheme if you choose to salary sacrifice. If
Funds SA develops investment strategies for each option. For you do not, your future super entitlement may be reduced.
further information please refer to the Investment of funds You may wish to contact Super SA for more information.
section.
1
For Lump Sum scheme - Growth option will no longer be available after 25 January 2021
82.3 Additional after-tax lump sum contributions into
Triple S
You are able to make additional after-tax lump sum
contributions to your super if you already have a Triple S
account.
A Triple S account will be established when you make salary
sacrifice contributions or if you stop making after-tax
contributions to the Lump Sum Scheme. You cannot establish
a Triple S account by making a lump sum contribution.
There is a cap of $100,000 each financial year on the amount
of after-tax contributions you can make. If you are under age
65 you can bring forward the cap for two years to contribute
up to $300,000 in one year. Your Lump Sum Scheme member
contributions will be counted towards the contribution cap.
If you go over these caps, you may be taxed at the highest
marginal rate plus Medicare levy on the excess amount.
Payments received from the Commonwealth Government as
part of the co-contributions scheme do not count towards
the contribution caps.
93. Investment of funds
Your super is made up of an Employer Component and a Investment switches are generally processed twice weekly as
Member Component. Some members may also have a PSESS follows:
entitlement, which forms part of their Employer Component.
The Employer Component is, in most cases, a guaranteed Form received by: Unit price applied:
entitlement determined as a multiple of your final annual
Entitlements Superannuation Salary (ESS), your length of
Unit price effective the
time in the Scheme and the rates of contribution that you 5pm Monday
following Thursday
have elected to make.
The Member Component is made up of your Member Account Unit price effective the
5pm Thursday
(your member contributions plus investment earnings) and following Tuesday
your Rollover Account (amounts you may have rolled into the
Scheme from other super funds, plus investment earnings).
These times may be varied for operational reasons, such as
Your Member and any Rollover Component is subject to
public holidays. Prior to variations members will be notified
Investment Choice. via the Super SA website.
Contributions to your Member Component are invested by
The unit price applied to a switch will represent the market
specialist investment manager, Funds SA.
value of an investment option calculated after the published
3.1 Converting your super dollars into units deadline for the receipt of Investment Choice forms.
When funds go into your Member Account, or you roll Other things you need to know when you switch:
in funds from another super fund, the money is used to – If you switch from one investment option to another, the
purchase units. switch will be made at the next determined unit price.
The number of units purchased will depend on the value of This could be higher or lower than the current unit price
the units on the date they’re purchased. This value, or unit of both the option you’re currently invested in and your
price, is generally determined twice weekly, in line with how new investment option
your investment option is performing. – As a Lump Sum Scheme member you can invest your
Therefore, the value of your Member and any Rollover funds in only one investment option
Component depends on the current unit price. – The first switch in any financial year is free and there’s
Units represent a share of the underlying investments in the a fee for every subsequent switch in the same financial
investment option of your choice and provide an efficient year. This fee is payable by Electronic Funds Transfer (EFT).
system for administering contributions and switching The bank details for EFT can be found on the Investment
between the different investment options. Choice form. You will need to use “005 (your Super ID)” as
Super SA, through Funds SA, purchases units on your behalf your reference number for any EFT payment for this fee.
at the prevailing unit price. Please refer to Section 8 for more information regarding
fees.
Your individual Member Account and any Rollover Account
balances are calculated by multiplying the number of units Variations to switching
you hold in each account by the prevailing unit price. A In the event of a significant variation in the value of the fund,
change in the unit price reflects changes in the value of the the Chief Executive may freeze the administration processing
underlying investments. of exits and switches until such time as the South Australian
Superannuation Board determines an appropriate course
Unit prices are posted on the Super SA website. While unit
of action. The new unit price is to operate with effect from
prices are generally determined twice weekly, investment
midnight of the day before the freeze was invoked.
options have been framed for investment time horizons of up
to 10 years and beyond. It is important to keep this in mind Where a member’s election to change investment options
when looking at returns over shorter periods. results in an advantage to that member to the detriment
of the other members of the scheme, the South Australian
3.2 Switching options Superannuation Board’s delegate may withhold processing of
When you’ve done your homework changing, or switching, to that member’s election.
an investment option that better matches your investment
Please note that any change to your investment option may
profile is important.
not be reflected in any quotes performed in the member
You need to make sure that your option suits your investor portal on the Super SA website until Super SA confirms the
profile. completion of this change to you in writing.
