TELSTRASUPER RETIREACCESS - 1 JULY 2018
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TelstraSuper
Product Disclosure Statement
RetireAccess ®
1 July 2018Telephone 1300 033 166 Facsimile 03 9653 6060 www.telstrasuper.com.au contact@telstrasuper.com.au © Telstra Super Pty Ltd. ® is a registered trademark in Australia of Telstra Corporation Limited. Telstra Super Pty Ltd (“we”, “our” or “us”) has a licence to deal in and provide general advice about superannuation products. Telstra Super Pty Ltd ABN 86 007 422 522, AFSL 236709 is the trustee of the Telstra Superannuation Scheme ABN 85 502 108 833 (TelstraSuper). 02
About this Product Contents
Disclosure Statement 01
About TelstraSuper and
TelstraSuper RetireAccess 04
This Product Disclosure Statement (PDS)
outlines the main features and benefits of 02 Which income stream is right for you? 06
TelstraSuper RetireAccess.
It also outlines the investment options available 03 At a glance summary 09
to you and explains important investment
concepts to help you make your choice. 04 How it works 10
The information in this PDS is accurate at the 05 Payments and withdrawals 11
time of preparation. Information that is not
materially adverse may change from time to 06 Investment guide 14
time and can be obtained from our website at
telstrasuper.com.au or a copy can be sent to 07 Tax 30
you by calling us.
08 Fees and costs 34
We encourage you to read this PDS
before making any investment decisions. 09 Insurance 41
10 How to apply 45
Glossary
To help you understand some of the terms used 11 Important information 46
in this PDS there is a glossary on pages 52 to 54.
12 Privacy information 49
13 Glossary 52
0301 Two flexible income streams
TelstraSuper RetireAccess offers two income streams.
About TelstraSuper and The one that’s right for you will depend on:
• your age
TelstraSuper RetireAccess • your work status
• if you’ve met a relevant condition of release (listed below)
A TelstraSuper RetireAccess account
Transition to Retirement Retirement
lets you receive a regular income while (TTR) income stream income stream
working or in retirement. If you’ve reached If you’ve reached
preservation age, still preservation age, retired
With more than 25 years’ experience and over $20 billion working and have never or have met a relevant
invested on behalf of around 95,000 members as at met a relevant condition condition of release.
1 July 2018, TelstraSuper helps members achieve a of release.
financially secure future long into their retirement.
Whether you’re looking to wind down to part-time work or
permanently retire, a TelstraSuper RetireAccess account
Relevant conditions of release
can give you the flexibility and options to plan your future. An event you must satisfy which allows you to access your
It also means you can start accessing your super while the super and start a TelstraSuper RetireAccess Retirement
balance stays invested. income stream. The relevant conditions of release are:
Simply open a TelstraSuper RetireAccess account with • permanent retirement from the workforce on or after
funds transferred from your super (accumulation) account your preservation age
and then receive a regular income in amounts pre- • leaving employment with an employer who has made
determined by you. You’re in control of the amount you contributions to TelstraSuper for you after turning
receive, the frequency and how it’s invested. age 60, without necessarily retiring permanently
To open a TelstraSuper RetireAccess account and receive • reaching 65 years of age, whether you’ve retired or not
a regular income, you need to: • no longer working due to permanent incapacity
• be a current TelstraSuper member or eligible to join • having a terminal illness.
TelstraSuper (see page 5)
Preservation age
• have reached your preservation age (see table on this
page) Your preservation depends on your date of birth:
• have a minimum of $10,000 to invest Date of birth Preservation age
• select an income stream that’s right for you. Before 1 July 1960 55
1 July 1960 to 30 June 1961 56
1 July 1961 to 30 June 1962 57
1 July 1962 to 30 June 1963 58
1 July 1963 to 30 June 1964 59
After 30 June 1964 60
Funding your retirement
Your money Reach
Your super Your regular
Employer and voluntary preservation
account income
contributions age
04Key features and benefits of TelstraSuper RetireAccess
Competitive fees • competitive administration fees
• competitive investment fees
Flexible income payments • choose your level of income within prescribed government limits
• choose twice-monthly, monthly, quarterly or annual income
• payments paid directly into your bank account
• option to automatically index your payments each year by CPI or a nominated
fixed percentage
• make additional lump sum withdrawals as needed, within government limits
Investment choice • keep your benefits invested
• broad range of investment options for the conservative through to aggressive
investor
• option to automatically re-weight your investments
Tax advantages • no tax payable on investment earnings once you satisfy a relevant condition of
release, otherwise up to 15% tax applies
• no tax payable on income stream payments once you turn 60
• 15% tax offset on the taxable component of your income stream payments if
under age 60
Insurance cover • affordable Death insurance cover*
Membership benefits • online access to check and manage your account
• education seminars
• eligible family members can join
• access to expert financial advice through TelstraSuper Financial Planning
*If aged under 75. Conditions apply. See pages 41-44 for details.
Who can join TelstraSuper?
• every current and former Telstra Group employee
• employees of a Telstra-approved employer
(Telstra stores)
• an eligible family member of a TelstraSuper
member. For the current list of eligible family
members visit telstrasuper.com.au
0502 Generally, to benefit from this you need to be:
• aged 60 or over and want to continue to work full-time
Which income stream is to take advantage of potential tax benefits on income
payments
right for you? • able to make pre-tax contributions into super (known
as salary sacrifice)
• in a financial position to salary sacrifice a percentage of
TelstraSuper RetireAccess has two income your pay.
streams with the flexibility for you to ease
A TTR strategy to build super can be complex. If this is
up on work as you near retirement and pay of interest to you, call TelstraSuper Financial Planning on
you an income when you finish work. 1300 033 166 to discuss your needs and whether it can
work for you.
Transition to Retirement (TTR) income stream Who’s eligible?
