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Annual Report 2011 - SuperFacts.com

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<strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Contact us1800 635 796The Fund AdministratorLutheran Superc/- GPO Box 4303Melbourne VIC 3001The yearin reviewwww.lutheransuper.<strong>com</strong>.auIssued by LCA Nominees Pty Ltd ABN 61 008 204 939AFSL No 240571 as Trustee of Lutheran SuperABN 93 371 348 387.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsLutheran Super at a glanceMembership profileGender profileAge Male Female Total members Percentage oftotal membersUnder 30 272 755 1,027 14.07%Males and Females by age group (Total Fund)30 – 39 369 1,134 1,503 20.58%160040 – 49 494 1,466 1,960 26.84%50 – 54 297 683 980 13.42%55 – 59 313 594 907 12.42%60 – 64 247 369 616 8.44%65 & Over 157 152 309 4.23%Total 2,149 5,153 7,302 100.00%Number of members1400120010008006004002000Under 30 30−39 40−49 50−54 55−59 60−64 65 & OverAge% of Total 29.43% 70.57% 100.00%Average age 46.83 44.18 44.95FemaleMaleAge profile8.44%4.23%14.06%12.42%13.42%20.58%Under 3030 − 3940 − 4950 − 5455 − 5960 − 6465 & Over26.84%2


Back to contentsInside this report...2 Lutheran Super at a glance4 Chairman’s report5 Market and economic conditions December <strong>2011</strong> year6 Super news9 A Super website11 Your investment options--Lutheran Super’s investment performance21 Fees and charges24 Getting to know your Fund27 Questions about your superannuation?28 Financial summaryLutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>3


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsWel<strong>com</strong>e to LutheranSuper’s <strong>Annual</strong> <strong>Report</strong>for the year ending31 December <strong>2011</strong>.On behalf of the Trustee I would like to presentthe <strong>2011</strong> <strong>Annual</strong> <strong>Report</strong>. However, rather thanconcentrate on the year that was (you can read thatin this report), I have chosen to look at what’s onthe horizon and bring you up to date on some ofthe positive changes ahead that will impact you andLutheran Super over the <strong>com</strong>ing months and years.Future of Financial AdviceFirst of all, the Future of Financial Advice (FoFA) reformswill provide millions of Australians with access tobeneficial scaled advice.Scaled advice, inside and outside super, is an initiativethat will take care of the middle ground. It will appealto anyone who doesn’t want <strong>com</strong>prehensive advicebecause their needs are much less <strong>com</strong>plicated. Scaledadvice is advice about a specific area of a person’s needsor about a limited range of issues. The reforms, due to<strong>com</strong>mence on 1 July this year have been postponed to1 July 2013. However, we do have the ability to opt inbefore that date and that’s just what we plan to do!Over the year, we have been working on deliveringscaled advice to members. By July this year, you willbe able to access personal advice on issues such asinvestment strategies, contribution strategies andinsurance via our Helpline – 1800 635 796. And, theadvice you receive will generate a written Statementof Advice.MySuperAnother legislative change that is due to be phasedin over several years and forms part of the ‘StrongerSuper’reforms is MySuper. MySuper is designed to suit‘most’members and will <strong>com</strong>prise a single, diversifiedinvestment strategy, low fees and an appropriate level ofinsurance. It is due to be phased in from 1 July 2013 to1 July 2017.We are yet to determine what our MySuper arrangementwill look like however, you can be assured we will let youknow the detail well ahead of its implementation.Increases to the superannuation guaranteeNext, the Superannuation Guarantee (SG) rate is setto gradually increase from 9% to 12% over seven yearsfrom 1 July 2013 as follows:YearSG rate2013-14 9.25%2014-15 9.5%2015-16 10%2016-17 10.5%2017-18 11%2018-19 11.5%2019-20 12%An important change is the SG age limit of 70 will beremoved from 1 July 2012 which means mature ageemployees aged 70 and older will now be eligible forSG contributions from their employer.Improved flexible insurance coverAnd finally, the introduction of our new insurancearrangements almost six months ago, are certainly beingembraced by our members. The new arrangements areproviding some significant improvements, including:• lower premiums – as a result of a change of insurerto AIA Australia Limited• automatic death and total and permanentdisablement cover to age 70 (previously it was 65)– we are working longer, it makes sense that we arecovered for longer• Lifestyle events cover – it also makes sense to havecover that changes as significant events impact yourlife (marriage, mortgage, children etc.) without theneed to provide evidence of good health• introduction of fixed cover – has given you theflexibility to choose the type of cover that suits youbest, i.e. a ‘fixed’amount in multiples of $1,000 orunit-based cover.You are also able to transfer any other cover you mayhave to Lutheran Super to add to your current LutheranSuper cover.We consider all these initiatives, both internal andexternal, to be a positive way forward to help you planand achieve a financially secure future and, as always,we will keep you posted on further developments asthey unfold.In the meantime, please take the time to read thisannual report and to review your super to ensure youare making the most of what your fund has to offer.Remember, as a Lutheran Super member, you’re valued!John GrockeChairman4


Back to contentsMarket and economicoverview – December<strong>2011</strong> yearGlobal economy faltersAs anticipated, the <strong>2011</strong> calendar year proved to bevolatile, though much more so than expected a yearago as the Eurozone debt crisis spread and deepened.Investors remain cautious going into 2012, with still noclear resolution to Europe’s debt woes in sight.The first quarter of <strong>2011</strong> saw global growth gathermomentum and remain resilient in the face of majorpolitical and natural disaster 'shocks' (e.g. the start of theso-called Arab Spring, floods, earthquakes). Nevertheless,with oil prices rising and fears of inflation heightening,some moderation to this growth was expected by theend of that quarter.Consistent with this expectation, global share marketsremained positive in April, but then fell over May andJune. Whereas successful policy interventions in the USand European Union had built the platform for strongergrowth in the second half of 2010, any rebound ingrowth over the last six months of <strong>2011</strong> was expected tobe more modest.However, modest growth would have been wel<strong>com</strong>ed.Instead, the third quarter of <strong>2011</strong> brought extremeand unusual volatility fuelled mainly by sovereign debtissues in the Eurozone; in particular, by heightenedfears of a default by Greece as that country continuedto miss fiscal milestones established as part of earlierbail-out agreements.More broadly, European policymakers struggled to agreeon both an appropriate response and a credible planto address other contagion threats to global financialmarkets. Meanwhile, undercapitalised European banksresponded by hoarding rather than lending money anddeleveraging balance sheets. By the end of the thirdquarter, consensus estimates for <strong>2011</strong> growth had fallen,along with forecasts for 2012.The roller coaster ride for investors continued over thelast three months of the calendar year, with global sharemarkets reacting positively in October to news of apossible breakthrough in the Eurozone debt crisis andrebounding strongly. Global share markets then fell inNovember over uncertainty related to that crisis, butsurged on the final day of the month in response to anagreement by six central banks to reduce the cost forborrowing for banks in emergencies.Global share markets ended the year flat, with investorsremaining cautious as it became apparent that themuch anticipated European Summit would provide noclear resolution for Europe's debt problems, which hadplagued markets for most of the year.Volatile market gives investorsa roller coaster ride in <strong>2011</strong>Global outlook for 2012As we enter 2012, despite the latest round of downwardrevisions to economic growth forecasts, there aregrounds for cautious optimism <strong>com</strong>pared with a verydifficult <strong>2011</strong>. In Europe, the situation remains delicatewith growth sentiment tempered by risks of a deeperrecession and countries leaving the Euro currency union.In the US, the recent upturn appears better groundedbut longer-term prospects for reducing sovereign debtremain problematic. Meanwhile China's economicfundamentals continue to impress with economicgrowth strong and inflation under control. Australia'seconomic growth has slowed modestly and the ReserveBank has acted to cut interest.Past performance is not indicative of future performanceso care should be taken when reading this information.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>5


