Annual report to members 2009 - QSuper - Queensland Government

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Changes to your investment optionsChanges to strategic assetallocationsWhen investing your super, QIC workswithin strict asset allocation ranges asprescribed by the QSuper Board. Theseranges apply to most of our Ready Madeoptions and defined benefit monies.In recognition of the fact that differentinvestment strategies may be requiredin different economic environments, theBoard made the decision to make theseasset allocation ranges wider for someoptions from 1 July 2008. This providesQIC with a greater ability to react to marketfactors and take advantage of investmentopportunities as they arise.Increasing these ranges also allows greaterdiversification and the ability to furtherboost the acquisition of alternative assets.This in turn offers the potential to achievesolid returns with less risk. Due to theilliquid nature of some investments, likeinfrastructure, this change is taking time toeffect.Balanced and High GrowthoptionsThe following changes were made to theBalanced and High Growth options:• Definitions of infrastructure and realestate were expanded to include bothlisted and direct assets. This providesgreater flexibility, responsiveness toopportunities, broader diversification,and lower associated costs.Socially Responsible optionAs a result of changes from the externalinvestment manager, AMP, the assetallocation ranges of the SociallyResponsible option were changed from20 April 2009. The change consisted of anincrease to the asset allocation ranges forall asset classes within the portfolio. Formore information regarding the SociallyResponsible option refer to page 10.Asset classCash Plus optionCash 0% – 6% 0% – 8%The Cash Plus option consists of 50% cashand Fixed 50% interest of the Balanced 17% – 29% option. 13% Changes – 33%to Property the Cash Plus option 4% – reflect 22% the 0% changes – 28%to both cash exposures and the BalancedAustralian shares 35% – 41% 33% – 43%investment option.International shares 11% – 33% 9% – 37%All the asset allocation ranges can befound Alternative on pages assets 10–12. 0% – 4% 0% – 6%Cash Plus optionRanges as at Ranges as14 July 2008 at 20 AprilThe Cash Plus option consists of 50% cashand 50% of the Balanced option. Changesto the Cash Plus option reflect the changesto both cash exposures and the Balancedinvestment option.All the asset allocation ranges can befound on pages 10–12.Cash optionIn March 2008 the QSuper InvestmentCommittee considered the then emergingglobal financial crisis and its impact onthe returns for the Cash option andother cash exposures across all of theinvestment options.This resulted in the committee approvingan immediate reduction in the risk of theCash option and the 50% cash allocationof the Cash Plus option. Both portfolioswould be transitioned over a two‐yearperiod to a low risk cash portfoliomirroring the UBS Bank Bill Index. Thismove was to reduce the effect of marketvolatility for the Cash and Cash Plusoptions, while also allowing the rest ofthe investment options to retain someexposure to the long-term value if thesesecurities were held to maturity.This move has seen the Cash optionsomewhat buffered from the full effects ofmarket volatility.8 | QSuper Annual report to members
QSuper investment policiesGeneral ReserveThe primary function of the QSuperGeneral Reserve is to ensure QSuper’scurrent and future liabilities associatedwith tax and administration areprovided for. Fees and tax deductedfrom members’ accounts are transferredinto the General Reserve. Generaladministration expenses and tax liabilitiesare paid from the General Reserve.The General Reserve operates under apolicy approved by the QSuper Board,which also sets and annually reviewsthe investment strategy of the reserve.In setting the investment strategy forthe reserve, consideration is given to thepurpose of the reserve, the nature of theunderlying liabilities, and investment risk.The General Reserve is currently investedin the Cash Plus and Balanced options.General Reserve $’00030 June 2009 157,14530 June 2008 408,08730 June 2007 519,60730 June 2006 352,038Derivatives policyDerivatives are investment products forwhich the value is linked to the value ofanother investment product. Derivativescan be bought and sold, and may beused to protect an investment portfolioagainst unfavourable movements inthe market, or to switch funds betweendifferent investments cost-effectively. TheQSuper Board of Trustees has obtainedand accepted a Derivative Risk Statementfrom QIC which defines how QIC can usederivatives.The QSuper Board of Trustees does notinvest directly in derivatives and monitorsQIC to ensure derivatives are used inaccordance with the Derivative RiskStatement and have not been used forspeculative purposes.Strategy and ObjectivesQSuper aims to be recognised for itscontribution to the quality of eachmember’s life through better knowledge,real service, great value and solid returns.VPP closed investment optionQSuper provides the members of theclosed Voluntary Preservation Plan(VPP) with a capital guarantee that theearning rate for a full financial year willnot be negative. In return for this capitalguarantee, VPP members are levieda premium of 0.35% on 30 June eachyear. This option is invested in a CashPlus strategy and consists of 25% to40% growth assets (such as shares andproperty), 52.5% to 70% defensive assets(such as fixed interest and cash), and 2.5%to 16.5% in alternative assets (such asinfrastructure and commodities).The VPP crediting rate for the 2008/2009financial year was applied to VPP memberaccounts before the capital guarantee feewas debited. The VPP crediting rate forthe 2008/2009 financial year was 0%.QSuper Annual report to members | 9
Page 1 and 2: 2009 Annual report to members Impor
Page 3 and 4: Chairman’s reportby Bob ScheuberC
Page 6 and 7: The Commonwealth Governmentbudget a
Page 10 and 11: QSuper investment optionsDefault op
Page 12 and 13: QSuper investment optionsYour Choic
Page 14 and 15: More important informationSalary sa
Page 16: 2009 Annual report to membersMajor

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