To switch your investment option, complete and sign the 3.3 Investment Choice – your investment options
Lump Sum Investment Choice form available to download from
As a Lump Sum Scheme member you can choose the
the Super SA website, and return it to Super SA.
investment option that best suits your individual needs for
your Member and any Rollover Component.
There are several investment options available – High
Growth, Socially Responsible, Growth2, Balanced, Moderate,
Conservative, Capital Defensive and Cash.
If you do not choose an option, the balance of your Member
and any Rollover Component will be invested in the default
option shown in section 2.
For a full description of all the options and their asset
allocations please refer to the Investment options section.
2
Growth option will no longer be available after 25 January 2021
10You should seek professional financial advice to ensure that – International shares: risks for international shares are
your chosen investment is suited to your personal needs. similar to risks for Australian shares. Additionally,
If you have a PSESS and/or SG Account, it is invested in the they are affected by political factors and the currency
Defined Benefit High Growth option, which is the investment exchange rate of the country where the shares are held.
for employer funded entitlements. Investment choice is not – Property: economic factors such as inflation and
available for your PSESS and/or SG Account because these unemployment will affect the return on property, as well
form part of your Employer Component. as the location and quality of the property itself.
How your investments are managed – Fixed interest investments: changes in interest rates, as
Strategies are developed for each option targeting the best well as the risk of loan repayment default, will result in a
balance of risk versus return. change in value of this investment.
Each option has its own: Other risks specific to super investments include changes to
super laws or taxation laws, which may affect the accessibility
– Objective. What does the option aim to achieve? or value of your investment.
– Investment Time Horizon. What is the length of
time needed to reach the earning potential of your
investment?
– Risk. What is the relative risk involved in the option?
– Asset Class Mix. What mix of investments makes up the
option?
When choosing the investment option right for you,
consider:
– your current financial position
– your age
– your estimated time of retirement
– how long your super will need to last
– your attitude to accepting additional risk in seeking
higher returns.
3.4 Risk of investments
Some important risks are:
– Inflation. Inflation may exceed the return you receive on
your investment.
– Market. Economic, technological, political or legal
conditions may affect the value of investments. Market
sentiment may also alter the value.
– Manager performance. The risk that individual investment
managers underperform.
– Interest rates. Changes in interest rates may also affect
investment returns positively or negatively.
– Foreign currency. For overseas investments there is a risk
that the value of other currencies may change in relation
to the Australian dollar and reduce the value of the
investment.
– Derivatives. Derivatives are financial contracts used in the
management of investments whose value depends on
the value of specific underlying investments. Their value
can fluctuate, sometimes away from the expected value,
and they are also subject to counterparty risk.
– Counterparty risk. Counterparty risk is the risk that an
organisation contracted to provide an investment service
is not able to do so. This may result in loss of value.
– Underlying investments. The value of each option’s
underlying investments can rise as well as fall.
Some of the most common influences on underlying
investments include:
– Australian shares: individual shares are affected by factors
affecting the share market generally but also by the
profits and expected profits of individual companies.
113. Investment of funds (continued)
3.5 Asset classes
Each investment option is made up of asset classes. An asset class can be something tangible like property or something
intangible like shares or fixed interest.
The table below lists the page lists the six main types of asset classes and the different levels of risk and return of each.
Asset classes that make up the investment options
Asset
Asset class Description Risk Return
type
Cash These are investments in assets that can be cashed in
(eg. 11am cash, bank quickly. A stable investment suitable for investors with a
Defensive Low Low
bills, term deposits and low risk tolerance.
floating rate notes)
Fixed Interest These investments are usually in the form of loans to
(eg. Government bonds, governments or companies who pay a fixed rate of
corporate bonds and interest for the term of the loan. Returns tend to be better
Low – Low –
inflation linked securities) than cash over the long term, but lower than property Defensive
Moderate Moderate
and shares. Inflation linked securities have the additional
feature of being linked to a measure of the general level of
prices in Australia, such as the Consumer Price Index (CPI).
Diversified Strategies - These are investments in domestic and international
Income corporate bonds, emerging market debt and absolute
Mixed Moderate Moderate
(eg. Corporate Bonds) return products. Returns tend to fluctuate and can be
negative.
Property These are investments in unlisted property trusts and
(eg. Retail, commercial shares in listed property trusts on the sharemarket.
and industrial property) There’s potential for these property assets to provide Mixed Moderate Moderate
moderate returns over the long term, however the value
of the assets can fluctuate and returns can be negative.
Shares (equities) These are investments in companies listed or about to be
(A stake or financial listed on the Australian or international stock exchanges.
interest in an Australian Dividends provide income although they can’t be
or international company) guaranteed. Share prices can fluctuate dramatically and Growth High High
can be frequently negative, which makes them high risk
but there’s potential for high capital growth over the long
term.
Diversified Strategies - These are investments in a diverse range of assets, for
Growth example, private companies and infrastructure. Returns
Mixed High High
(eg. infrastructure) tend to fluctuate and can be negative. These assets carry a
high level of risk.
Growth assets aim to achieve higher returns over
the long term but also carry higher risk.
Defensive assets usually deliver lower returns over
the long term but tend to carry less risk.
Mixed assets have both Growth and Defensive
characteristics to varying degrees.
123.6 Rates of return
Investment returns reflect the movements in the unit price over the periods shown.
Returns are reported net of investment management fees. It is important to remember that past performance should not be
taken as an indication of future performance.
Tax is not applicable to the investment returns of the Lump Sum Scheme as it is an untaxed scheme and therefore the returns
for the Lump Sum Scheme are reported without taking tax into account. However, most other funds are “taxed funds” and their
investment earnings are usually reported net of tax. Care must therefore be taken when comparing the performance of the
Lump Sum Scheme to that of other funds to ensure that the impact of tax on investment returns is considered.
It is important to remember that past performance should not be taken as an indication of future performance.
Periods to 30 June 2020
Option
10 years % p.a. 5 years % p.a. 3 years % p.a. 1 year % p.a.
High Growth 9.3% 7.2% 6.2% -1.4%
Socially Responsible 7.4% 4.8% 5.2% -1.3%
Growth4 8.7% 6.7% 5.8% -0.8%
Balanced 8.3% 6.3% 5.6% -0.3%
Moderate 7.4% 5.4% 4.9% -0.4%
Conservative 6.6% 4.8% 4.5% 0.7%
Capital Defensive 5.6% 4.0% 3.8% 1.3%
Cash 2.8% 1.8% 1.6% 0.9%
Defined Benefit High Growth3 8.8% 6.9% 6.1% -1.2%
Expected range of return outcomes for the Lump Sum
Scheme investment options Expected range of annual returns - Triple S
For each investment option there is an expected range of 30%
annual returns. This varies between the options.
The expected range of annual returns5 for the investment 25%
options are shown in the below graph.
Capital Defensive
Generally, the options that offer the highest potential long- 20%
term returns also come with the widest range of returns
including the possibility of negative returns. Options that
Socially Responsible
15%
offer the lowest potential long-term returns come with
the narrowest range of returns and greatest likelihood of
10%
Conservative
High Growth
positive returns.
Moderate
Balanced
Growth4
Cash
5%
0%
-5%
Next steps -10%
To keep track of how your option is doing, you can check
its investment performance on the Super SA website. -15%
3
Option introduced 1 January 2017
4
Growth option will no longer be available after 25 January 2021.
5
There is approximately a 5% chance that the return in any given year could lie outside of this range.
134. Investment options
High Growth Socially Responsible
This option is structured for investors with an investment Please also refer to the next section of this Guide for
time horizon of at least 10 years. more specific information about the Socially Responsible
Annual returns may be volatile. investment option.