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contents6Super newsThe Federal Government announced a numberof changesIt seems that superannuation is always changing andthe last twelve months have been no different with theFederal Government announcing a number of changesaffecting superannuation. Whilst a number of thesechanges have already been legislated, some are yet tobe passed by Parliament. Changes which have beenannounced over the last year or which are still to beimplemented include the following:Changes to the Superannuation GuaranteeIn March 2012, the Government passed the MineralsResource Rent Tax (known as the Mining tax),bringing with it a range of improvements toAustralians' super including:• a gradual increase in the Superannuation Guarantee(SG) from 9% in 2013 and reaching 12% in 2019-20.This will assist in improving the adequacy ofretirement benefits provided to Australians and thesustainability of Australia's retirement in<strong>com</strong>e system.• the abolition of age limits for super contributions.Currently, once you reach age 70, SG contributionsare no longer allowed to be paid on your behalf.From 1 July 2013, there will be no longer be anage limit. This is also a positive change whichbroadens the range of employees covered bythe Superannuation Guarantee.SG contributions to rise from 2013Superannuation contribution for lowin<strong>com</strong>e employeesA new contribution of up to $500 (not indexed)will be provided by the Government for individualswith an adjusted taxable in<strong>com</strong>e* of up to $37,000and who satisfy certain other conditions. This isdesigned to effectively return the 15% contributiontax on Superannuation Guarantee contributionsand will <strong>com</strong>mence in respect of contributionsfrom 1 July 2012 with the first payments beingmade in the year <strong>com</strong>mencing 1 July 2013.This change will help to improve the taxeffectiveness of superannuation for eligible lowin<strong>com</strong>e earners, as well as provide a boost to theirsuperannuation savings. This change is set toproceed with the passing of the Mining tax.* Your adjusted taxable in<strong>com</strong>e includes your taxablein<strong>com</strong>e plus a number of other items. Go to the AustralianTaxation Office website for more details – www.ato.gov.auHigher concessional contribution limit for somemembers aged 50 or more to reduceThe current transitional concessional limit of $50,000applicable to those aged 50 or more only applies until30 June 2012. The Government has announced thatthis limit will reduce down to $25,000* for all membersregardless of age from 1 July 2012.* The limit is normally indexed based on movements in full timeadult Average Weekly Ordinary Time Earnings (AWOTE) androunded down to the nearest multiple of $5,000. However,the Government has paused indexation of the concessionalcontribution limit to ensure it remains at $25,000 until 30 June 2014.Refund of excess concessional contributionsThe Government has announced that, from 1 July <strong>2011</strong>,individuals who breach the concessional contributionscap by $10,000 or less can request the excesscontributions be withdrawn from their super fundand refunded to them. Those excess concessionalcontributions will be taxed at the individual’s marginaltax rate.This measure, if passed by Parliament, will only applyfor first time breaches of the concessional cap and onlyapply to contributions made from 1 July <strong>2011</strong> onwards.Flood levyFrom 1 July <strong>2011</strong>, many superannuation benefits willbe treated as in<strong>com</strong>e for the purposes of determiningwhether a person is subject to the flood levy for the<strong>2011</strong>-12 year. The flood levy will apply to taxablein<strong>com</strong>e as follows:Taxable in<strong>com</strong>eFlood levy on this in<strong>com</strong>e$0 to $50,000 Nil$50,001 to $100,000 Half a cent for each$1 over $50,000Over $100,000$250 plus 1c for each$1 over $100,000Taxable in<strong>com</strong>e will include the following in relation tosuperannuation:• the taxable <strong>com</strong>ponent of all superannuation lumpsum and pension benefits received before age 60• the taxable <strong>com</strong>ponent of a lump sum death benefitpaid to certain dependants• the taxable <strong>com</strong>ponent of a pension death benefitwhere the recipient is under age 60 and thedeceased member died before age 60.It will not apply to superannuation benefits that arerolled over or to in<strong>com</strong>e which is exempt from tax.Co-contributions reduced but still valuableThe Federal Government currently makes a specialcontribution for you up to $1 for each $1 contributionyou make from your after-tax in<strong>com</strong>e (subject toyou satisfying the qualification requirements). Themaximum co-contribution is $1,000 a year if your totalin<strong>com</strong>e is less than $31,920 a year. The co-contributionreduces gradually for those earning up to a maximumof $61,920.


Back to contentsHowever, the Government has announced that it willchange the rules from 1 July 2012. The maximumGovernment co-contribution will reduce to 50 centsfor each $1 contribution you make from your after-taxin<strong>com</strong>e after that date. The maximum co-contributionwill be<strong>com</strong>e $500 a year if your total in<strong>com</strong>e is less than$31,920 a year. The co-contribution will reduce graduallyfor those earning up to a maximum of $46,920.The in<strong>com</strong>e thresholds will not be indexed until1 July 2013.Despite the reduction in the level of Governmentco-contributions, they can still provide you withadditional retirement savings.* Your total in<strong>com</strong>e includes your assessable in<strong>com</strong>e, reportablefringe benefits and your reportable employer superannuationcontributions less any deductions for carrying on a business.Account based pensionsFor the year 1 July <strong>2011</strong> to 30 June 2012, the minimumamount required to be drawn down from an accountbased pension has been reduced by 25%. This is asmaller reduction than the 50% reduction allowedin the previous two years. The reduced drawdownrequirements were put in place to enable pensioners toreduce the amount they withdraw from their accountbased pensions and hence provide more time forasset values to recover following the Global FinancialCrisis. Since this change was implemented, the FederalGovernment has also announced that it will reduce theminimum draw down amount for the year 1 July 2012to 30 June 2013 by 25%.Drawdown relief continues forin<strong>com</strong>e stream membersMySuperFrom 1 July 2013, subject to Parliament passing therequired legislation and the Trustee obtaining approvalfrom the superannuation regulator, APRA, super fundswill be able to offer a new style of superannuationcalled MySuper. MySuper funds will need to meeta number of new standards including rules relatingto fees and charges. They will also be simpler thanmany current arrangements. The Government hasannounced that, from 1 October 2013, unless anemployee has specified another fund or arrangement,employers will need to pay their contributions for theseemployees to a MySuper facility.Lutheran Super is likely to have a MySuper arrangementin place by that date if the required legislation is passedby Parliament.New Trustee requirementsThe Government will place more stringentrequirements on trustees to ensure that they actin an appropriate manner and in the interests ofmembers. Trustees will also be required to establishan operational risk reserve to protect members ifsomething goes wrong in the operation of the fund.These changes are intended to increase the securityof members’retirement benefits by improving thegovernance of superannuation funds by trustees. It islikely that these new requirements will <strong>com</strong>mence in2013 subject to the relevant legislation being enacted.Fees for adviceIn conjunction with the above changes, limitations willbe placed on fees that can be charged to members’superannuation accounts for financial advice. Thisis primarily aimed at stopping ongoing fees foradvice being automatically deducted unless theseare regularly approved by the member. Parliament iscurrently considering this legislation.SuperStreamThe Government is working with the superannuationindustry to develop new reporting protocols whichwill be standardised across the industry. Once fullyimplemented, the changes are expected to generatecost savings for superannuation funds which shouldeventually result in lower fees being applied tosuperannuation members. The changes include greaterstandardisation of forms and back-office practices usedby the industry as well as working towards employersproviding better data in respect of contributions paid.Greater use of tax file numbersSuper fund trustees will, subject to <strong>com</strong>plying withregulations, be able to use tax file numbers (TFNs)to locate members’accounts and facilitate accountconsolidation, whether in the same fund or acrossmultiple funds, making it easier to track lost super and<strong>com</strong>bine a member’s accounts. Over time it is intendedto extend the ability of trustees to use your TFN for thepurposes of <strong>com</strong>bining accounts.Super contributions on payslipsFrom 1 July 2012, employers will be required toprovide information on an employee’s payslip aboutthe amount of super actually paid into the employee’ssuper fund account during the pay period. From1 July 2013, super funds will be required to either issuesix monthly statements which show contributionsmade, or report electronically to members onwhether they have received or not received any supercontributions for that quarter. These changes, if passedby Parliament, are intended to help employees keeptrack of their employer’s contributions.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>7


