Welcome to the fourth edition of CEO Online
In this edition I'll bring you up-to-date with:
- Investment performance
- the latest Budget news
- members working overseas get a win with insurance cover
- how insurance works
- nominating your beneficiaries
Investment performance
The performance of the PSSap investment choice options continues to be very pleasing. Most financial markets have risen strongly this financial year and as at the 27 of October the ‘Trustee Choice” default fund had returned 20.1% since its inception on 1 July 2005, well above its medium term target return of 7% per annum.
The other three pre-mixed options are also performing well with the aggressive option returning 23.1%, the balanced option returning 14.7% and the conservative option returning 11.2%, since inception on 1 July 2005.
For those members mixing their own option our single strategy options are generally performing well with all but the fixed interest and cash options delivering double digit returns.
The fixed interest option’s performance of 4.2% since inception of 1 July 2005 is disappointing but reflects the rising interest rate environment we are in and the fact that rising interest rates depress the capital values of bonds. Overall though, this period has seen strong figures for the PSSap.
Find out more about investment performance.
The latest Budget news
The Government announced significant proposals to simplify and streamline the taxation of superannuation benefits as part of the Budget in May 2006. The Government consulted on the proposals until 9 August and on 5 September, announced the outcomes of this process. It is now expected that legislation will be brought forward by Christmas for implementation by 1 July 2007.
Basically, these proposals make taxation of super much more simple, particularly when approaching retirement.
For more information see Update on Budget or visit www.simplersuper.treasury.gov.au
Members working overseas get a win with insurance cover
We are pleased to announce significant improvements to insurance for PSSap members working overseas. We have negotiated enhanced insurance cover with the Fund’s insurer, AIG Life, for members being posted overseas. The changes have been made without any increase in the premium and took effect on 1 August 2006.
As a result of the changes, Death and TPD cover for PSSap members who are employed overseas, is provided for an unlimited period of time and irrespective of the location of employment.
Income protection is also provided to PSSap members who are employed overseas for an unlimited period of time and irrespective of the location of employment. However, any claims arising from acts of war, or where the PSSap member is in active service in the armed forces of any country or international organisation, are excluded and are not payable by the insurer.
The insurance cover for those PSSap members who have been employed overseas within 12 months prior to 1 August 2006, will be carried over and continue in accordance with the new provisions.
Members can find more information at www.pssap.gov.au
How insurance works
Insurance can help you protect your current lifestyle and provide for you or your family if you become sick, injured, or die.
As a PSSap member you automatically receive Basic Death and Total and Permanent Disability (TPD) when you join if you:
- are under 65 years of age; and
- join the PSSap within 60 days of starting your new job if you’re permanent or non-ongoing; or
- join the PSSap within 30 days of starting your new job if you’re casual.
There are two cover options you can choose from. Death and TPD Cover 1 is based on a percentage of your salary multiplied by your prospective years of service to age 65 and Death and TPD Cover 2 gives you one unit of cover at $2 per week. You can increase or decrease the level of cover to suit your individual circumstances with our INSURANCE – VARIATION form .
Income protection is also automatically provided when you join if you:
- are under 65 years of age; and
- join the PSSap within 60 days of starting your new job if you’re permanent or non-ongoing with a contract of more than three months and if you work 15 hours or more per week.
You can change the level of protection, vary the waiting period or opt out altogether with our INSURANCE – VARIATION form.
For more detailed information about insurance see our DEATH AND TPD fact sheet.
Nominating your beneficiaries
Your nominated beneficiary is the person or persons you would like your benefit, including any insurance proceeds, to be paid to in the event of your death. The basic points you need to know are:
- Superannuation law restricts the beneficiaries you can nominate to dependants, this means your spouse (including de facto), your children (including step, adopted or ex-nuptial), or a person with whom you have an ‘interdependency relationship’.
- Remember you must renew your nomination every three years for it to remain valid, and also when your circumstances change (eg. if you marry, divorce, remarry or have children) you should ensure that you provide us with an update.
- Most importantly, if you have not nominated any beneficiaries and you die, we make a decision as to who receives your benefit, taking into consideration the needs of your eligible dependants. We may pay your benefit to your legal personal representative, one or more of your eligible dependants, another person or apportion it between persons at our discretion.
To nominate or change your nominated beneficiaries please use the BENEFICIARY NOMINATION form or call us on 1300 725 171 for a copy. For more detailed information see our BENEFICIARY NOMINATION fact sheet .
I look forward to reporting to you again soon.
Steve Gibbs
November 2006
