2018/19 · 2020. 4. 29. · working in . your community. our community program. we support the...

Annual Report 2018/19

ContentsWelcome 3

CEO & Chair report 4

Who we are 6

LUCRF Super at a glance 7

Our Trustee Board 9

Investment update 11

Investment options 14

Investment returns 18

Financial statements 20

Our Community Program 23

Other important information 25

LUCRF Super Annual Report 2018/192

WelcomeLUCRF Super was established in 1978, at a time when only a privileged few had access to superannuation and its benefits. Since then, we've played an active role in helping shape the superannuation industry as it is today, working hard to provide every Australian with financial independence and dignity.

Our focus remains the same: putting our members first.

For over 40 years, we've supported members and their communities. We'll continue to build a stronger super system and secure financial future for every member.

Let's work together for a better future.


Since 1978, when LUCRF Super was established by the Federated Storemen and Packers Union – now the National Union of Workers (NUW) – we’ve stood by the philosophy that super is a basic right of employment for all, not just for a group of privileged few. We’ve worked hard to provide financial independence and dignity in retirement for all hard-working Australians.

Our financial year in reviewThe news headlines in December 2018 were dominated by US President Trump, tariffs and trade policies. Six months later, those same issues continued to dominate the headlines, but share markets remained remarkably resilient, bouncing back to more than recover their first-half losses.

Despite a challenging economic climate and an industry undergoing change, our MySuper Balanced option achieved another strong financial year return of 6.06% while our Balanced option for pensioners delivered 6.90%. Our MySuper Balanced option surpassed its CPI + 4% p.a. return objective for 2018/19.

Exceeding CPI + 4% p.a. seemed unlikely at Christmas time, when returns were generally negative. However, not only did our MySuper Balanced option rise above its CPI + 4% p.a. return objective for 2018/19, it beat that marker over the past 10 years to 30 June 2019. More importantly is the fact that since we began in 1978, the average return of our MySuper Balanced option is 9.60% p.a. – a number that sits comfortably above our CPI + 4% p.a. return objective

After the end of the financial year, the Trustee Board elected to lower its return objective for the Balanced option slightly from CPI + 4% p.a. to CPI + 3.75 p.a. for each of our Super and Pension products over rolling 10-year periods. This reflects our belief that returns may be slightly harder to come by in the years ahead.

CEO & Chair report

For 40 years, members have been our main priority. In 2018, LUCRF Super celebrated 40 years of putting members first. Although a lot has changed since our humble beginnings, one thing remains constant: every day we continue to work for a better future for every member.


At the end of each financial year, the media likes to report on the best and worst performing funds over the previous year. Whilst these reports provide an interesting and broad synopsis of the industry and performance results, we prefer to focus on the principle that super is a long-term investment. 2018/19 demonstrated once again that it’s important to hold your nerve through bouts of volatility and remain focussed on the long term – even when the world appears to be even more unpredictable than ever.

Improving how we do things, enhancing the member experience Our members are at the centre of everything that we do, and we don’t settle for mediocrity when it comes to the services and experience that we offer. As our members’ needs change, so do the ways in which we engage with them.

Following extensive research to understand the needs, interests and long-term aspirations of our diverse members, we embarked on a number of exciting initiatives to elevate our overall offering: a new brand, enhanced digital advice service and, whilst still in development, a new website. Superannuation is complex enough as it is, it’s our job to make the experience – our technology, services and offerings – simpler and more enjoyable in order to benefit members and employers alike.

Protecting Your Super, protecting our membersWe understand that many of our members change jobs and, as a result, lose track of their super accounts. To help preserve savings and consolidate super, we have contacted approximately 30,000 of our members with low balances or with inactive accounts. While some of these members opted-in to keep their accounts with LUCRF Super, or took steps to reactivate them, many accounts have been transferred to the ATO to be reunited with active accounts.

Earlier this year, the industry experienced another major change with the Government’s ‘Protecting Your Super’ (PYS) legislation being passed in an effort to protect Australians’ super savings from unnecessary erosion by fees and insurance costs.

Under PYS, super accounts considered inactive for 16 months or more automatically lose insurance cover, and inactive accounts under $6,000 are transferred to the ATO. As an industry super fund, we’ve been pushing for this change for several years and are pleased that it has finally been addressed. Prior to legislation being passed, LUCRF Super had already embarked on a proactive campaign to help members consolidate their accounts.