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contents<strong>Report</strong>able employer superannuation contributionsFrom 1 July 2009, employers have been required to report details of employees' reportable employersuperannuation contributions. This is shown on payment summaries given to you by your employer each yearso that you can include it in your tax return.Generally, your reportable employer superannuation contributions will include any salary sacrifice contributionsyou make and any voluntary employer contributions over which you have some control.The Government has amended the definition of ‘reportable employer superannuation contributions’retrospectively to 1 July 2009. This change may mean that the amount reported may reduce for some members.If your employer provides you with an updated payment summary for previous years, you may need to lodge anamendment to your tax return for those years to take advantage of any reduction in the reported amount.Your reportable employer superannuation contributions are taken into account in assessing your eligibility forvarious benefits including Government superannuation co-contributions, the eligible spouse superannuationcontribution tax offset, mature age worker tax offset and family tax benefits.Did you know?You can now tell us just how you prefer to receive your super information fromLutheran SuperAnd by joining our electronic <strong>com</strong>munity and going green, you will be helping to save the environment.Just follow these steps to update your <strong>com</strong>munication preferences:1. sign into your account at www.lutheransuper.<strong>com</strong>.au using your member number and PIN. If you don’t havea PIN, call the Helpline. If we have your email address, you can reset your PIN online at any time2. go to the ’Personal details’page3. indicate how you would like to receive Fund <strong>com</strong>munication such as the annual report, newsletters and otherimportant updates, remembering to include your email address if we don't have it and your mobile phonenumber if you have chosen SMS.You can change your preferences whenever you choose.8


Back to contentsA super websiteCheck out our website for super easy accessto your super!The Lutheran Super website puts all the importantinformation you need to make good choices right atyour fingertips – just a click away.With the Lutheran Super website, you're able to:Visit www.lutheransuper.<strong>com</strong>.au and tell us whatyou think of the site.We’d love to hear from you.Watch short webinars to learn more about:• Understanding market volatility• Contribution strategies• Transition to retirement• Government super co-contributionsGain access to youraccount balances at anytime – sign in using yourmember number and PINIf we have your emaildetails – you can resetyour PIN any time.Read up on the latestnews and generalinformation aboutsuperannuationPlan and manage yoursuper using interactiveplanning toolsCheck the historicalperformance ofinvestment optionsLutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>9


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsIn your account information you can:• Check your super balance andbeneficiaries nomination• Change your investment option at any time• Check the value of your death benefit• View your transaction historyCheck yourinvestment strategyPersonal reminder messagesJohn CitizenArchived benefitstatement historyCheck the value ofyour insurance coverWorkflow of yourtransactions10


Back to contentsYour investment optionsAs a member of Lutheran Super, you are entitledto choose how your money in the Fund is invested.Of course, the option you choose depends onyour personal circumstances and your attitudeto investments in certain markets.Remember to focus on longterm performanceYou can change your options at any time. We suggestthat if you are unsure what the best option is for youthen you should obtain advice from a professionallicensed financial adviser.If you do not make an investment selection you will beallocated to the Trustee Mix, which is a <strong>com</strong>bination oftwo of the options, 70% Growth and 30% Capital Stable.This option has been structured to provide a reasonablelevel of exposure to share markets to provide theopportunity for capital growth but also has an exposureto fixed interest and cash investments to provide someprotection when share markets are not performing.More details on each option are provided in the Fund'sProduct Disclosure Statement which can be obtainedby calling the Helpline or by going to the Fund'swebsite, www.lutheransuper.<strong>com</strong>.au.Lutheran Super’s investment performanceThe table below shows the investment performance of the various options in the Fund for the year ending31 December <strong>2011</strong> and over a three and five year period ending 31 December <strong>2011</strong>.Investment returns have been calculated on a simple time weighted basis based on the change in the underlyinginvestment option’s unit price for the relevant period. All rates quoted are net of tax and the standard rate ofmanagement fees.Please note that past performance is not a reliable indication of future performance.Investment optionAccumulation membersOne year% p.a.Three year% p.a.Five year% p.a.Since<strong>com</strong>mencement% p.a.**Trustee Mix* (default) -3.23 4.84 -1.25 n/a n/aCapital Secure 3.80 3.32 3.84 n/a n/aCapital Stable 2.41 4.72 2.03 n/a n/aBalanced -1.60 4.37 -1.21 n/a n/aGrowth -5.65 4.89 -2.66 n/a n/aGrowth – Australian Shares -10.87 7.16 -3.24 n/a n/aGrowth – SRI Australian Shares -10.14 4.71 -3.06 n/a n/aDefined benefit membersActual rate of earnings 6.85 5.31 1.51 n/a n/aPension membersCommencementdateCapital Secure 4.54 3.97 n/a 4.01 1 July 2008Capital Stable 2.84 5.54 n/a 2.47 1 July 2008Balanced -1.87 5.02 n/a -1.73 1 July 2008Growth -6.63 5.48 n/a -1.68 1 July 2008Growth – Australian Shares -12.77 7.85 n/a -4.28 1 July 2008Growth – SRI Australian Shares -11.93 5.07 n/a -5.34 1 July 2008* The Trustee Mix option <strong>com</strong>menced 1 July 2007. It is based on the structure of 70% Growth and 30% Capital Stable.** Where three and five year returns are available, for simplicity only these are shown. Where these three and five year returnsare not available, returns since <strong>com</strong>mencement are shown with the option's <strong>com</strong>mencement date.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>11


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsEffect of taxes, fees and costsThe investment performance shown is after taxand Lutheran Super's standard rate of investmentmanagement fees, but does not include the effectsof other fees you might be charged. Other fees willreduce your account balance. Any fees and coststhat may apply to you for the year are shown on your<strong>2011</strong> Member Statement.Did you know?You only need one super fund – ever.Even if you leave your Lutheran employer, you canstay with your super in the Fund you know andtrust. Call the Helpline for more information.Investment objectives and strategyThe Trustee is required by law to set investmentobjectives for the Fund and its underlying investmentoptions. The investment objectives set out in thefollowing pages for each option are not a financialforecast or a guarantee of any future returns from therelevant option.Before you read the description of the various options,you should be aware that the following strategy willbe applied to all of the options to ensure they achievetheir objectives:• invest across all the major asset classes inproportions appropriate to the overall profileof the option• invest the assets with professionalinvestment managers• monitor the performance of each portfolioand manager to ensure <strong>com</strong>petitiveinvestment performance• allow the investment managers to invest in variousfacilities within overall guidelines to protect orenhance the investment performance.The Trustee does not invest directly in derivatives,such as futures and options but does allow theFund's investment managers to use these facilities inmanaging their portfolios. Derivatives are used by themanagers to manage risk and can result in losses aswith most other asset classes. The Trustee does notallow the investment managers to gear the portfolioby using derivatives.12


Back to contentsCapital Secure optionObjectives• Broad aim is to seek the security of capital and to never achieve a negative returnon assets invested.• Expected to achieve investment returns consistent with bank deposits.There is no guarantee that these objectives will be met or that the value of yoursuperannuation will not decrease as a result of negative returns.Cash 100%StrategyAll money is invested in cash investments such as bank bills and term deposits.Return performance*The five-year average rate of return for this option for the period ending31 December <strong>2011</strong> was 3.84% p.a.The investment return for Pension Members in the Capital Secure option from1 January <strong>2011</strong> to 31 December <strong>2011</strong> was 4.54% p.a.* Please note that past performance is not an indication of future performance.Investment managerThe investment manager currently used by the Trustee for the Capital Secureoption is Vanguard Investments Australia Limited in their Cash Reserve Fund.Year ended31 December<strong>2011</strong> 3.802010 3.542009 2.622008 4.292007 4.98Rate % p.a.To choose this optionThere is no cost in transferring your money into the Capital Secure option fromanother investment option.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>13


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsCapital Stable optionObjectives• Broad investment objective will be to limit year-to-year variability in returns whilehaving a greater focus on security of capital than the other investment options.• More specifically, to achieve returns after tax and fees that exceed CPI increases byat least 2% p.a. over rolling five and seven-year periods.• To achieve an after tax and fees return in line with the notional return on the Fund'sspecified benchmark portfolio.• To earn a rate of return after tax and fees above the median of results for the MercerCapital Stable Fund Survey over rolling three and five-year periods.• Over a three-year period, to have a reward to risk ratio higher than the medianreward to risk ratio in the Mercer Capital Stable Fund Survey.There is no guarantee that these objectives will be met or that the value of yoursuperannuation will not decrease as a result of negative returns.StrategyThis option invests in all the major asset classes but with a relatively low exposure toshares and property.The pie chart illustrates the expected allocation of assets within the various investmentmarkets over the longer term.Return performance*The investment returns for the Capital Stable option in recent years are listed in thetable at right.The average <strong>com</strong>pound rate of return for the five years to 31 December <strong>2011</strong> was2.03% p.a.The investment return for Pension Members in the Capital Stable option from1 January <strong>2011</strong> to 31 December <strong>2011</strong> was 2.84% p.a.* Please note that past performance is not an indication of future performance.Investment managerThe investment manager currently used by the Trustee for the Capital Stable option isVanguard Investments Australia Limited in their Conservative Index Fund.To choose this optionThe cost of transferring into the Capital Stable option from another investmentoption is approximately 0.21% of the money being switched into this option.Shares 25%Year ended31 DecemberProperty/Alternatives 5%Cash 42%Rate % p.a.<strong>2011</strong> 2.412010 4.062009 7.752008 -9.362007 6.22FixedInterest 28%14


Back to contentsBalanced optionObjectives• Broad aim is to maximise long-term investment returns, whilst accepting asignificant degree of variability in year to year returns.• More specifically, to achieve returns after tax and fees that exceed CPI increasesby at least 3% p.a. over rolling five and seven-year periods.• To earn a rate of return after tax and fees above the median of results for theMercer Pooled Fund Survey over rolling three and five-year periods.• To achieve an after tax and fees return that exceeds the notional return on theFund’s specified benchmark portfolio.• Over a three-year period, to have a reward to risk ratio higher than the medianreward to risk ratio in the Mercer Pooled Fund Survey.There is no guarantee that these objectives will be met or that the value of yoursuperannuation will not decrease as a result of negative returns.StrategyThe pie chart illustrates the expected allocation of assets within the variousinvestment markets over the longer term.Return performance*The investment returns for the Balanced option in recent years are listed in the tableat right.The average <strong>com</strong>pound rate of return for the five years to 31 December <strong>2011</strong> was-1.21% p.a.The investment return for Pension Members in the Balanced optionfrom1 January <strong>2011</strong> to 31 December <strong>2011</strong> was -1.87% p.a.* Please note that past performance is not an indication of future performance.Investment managerThe manager used to invest assets for this option is Schroder InvestmentManagement Australia Limited in their Balanced Fund Standard Class.To choose this optionThe cost of moving to this option is approximately 0.44% of the amount switchedinto this option.Property/Alternatives 15%Shares 57%Year ended31 DecemberFixedInterest 20%Rate % p.a.<strong>2011</strong> -1.602010 1.642009 13.672008 -24.452007 9.55Cash 8%Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>15


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsGrowth optionObjectives• Broad aim is to maximise long-term investment returns whilst accepting a highdegree of variability in year to year returns.• More specifically, to achieve returns after tax and fees that exceed CPI increasesby at least 4% p.a. over rolling five and seven-year periods.• To achieve an after tax and fees return, over rolling three and five-year periods,that exceeds the notional return on the Fund's specified benchmark portfolio.• To earn a rate of return after tax and fees above the median of an asset-weighted<strong>com</strong>posite of the relevant Mercer Sectors Survey medians included in the Growthoption benchmark.• Over a three-year period, to achieve a reward to risk ratio higher than the medianreward to risk ratio in the Growth option benchmark.There is no guarantee that these objectives will be met or that the value of yoursuperannuation will not decrease as a result of negative returns.StrategyThe pie chart illustrates the expected allocation of assets within the variousinvestment markets over the longer term.Return performance*The investment returns for the Growth option in recent years are listed in thetable at right.The average <strong>com</strong>pound rate of return for the five years to 31 December <strong>2011</strong> was-2.66% p.a.The investment return for Pension Members in the Growth option from1 January <strong>2011</strong> to 31 December <strong>2011</strong> was -6.63% p.a.Investment managerThe investment manager currently used by the Trustee for the Growth optionis Vanguard Investments Australia Limited in their High Growth Index Fund.To choose this optionThe cost of transferring into the Growth option from another investment optionis approximately 0.41% of the money being switched into this option.OverseasShares 36%Year ended31 DecemberProperty 10%Rate % p.a.<strong>2011</strong> -5.652010 2.902009 18.872008 -28.872007 6.45FixedInterest 10%AustralianShares 44%* Please note that past performance is not an indication of future performance.16