You can draw an income from your super while you’re still You can start a TTR income stream if you:
working. A TTR income stream is a flexible income stream
you can use to maintain your income while you work less • have reached your preservation age
or boost your super leading into retirement. • are less than 65 years of age
Ease into retirement by reducing work hours • have never met a relevant condition of release
If you want to reduce the number of hours you work without • have a minimum of $10,000 to invest.
reducing your take-home pay, a TTR income stream can
help top up your income while you enjoy more of life.
Build your wealth for retirement
In some situations, a TTR income stream can help you
build your wealth while you’re still working by salary
sacrificing a percentage of your pay into super.
06How a TTR income stream works When you meet a relevant condition of release
With a TTR income stream, you transfer funds from When you turn 65, we’ll change your TTR income stream
your super account into your TelstraSuper RetireAccess to a Retirement income stream as you’ll have automatically
account and then draw down a regular income. If you’re satisfied a relevant condition of release. However, if you
still working you’ll generally have two accounts: satisfy a different relevant condition of release before
turning 65 (see page 4) you can also change to a Retirement
• your super (accumulation) account: this account income stream by notifying us. Simply complete the
continues to receive contributions plus any investment Condition of Release Notification form available at
earnings while you’re still working. telstrasuper.com.au/forms
• your TelstraSuper RetireAccess account: this is
Once you’ve met a relevant condition of release and
opened using some of your funds from your super
change to a Retirement income stream, any income you
account to pay you a regular income so your take
earn from your investments will be tax-free and there will be
home pay is not affected. The minimum amount you
no limit on your annual payments. Your existing investment
must transfer into a TTR income stream is $10,000.
options allocation will remain the same, however they
The maximum annual payment is 10% of your
will be transferred into a tax-free environment. A buy-sell
account balance.
spread will not apply. You will be subject to the $1.6m
transfer balance cap which is the total amount of super you
can use to transfer into tax-free retirement income stream
accounts. This total amount includes your retirement
income stream with TelstraSuper in addition to any
amounts you may have with other super funds.
Can I add to my income stream?
As your super account builds up, you can
consolidate your existing income stream and
super account into a new income stream. Simply
complete and return the Reinvestment Application
TelstraSuper RetireAccess form available from
telstrasuper.com.au/forms
TTR to Retirement income stream at a glance
• Employer and Investment earnings
voluntary contributions (up to 15% tax applies
until you satisfy a relevant
• Investment earnings condition of release)
Transfer when you TTR income
Your reach preservation Your payments
super age and still working RetireAccess
account account
Turn 65 or notify us that you have
met a relevant condition of release
Retirement income
payments
07Retirement income stream Transfer balance caps for Retirement income streams
Sit back, relax and enjoy a regular income when you retire. When commencing a Retirement income stream you’re
subject to the $1.6m transfer balance cap, which is the
When you’ve completely finished work or met a relevant total amount you can transfer into tax-free income stream
condition of release (see page 4), you can use a Retirement accounts. This cap amount includes your Retirement
income stream to draw a regular income from your income stream with TelstraSuper in addition to any
retirement savings while your investment earnings are amounts you may have in tax-free income streams with
tax-free. That way you can spend your time enjoying life other super funds. If you exceed the cap, you’ll be required
while your super savings work for you. to reduce the amount held in a tax-free income stream.
You’ll also pay tax on the excess amount, including
Who’s eligible? interest.
You can start a Retirement income stream if you meet all If you have exceeded the $1.6m transfer balance cap,
of the following: the Australian Taxation Office (ATO) will issue you with an
Excess Transfer Balance determination requesting you to
• have reached your preservation age
transfer the excess amount from your Retirement income
• met a relevant condition of release stream. If you do not act on this we will transfer the excess
amount into an existing TelstraSuper account or open a
• have a minimum of $10,000 to invest.
new TelstraSuper Personal Plus account on your behalf.
How a Retirement income stream works If you open your account with $1.6m and it grows over
time with investment earnings, you’ll not be considered in
With a Retirement income stream, you transfer funds from
breach of the cap.
your super account into your TelstraSuper RetireAccess
account and then draw down a regular income. The good news is there’s no limit to the amount of money
you can have in super and you can keep growing your
You can choose the amount of income you receive,
super in a tax-friendly environment. If you have more than
and how often, as long as you withdraw at least the
$1.6m in super, you can use $1.6m to open a Retirement
government prescribed minimum payment each year
income stream and keep the balance in a TelstraSuper
(see page 11).
accumulation account.
• Employer Investment If you exceed the $1.6m transfer balance cap
and voluntary earnings You will be required to reduce the amount held
contributions (0% tax applies)
in a tax-free income stream. You’ll also pay
• Investment tax on the excess amount, including interest. For more
earnings information visit the ATO website www.ato.gov.au
Your Your Still not sure which income stream is right
super RetireAccess for you?
account account
TelstraSuper Financial Planning can provide you with
Transfer when
general and simple personal advice over the phone
you meet a relevant about TelstraSuper RetireAccess and your retirement
condition of release planning options. There’s no additional cost for
our phone based advice as this is included in your
TelstraSuper membership. Call us on 1300 033 166.
Retirement
income
payments
0803
At a glance summary
Important information about TelstraSuper RetireAccess income streams
TTR income stream Retirement income stream
Minimum initial $10,000
investment
Minimum annual 4% of your account balance Between 4% and 14% of your account Refer to the table on
payment balance depending on your age page 11
Maximum annual 10% of your account balance No maximum
payment
Payment frequency You choose:
• twice-monthly
• monthly
• quarterly
• annually
Payments made To your bank account by EFT
Rollbacks, • You can rollback • You can rollback Find out more about
withdrawals and • You can make one-off income payments in • You can make one-off income payments in withdrawals on page 13
additional one-off addition to your regular payments (minimum addition to your regular payments (minimum
income payments of $1,000 applies) up to the maximum of $1,000 applies)
annual payment of 10% • You can make a full or partial lump sum
but: withdrawals as long as you have reached
You cannot generally make a full or partial your pro-rata minimum regular payment (a
lump sum withdrawal minimum of $2,000 applies)
Investment options Choice of 10 investment options or a mix of the 10 Refer to the Investment
section on pages 14-29
for details
Administration fee • $1.50 per week plus 0.20% pa - if you have more than one account the $1.50 per Refer to the Fees
week fee will only apply to one account and Costs section on
• A fee rebate applies if your balance exceeds $1.328m or if you and your spouse’s pages 34-41 for details
combined account balances exceed $1.289m
Indirect costs and Depends on the investment option or mix of options you select, fees range from
investment fees 0.10% to 1.05%
(for managing your
investment)
Insurance • Default death cover • Default death cover Refer to the Insurance
• You can apply for top up cover • You can apply for top up cover and/or section on pages 41-44
transfer existing TelstraSuper death cover for details. Cover is
• If you’re already an accumulation member subject to approval
of TelstraSuper any existing insurance from the insurer
arrangement will continue and you will not
receive default Death cover
Estate planning Flexibility to make a: Refer to pages 47-48
• Reversionary beneficiary nomination
• Binding or non-binding beneficiary nomination
Cooling-off period 14 days Refer to page 46
Tax on investment Up to 15% tax on investment earnings No tax payable
earnings
Transfer balance cap Not applicable $1.6 million
This table is a summary only. We encourage you to read this PDS in full before making any investment decisions.
Ready to apply?
Follow the steps on page 45 or call us on
1300 033 166 and let us help you.
0904 Insurance premiums
If applicable, the cost of Death insurance cover is
deducted by reducing the number of units at the end of
How it works each quarter*. See pages 41-44 for more details.
Your TelstraSuper RetireAccess account consists of: Fee rebate
If you have combined TelstraSuper account balances
of over $1.328m (excluding Defined benefits), or you’re
part of an eligible couple whose combined TelstraSuper
Money in Corporate Plus, TelstraSuper Personal Plus and/or
TelstraSuper RetireAccess account balances exceed
Super you transfer to open your account $1.289m, you may receive an administration fee rebate.
Defined benefit members are not eligible for the fee rebate.
less See page 41 for details.
Your units
Money out The money you transfer to TelstraSuper RetireAccess to
• Your regular income payments open your account buys units in the investment option(s)
• Any withdrawals of your choice. See pages 14-29 for more details. Your
• Management costs less rebates income payments, withdrawals, insurance premiums and
• Insurance premiums administration fees reduce your number of units. Any
applicable fee rebate will increase your number of units.
equals Unit prices
Percentage based administration and investment fees
are deducted as part of the daily unit price calculation.
Your units
Unit prices reflect the earnings on the investments of your
The number of units you hold chosen investment option(s).
TelstraSuper RetireAccess has a percentage based
multiplied by administration fee of 0.20% pa, which is calculated daily
and is deducted when calculating daily unit prices. A new
unit price is set each Victorian business day, reflecting the
Unit prices changing value of the underlying assets in the investment
Current unit prices of your investments option(s). Unit prices are released on our website each
(after adjusting for buy-sell spread) Victorian business day.
You can view your balance anytime via your online account
equals at telstrasuper.com.au
Example:
Your income
Mandy opens her TelstraSuper RetireAccess account
stream’s value with $200,000. The buy unit price for her chosen
investment option the day she joins and purchases her
units was $1.00000. Therefore, Mandy has 200,000
units. After one month, the sell unit price for Mandy’s
chosen investment option has risen to $1.05375. As
she has not yet received income payments or made
any withdrawals, her number of units is still 200,000 but
her TelstraSuper RetireAccess account balance is now
$210,750.
Daily unit Account
No. of units
sell price balance
On opening 200,000 $1.00000 $200,000
After one
200,000 $1.05375 $210,750
month
* If you leave the fund or your balance is transferred to a different
TelstraSuper product during the quarter, the applicable fees and taxes will
be deducted at that time.
1005 Example:
Payments and withdrawals Let’s look at two TelstraSuper RetireAccess
members and calculate their minimum and
maximum limits:
Regular income payments • Kate is retired and has a Retirement income stream.
As at 1 July 2018 she will be 66 with a TelstraSuper
TelstraSuper RetireAccess is designed to provide a flexible RetireAccess account balance of $150,000.
income stream to meet your financial needs. You choose
how much income you receive (within the government’s set • Murray is still working and has a TTR income stream.
minimum and maximum limits) as well as how often you As at 1 July 2018, he will be 64 with an account
receive your money. See the table on page 12 for details. balance of $250,000.
You can change your income or the frequency of your Minimum Maximum How
payments any time you like. The amount of income you limit limit calculated
choose will depend on your retirement goals and legislated
annual income limits. Minimum
= 5%
According to government regulations you must: Kate $7,500 None x
$150,000
• choose a payment amount at or above your minimum = $7,500
annual income limit (a maximum applies to TTR income
streams)
Minimum
• receive at least your minimum payment each financial = 4%
year x
$250,000
• receive at least one income payment each financial
= $10,000
year (except for the first year where the pension Murray $10,000 $25,000
commences after 1 June). Maximum
= 10%
x
Minimum and maximum annual limits $250,000
= $25,000
The government has set minimum and maximum annual
payments that you must withdraw from your TelstraSuper
RetireAccess account each financial year based on your age.
The minimum annual payment is calculated as a
percentage of your account balance at 1 July:
Age* Minimum annual payment†
Under 65 4%
65-74 5%
75-79 6%
80-84 7%
85-89 9%
90-94 11%
95+ 14%
If you have a TTR income stream the maximum annual
payment is 10% until you meet a relevant condition
of release (as at 1 July in the year the payments are to
be made). There is no maximum for the Retirement
income stream.