We see this as a positive step for the industry and the member as our focus is ultimately on financial security for our members, not the Fund.

Board and Executive TeamIt’s an exciting time to be involved in superannuation, and we’re proud to be part of a Board and Executive Team that not only values change, but also actively embraces gender diversity and boasts the necessary skills to tackle industry issues and changes – past, present and future.

As with any organisation, we’re only as good as the people that support us. Our success is not based on working in isolation. As a Board and Executive Team, we are lucky to be backed by a highly skilled body of employees that puts our members first in everything that we do.

Thank youWith a challenging, yet productive, year behind us, we look forward to the year ahead, which will see a number of exciting developments – both in the industry and LUCRF Super. We thank you for your support and loyalty over the past 40 years and look forward to many more.

Joseph Di Leo Chair Charlie Donnelly CEO


We stand by our values

We're an industry super fund that works hard for you

It’s all about our membersAs an industry super fund, we're run only to benefit our members – regardless of the industry they work in. Originally, industry funds were set up to support workers in certain industries. Now, like most industry super funds, we're open to anyone.

As one of Australia’s first industry super funds, we boast a long history of strong investment performance and low fees. Because we don't pay profits or dividends to shareholders, the money we make goes back into the fund, which benefits our members.

Our approach is simple: we work to provide long-term benefit to our members, our employers and other important stakeholders and partners. Because our focus is not industry specific, we’ve created a community that includes members who come from all walks of life and are employed in a range of industries, including warehousing, pharmaceuticals, food processing, market research, poultry, dairy, supply chain and labour hire.

6

Who we are

Self beliefFriendly

customer serviceStanding up for

one anotherFairness Members firstIntegrity

Working for your financial future

Competitive fees and performance

Benefit from capped administration fees and solid

long-term success.

Helpful adviceOur experienced advisers help

you make the right decisions for a better future.

40 years of heritageYou’re in safe hands with one of

Australia’s first super funds.

Working to support you

Help anywhere, anytimeReceive face-to-face support at your workplace or home.

In-house call centreOur experienced team is only a phone call away.

Digital supportAccess your account online

or via the app 24/7.

Working in your community

Our community programWe support the communities

where you live and work.

Super for all AustraliansWe work with policy makers

to build a stronger super system for all.

A voice for membersWe use our voting power to

make a positive difference to the industries we invest in.


7

2.9%

4.3%

9.6%

30.9%

1%50.6%

.40%

.30%WA

NT

SA

QLD

NSW

ACT

TAS

VIC

32% Female

68% Male

This year our Business Development Managers

made 6,580 site visits

Our members are:

Geographic location of members by state (%)

LUCRF Super at a glance

7 LUCRF Super Annual Report 2018/19

Our members know what we're about, and we know what they're about. The past year is a testament to how hard our teams have worked to ensure that we continue to create long-term benefits for our members and to provide financial dignity in their retirement.

80,000+calls from members

29,000+emails from members

2,500members used our

financial advice service

161,900+website users

131,600+members

23,460+employers

9.60%average annual return

since inception*

$6.7+ billionfunds under

management

As at 30 June

For the 2018/19 financial year

*For our MySuper Balanced option in which most members invest. Inception date is 19 December 1978. Past performance is not a reliable indicator of future investment returns.

LUCRF Super at a glance


National Secretary, National Union of Workers Member

Tim Kennedy

Deputy Chair

Member Representative Directors

Employer Representative Directors

Independent Directors Non-Executive Investment Committee

LUCRF Super is governed by the Trustee of the Fund, L.U.C.R.F Pty Ltd. The Trustee acts in the best interests of all members and obtains professional independent advice to assist in achieving the Fund’s objectives.

Our Trustee Board

National Education & Campaign Coordinator/ National President, National Union of Workers

Caterina Cinanni

General Branch Secretary, National Union of Workers

Sam Roberts

Victorian Branch Secretary, National Union of Workers

Susan Allison

Chief Financial Officer – Adecco, Australia

Givile Mockute

Chief Operating Officer, Clifford Hallam Healthcare Pty Ltd

Carmen Riley

Employee Relations Manager & HR Business Partner, Nestle Australia Ltd

James Corbett

HR Director, Australia/New Zealand, Mondelez Australia Pty Ltd

Craig Taylor

Nominated by Cargill

Chair

Joseph Di Leo

Judith Smith Greg Nolan

Assistant National Secretary, National Union of Workers

Paul Richardson

Ann Byrne


Appointment to the Board The Fund Trust Deed, Constitution, Board Charter and Board Appointment and Renewal Policy sets out the procedure for appointing directors. The National Committee of Management of the National Union of Workers nominates member representatives in writing. Employer representatives and independent directors are appointed on the recommendation of nominating committees.