Back to contentsGrowth – Australian Shares optionObjectives• Broadly to maximise long term investment returns whilst tolerating a high degreeof variability in year-to-year returns.• More specifically, to earn returns after tax and fees that exceed CPI increasesby at least 4% p.a. over rolling five and seven year periods and to match theperformance of the broad Australian share market over the medium term.• Over rolling three year periods, to achieve returns that equate to the returnsachieved by the Australian share market as measured by the ASX 300.There is no guarantee that these objectives will be met or that the value of yoursuperannuation will not decrease as a result of negative returns.Return performance*The investment returns for the Growth – Australian Shares option in recent years arelisted in the table at right.The average <strong>com</strong>pound rate of return for the five years to 31 December <strong>2011</strong> was-3.24% p.a.The investment return for Pension Members in the Growth – Australian Shares optionfrom 1 January <strong>2011</strong> to 31 December <strong>2011</strong> was -12.77% p.a.* Please note that past performance is not an indication of future performance.Investment managerThe manager used to invest assets for this option is Macquarie InvestmentManagement Ltd in their True Index Australian Equities option.To choose this optionThe cost of moving to this option is 0.50% of the amount switched into this option.Year ended31 DecemberAustralianShares 100%Rate % p.a.<strong>2011</strong> -10.872010 1.422009 36.112008 -38.982007 12.98Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>17


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contents18Growth – SRI Australian Shares optionThis is the only option where the investment manager appointed by the Trusteetakes into account labour standards, social, environmental or ethical issues whendetermining strategies when developing its investments and will exclude certainorganisations on the basis of their activities.Objectives• Broadly to maximise long term investment returns whilst tolerating a high degreeof variability in year to year returns.• More specifically, to earn returns, after fees and taxes, that exceed CPI increasesby at least 4% p.a. over rolling five and seven year periods and to match theperformance of the broad Australian share market over the medium term.• Over rolling three year periods, to produce returns that equate to the returnsachieved by the Australian share market as measured by the ASX 300.There is no guarantee that these objectives will be met or that the value of yoursuperannuation will not decrease as a result of negative returns.StrategyThis option will not invest in shares in any of the following:• weapons manufacturing• alcohol• tobacco• gaming• <strong>com</strong>panies with an environmental and/or a human rights prosecution.The SRI option also has a positive screening process that seeks <strong>com</strong>panies based onthe following criteria:• provides some form of environmental or social benefits through managementand or remediation of environment resources• demonstrates or enables reduced adverse environmental and social impactsrelative to other organisations• <strong>com</strong>panies that benefit <strong>com</strong>munities such as:--renewable energy--sustainable agribusiness--ecotourism.All money is invested in Australian shares.Return performance*The investment returns for the Growth – SRI Australian Shares option in recent yearsare listed in the table below. The average <strong>com</strong>pound rate of return for the five yearsto 31 December <strong>2011</strong> was -3.06% p.a.The investment return for Pension Members in the Growth – SRI Australian Sharesoption from 1 January <strong>2011</strong> to 31 December <strong>2011</strong> was –11.93% p.a.* Please note that past performance is not an indication of future performance.Investment managerThe manager used to invest assets for this option is BT Financial Group in theirWholesale Ethical Share Fund.To choose this optionThe cost of transferring into this option is 0.50% of the money that is switched intothis option.Year ended31 DecemberAustralianShares 100%Rate % p.a.<strong>2011</strong> -10.142010 -2.732009 31.342008 -35.982007 16.48


Back to contentsTrustee MixPlease note that this is not an investment option a member can directly invest in.If a member does not make a selection, they are allocated to a mix of the previousoptions based on the Trustee’s determination as shown in the table below.OptionCapital Stable 30%Growth 70%ProportionDefined benefit informationFor defined benefit members, the amount your employer contributes variesdepending on the advice of a super expert called an actuary. At least every threeyears, the Fund’s actuary prepares a valuation report that states how much youremployer needs to contribute to meet any super payouts now and in the future. Theemployer has paid contributions in relation to defined benefit members at a levelnot less than that re<strong>com</strong>mended by the actuary during the period. At the time of thelast actuarial valuation (31 December 2008) the value of the Fund's assets amountedto 107.3% of the sum of all defined benefits member's super pay-outs assuming allmembers ceased employment at that date. Therefore the Fund was considered to bein a satisfactory financial position at that date.Crediting rate for EX-QLSSSP defined benefit membersInvestment choice has been a reality for all defined benefit members since1 July 2006 in respect of their voluntary accumulation accounts in the Fund.All members were allocated to the Balanced option unless they had made a specificselection of another option.The crediting rate for the defined benefit <strong>com</strong>ponent of the benefit is the rateof return on the underlying assets for the defined benefit section. The rates areupdated monthly once the actual performance of the assets is known. All voluntaryaccounts receive earnings based on the movement in the unit price for their selectedinvestment option.The defined benefit liabilities of the Fund are supported by Schroder InvestmentManagement Australia Limited in their Fixed In<strong>com</strong>e Fund Standard Classand Kapstream Capital Pty Limited in their Absolute Return Fund.The effective rate that was applied to the defined benefit member account for theyear ended 31 December <strong>2011</strong> was 6.85% p.a.Defined benefitsObjectives• Broad aim is to maximize long-term investment returns, whilst accepting areasonable degree of variability in year to year returns.• More specifically to achieve returns after fees and tax that exceed CPI increases byat least 2.5% p.a. over rolling five and seven-year periods.• To earn a rate of return after tax and fees above the median results for 50% of theMercer Pooled Fund Survey and 50% of the Mercer Capital Stable Fund Surveyover rolling three and five-year periods.• To achieve an after tax and fees return that exceeds the notional return on theFund’s specified benchmark portfolio.• Over a three-year period, to have a reward to risk ratio higher than the medianreward to risk ratio for 50% of the Mercer Pooled Fund Survey and 50% of theMercer Capital Stable Fund Survey.StrategyThe pie chart illustrates the expected allocation of assets within the variousinvestment markets over the long term.FixedIn<strong>com</strong>e 100%Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>19


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsReturn performance*The investment returns in recent years are listed in thetable below.* Please note that past performance is not an indication of futureperformance.Year ended31 DecemberInvestment managersRate % p.a.<strong>2011</strong> 6.852010 2.202009 6.952008 -14.582007 8.04The investment managers currently used by the Trusteefor defined benefit assets are Schroder InvestmentManagement Australia Limited in their Fixed In<strong>com</strong>eFund and Kapstream Capital Pty Limited in theirAbsolute Return Fund.Allocation of earningsThe Trustee calculates a unit price on a weeklybasis which takes account of investment earningswhether positive or negative. Net earnings areallocated to member accounts via a weekly unit pricecalculation process.Fund manager allocationAs part of their ongoing responsibilities the Trusteemonitors and reviews the Fund’s investment managers’performance on a regular basis. The Trustee obtainsadvice from professional investment consultants toassist it in this process.The current managers and facilities used are as follows:Schroder Investment Management Australia Limited• Fixed In<strong>com</strong>e Fund Standard Class• Balanced Fund Standard ClassVanguard Investments Australia Limited• High Growth Index Fund• Conservative Index Fund• Cash Reserve FundMacquarie Investment Management Ltd• Macquarie True Index Australian Equities FundBT Financial Group• BT Wholesale Ethical Share FundKapstream Capital Pty Limited• Absolute Return FundDid you know?A key benefit of Lutheran Super is no <strong>com</strong>missionsand no establishment fees.20


Back to contentsFees and chargesAdministration feesThe table at right shows the Fund's expensesor fees and charges that might apply to yoursuperannuation benefits.All expenses are current at the time this annual reportwas produced and may be revised, increased or addedto or adjusted by the Trustee from time to time (forexample, due to changes to superannuation law orthe Fund trust deed). The Trustee may also introducenew fees.While it is not anticipated that fees and charges willchange, if there is an increase in fees we must notifyyou 30 days in advance of the change. The Trustee isnot able to negotiate the fees detailed at right.No GST is payable by you on any of the fees andcharges described in the table.You should read this fee information carefully, as it'simportant that you understand how these fees canaffect your benefits in the Fund.Please note, that the Trustee is not able to provideany discounts to any of the fees outlined for anyindividual member.Table 1 Significant feesWhat the fee is for Amount How the fee is calculated and paidEstablishment feeThis is the fee to set up youraccount in the Fund.Contribution feeThis is the fee charged for the initialand every subsequent investmentyou make (including anycontributions made to the Fund onyour behalf e.g. by your employer).Withdrawal feeThis is the fee charged for eachpayment paid out from the Fund.Termination feeThis is the fee when you close youraccount in the Fund.On-going feesThis is the total of all ongoingadministration, investmentmanagement, expense recoveryand other fees charged by the Fund.A breakdown of fees is shown inthe ‘Ongoing fees’ table on page 22.NilNil$50.00 per withdrawal This fee is deducted from your account at thetime a payment is made including paymentsunder portability legislation.$50.00 The fee is deducted from your accountat the time your final payment is made.$1.00 per weekplus an asset fee of 0.30% of youraccount balance (see the Ongoingfees table on page 22).plus an asset based fee depending onyour selected investment option(see the Ongoing fees table onpage 22).N/aN/aDeducted from your account balanceevery month.Deducted in the calculation of the unit priceby the Trustee.This fee is deducted by the investmentmanager prior to the calculation ofunit prices.Switching feeThis is the fee charged when youswitch between investment optionsoffered by the Fund.One free switch per calendar year butsubsequent switches are $30 each.In addition, a buy/sell spread appliesdepending on the investment option(see the Ongoing fees table on page 22).When the Fund receives contributionsor you choose to make a switch betweenportfolios, the buy unit price is used to buyunits and the sell unit price is usedto value your investment in the Fund.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>21


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsBreakdown of ongoing feesThis table contains a breakdown of the ongoing feesshown in the table on page 21. They are not additionalto the fees detail in the Table ‘Significant 1fees’.Table 2 Ongoing feesOngoing fees Amount How and when it is paidAdministration feeThis is the fee to cover the generaladministration of the Fund.Investment management feeThis is the fee charged for managingthe Fund’s assets based on theamount invested in that option.Issuer feeThis is the fee for the product issuer’sservices in overseeing the Fund’soperations and/or providing access tothe Fund’s investment options.$1.00 per week plus an asset fee of0.30% of your account balance.Capital SecureCapital StableBalancedGrowthGrowth Australian SharesGrowth SRI Aust SharesNil0.10% p.a.0.16% p.a.0.52% p.a.0.16% p.a.nil0.95% p.a.Deducted monthly from youraccount. Deducted fromthe investment earnings indetermining the unit price foreach option.The fee is deducted by theinvestment manager prior tothe calculation of unit prices.N/aExpense recoveriesThis is an estimate of out-of-pocketexpenses the Trustee is entitled torecover from the Fund.Member feeThis is a member-keeping fee chargedby the Fund.Buy/sell spreads for eachinvestment optionThe buy/sell spread is an allowancefor the transaction costs incurredwhen buying or selling investments,for example stamp duty andbrokerage. The fee will apply to theamount of money moved into anoption or any contribution paid.NilNilThe buy/sell spreads outlined below arebased on the current benchmark assetallocation and may vary slightly fromtime to time.Capital SecureCapital StableBalancedGrowthGrowth Australian SharesGrowth SRI Aust Shares0.00% p.a.0.21% p.a.0.44% p.a.0.41% p.a.0.50% p.a.0.50% p.a.N/aN/aThe buy/sell spread is takeninto account when calculatingthe unit prices applicableto that particularinvestment option.22


Back to contentsFamily Law feesThe Trustee charges fees in order to recover its costsassociated with the splitting of superannuationbenefits for Family Law purposes – for example, forrequests for information or implementing a split of asuperannuation benefit.For more information about Family Law and how itmay affect you, contact the Helpline on 1800 635 796.Table 3 Family LawWhere feesapplyApplication forinformation –in the formatspecified underthe FamilyLaw ActSplittinga benefitFlagginga benefitFeeNilWho paysthe feeN/a$451.00 Generallyshared equallyby both partiesand will bededucted fromeach superbenefit at thetime the benefitis split (unless100% of thebenefit is tobe paid to thenon-memberspouse in whichcase he/she willpay to full fee).NilN/aProtection of small account balancesSuperannuation legislation protects smallsuperannuation account balances from erosion byadministration expenses. Any member with a totalaccount balance in the Fund of $1,000 or less will be“protected”in this way.In short, this will mean that the normal expensesdeducted from your Accumulation Account in theFund (detailed on your benefit statement underEmployer Account) to cover administration expenseswill not apply to you if:• the total of your Accumulation Account is $1,000 orless at the Fund's review date (31 December) or atthe date you leave the Fund, and• the normal expenses deducted from yourEmployer Account since the last review date(or the date membership <strong>com</strong>menced, if later)exceed the investment earnings credited to yourAccumulation Account.In these circumstances, the expenses deductedfrom your Employer Balance will be limited to thetotal investment earnings credited to you over thesame period.Insurance costsAs at the year ended 31 December <strong>2011</strong>, the feescharged for insurance were as follows:Death and permanent disablement• $0.85 per unit per week• Ex-QLSSSP accumulation members – $0.30 cents perunit per week.Death only benefits• $0.51 cents per unit per week• Ex-QLSSSP accumulation members – $0.18 cents perunit per week.Salary continuance benefits• 0.38% of salary.From 1 January 2012, members have additionalfeatures and flexibility for their insurance cover inLutheran Super. There are changes to death andtotal and permanent disablement (TPD) coverand in<strong>com</strong>e protection cover. Information aboutthese changes is available from the Fund’s websitewww.lutheransuper.<strong>com</strong>.au or by calling the Helplineon 1800 635 796.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>23


