Uniting Church Superannuation Plan - SuperFacts.com

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Fairer weather brings improved outlook Market and economic conditions in detail for the 12 months to 30 June 2010 30 Asset Class Returns 25 27.1 Return (%) 20 15 10 5 0 -5 13.1 11.2 -4.8 5.2 14.1 -2.6 16.2 -0.4 17.9 2.1 2.8 -1.5 20.3 -6.3 -1.4 -0.6 3.6 7.9 3.5 9.2 1.1 3.9 -10 -11.2 -11.6 -10.9 -15 Australian Shares Australian Small Caps Overseas Shares (UH) Overseas shares (H) Overseas Small Caps (UH) Emerging Markets (UH) Direct Property Australian REITs Global REITs (H) Global Listed Infr. (H) Australian Fixed Income Overseas Fixed Income (H) Cash June 2010 Quarter 12 Months to June 2010 Data source: Thomson Financial Datastream; MSCI Date provided ‘as is’ The 2009/2010 financial year produced positive returns for investors across all asset classes except for Global Listed Infrastructure. Australian Shares outperformed their unhedged global peers. Investments in Overseas Shares (Hedged and Unhedged), Overseas Small Caps, Emerging Markets and Global REITs (Hedged) all provided strong returns over the year. Most of the gains in equity markets were made in the first half year. Concerns about the pace of the global recovery out of the GFC, triggered by problems in Europe (in particular in relation to sovereign debt) led to aggressive selling in the last two months of the financial year. Bond market returns were strong after yields fell as risk aversion dominated sentiment. Key developments during the year were: • The Reserve Bank of Australia lifted the cash rate from 3.0% to 4.5%. In June, the board cited the potential for events in Europe to affect the global economy as a factor in its decision to leave rates on hold. • Australian economic data highlights: – GDP expanded at 0.5% quarter-on-quarter pace in the March quarter, less than half the upwardly revised 1.1% rate of advance in 4Q 09. – Employment increased. The unemployment rate fell to 5.2% in June. – The NAB survey showed business confidence fell for a third straight month in May. The index fell to +5 (expected +11). – Housing finance commitments fell 2.8% in April, after also falling in February and March. This reflected the phasing down of the First Home Owners Grant. • US economic data highlights: – The FOMC left interest rates on hold at 0.25% in light of continued concerns regarding economic growth including low rates of resource utilisation, subdued inflation trends and stable inflation expectations. – The official unemployment rate hit a new high of 10.2% after data was released during the December quarter. – In January, US President Obama proposed the introduction of limits on the size of proprietary trading operations by banks and the banning of proprietary trading by deposit taking banks in order to curb banks risk taking. – The ISM manufacturing index expanded for a tenth straight month, along the way hitting its highest reading (March, 59.6) since June 2004. • In China: – The Chinese authorities announced a set of measures to tighten monetary policy, including raising the reserve requirements of banks by 0.5%, lifting the official interest rate and curbing bank lending. – A series of measures were announced aimed at cooling growth in the residential property market, including raising the downpayment on first homes of more than 90 square metres to 30% from 20% and raising down-payments on second homes to 50% from 40%. – The People’s Bank of China announced a rise in the deposit requirement ratio by 50bps to 17% for larger institutions in an attempt to slow credit growth. Also, China abandoned its currency peg with the USD, moving back to a target range against a basket of currencies which was the system employed until 2008. – GDP rose 11.9% year-on-year in Q1 which was above consensus (11.7%) due to solid investment and private consumption growth. – Manufacturing activity expanded in May for the 15th straight month. • The International Monetary Fund (IMF) upgraded its global economic forecast for 2010 from 3.1% to 3.9%, and also lifted its Australian GDP growth forecast to 2.5% in 2010 and 3.0% in 2011. • In late March, Europe’s leaders agreed to an emergency facility for Greece backed by the IMF and bilateral loans from Euro zone states. • Ratings agencies downgraded the rating on Greek bonds to “junk”. • Oil gained 7.8% to finish at US$75.25/bbl. There was strong support for gold as risk aversion set in. Gold hit a record high of US$1,265/oz during the June quarter before closing up 34.2% at US1,242/oz. 4 Uniting Church Superannuation Plan