* Member’s age at 1 July in financial year when the income payments are to
be made or in the financial year income payments commence.
†
ercentage of account balance on 1 July in the financial year when the
P
income payments are to be made.
11How often and when you get paid
You can choose to receive your income payments twice-monthly, monthly, quarterly or annually. Your payments will be
made on or before the following days:
How often Twice-monthly Monthly Quarterly Annually
Pay dates 14th day and 28th day of each 28th March 28th day of the month
28th day of each month 28th June you nominate
month 28th September
28th December
Option to index your pension
Annual review of payment details
If you have nominated to receive a fixed dollar amount, you
can choose to automatically index your pension each year Each year we’ll send you a Statement of Income
to keep up with the cost of living. You can increase by: Limits showing your new minimum income limit (and
the maximum if applicable) and payment details for
• The Consumer Price Index (CPI) - applied each 1 July the new financial year, together with a Change of
using the most recently published CPI figure, or Payment form. That way, if you want to make changes
• A fixed percentage - applied each 1 July. to your current payments, it’s easy to complete and
return the form. Your new payment details will apply
from 1 July.
If you would like to index your pension payments,
you can do so by completing a Change of Details You can also change your payment details throughout
TelstraSuper RetireAcess form available at the year by completing the Change of Details
telstrasuper.com.au/forms or by calling us. TelstraSuper RetireAcess form available at
telstrasuper.com.au/forms
Convenient payments
For your safety and convenience all TelstraSuper
RetireAccess income stream payments are made directly
to your nominated bank, building society or credit union
account. Payments can only be made into an account in
your name (including joint accounts). We cannot pay into
business accounts, Self-Managed Super Funds (SMSFs),
third party accounts or overseas accounts.
There is no fee for receiving income payments.
If you change account details, and you receive:
• Monthly, quarterly or annual payments - notify us
before the 20th of the month so your money can be
deposited in the correct account
• Twice monthly payments - notify us before the 6th
of the month for changes to be made by the 14th.
If notified between the 7th and 20th of the month,
payments will be made on the 28th of the month.
If you wish to change your banking details, notify us
by completing a Change of Details TelstraSuper
RetireAcess form available at telstrasuper.com.au/forms
12Access to more money To ensure withdrawals are paid within government
guidelines, there could be a small delay in processing your
There are two options available if you require more than request. Please call us if you have any queries about the
your regular income stream payment: timing of payments.
• additional one-off income payments
• full or partial withdrawal.
There is no fee to make a withdrawal in addition to your
regular income stream payments. However, different taxes
and conditions may apply to additional one-off income
payments and full or partial withdrawals. The table below
compares withdrawal types.
Type of withdrawal TTR income stream Retirement income stream
Additional one-off income $1,000 minimum amount $1,000 minimum amount
payments
One-off payments can only be made if they No maximum applies
Paid in addition to your regular do not put you in excess of your maximum
payments, regardless of whether annual limit of 10%
or not you have met your
minimum annual limit.
Full or partial withdrawal Only in limited circumstances: $2,000 minimum applies
Paid in addition to your regular • y ou wish to cash the unrestricted No maximum applies
payments, but you must have non-preserved portion of your
met your pro-rata minimum benefit
annual limit before a withdrawal
can be paid. Any withdrawals • to pay a superannuation surcharge
cannot be counted towards your debt
annual minimum income limit.
• to meet a Family Law payment
• y ou transfer your income stream into
an accumulation super account
• y ou transfer your income stream into
another non-commutable income
stream
• y ou meet a relevant condition of
release
Centrelink and DVA benefits impact your entitlements. Full or partial withdrawals are
not included in your assessable income but still need to be
Your TelstraSuper RetireAccess balance may affect your reported to Centrelink and/or DVA and may impact your
eligibility for government income support including the age entitlements.
pension.
For more information about your entitlements, please call
Your account is assessable by Centrelink and/or the Centrelink on 132 300 or the DVA on 133 254.
Department of Veterans’ Affairs (DVA) for the asset
test and income test. In accordance with government
requirements, we will provide Centrelink and/or the DVA
with details of members’ account balances electronically.
For more information about this process, please call us
on 1300 033 166.
As additional one-off income payments are included
in your assessable income, you need to report these
payments to Centrelink and/or the DVA and they may
13How long payments continue
Payments from your TelstraSuper RetireAccess account 06
stop when your account balance is exhausted.
Investment guide
How long that will take will depend on factors such as:
• how much you initially invest
Factors to consider
• how much you draw down as regular payments
You should consider a number of key things when thinking
• if you make any one-off withdrawals about your investments with TelstraSuper RetireAccess.
• your chosen investment option(s) and how they perform A good place to start is with your retirement plans,
• the deductions from your account (for fees and costs). including your:
• financial and retirement goals
Drawing down your benefit • retirement age
Your income payments will initially be drawn from
the unrestricted non-preserved portion of your super • eligibility to access super and government pensions
benefit. The restricted non-preserved portion of your • life expectancy
benefit will be reduced next and, finally, the preserved
portion of your benefit. • tax situation and how it relates to your savings
• spending and income needs in retirement.
Consider speaking with a financial adviser through
TelstraSuper Financial Planning on 1300 033 166 to
discuss your investment options.
Investment considerations
Your next step is to consider the investments themselves.
When you retire, you’ll continue to have money invested,
so you’ll also need to know about a range of investment
concepts and how they relate to your retirement plans.
Risk versus
Return
Familiarity
Diversification with investment
markets
Investment Your risk
timeframe tolerance
With a sound retirement plan and an understanding
of the above investment concepts, you’ll be able to
make informed choices about your investments for an
enjoyable retirement.