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contents24Getting to knowyour FundWho is the Trustee?The Fund’s Trustee is a <strong>com</strong>pany, LCA Nominees Pty LtdABN 61 008 204 939. At 31 December <strong>2011</strong>, there wereten directors of the <strong>com</strong>pany, five of whom are electedby the members of the Fund and five appointed by theprincipal employer, Lutheran Super.The directors have responsibility to manage the Fund inthe best interest of all members in accordance with theFund’s Trust Deed and relevant legislation.On 30 June <strong>2011</strong> Mr Graeme Drapper and Mr StephenWenke were re-appointed as member directors for aperiod of four years.The Directors as at 31 December <strong>2011</strong> wereEmployer appointedMr John Grocke – ChairmanFinancial PlannerJohnston Grocke Financial ServicesMr Allen TrusloveAllen L Truslove Actuary & Statistician Pty LtdMr John NieldRetired TeacherMr Anthony KlattFinancial PlannerJohnston Grocke Financial ServicesMr Jeff HarmanBusiness ManagerConcordia College Highgate, SAMember-representativeMr Graeme DrapperBusiness ManagerLCA Queensland District, Schools DeptMr Lester KerberBusiness ManagerLuther College Croydon, VICMr Stephen WenkeChurch AdministratorGood Shepherd Lutheran CongregationNoosa, QLDMr John FindlayTeacherSt Peters Lutheran CollegeIndooroopilly, QLDMr Brett ClarkeBusiness ManagerRedeemer Lutheran CollegeMount Gravatt, QLDDid you know?The Trustee Board operates solely in the bestinterests of membersUnder the current election rules, memberrepresentativedirectors will cease to hold office if:• they cease to be a member• they resign as a member-representative director• the Trustee receives a written notice signed bymore than 50% of members at the date of receipt ofsuch notice calling for the removal of that memberrepresentativedirector• they be<strong>com</strong>e ineligible under law.A summary of the Fund’s election rules are availablefrom the Enquiries and Complaints Officer (see page 27for contact details).The term of office for the member representatives istwo and four years. The terms of office for the currentmember-representatives cease in either 2013 or 2015.Trustee indemnity insuranceThe Trustee has chosen to take out an indemnityinsurance policy as a prudent measure becauseof legislative requirements placing increasedresponsibilities on the Trustee.Trust DeedThe Fund is governed by a legal document called theTrust Deed. The Trust Deed sets out the rights andobligations of the members, participating employersand the Trustee. During the year there were no TrustDeed amendments.Superannuation contributionssurchargeThe superannuation contributions surcharge wasabolished on 1 July 2005. However, the Fund maystill receive a surcharge assessment or an amendedsurcharge assessment for the financial years 1997 –2005 from the Australian Taxation Office. Where theFund receives a surcharge assessment or amendedsurcharge assessment in respect of your super, theFund will pay the assessment and deduct the relevantamount from your member account. This will be shownon your member statement. If the Trustee receives anassessment after you have left the Fund, it will generallybe forwarded on to the fund or institution to which youhave transferred your benefit.Service providers to the TrusteeThe Trustee uses professional organisations to assistin the operation of the Fund. The organisations usedduring the year were as follows:


Back to contentsAdministration and general consulting advice• Mercer (Australia) Pty LtdInvestment consulting advice• JANA Investment Advisers Pty LtdInvestment managers• Schroder Investment Management Australia Limited• Vanguard Australia Investments Ltd• Macquarie Investment Management Ltd• BT Financial Group• Kapstream Capital Pty LimitedAudit• KPMGInsurance• ING (death and total and permanent disablement)until 31 December <strong>2011</strong>• CommInsure (salary continuance) until31 December <strong>2011</strong>(AIA death and total and permanent disablementand in<strong>com</strong>e protection from 1 January 2012)Legal advice• Wallmans Lawyers.If you leave your employer and claimyour benefitIf you leave your employer, you don’t need to leaveLutheran Super: you will automatically be<strong>com</strong>e amember of the Retained Benefits section of the Fund.If you start working for another employer, you canask them to continue to pay your <strong>com</strong>pulsory supercontributions to Lutheran Super. Complete a Standardchoice form (available from the Lutheran Superwebsite or by calling the Helpline) and give this to yournew employer.You can also roll your super over to another superfund with your new employer or roll it over to anyother superannuation fund. You may also be able totake some or all of your benefit in cash dependingon your personal circumstances and superannuationpreservation requirements.If your super account balance in the Retained Benefitssection is less than $2,000 for a period of 12 monthsand no contributions are received for you during thisperiod, your benefit will be transferred to the Fund’sEligible Rollover Fund (ERF) on your behalf. This benefitwill then cease to be payable from the Fund andcould only be claimed by you contacting the ERF towhich it was paid. An ERF is simply a holding accountwhere your benefit will remain until you notify theadministrator of the ERF what action is to be taken.The ERF used by the Trustee is AUSfund, Australia’sUnclaimed Super Fund.About AUSfund investment strategyAUSfund’s membership is largely made up of small,lost and inactive members’accounts. The ResponsibleEntity of AUSfund is responsible for making decisionsabout how to invest the money held and has adopteda diversified investment strategy which is appropriatefor its membership.AUSfund investment strategy:• the Responsible Entity has chosen a diversifiedinvestment strategy to provide security tomembers’monies over the medium term(three – five years)• the strategy aims to balance the need to deliverreturns to members with the need to limit thelikelihood of a negative return to one in everyten years• to provide a <strong>com</strong>petitive return at a moderate levelof market risk• invest in a mix of shares, property, alternative assets,fixed interest and cash, aiming to provide a mix ofin<strong>com</strong>e and capital growth over the medium term.AUSfund investment objectives:• to invest monies to give security to members’monies over the medium term• the asset mix should be structured to limit thelikelihood of a negative return to one in everyten years• deliver an after tax return of at least inflation plus2.5% per annum over rolling five-year periods atleast 75% of the time• an investment reserve is managed to assist in thesmoothing of returns to members and to lower thepossibility of a negative return• a long term asset mix is selected to take accountof the above risk constraints and allow the highestpossible return for an agreed level of risk• the investment process should be cost efficient andthe strategy reviewed at least annually • the short term investment strategy should becontrolled by adjusting cash flow betweeninvestments as the investment environment dictates,while remaining within the longer term strategies.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>25


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsAUSfund does not provide access to investment choiceor provide any level of insurance cover.The following fees and charges apply in AUSfund:• an administration fee of $14 per annum. This fee isdeducted from your account• management costs of 1.68% ($16.80 per $1,000invested) which is deducted from gross returns priorto the setting of the crediting rate• Family Law fees of $100 for the provision ofinformation and $69 for splitting an accountAUSfund will not accept employer contributions(including salary sacrifice contributions) unless thereare exceptional circumstances. You can rollover othermonies into AUSfund and make voluntary contributionsbut AUSfund will not accept any Government cocontributionsor spouse contributions and contributionsplitting is not allowed.Once your super is transferred to AUSfund you will nolonger have any rights under Lutheran Super and youwill need to deal directly with AUSfund in respect ofyour benefits that have been transferred.If you have any questions about AUSfund, pleasecontact them via the details below:AUSfundPO Box 2468,Kent Town SA 5071P: 1300 361 798F: 1300 366 233E: admin@ausfund.net.auW: www.unclaimedsuper.<strong>com</strong>.auHow we protect your privacyYour privacy has always been important to the Fund andthe Trustee. With the increasingly rapid expansion oftechnology and access to information, preserving yourprivacy is now more important than ever.In order to provide you with superannuation benefits,including death and disability benefits, and toproperly manage the Fund, the Trustee holds personalinformation about you that identifies you as a member.This information typically includes your name, address,date of birth, gender, occupation, salary, tax file numberand any other required information.The Trustee generally collects this information eitherfrom you or your employer. Your personal informationmay be disclosed to the Fund's administrator andprofessional advisers, insurers, government bodies, youremployer and other parties as required, including theTrustee of any other fund you may transfer your benefitto. By be<strong>com</strong>ing a member of the Fund, it is assumedthat you consent to this handling of your personalinformation. If you do not provide the Fund with yourpersonal information, the Trustee may not be able toprovide your superannuation benefits and choices.You can request access to your personal informationheld by the Trustee. Should any of your personalinformation be incorrect, you may have the opportunityto correct it. There are, however, some circumstanceswhere you may be denied access to your information.The Fund's Privacy Officer will advise if any of thesecircumstances apply.The Trustee abides by the National Privacy Principlesunder the Privacy Act 1988 (Cth) and has adopted aPrivacy Policy which sets out in more detail the way inwhich it handles members' personal information. If youwould like a copy of the Trustee’s Privacy Policy, pleasecontact the Fund's Administrator (contact details forthe Fund’s administrator can be found on page 27).26


