The Commonwealth <strong>Government</strong>budget and your superThe Commonwealth<strong>Government</strong>’s Budget<strong>2009</strong>/2010 had someinteresting outcomes for thesuperannuation industry.Since first announced, some proposalshave been enacted in legislation underthe Tax Laws Amendment (<strong>2009</strong> BudgetMeasures No.1) Act <strong>2009</strong>, the SuperannuationIndustry (Supervision) AmendmentRegulations <strong>2009</strong> (No.4) and the SocialSecurity And Other Legislation Amendment(Pension Reform And Other <strong>2009</strong> BudgetMeasures) Act <strong>2009</strong>. Some of the measuresannounced include:Minimum draw-down amountA regulation amendment passed inJune <strong>2009</strong> extended the reducedminimum drawdown for account basedpensions <strong>to</strong> the end of the <strong>2009</strong>/2010financial year. This change applies <strong>to</strong><strong>members</strong> with a <strong>QSuper</strong> Pension accountand <strong>members</strong> using the transition <strong>to</strong>retirement option. For more informationabout this change, please see the <strong>QSuper</strong>Pension account documents includedwith your <strong>QSuper</strong> benefit statement, orcontact <strong>QSuper</strong>.Super co-contributionsTemporary reductions <strong>to</strong> the super cocontributionhave been included in the<strong>2009</strong>/2010 Budget. These reductions willbe scaled back up <strong>to</strong> the 2008/<strong>2009</strong> rateby 2014/2015.In 2008/<strong>2009</strong>, the matching rate foreligible <strong>members</strong> was $1.50 for every $1.00contributed, up <strong>to</strong> a maximum of $1,500.The matching rate drops <strong>to</strong> $1.00 for $1.00,up <strong>to</strong> a maximum of $1,000, starting fromthe <strong>2009</strong>/2010 financial year.In the 2012/2013 and 2013/2014 financialyears, the matching rate and maximumcontribution will increase <strong>to</strong> $1.25 for every$1.00 contributed (up <strong>to</strong> $1,250) and in the2014/2015 financial year, the full matchingrates and co-contribution will be res<strong>to</strong>red.As these changes only become effectivefrom 1 July <strong>2009</strong>, the 2008/<strong>2009</strong>co‐contributions will not be affected.Concessional contributions capThe <strong>Government</strong> has reduced the capon concessional (including employer andpersonal before-tax i.e. contributions madethrough salary sacrifice) contributions from$50,000 <strong>to</strong> $25,000 p.a., for the <strong>2009</strong>/2010financial year, and the transitionalarrangement for those 50 or over from$100,000 <strong>to</strong> $50,000 p.a. from 1 July <strong>2009</strong><strong>to</strong> 30 June 2012. If your concessionalcontributions exceed the cap, you arerequired <strong>to</strong> pay additional tax on anyamount above the cap.Subject <strong>to</strong> any conditions <strong>to</strong> be imposedby the <strong>Government</strong> under legislation,special arrangements will apply <strong>to</strong> theconcessional contributions of <strong>members</strong>with defined benefit interests at 12 May<strong>2009</strong>, including the method by whichthese concessional contributions(which, for defined benefit interests arecalled notional taxed contributions) arecalculated. This is because employercontributions in<strong>to</strong> these interests arenot always attributable <strong>to</strong> individual<strong>members</strong>. Where these <strong>members</strong>’ notionaltax contributions exceed the reducedconcessional contributions cap, theywill be deemed <strong>to</strong> have met the cap.These arrangements are similar <strong>to</strong> thearrangements that were applied when theconcessional contributions cap was firstintroduced in July 2007. This arrangemen<strong>to</strong>nly applies <strong>to</strong> concessional contributionsmade in respect of a Defined Benefitaccount. For further information on thesespecial arrangements, please refer <strong>to</strong> the<strong>QSuper</strong> website.Non-concessionalcontributions capChanges <strong>to</strong> the non-concessional(after‐tax) contributions cap havealso been legislated. The currentnon‐concessional contributions capis set at three times the concessionalcontributions cap of $50,000, which equals$150,000 p.a., or $450,000 under the ‘bringforward rule’.The cap will stay at the same level forthe <strong>2009</strong>/2010 financial year, and willbe calculated at six times the level ofthe concessional contributions cap infollowing financial years.The following proposalsannounced in the <strong>2009</strong>/2010Commonwealth <strong>Government</strong>Budget