Bearing fruit – your earnings Australian shares The Australian share market started the financial year strongly, rising 21.6% in the September quarter. However, the market went downhill from there. The second quarter return was 3.4%, while the three months from January to March returned a meagre 1.3%. The market drastically declined in the last quarter, with the market falling 11.2% over the three months to June 2010. The S&P/ASX 300 Index returned +13.1% for the year. Overseas shares Overseas shares (unhedged in AUD) returned 5.2%, with most major markets other than Japan able to produce a good return for the year. The appreciation of the Australian dollar against most major currencies, particularly the Pound and the Euro, resulted in a fully hedged investor seeing a return of 14.1%. Property Global Listed Property (FTSE EPRA/NAREIT Global Hedged AUD Index) outperformed all other asset classes gaining 27.1%. Domestic Listed Property (S&P/ASX 300 Property Trust Index) returned a robust +20.3% over the financial year. Fixed income and cash Domestic bond returns were strong after Australian 10 year bond yields fell 53bps to 5.09%. The UBS Composite Index returned +7.9% for the year. Global bond returns were also strong after US 10 year bond yields fell 60bps to 2.93%. The Citigroup World Government Bond Index and the Barclays Capital Global Aggregate Index returned +9.2% and +11.5% over the financial year. Currency markets Over the June year the Australian dollar appreciated 4.5% against the US dollar, 15.0% against the Pound Sterling and 19.6% against the Euro. The local currency depreciated 4.2% against the Yen. Over the financial year the Australian dollar gained 4.0% on a trade weighted basis. We talk about two different rates in this report – a net earning rate and a crediting rate. Let’s look at what each of these rates mean for Accumulation accounts, Pension accounts and for Defined Benefits. Earnings for Accumulation accounts Net earning rate This is the rate of investment return (after tax and investment expenses) on money invested in each investment option. It is expressed as a percentage rate per annum of assets and can be positive or negative. Crediting rate Each month, the Trustee calculates the crediting rate for each investment option. This is calculated as the net earning rate (positive or negative) on each investment option less an allowance for the Plan’s administration expenses not already recovered from administration fees deducted from members’ accounts or the Plan’s Administration Reserve. How are earnings applied to Accumulation accounts Crediting rates (which can be either negative or positive), are applied each month to your account according to your chosen investment option(s), taking into account your daily transactions during the month. Your actual investment earnings may therefore be different to the crediting rates because of the timing of your transactions, such as withdrawals, switching and contribution payments. This year’s net earning rates The Plan’s investment performance over the 2009/10 year reflected a pleasing return to positive rates. While the returns didn’t quite reach the highs that might have been expected based on the signs of market recovery in the earlier half of the year, they were still solid for all options. The net earning rates achieved by the Plan’s investment options are detailed in Table 1. Please be aware that past performance is not necessarily an indication of future performance and returns can be volatile as a result of market fluctuations. This year’s crediting rates For the year ended 30 June 2010, the Trustee has deducted 0.4% p.a. from the net earning rates for administration expenses. This adjustment is reflected in the annual crediting rates which are also detailed in Table 1. Table 1 Year ended 30 June High Growth 1 Growth Net earning rates (% p.a.) SRI Growth 2 Diversified Conservative Investment option High Growth 1 Growth Crediting rates (% p.a.) SRI Growth 2 Diversified Conservative 10 year returns 3.7 4.6 -2.6 4.9 5.0 3.8 4.5 -2.5 4.8 4.9 3.2 5 year returns 3.7 4.2 -2.6 4.3 4.9 3.6 4.2 -2.5 4.2 4.8 3.0 2010 13.8 11.8 9.8 10.4 7.7 13.4 11.4 9.4 10.0 7.3 3.1 2009 -14.7 -9.9 -11.4 -7.0 1.0 -14.2 -9.4 -10.9 -6.5 1.6 1.5 2008 -15.8 -10.3 -9.0 -6.9 0.7 -15.6 -10.1 -8.8 -6.7 0.9 4.5 2007 21.3 16.6 3.3 14.1 7.9 20.9 16.2 3.1 13.7 7.5 2.1 2006 20.8 16.7 n/a 13.0 7.2 20.4 16.3 n/a 12.7 6.9 4.0 You can see how much you have earned (or lost) on your UCSuper account this year, and over the longer term – the crediting rates applied for each month in 2009/10 are shown on your annual statement of benefits. CPI 1 The High Growth Option was introduced in December 2000. The rate of return for the 2000 year has been calculated for 7 months to 30 June 2001. The 10 year return reflects performance for the 9 years and 7 months since inception. 2 The SRI Growth Option was introduced on 1 December 2006 and there were no returns to report prior to 1 February 2007 when the first investment was made. The rate of return for the 2007 year has been calculated for 5 months from 1 February 2007 to 30 June 2007. The 5 and 10 year returns reflect performance for the 3 years and 5 months since inception. Uniting Church Superannuation Plan 5
Page 1 and 2: Uniting Church Superannuation Plan
Page 3: Your super: back in bloom Welcome t
Page 7 and 8: Administration reserve The Trustee
Page 9 and 10: Your investment options in detail O
Page 11 and 12: Fees and costs Costs are carefully
Page 13 and 14: Example of annual fees and costs fo
Page 15 and 16: GST Fees and costs shown in this se
Page 17 and 18: When you can harvest your super cro
Page 19 and 20: If you recommence employment within

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