Back to contentsQuestions about yoursuperannuation?Ask your Fund administratorThe Fund administratorLutheran SuperGPO Box 4303, Melbourne Vic 3001Phone: 1800 635 796Fax: (03) 9245 5827Or contact us online at www.lutheransuper.<strong>com</strong>.auEnquiries and <strong>com</strong>plaintsIf you have a question about your superannuation orwant more information about the Fund, please contactthe Fund administrator. Most queries can be sorted outover the phone.However, if your query is not resolved to yoursatisfaction, you can contact the Enquiries andComplaints Officer:Enquiries and Complaints OfficerLutheran Super197 Archer Street,North Adelaide SA 5006Phone: (08) 8267 7300Fax: (08) 8267 7310The matter will be investigated by the Enquiriesand Complaints Officer and, where necessary, theComplaints Committee on behalf of the Trustee. You willbe advised of the Trustee’s decision as soon as possibleand within 90 days, or within 30 days of the Trustee’sdecision, whichever is earlier. Sometimes further time isrequired for <strong>com</strong>plicated matters. If we need more timewe will let you know. Please remember to include anaddress to which the response can be mailed.If you have a <strong>com</strong>plaint and you are not satisfied withthe response, or the matter can’t be resolved, youmay be able to refer the matter to the SuperannuationComplaints Tribunal (SCT). The SCT is an independentgovernment body which is set up to help resolvedisputes between super funds and their members. Any<strong>com</strong>plaints must be lodged with the Tribunal withincertain time limits.For more information you can contact the SCT on1300 884 114 or write to:Superannuation Complaints TribunalLocked Bag 3060,GPO Melbourne Victoria 3001Email: info@sct.gov.auMonitoring enquiriesThe Trustee may, at its discretion, monitor or recordenquiries or transactions made by telephone. This isdone for reasons of accuracy, security and service.Extra information availableAs a member of Lutheran Super, you should alreadyhave a member booklet or Product DisclosureStatement containing detailed information about yourbenefits and some of the important rules governingthe Fund. You also receive an annual benefit statementsetting out important personal information about yourbenefits in the Fund.Any member of the Fund may request to see certaindocuments associated with the operation of the Fund.The documents available to members include:• the Trust Deed that governs the Fund• the Investment Policy Statement• the Fund’s Privacy Policy• audited financial statements• current Product Disclosure Statement.• extracts from the latest actuarial reviewIf you would like to see any of these documents orneed further information, please contact the Helplineon 1800 635 796.Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>27


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsFinancial summaryA summary of the Fund's accounts for the year ended31 December <strong>2011</strong> is shown at right. Comparativefigures for 2010 are also shown.Copies of the audited accounts and the auditor's reportare available on request from the Executive Officer.The financial statements confirm that the Fund is in asatisfactory financial position as at 31 December <strong>2011</strong>.The audited financial statements are available bycontacting the Fund's Helpline on 1800 635 796.Statement of the change in net assets31/12/11 31/12/10Fund assets 319,656,909 $297,660,804PlusNet investment revenue (1,554,030) 11,245,428Employer contributions 32,825,879 31,843,611Member contributions 3,050,537 2,741,012Government co-contributions 542,466 708,182Transfers from other funds 4,032,708 3,936,565Other revenue 1,142,329 1,167,218Total revenue 40,039,889 51,642,016LessBenefits paid 26,680,355 21,123,263General administration expenses 1,636,357 1,481,555Insurance premiums 1,519,102 1,294,154In<strong>com</strong>e tax expenses 4,041,722 5,746,939Total expenses 33,877,536 29,645,911Fund assets as at 31 December 325,819,262 319,656,90928


Back to contentsNet Fund assets31/12/11 31/12/10Investment by facilityInvestments 318,060,276 319,113,186Cash at bank 6,457,625 2,664,803Other assets 2,098,057 428,557Receivables 2,126,083 2,876,729Total assets 328,742,041 325,083,275LessLiabilitiesProvisions for in<strong>com</strong>e tax 2,047,383 2,531,739Other liabilities 875,396 2,894,627Total liabilities 2,922,779 5,426,366Net assets as at 31 December 325,819,262 319,656,909Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>29


Lutheran Super <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>Back to contentsReservesThe Fund maintains two formal reserves:• an Accumulation Reserve• an Investment Reserve.The Accumulation Reserve helps the Fund manage expenses incurred by the Fund in respect of accumulationmembers. The Accumulation Reserve is invested 100% in the Capital Secure investment option.The Investment Reserve contains any excess of investment returns obtained by the Fund’s accumulation-relatedassets which have not been passed on to member accounts. The Investment Reserve is invested in the Fund'sTrustee Mix (70% Growth and 30% Capital Stable).The total amounts in each reserve are shown in this table:Reserve as at31 December<strong>2011</strong>$2010$2009$Accumulation 1,251,870 1,308,422 1,302,414Investment 2,585,449 1,014,413 1,120,04130


Back to contentsLutheran SuperFreecall Helpline1800 635 796Facsimile(03) 9245 5827MailFund administratorLutheran SuperGPO Box 4303Melbourne, VIC 3001Online informationwww.lutheransuper.<strong>com</strong>.auIssued by:LCA Nominees Pty Ltd, ABN 61 008 204 939, RSE Licence No L0002103, AFS License 240571 astrustee for Lutheran Super, RSE Registration No R1005707 ABN 93 371 348 387DisclaimersThe information contained in this <strong>2011</strong> <strong>Annual</strong> <strong>Report</strong> is general information only and doesnot take into account any person’s individual financial objectives, financial situation or needs.Because of this, you should, before acting on the advice, consider the appropriateness of theadvice having regard to your individual financial situation and needs. We re<strong>com</strong>mend that youspeak to a licensed financial adviser before you make an investment or insurance decision.The value of investments in the Fund or any underlying investment options may rise and fallfrom time to time. LCA Nominees Pty Ltd or the employers do not guarantee the investmentperformance, earnings or return of capital invested in any of the investment options madeavailable to members set out in this report. If you leave the Fund within a few years of joining,you may get back less than the contributions paid into the Fund due to the effect of taxes, feesand possible negative investment returns.The information contained in this report is up-to-date at its preparation. However, some ofthe information can change from time to time, for example, fees or the structure of any of theinvestment options. If there is a material change, inaccurate statement or omission the Trusteewill inform you as required. If there is any inconsistency between the Trust Deed and thisreport, the Trust Deed will be the final authority.For other changes and information about any investment option you can call the LutheranSuper Helpline on 1800 635 796 for an update.

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