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How we performed in 2007/08

After four consecutive years of strong equity market advances, 2007/08 broke the trend with both Australian and overseas equity markets recording double digit declines. Expectations of a marked slowing in global economic growth and a significant increase in inflationary pressures stemming from large rises in oil and food prices have contributed to weakness in global equity markets.

As a consequence of this environment, the PSS Default Fund posted a negative return given its significant allocation to equity markets. However, performance over the longer-term remains very strong. In the three years to June 2008, the PSS Default Fund achieved a return of 8.2% p.a., while the figure for the five years ending June 2008 was 10.5% p.a. These figures compare favourably with the long-term objective of the PSS Default Fund.

Objective

1 year % p.a.

3 year % p.a.

5 year % p.a.

PSS Default Fund

This Fund’s key investment
objective is to maximise
long-term real returns within some risk constraints.

-1.9

8.2

10.5

(CPI) inflation

  

3.1

Figures rounded to one decimal place. All returns for the period 1 July 2007 to 30 June 2008 are after fees and taxes.

How does investment performance affect your benefit?

If you are a contributing member your total final benefit is largely unaffected by Fund earnings because it is ‘defined' by your Final Average Salary and a factor called an Accrued Benefit Multiple. Your Accrued Benefit Multiple is determined by how many years you contribute and your rate of contribution. However, any money you have transferred from another fund may be affected by Fund earnings.
If you are a preserved benefit member Fund earnings have a more direct impact on your benefit. Your total benefit is no longer defined by your Final Average Salary and Accrued Benefit Multiple. Instead, the taxed components of your benefit (your member and productivity components) will grow in line with Fund earnings. The untaxed component (your employer- financed component) will continue to grow in line with the Consumer Price Index (CPI).
Find out more about our investments and performance: