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Welcome to the eighteenth edition of CEO Online
In this edition I'll bring you up-to-date with:
- Investment performance including preliminary end-of-year results
- Australian Reward Investment Alliance (ARIA) starts work for you
- Changes proposed in 2006 Budget
- Your annual member statement is coming soon
Investment performance
PSS contributing members are largely unaffected by investment performance. However, I know members find it useful to understand how super investments work over the long term.
It's been another solid investment year for your fund in 2005/06 with the successive third year of double digit growth. Although audited figures are not yet finalised, the default Fund is estimated to have returned 13.2% per annum after tax and fees, well over the target rate of 7% per annum over the long term. This gives the default Fund a three-year performance rate of 13.7% per annum, a five-year rate of 7.4% per annum and a 10-year rate of 9.1% per annum.
The Cash Investment Option for preserved benefit members has earned 4.8% after tax and fees, in line with our target.
Remember that past performance is not an indication of future performance. Returns are volatile and it is impossible to predict if they will go up or down.
The ongoing performance of the default Fund and Cash Investment Option is set out below:
PSS default Fund
From 1 July 2003 to11 August 2006, the estimated performance (after adjustments for tax, fees and the reserve) is 42.90%. This translates to a daily compound rate of 0.031414% for exits from 16 August 2006.
PSS Cash Investment Option for preserved benefit members
From 1 December 2004 to 11 August 2006, the estimated performance (after adjustments for tax, fees and the reserve) is 8.29%. This translates to a daily compound rate of 0.012863% for exits from 16 August 2006.
If you are planning to retire or claim your benefit in the next 12 months, please call us on 1300 000 377 for a detailed estimate of your benefit and read about WITHDRAWING YOUR BENEFIT in our Product Disclosure Statement .
Find out more about your Fund's investment performance , investment strategy and Cash Investment option for preserved members .
Australian Reward Investment Alliance (ARIA) starts work for you
On 1 July 2006, your new Trustee, Australian Reward Investment Alliance (ARIA), started working for you when the Public Sector Superannuation Scheme (PSS) and Commonwealth Superannuation Scheme (CSS) Boards merged. ARIA provides a simplified, sustainable and more effective governance structure to meet Australia 's competitive and regulatory superannuation environment. It achieves cost efficiencies by doing away with any unnecessary duplication of the old structure, consolidating the PSS and CSS Boards into one Trustee and creating a single investment Trust to manage the three individual schemes - PSS, CSS and PSSap. There is no change to the underlying investment scheme but ARIA provides greater economies of scale and a better administrative structure for your super. Your benefits and entitlements remain the same, but over time you will notice improved services and communications.
The name Australian Reward Investment Alliance came from extensive consultations with you, our members, and all our other stakeholders. We decided to choose a name that reflected your work and our role:
Australian - we work for Australian Government employees who work for the Australian community
Reward - we believe our members work hard for the Australian community as public servants and we think they deserve to be rewarded with world-class superannuation arrangements
Investment - our core activity is to manage the investment of Funds for our members
Alliance - we bring world-class partners together in the best interests of members.
You can learn more about ARIA at www.aria.gov.au
Changes proposed in 2006 Budget
The 2006 Federal Government Budget proposed some far-reaching changes to current tax arrangements that apply to superannuation benefits. The plan includes the following changes that may affect your benefit:
- abolishing the tax paid on superannuation pensions and lump sums paid from a taxed fund for members aged 60 and over
- reducing the tax payable on superannuation pensions paid from an untaxed fund for pensioners aged 60 or over by providing a 10% tax offset
- simplifying the tax arrangements for lump sums paid from an untaxed fund and for lump sums paid from a taxed fund for members under 60.
Your PSS benefit includes taxed and untaxed components. Your contributions, the funded employer productivity component and Fund earnings are from a taxed source. The balance of your benefit - the unfunded employer component - comes from an untaxed source.
Please note these are only proposals at this stage and the Government is seeking advice on the changes, which have a proposed implementation date of 1 July 2007.
For more information go to the full story
Your annual member statement is coming soon
Keep an eye out for your 2005/06 Annual Member statement, which is coming soon. Distribution is scheduled to commence in September. If we have your current postal address we will be able to post it direct to you. Otherwise it will be sent via your employer. If you haven't provided us yet with your current address and you'd like the convenience of important information being sent to you directly then you can provide or update your details by:
- using the secure Member Services Online area (if you have an active Number)
- emailing your postal address, name, membership/AGS number and date of birth to members@pss.gov.au ; or
- call us on 1300 000 377.
I look forward to reporting to you again soon.
Steve Gibbs