are still beingconsidered:Lost or unclaimed superThe <strong>Government</strong> has announced thatfrom the 2010/2011 financial year,superannuation providers will be required<strong>to</strong> transfer <strong>to</strong> the Australian Tax Office, lostaccounts which have balances less than$200, or that have been inactive for fiveyears, and for which there are insufficientrecords <strong>to</strong> identify the owner of theaccount.Trans-Tasman portabilityThe Budget announcement also includeda proposal <strong>to</strong> continue the <strong>Government</strong>’scommitment <strong>to</strong> establish a scheme fortrans-Tasman portability of retirementsavings. This means once an agreementis reached, retirement savings could betransferred between certain Australian andNew Zealand funds. As yet, no details ofhow this scheme will operate have beenreleased, but we will keep you updated viathe website.6 | <strong>QSuper</strong> <strong>Annual</strong> <strong>report</strong> <strong>to</strong> <strong>members</strong>
About <strong>QSuper</strong>’s investmentsWho invests your money?The <strong>QSuper</strong> Board has appointedQIC Limited (ABN 95 942 373 762,ACN 130 539 123) as the investmentmanager for <strong>QSuper</strong>. As well as managing<strong>QSuper</strong> money directly, QIC Limited (QIC)acts as a manager of managers, selectingand moni<strong>to</strong>ring specialised fund managers<strong>to</strong> complement its own expertise. Thesemanagers change from time <strong>to</strong> time andare moni<strong>to</strong>red daily by QIC. The <strong>QSuper</strong>Board has the discretion <strong>to</strong> change theinvestment manager at any time. To keepup <strong>to</strong> date with any changes, visit the<strong>QSuper</strong> website.Allocation of investment returns<strong>QSuper</strong> Accumulation and Pensionaccounts are unitised. Your Accumulationor Pension benefit is expressed as anumber of units, and so the value of yourbenefit is determined by the number ofunits held and the value of those units.Your investment option has a unit pricethat is set daily. These unit prices change<strong>to</strong> reflect investment returns and changesin market values.The <strong>QSuper</strong> Board has the discretion <strong>to</strong>suspend unit prices if it requires furthervalidation of a unit price for any reason.If the <strong>QSuper</strong> Board uses this discretion,information will be available on the<strong>QSuper</strong> website.Unit pricing error compensation<strong>QSuper</strong> ensures extensive controls arein place <strong>to</strong> minimise the chance of unitpricing errors. In the unlikely event thatan error occurs and you are negativelyaffected by transacting at an incorrectprice, <strong>QSuper</strong> will aim <strong>to</strong> compensate youso that you are returned <strong>to</strong> the financialposition that would have existed had theerror not occurred.In the event of an error, exited <strong>members</strong>will be awarded compensation if theamount of compensation is greater thanor equal <strong>to</strong> $20.Investment fees and costsThe Management Expense Ratios (MER)for the 2008/<strong>2009</strong> financial year for allour options are outlined in the tables onpages 10-12. The MER is made up of afixed component (fund administration,financial planning services, and coreinvestment management fees) and avariable component (non-core investmentmanagement fees including externalmanagers). Performance fees are includedin the calculation of MERs. The <strong>QSuper</strong>Board will provide at least 30 days’ noticeof any increase in the fixed component,which is currently not more than 0.30%of a member’s Accumulation or <strong>QSuper</strong>Pension account balance. Given the natureof the variable component, these feescannot be precisely calculated in advance.We will provide updated fees on thewebsite throughout the year. For moreinformation on fees and costs please refer<strong>to</strong> the product disclosure statement.During the course of the year,changes made <strong>to</strong> investmentstrategies resulted in changes<strong>to</strong> MERs.The Balanced, Cash Plus, High Growth,Cash and Fixed Interest options allresulted in a higher MER than last year.The Basic Growth, Australian Shares andInternational Shares options all resulted ina lower MER than last year.Assets above 5% of funds undermanagement<strong>QSuper</strong>’s exposure <strong>to</strong> the CommonwealthBank of Australia at the end of the financialyear was 5.71%.<strong>QSuper</strong> <strong>Annual</strong> <strong>report</strong> <strong>to</strong> <strong>members</strong> | 7