14Setting your retirement goals The table below estimates annual income based on a lump
sum at different ages, but it’s to be used as a guide only
Before you choose an investment option(s), you should as everyone’s individual circumstances are different.
have a clear understanding of your retirement goals. These
goals might include maintaining your current lifestyle, You may also find the Retirement Income Projector
paying off your mortgage, taking that long awaited holiday at telstrasuper.com.au helpful in calculating your lump
or helping your family with their financial needs. Also, you sum needs.
may want to transition into retirement by reducing your
working hours.
Retirement age
So how do you meet your retirement goals? Work out Annual
how much income you’ll need in your retirement based on income 56 60 65
information today by identifying things such as your:
$25,000 $480,000 $440,000 $385,000
• current expenses
$30,000 $570,000 $525,000 $460,000
• short and long-term goals
$35,000 $670,000 $615,000 $530,000
• level of debt.
$40,000 $765,000 $700,000 $615,000
You should also think about:
$45,000 $855,000 $790,000 $700,000
Your retirement age $50,000 $955,000 $875,000 $770,000
Your needs will vary, depending on your age. If you’re
younger you may feel comfortable taking higher risks for $55,000 $1,050,000 $965,000 $855,000
potential greater long-term growth. As you get older, you
$60,000 $1,145,000 $1,055,000 $935,000
may be more comfortable with security of capital or taking
lower risks. All figures are in today’s dollars using 2.75% of average weekly earnings
as a deflator and an assumed investment earning rate of 6 per cent.
Tax savings They’re based on the means test.
Tax is a key consideration for your retirement planning.
How you structure your investments and access Assumptions
super can result in different tax liabilities, so it’s worth • Single investor purchases a retirement income stream like TelstraSuper
planning ahead. RetireAccess and this is their only taxable income.
• Investor doesn’t convert any part of their income stream to a lump sum
For example, income streams may give you more net or make additional contributions after retirement.
income than investments outside super because of the • Calculations are in year 2018 dollars based on a ‘real’ rate of return of
available tax concessions. 3.5% pa after 2.5% inflation (total return of 6% pa).
• Taxation has been taken into account on the basis that the
How much income will you need? superannuation benefit used to purchase the income stream has no tax-
free component.
As a general rule, it’s anticipated you’ll need between 60%
and 80% of your final annual salary to maintain your current • Calculations are based on personal income tax rates that apply from
1 July 2018 and allowance has been made for tax payable on income
lifestyle in retirement. Much will depend on your own
payments (assuming the 15% tax-offset is applicable).
personal circumstances. You should seek financial advice
about the level of income you’ll need to live on. Generally, • These amounts are within the annual income limits permitted by the
government.
you can use the percentage noted above as a quick gauge,
but it’s worth doing a budget to make sure you take your • The figures in the table are based on a full financial year and are
applicable at the commencement of an income stream.
personal circumstances into account (and don’t forget to
include inflation when estimating future costs). • Payments are indexed by 3% each year.
• Low income tax-offset has been included.
The Association of Superannuation Funds of Australia
• Lump sums represent amounts required today at these ages to provide
(ASFA) releases regular cost of living figures for couples
the stated income to age 85 with no residual capital remaining.
and singles to achieve a moderate or comfortable
retirement lifestyle. Future performance is not guaranteed. Figures are estimates only.
For up-to-date information on how much super is enough
and the ASFA Retirement Standard, visit the ASFA website
at www.superannuation.org.au.
15The risks of investing The risks of investing include:
Like any investment, there are risks with investing your
super. Different investment options carry different levels of Risk Description
risk depending on the assets that make up those options. Inflation risk Inflation may exceed the return on your
The investment option(s) you choose will change in value investment, reducing its real value.
over time and may rise or fall due to various factors. You Individual The investment option(s) you choose may
should also consider the impact of super and tax law investment fall in value.
changes on your investments. risk
Risk
Market risk Changes in investment markets due
to economic or political factors may
The higher the potential return, the higher the occur, possibly causing changes in your
short-term risk. investments and returns.
It’s important to achieve a balance between being Interest rate Changes to interest rates may impact on
too aggressive in your investment option(s) and too risk investment returns.
conservative to achieve your long-term goals. An
aggressive growth strategy has higher short-term risk. Hedging risk We invest in overseas investments, for
However, if you invest too conservatively you may run (currency) example international shares, and if the
the risk of falling short of your retirement needs. currency of those countries rises or falls,
or if the Australian dollar rises or falls,
Your risk tolerance your investment's value may change.
The risk you feel comfortable with will depend on your Derivative Derivatives are instruments that get
own financial needs, retirement plans and personal risk their value from an underlying asset,
situation. See the table on this page for more information such as a share or index. We use
on the risks of investing. derivatives to reduce risk, reduce
transaction costs and gain exposure
Inflation to certain asset classes, including
It is very important that your retirement investment Australian and International shares and
strategy is aggressive enough to beat inflation, otherwise fixed interest. Derivatives are not used
it may be difficult to fund your retirement goals. This is for gearing. Risks can include the value
because inflation erodes the purchasing value of your of the derivative falling, which may affect
dollar. In other words, a dollar will buy you less in the your investments. We aim to control
future than it buys today. derivative risk by monitoring the fund’s
contracts and by entering into derivative
contracts with reputable parties.
Changes to Super and tax laws change often and
law may affect your investment.
Manager risk The risk an investment manager will not
perform to expectation (which might put
your investments at risk). Our manager
risk is reduced by using a diverse range
of specialist investment managers chosen
to provide competitive performance as
well as specialist skills. Performance is
carefully monitored and managed.