Trust Deed The way in which the Fund is governed and controlled is established through a legal document called the Fund Trust Deed and Rules. To obtain a copy, visit lucrf.com.au

There were some changes to the trust deed during the year up to 30 June 2019. These included amendments to:

• reflect the change in the tax treatment of transition to retirement (TTR) pensions. Recent tax legislation provides that the assets underlying a TTR pension are taxable until the member has satisfied a condition of release or turned 65. The Trust Deed clarifies that TTR pensions will be in the retirement phase once a legislated condition of release is satisfied

• allow members to split contributions with their spouse who are members of the Fund.

Attendance at Board & Committee Meetings as at 30 June 2019

Directors Board Investment Compliance, Risk & Audit

Growth & Transformation Remuneration

Susan Allison 5/6 – – 5/5 –Ann Byrne 6/6 8/9 5/5 – 2/2Phillip Caris 1/2 – 2/2 – –Caterina Cinanni 6/6 – – 5/5 –Joseph Di Leo 6/6 – – 4/5 1/1Ted Eftimiadis 3/3 – 3/3 – 1/1Tim Kennedy 6/6 9/9 – – 2/2Givile Mockute 5/6 – 5/5 – –Paul Richardson 6/6 – 5/5 – –Sam Roberts 5/6 8/9 – – –Judith Smith 6/6 9/9 – – –Craig Taylor 4.5/6 – 1/1 4/5 –James Corbett 1/1 – – 1/1 –Carmen Riley 1/1 – – – –

Director’s attendance at meetingsTed Eftimiadis: Resigned from the Board, the Remuneration Committee and the Compliance, Risk & Audit Committee on 9 February 2019Paul Richardson: Appointed Chair of the Compliance, Risk & Audit Committee on 9 February 2019Phillip Caris: Resigned from the Board on 7 November 2019Craig Taylor: Resigned from the Growth & Transformation Committee on 13 June 2019 / Joined the Compliance, Risk & Audit Committee on 11 June 2019James Corbett: Appointed to the Growth & Transformation Committee on 6 March 2019Joseph Di Leo: Appointed to the Remuneration Committee on 11 April 2019Carmen Riley: Appointed to the Board on 6 May 2019

Director’s attendance at meetings

Trustee Board

Committees The Trustee Board has committees to monitor and advise the Board. Committee members are selected by the Board based on the skills required for the particular committee. Members of each Board Committee as at 30 June 2019 are:

Investment Committee

Judith Smith (Chair) Ann Byrne

Tim Kennedy

Sam Roberts Greg Nolan

(Non-director)

Growth & Transformation Committee

Caterina Cinanni (Chair)Joseph Di Leo Susan Allison James Corbett

Compliance, Risk & Audit Committee Paul Richardson (Chair)

Ann Byrne Givile Mockute

Craig Taylor

Remuneration Committee

Ann Byrne (Chair) Joseph Di Leo Tim Kennedy


Investment update

2018 / 2019 financial year economic commentary The past financial year saw an overall slowdown of global economic growth, particularly in Europe, Japan and China, with global trade and manufacturing activity slowing notably. Heightened trade tensions have been a key issue throughout the year, despite hopes that a negotiated settlement will be reached between the US and China. In Australia, house prices falling as the construction boom peaked saw weakness in consumer spending. However, exports were very strong, producing the largest trade surplus since the 1970s, driven by the iron ore price, which almost doubled over the year. Conversely, the oil price fell over the year in response to slower global growth.

There has been a major shift in monetary policy over the year, from tightening to an expectation of easing in the future. The US Federal Reserve Bank (the Fed) has moved from increasing rates in 2018 to now expecting to be cutting rates, and the European Central Bank (ECB) has halted quantitative tightening and now expects to retain negative interest rates for a longer period. In Australia, the RBA has moved from an expectation that the next move would be a rate rise to cutting rates. Central banks have been able to move to easing because inflation remains low, below target levels.

The US Fed was a key driver of the volatility in equity markets over the year. Equity markets fell sharply in late 2018 when further tightening was expected, but then rebounded strongly in 2019 to date as the Fed indicated more supportive policy action going forward. The result over the 12 months, was a solid positive return from US equities, while weaker economies, Europe and Japan, produced a small positive and negative return respectively for the year. UK equities were also negative, as the Brexit process remained unresolved and a new Prime Minister appointed in July.

Emerging market equities produced a small positive return for the year, weighed down by trade concerns and weaker commodity prices.

Australian equities have been a standout performer over the financial year. Resources stocks have been particularly strong, benefiting from the rise in the iron ore price, but the price rises have been supply-side driven (e.g. constraints in Brazil) that are expected to be temporary. Australian banks recovered late in the year as the cut in rates and the Federal election result contributed to signs that house prices are now stabilising.

Bonds, particularly Australian bonds, provided strong returns over the year. The change in monetary policy stance saw bond yields fall significantly globally, with Australian and Euro bonds at historically low yields. Australian bond yields are now materially lower than in the US, which has rarely occurred in history.

The Australian dollar fell over the year, supporting unhedged international equity returns. The US dollar and Japanese yen were the strongest currencies, while the British pound was relatively weak given ongoing Brexit uncertainty.

Report prepared by:Frontier Advisors, AFS Licence No: 241266


Service providers and investmentsCalculation of your returnsThe returns declared for our investment options are net of investment fees and tax, except in the case of our retirement pension options which are untaxed. The earnings applied to members’ accounts may differ. Investment returns are at the investment option level and are reflected in the unit prices for each option.

At the end of each financial year, we send members a statement outlining how their account has performed over the year. Each member’s return is influenced by the timing of contributions received, and any withdrawals and/or investment option changes that the member may have made during the financial year.

DerivativesWe primarily use derivatives for currency risk control and as part of investment strategies to enhance returns in our investment options via external investment managers. Derivatives are not used for gearing purposes and any derivatives are asset-backed by actual holdings in our portfolio.

Investment exposuresAt 30 June 2019, the following investment managers held more than 5% of the Fund’s total assets:

DFA Australia Limited 9.02%

Northern Trust Global Investments 7.67%

Colonial First State Investments Limited 6.72%

IFM Investors Pty Ltd 6.38%

Airlie Funds Management Pty Ltd 5.93%

Bell Asset Management 5.44%

Investment update


Investment managers as at 30 June 2019

Acadian Asset Management (Australia) Limited

Franklin Templeton Investments Australia Limited

Northern Trust Global Investments

Airlie Funds Management Pty Ltd GMO Australia LimitedPacific Road Capital Management Pty Ltd

AMP Capital Investors Limited GPT Funds Management Limited Palisade Investment Partners

APN Funds Management Limited GSA Capital Limited Pzena Investment Management LLC

Baillie Gifford Overseas Limited IFM Investors Pty Ltd QIC Limited

Bain Capital Credit LP Industry Super Holdings Pty LtdSchroder Investment Management

Australia Limited

Barwon Investment Partners ISPT Pty Ltd Sentient Equity Partners SPC

Bell Asset Management Lazard Asset Management Limited Stewart Investors Ltd

Brandywine Global Investment Management LLC

Lendlease Real Estate Investments Limited

TCW Group

Bridgewater Associates LPMacquarie Investment Management

Global LimitedTouchstone Asset

Management Pty Ltd

CBRE Clarion Securities Macquarie Securities (Australia) LimitedVeritas Asset

Management LLP

Charter Hall Social Infrastructure LimitedMacquarie Specialised Asset

Management LimitedVirtual Communities Limited

Colonial First State Asset Management (Australia) Limited

Members Equity Bank Limited UBS Securities Australia Limited

Colonial First State Investments Limited Montreux Equity Partners

Wellington Management Australia Pty Ltd

Copper Rock Capital Partners LLCMorgan Stanley Investment

Management (Australia) Pty Ltd

DFA Australia Limited New Mountain Capital LLC

LUCRF Super service providers as at 30 June 2019

AuditorPricewaterhouseCoopers

Eligible rollover fundAUSfund

Legal advisers Holding Redlich

HWL Ebsworth Lawyers TurksLegal

Hall & Wilcox

BankersCommonwealth Bank of Australia

JP Morgan Chase Bank

Group insurerOnePath Life

CustodianJP Morgan Chase Bank

Investment advisorFrontier Advisors

Tax adviserDeloittes Australia

Investment update


Pre-mixed options Each pre-mixed option contains a diversified mix of growth and defensive asset classes.