Investment return This option is structured to provide investors with risk and
CPI + 4.5%
objective6 return characteristics likely to be similar to those of an
industry growth fund. Annual returns may be volatile.
Asset allocation
Investment return Similar to those of an
This option is invested in the range of 70 - 100% in growth objective6 industry growth fund.
assets (shares, certain types of property, private equity and
other growth opportunities) and the balance in defensive Asset allocation
assets (such as cash and fixed interest).
The strategic asset allocation for the SRI option is
Strategic Asset Allocation7 determined by the underlying fund manager/s.
Asset class % Range % Strategic Asset Allocation
Australian Equities 24 10-40 Asset class % Range %
International Equities 36 20-50 Australian Equities 25 15-40
Property 16 5-30 International Equities 33 15-48
Diversified Strategies Property 9 0-20
10 0-20
Growth
Alternatives 6 0-13
Diversified Strategies
12 0-25 Fixed Interest 25 0-45
Income
Inflation Linked Securities 0 0-10 Cash 2 0-20
Fixed Interest 0 0-15 Similar to those of an
Min suggested time frame
industry growth fund.
Cash 2 0-20
It is likely that a negative
Min suggested time frame 10 years return might be expected to
Summary risk level8
occur between four and six
It is likely that a negative years in 20.
return might be expected to
Summary risk level 8
occur between four and six Risk classification High risk (Risk Band 6)8
years in 20.
Risk classification High risk (Risk Band 6)8
6
The investment objectives state what each option aims to achieve and are designed to help investors with their investment decisions. The objectives have been
developed having regard for the long term performance and characteristics of financial markets and taking into account expert advice provided by specialist
investment advisor JANA. There is no guarantee, however that the objectives will be met. This is because financial markets are volatile and future returns
may vary from returns earned in the past. Indeed, for funds with exposure to growth assets there is a material likelihood that returns may be negative in any
particular year.
7
Long-Term Strategic Asset Allocation (LTSAA).
8
See Glossary of terms for more information about the Standard Risk Measure.
14Growth Balanced
This option will no longer be available after 25 January 2021. This option is structured for investors with an investment
time horizon of at least 10 years.
This option is structured for investors with an investment Annual returns may be volatile.
time horizon of at least 10 years.
Annual returns may be volatile. Investment return
CPI + 3.5%
objective6
Investment return
CPI + 4.0%
objective6 Asset allocation
Asset allocation This option is invested in the range of 60 - 90% in growth
assets (shares, certain types of property, private equity and
This option is invested in the range of 70 - 100% in growth other growth opportunities) and the balance in defensive
assets (shares, certain types of property, private equity and assets (such as cash and fixed interest).
other growth opportunities) and the balance in defensive
assets (such as cash and fixed interest). Strategic Asset Allocation7
Strategic Asset Allocation7 Asset class % Range %
Asset class % Range % Australian Equities 23 10-40
Australian Equities 24 10-40 International Equities 33 20-45
International Equities 36 20-50 Property 12 0-25
Property 16 5-30 Diversified Strategies
8 0-20
Growth
Diversified Strategies
10 0-20
Growth Diversified Strategies
8 0-20
Income
Diversified Strategies
12 0-25
Income Inflation Linked Securities 5 0-15
Inflation Linked Securities 0 0-10 Fixed Interest 8 0-25
Fixed Interest 0 0-15 Cash 3 0-20
Cash 2 0-20 Min suggested time frame 10 years
Min suggested time frame 10 years It is likely that a negative
return might be expected to
It is likely that a negative Summary risk level 8
occur between four and six
return might be expected to years in 20.
Summary risk level 8
occur between four and six
years in 20. Risk classification High risk (Risk Band 6)8
Risk classification High risk (Risk Band 6)8
6
The investment objectives state what each option aims to achieve and are designed to help investors with their investment decisions. The objectives have been
developed having regard for the long term performance and characteristics of financial markets and taking into account expert advice provided by specialist
investment advisor JANA. There is no guarantee, however that the objectives will be met. This is because financial markets are volatile and future returns
may vary from returns earned in the past. Indeed, for funds with exposure to growth assets there is a material likelihood that returns may be negative in any
particular year.
7
Long-Term Strategic Asset Allocation (LTSAA).
8
See Glossary of terms for more information about the Standard Risk Measure.
154. Investment options (continued)
Moderate Conservative
This option is structured for investors with an investment This option is structured for investors with an investment
time horizon of at least six years. time horizon of at least four years.
Annual returns may be volatile. Annual returns may be volatile.
Investment return Investment return
CPI + 3.0% CPI + 2.0%
objective6 objective6
Asset allocation Asset allocation
This option is invested in the range of 40 - 70% in growth This option is invested in the range of 25 - 55% in growth
assets (shares, certain types of property, private equity and assets (shares and certain types of property) and the
other growth opportunities) and the balance in defensive balance in defensive assets (such as cash and fixed interest).
assets (such as cash and fixed interest).
Strategic Asset Allocation7
Strategic Asset Allocation 7
Asset class % Range %
Asset class % Range %
Australian Equities 10 0-20
Australian Equities 16 5-30
International Equities 15 5-25
International Equities 22 10-35
Property 9 0-20
Property 10 0-20
Diversified Strategies
18 5-30
Diversified Strategies Income
5 0-15
Growth
Inflation Linked Securities 15 5-25
Diversified Strategies
12 0-25 Fixed Interest 23 10-45
Income
Inflation Linked Securities 11 0-25 Cash 10 0-20
Fixed Interest 16 0-30 Min suggested time frame 4 years
Cash 8 0-20 It is likely that a negative
return might be expected
Summary risk level 8
Min suggested time frame 6 years to occur between two and
three years in 20.
It is likely that a negative
return might be expected Risk classification Medium risk (Risk Band 4)8
Summary risk level 8
to occur between three and
four years in 20.
Medium to high risk
Risk classification
(Risk Band 5)8
6
The investment objectives state what each option aims to achieve and are designed to help investors with their investment decisions. The objectives have been
developed having regard for the long term performance and characteristics of financial markets and taking into account expert advice provided by specialist
investment advisor JANA. There is no guarantee, however that the objectives will be met. This is because financial markets are volatile and future returns
may vary from returns earned in the past. Indeed, for funds with exposure to growth assets there is a material likelihood that returns may be negative in any
particular year.
7
Long-Term Strategic Asset Allocation (LTSAA).
8
See Glossary of terms for more information about the Standard Risk Measure.
16Capital Defensive Cash
This option is structured for investors with an investment A stable investment for investors with a low risk tolerance.
time horizon of at least two years.
Annual returns may be volatile. Investment return
RBA cash rate
objective6
Investment return
CPI + 1.5%9 Asset allocation
objective6
Asset allocation This option is invested in 100% Cash.
This option is invested in the range of 10 - 40% in growth Strategic Asset Allocation7
assets (shares and certain types of property) and the Asset class %
balance in defensive assets (such as cash and fixed interest).
Cash 100
Strategic Asset Allocation7
Min suggested time frame 0 years
Asset class % Range %
It is likely that a negative
Australian Equities 5 0-15 return might be expected to
Summary risk level 8
International Equities 7 0-20 occur less than 0.5 years
in 20.
Property 6 0-20
Risk classification Very low risk (Risk Band 1)8
Diversified Strategies
17 5-30
Income
Inflation Linked Securities 15 5-25
Fixed Interest 35 20-55
Cash 15 0-25
Min suggested time frame 2 years
It is likely that a negative
return might be expected to
Summary risk level 8
occur between 0.5 and 1 year
in 20.
Risk classification Low risk (Risk Band 2)8
6
The investment objectives state what each option aims to achieve and are designed to help investors with their investment decisions. The objectives have been
developed having regard for the long term performance and characteristics of financial markets and taking into account expert advice provided by specialist
investment advisor JANA. There is no guarantee, however that the objectives will be met. This is because financial markets are volatile and future returns
may vary from returns earned in the past. Indeed, for funds with exposure to growth assets there is a material likelihood that returns may be negative in any
particular year.