16Investment option risk measures If you were previously invested in a MySuper investment,
you can either:
Before making an investment decision it is important you
understand the risk characteristics of different investment 1. T
ell us you want to stay in an equivalent investment
options. option(s)
To make this easier for you, we use an industry standard Indicate in the Investment Choice section of your
risk measure to describe each option’s risk. TelstraSuper RetireAccess Income Stream Application
form that you want to stay in an equivalent option. For
The industry standard risk measure considers the example, from MySuper Conservative to Conservative.
estimated number of negative annual returns that might This transfer won’t incur a buy-sell spread.
be expected from each option over 20 years. The higher
the number of expected negative returns the riskier the OR
investment option is, as can be seen from the table below.
2. Tell us you want to select a different investment option(s)
ASFA/FSC Standard Risk Measure categories You can select a different investment option(s) on the
application form and the usual buy-sell spread will be
Risk label Risk Band Estimated charged.
number of
negative annual We also offer flexibility on where your income is sourced
returns over any from.
20 year period
If you choose more than one investment option for your
Very low 1 Less than 0.5
income payments, you can have your income drawn
Low 2 0.5 to less than 1 from any one of your selected options. Or, you can draw
proportionally from your mix of investment options.
Low to medium 3 1 to less than 2
If you don’t select an investment option, or your choice
Medium 4 2 to less than 3 has insufficient funds, your balance will be drawn
proportionally from your mix of investment options.
Medium to high 5 3 to less than 4
See pages 20-29 for more detailed information on our
High 6 4 to less than 6 investment option(s).
Very high 7 6 or greater
Changing your investment options
At TelstraSuper we understand that your circumstances
Investment choice may change. That’s why our investment choice is flexible
and lets you change your investment option(s) at any time.
Everyone’s plans and financial goals are different
Investment option switches are covered by a cost known
Now that you’re ready to build your investment for
as a buy-sell spread. When making an investment switch
retirement you need to consider how to invest your money
you’re effectively buying and/or selling investment units,
in order to help meet your income needs.
similar to how you would purchase and sell shares in a
As a member of TelstraSuper RetireAccess, you control company.
where your money is invested. You can choose from a
The cost of the buy-sell spread is not directly deducted
broad range of investment options, including Growth,
from your account, but is reflected in calculating the
Balanced, Diversified Income, Defensive Growth,
unit prices. This will therefore affect the amount of units
Conservative, International Shares, Australian Shares,
you’re able to purchase in an investment option. For more
Property, Fixed Interest or Cash — or a combination of any
information please see page 38.
of these options.
Changing your investment option(s) may affect your
Each option has different objectives and strategies so
investment earnings. To find out how earnings are applied
you can invest your retirement savings in the investment
when you change investment options, please see the
option(s) that best suit you.
information about applying investment returns to your
account on page 19.
How to choose an option
You must make a new investment choice to start a If you would like to change your investment option, you
TelstraSuper RetireAccess income stream, regardless of can do so securely via your online account. Alternatively,
whether you’re an existing or new TelstraSuper member. you can change your option by filling in a Investment
Choice TelstraSuper RetireAccess form available at
telstrasuper.com.au/forms
17How to choose a mix of investment options Investment performance
As a TelstraSuper RetireAccess member, you’ll have Investment performance figures for each option are
flexibility in how to set up your investments. For example, provided every year in the Annual Report and are available
if you want to individually tailor your investments you can on the website. Investment earnings applied to your
do so by choosing a mix of options. TelstraSuper RetireAccess TTR income stream are taxed
up to 15%, but are tax-free for other income streams.
Example: The future performance of any investment option is not
guaranteed. Past performance is not a reliable indicator
Sally has $100,000 in her account and would like to of future performance.
divide it between a mixture of investment options, which
she can do by allocating specific percentages to the Members should be aware that TelstraSuper’s investment
options of her choice. options may produce negative returns in certain
circumstances. Therefore, the investment returns in each
Investment option Percentage investment option are not guaranteed and the value of the
investment may rise or fall.
Growth 25%
The importance of diversifying
Balanced 45%
Investing in a mix of asset classes such as shares,
Diversified Income - property and fixed interest is known as diversification.
Diversification helps reduce investment risk. Different
Defensive Growth - asset classes often perform well at different times.
Therefore, if one asset class is not performing well,
Conservative 15% performance of the other asset classes in your investment
strategy may help to balance the overall investment return.
International Shares -
Australian Shares - Asset ranges
Many investment options invest in different asset classes
Property - within a certain range. We use the asset ranges to take
advantage of market opportunities and vary the levels
Fixed Interest -
of investment in each asset class from time to time.
Cash 15% The asset ranges are displayed in brackets next to the
target investment mix figures for these options on
Total 100% pages 20-29. Varying the investment mix within these
ranges may also cause the split between growth and
The mix will change as investment earnings accrue and defensive assets to vary from the target investment mix
income payments are made. Sally should therefore be from time to time.
careful to review her choice regularly to ensure that her
selection remains appropriate.
How investment earnings work
Your savings may earn income from the investments
Easy auto re-weight you’ve chosen. You should consider the points below
Over time, the value of your account will fluctuate. regarding the way investment earnings are calculated
If you’re invested in more than one investment option, and paid.
these fluctuations will likely cause your percentage of
holdings to vary from your initial investment profile. • When you invest across a mix of investment options
your investment earnings will depend on the
If you’d like to automatically balance your account, combination of options you choose.
simply use our Automatic Investment Re-weight facility.
• When you invest in the Diversified Income option
The facility lets you: your income returns (net of fees and taxes,
where applicable) are distributed on a monthly
• re-weight your account quarterly, half-yearly or yearly basis† and used to purchase Cash investment
• set a deviation tolerance percentage so re-weighting option units at that time.
occurs when your account fluctuates to a pre-
determined point from your initial allocation*
To set up the Automatic Investment Re-weight facility you
must complete an Investment Choice TelstraSuper
RetireAccess form at telstrasuper.com.au/forms
* Buy-sell spreads will be incurred for re-weighting your investment profile.
†
Subject to investment performance.
18As a TelstraSuper RetireAccess member, you can draw Labour standards, environmental, social and
down this income as part of your pension payment, ethical considerations
reducing the need to sell capital to fund your retirement.
We believe that incorporating environmental, social and
Or, you can choose to re-invest the Cash units in another governance (ESG) considerations into investment decision
investment option. making is part of good risk management and making
better investment decisions.
Your total investment income earned for the month is
applied within seven business days of the following month. TelstraSuper, therefore, has a preference for investments
If a full withdrawal is made before the month end, no with good ESG credentials provided there is no compromise
income distribution will take place for that month. Instead on expected risk-adjusted returns for the portfolio.
the withdrawal benefit will be inclusive of income accrued
at the time of redemption. For further information, please view our Sustainable
Investment Policy available at telstrasuper.com.au
Applying investment returns to your account
Your investment managers
Investment earnings or returns are applied to your
account according to your chosen investment option(s). As a TelstraSuper RetireAccess member, your super is
We declare daily unit prices for the purpose of applying managed by high quality investment managers. We have
investment returns to your account. The unit price applied selected a diverse range of managers who are experts in
depends upon your account activity and the Effective fixed interest, shares, property and other asset classes.
Day for transactions.
We also manage investments internally, including
Australian shares, cash, fixed interest, property and asset
Effective Day cut-off times for transactions
allocation overlay.
We must receive investment option switches before
5.30pm on a Victorian business day in order to be Your investment risks are reduced as they are spread
transacted at that day’s declared unit price. Unit prices across a number of investment portfolio managers and
for a particular day are declared on the following Victorian asset types. Each manager is carefully chosen to provide
business day. If received after 5.30pm the switches will be competitive performance as well as specialist skills in
transacted using the next day’s buy and sell unit prices. particular markets.
Example:
Jane makes an investment switch via her online account
at telstrasuper.com.au at 11.00am on Monday the 11th.
Jane’s investment switch is processed using the unit
prices declared for Monday the 11th. These prices are
declared on the following day.
Jane can view her updated investments via her online
account on Tuesday the 12th after the unit prices have
been declared.
19Growth option
Objective Return objective
To build an investment portfolio to achieve the stated Outperform CPI+3.5%p.a.
return objective within the stated risk parameters over the
specified timeframe. Investment timeframe
7 to 10 year periods.
Who should invest?
This option suits those who are seeking high growth and Risk objective
are comfortable with high levels of volatility in returns, A high level of risk expected to generate 4 to less than
particularly over the short-term. Compared to the other 6 negative annual returns over any 20 year period.
options available in TelstraSuper, this option involves a
higher level of risk to target greater returns over the longer
Long-term strategic investment mix*
term. As a result, the value of your investment may rise or
fall in the short-term. 90.5% growth assets,
9.5% defensive assets.
Investment strategy
Strong bias towards growth assets, such as Australian
and International Shares, and Property, with a smaller
allocation towards defensive assets such as Cash.
Investment mix and asset ranges
International Shares 35% (20-55%)
Australian Shares 35% (20-55%)
Property 10% (0-25%)
Hedge Funds 5% (0-20%)
Infrastructure 5% (0-15%)
Private Markets 4% (0-15%)
Alternative Debt 3% (0-20%)
Cash 3% (0-20%)
Australian Fixed Interest 0% (0-15%)
International Fixed Interest 0% (0-15%)
Opportunities 0% (0-10%)
Credit 0% (0-10%)
Income Securities 0% (0-10%)
The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members
reasonably need to understand the fund’s investments and reflect the manner in which objectives and strategies have been formulated by the Trustee
pursuant to superannuation law and discretionary powers under the fund’s Trust Deed.
*The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment
in each asset class may vary within the allowable ranges.
20Balanced option
Objective Return objective
To build an investment portfolio to achieve the stated Outperform CPI+3%p.a.
return objective within the stated risk parameters over the
specified timeframe. Investment timeframe
5 to 10 year periods.
Who should invest?
This option suits those who are seeking growth and are Risk objective
comfortable with volatility of returns, particularly over the A high level of risk expected to generate 4 to less than
short-term. This option is designed to provide lower levels 6 negative annual returns over any 20 year period.
of risk and return than the Growth option, but higher
long-term returns than the Conservative and Cash options.
Long-term strategic investment mix*
Investment strategy 74.5% growth assets,
25.5% defensive assets.
The Balanced option has a moderate bias towards growth
assets, such as Australian and International Shares, and
Property, balanced by an allocation towards defensive
assets such as Fixed Interest Securities and Cash.
Investment mix and asset ranges
Australian Shares 27% (15-50%)
International Shares 27% (15-50%)
Property 10% (0-25%)
Australian Fixed Interest 7% (0-25%)
Cash 7% (0-25%)
Infrastructure 5% (0-15%)
Alternative Debt 4% (0-20%)
Private Markets 4% (0-15%)
Hedge Funds 4% (0-15%)
International Fixed Interest 3% (0-25%)
Credit 2% (0-10%)
Income Securities 0% (0-10%)
Opportunities 0% (0-10%)
The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members
reasonably need to understand the fund’s investments and reflect the manner in which objectives and strategies have been formulated by the Trustee
pursuant to superannuation law and discretionary powers under the fund’s Trust Deed.
*The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment
in each asset class may vary within the allowable ranges.
21Diversified Income option
Objective Return objective†
To build an investment portfolio to achieve the stated Outperform CPI+2%p.a.
return objective within the stated risk parameters over the
specified timeframe and to produce a distributable income Investment timeframe
above the Cash rate over the medium-term, while also 4 to 6 year periods.
aiming for stability in the value of capital.
Risk objective
Who should invest?
A medium to high level of risk expected to generate 3 to
Members who are looking for an income stream, while less than 4 negative annual returns over any 20 year period.
still seeking some growth on their initial investment capital.
A minimum investment of $100,000 applies.
Long-term strategic investment mix*
Investment strategy 57.5% growth assets,
42.5% defensive assets.
The Diversified Income option is uniquely structured to
distribute income it receives from investments, allowing
members to fund part of their retirement needs without the
need to sell capital assets.
When selecting investments, preference is made for
expected returns predominately driven by income rather
than capital growth. Income is accrued as underlying
investments pay income distributions during the month.
Due to the varying income distributions of the underlying
investments, the income payment to members will vary
from month to month.
Investment mix and asset ranges
Australian Shares 20% (10-50%)
Diversified Fixed Interest 15% (0-50%)#
International Shares 15% (0-30%)
Property 15% (0-25%)
Cash (includes term deposits) 10% (0-50%)
Income Securities 10% (0-30%)
Infrastructure 10% (0-20%)
Alternative Debt 5% (0-20%)
Opportunities 0% (0-10%)
#
iversified Fixed Interest comprises Australian and
D
International fixed interest and credit securities.
The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members
reasonably need to understand the fund’s investments and reflect the manner in which objectives and strategies have been formulated by the Trustee
pursuant to superannuation law and discretionary powers under the fund’s Trust Deed.
he investment return for the Diversified Income option is calculated on the basis of daily movements in unit prices and distributions payable to members, as
T
†
if distributions are reinvested in the option’s asset pool. Distributions are not actually reinvested; they are paid into the accounts of eligible members effective
the first business day of each calendar month and are invested in the Cash option.
*The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment
in each asset class may vary within the allowable ranges.
22Defensive Growth option
Objective Return objective
To build an investment portfolio to achieve the stated Outperform CPI+2%p.a.
return objective within the stated risk parameters over the
specified timeframe. Investment timeframe
2 to 6 year periods.
Who should invest?
Members who want the potential for moderate investment Risk objective
growth but with greater security than the Balanced or A medium to high level of risk expected to generate 3 to
Growth options. This option is designed to give more less than 4 negative annual returns over any 20 year period.
flexibility for members who might be looking to access
their super in the short to medium-term and who want to
Long-term strategic investment mix*
continue participating in capital growth.
59.5% growth assets,
Investment strategy 40.5% defensive assets.
The Defensive Growth option is uniquely structured to
adjust its exposure to a range of growth and defensive
assets, based on the performance and confidence of
investment markets at any point in time.
When investing in growth assets, it does so in a way that
aims to reduce volatility. For example, by investing in
stable businesses with long histories of reliable cash flows
and profitability.
Investment mix and asset ranges
Australian Shares 20% (0-50%)
International Shares 20% (0-40%)
Australian Fixed Interest 10% (0-30%)
Credit 10% (0-40%)
Infrastructure 10% (0-30%)
Property 10% (0-30%)
Cash 6% (0-30%)
Alternative Debt 6% (0-20%)
International Fixed Interest 5% (0-30%)
Hedge Funds 3% (0-15%)
Income Securities 0% (0-40%)
Opportunities 0% (0-10%)
The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members
reasonably need to understand the fund’s investments and reflect the manner in which objectives and strategies have been formulated by the Trustee
pursuant to superannuation law and discretionary powers under the fund’s Trust Deed.
*The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment
in each asset class may vary within the allowable ranges.
23Conservative option
Objective Return objective
To build an investment portfolio to achieve the stated Outperform CPI+1.5%p.a.
return objective within the stated risk parameters over the
specified timeframe. Investment timeframe
3 to 10 year periods.
Who should invest?
Those who want to maintain some growth, with a lower Risk objective
risk of capital loss than the Balanced or Growth options. A low to medium level of risk expected to generate 1 to less
than 2 negative annual returns over any 20 year period.
Investment strategy
The Conservative option has a bias towards defensive Long-term strategic investment mix*
assets, in particular a high weighting towards Cash, to 38.5% growth assets,
minimise short-term fluctuations (risk) but has some 61.5% defensive assets.
exposure to growth assets for long-term growth (return).
Investment mix and asset ranges
Cash 22% (10-50%)
Australian Fixed Interest 20% (0-40%)
International Fixed Interest 15% (0-40%)
Australian Shares 12% (5-25%)
International Shares 12% (5-25%)
Property 10% (0-20%)
Alternative Debt 3% (0-15%)
Infrastructure 3% (0-15%)
Hedge Funds 3% (0-15%)
Opportunities 0% (0-10%)
The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members
reasonably need to understand the fund’s investments and reflect the manner in which objectives and strategies have been formulated by the Trustee
pursuant to superannuation law and discretionary powers under the fund’s Trust Deed.
*The long-term investment mix is used as a strategic guide for investing. The split of defensive and growth assets can vary from time to time as investment
in each asset class may vary within the allowable ranges.
24International Shares option
Objective Return objective
To build an investment portfolio to achieve the stated Outperform CPI+4%p.a.
return objective within the stated risk parameters over the
specified timeframe. Investment timeframe
8 to 10 year periods.
Who should invest?
Those who want to achieve potentially high returns in the Risk objective
long-term through exposure to International Shares, while A high level of risk expected to generate 4 to less than
being willing to accept a high level of volatility in returns. 6 negative annual returns over any 20 year period.
Investment strategy Long-term strategic investment mix
The International Shares option has 100% exposure to 100% growth assets.
International Shares, and is invested through several
investment managers. It aims to achieve exposure
to industries and companies that are not part of the
Australian sharemarket.
Investment mix and asset ranges
International Shares 100%
The aim of this information is to provide members with investment objective and strategy details (including investment mix) that we consider members
reasonably need to understand the fund’s investments and reflect the manner in which objectives and strategies have been formulated by the Trustee
pursuant to superannuation law and discretionary powers under the fund’s Trust Deed.
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