7
Long-Term Strategic Asset Allocation (LTSAA).
8
See Glossary of terms for more information about the Standard Risk Measure.
9
Target rate of return changing to CPI + 1% from 1 January 2021.
174. Investment options (continued)
Defined Benefit High Growth Responsible Investing
(Employer component only)6 Responsible investment “is an approach to investment that
This option is structured for investors with an investment explicitly acknowledges the relevance to the investor of
time horizon of at least 10 years. Annual returns may be environmental, social and governance factors, and of the
volatile. long-term health and stability of the market as a whole. It
recognises that the generation of long-term sustainable
Investment return objective6 returns is dependent on stable, well-functioning and well
governed social, environmental and economic systems.”8
CPI + 4.5% Across all Lump Sum Scheme investment options, the
managers appointed are required to follow thorough and
well developed investment processes which aim to identify
Asset allocation companies that will generate the best financial performance
resulting in the best investment returns for stakeholders.
This option is invested in the range of 70 – 100% in growth
assets (shares, certain types of property, private equity and Wherever possible, Lump Sum Scheme options exclude
other growth opportunities) and the balance in defensive investments in manufacturers of tobacco products.
assets (such as cash and fixed interest). In evaluating investment opportunities, managers will
consider the many risks inherent in each investment. In most
Long Term Strategic Allocation (LTSAA) cases this includes environmental, social and governance
(ESG) factors, where relevant, as managers acknowledge that
Asset class % Range % such issues may impact performance.
For example, the impact of carbon pricing on individual
Australian Equities 20 15-25 investments is a common risk related to the “Environmental”
factor, and in relation to the “Governance” factor, managers
International Equities 30 25-35 consider that a successful company requires good corporate
governance practices, remuneration policies and a strong
Property 18 13-23 management team.
Diversified Strategies Growth 16 11-21 All managers appointed are active and diligent
representatives of members’ interests as shareholders in
Diversified Strategies Income 14 9-19 companies in the portfolio. Many of the managers adopt a
positive engagement approach, working directly with the
Cash 2 0-20 management of companies in order to achieve any change
necessary to improve the financial performance and risk
Min suggested time frame management of the company.
All managers are active in exercising their right to vote at
general meetings of companies in which Lump Sum Scheme
10 years
members are invested. The managers’ guiding principle is
to vote in the best financial interests of members on the
Summary risk level7 numerous issues raised at general meetings of companies.
The majority of managers are members of specific groups
It is likely that a negative return might occur between four that promote the inclusion of ESG factors in investment
and six years in 20. decisions or provide information to assist in monitoring
such factors. Examples of such groups include: the UN
Principles for Responsible Investment, The Investor Group on
Risk classification Climate Change, the Carbon Disclosure Project (CDP) and the
International Corporate Governance Network.
High risk (Risk Band 6)7 Whilst all options have this approach, the managers in
the Socially Responsible option actively incorporate the
consideration of environmental, social and governance
factors in their investment decisions and avoid investments in
areas of high negative social impact. More information on this
option can be found in the Socially Responsible Investment
Option fact sheet available on the Super SA website.
The use of socially responsible investment criteria in
the construction of an investment portfolio may not
necessarily result in higher investment returns as particular
opportunities are excluded by the responsible investment
process.
6
This option is only relevant to your employer component. Members a with a PSESS and/or SG Account have this component invested in the Defined Benefit
High Growth option, which cannot be changed. The investment objectives state what each option aims to achieve and are designed to help investors with their
investment decisions. The objectives have been developed having regard for the long term performance and characteristics of financial markets and taking into
account expert advice provided by specialist investment advisor JANA. There is no guarantee, however that the objectives will be met. This is because financial
markets are volatile and future returns may vary from returns earned in the past. Indeed, for funds with exposure to growth assets there is a material likelihood
that returns may be negative in any particular year.
7
See Glossary of terms for more information about the Standard Risk Measure.
8
From the UN Principles of Responsible Investment on www.unpri.org
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