MySuper Balanced* High Growth

Strategic asset allocation %

Range %

Australian shares 26 15–40

International shares 28 17–40

Property 10 4–20

Infrastructure 8 2–20

Alternatives 15 0–38

Fixed interest 9 0–25

Cash 4 0–25


Range %


International shares 41 26–56

Property 10 5–15



Cash 2 0–8

Suggested minimum investment time frame

5 years Suggested minimum investment time frame

6 years

Expected frequency of negative annual returns in any 20-year period

Approx. 3.5 Expected frequency of negative annual returns in any 20-year period

Approx. 5.5

Risk band (1–7) 5 Risk band (1–7) 6

Risk label Medium to high Risk label High

Investment objectiveTo achieve a return (net of tax and investment expenses) that exceeds the increase in the consumer price index (CPI) by at least 4% per annum over rolling 10-year periods.

Investment objectiveTo achieve a return (net of tax and investment expenses) that exceeds the increase in the CPI by at least 4.5% per annum over rolling 10-year periods.

Investment strategyTo invest in a diversified range of investments, with a greater proportion in shares, property and alternative investments, and the remainder in cash and fixed interest.

Investment strategyTo invest in a diversified range of investments, including shares, property and alternative investments.

*The MySuper Balanced option is the same as the Balanced option available to pension members.

Investment options


Pre-mixed options (continued)Each pre-mixed option contains a diversified mix of growth and defensive asset classes.

Targeted Return Moderate Conservative


Range %

Australian shares 11.1 0–33

Liquid alternatives 55.6 11–90

Infrastructure 11.1 0–33

Fixed interest 22.2 10–60


Range %

Australian shares 17.5 10–28

International shares 19.5 10–27.5

Property 8 4–12



Fixed interest 23 15–40

Cash 13 5–25


Range %


International shares 13.5 9–18

Property 6 3–10



Fixed interest 26.5 15–40

Cash 26 20–40




3 years




Approx. 1.5

Risk band (1–7) 5 Risk band (1–7) 4 Risk band (1–7) 3

Risk label Medium to high Risk label Medium Risk label Low to medium

Investment objectiveTo achieve a return (net of tax and investment expenses) that exceeds the increase in the CPI by at least 4% per annum over rolling 5-year periods.



Investment strategyTo invest in a portfolio of highly diversified assets which aim to provide strong above-inflation returns with low levels of volatility.

Investment strategyTo invest in a diversified range of investments, including shares, property, alternative investments and fixed interest.

Investment strategyTo invest in a diversified range of investments, with a greater proportion in cash, fixed interest and defensive property, and the remainder in shares, property and alternative investments.

Investment options


Asset class optionsEach option invests in a single asset class.

Australian Shares International Shares Indexed Shares


Active Australian shares 100^


Active International shares 100^


Range %

Passive Australian shares 50^ 48-52

Passive International shares 50^ 48-52




7 years


Approx. 7 Expected frequency of negative annual returns in any 20-year period

Below 6 Expected frequency of negative annual returns in any 20-year period

Approx. 6.5

Risk band (1–7) 7 Risk band (1–7) 6 Risk band (1–7) 7

Risk label Very high Risk label High Risk label Very high

Investment objectiveTo achieve a return (gross of tax and investment expenses) that exceeds the change in the S&P/ASX300 Accumulation Index over rolling 3-year periods.

Investment objectiveTo achieve a return (gross of tax and investment expenses) that exceeds the change in the MSCI World ex-Australia Total Return Index (net dividends reinvested), 75% unhedged and 25% hedged into Australian dollars, over rolling 3-year periods.

Investment objectiveTo achieve a return (gross of tax and investment expenses) that matches the change in a 50%/50% combination of the S&P/ASX300 Accumulation Index and the MSCI World ex-Australia Total Return Index (net dividends reinvested unhedged in Australian dollars) over rolling 3-year periods.

Investment strategyTo invest totally in Australian shares on an actively managed basis.

Investment strategyTo invest in international shares on an actively managed basis.

Investment strategyTo invest totally in shares on a passive basis, with approximately half in Australian shares and half in international shares.

^From time to time the investment managers may hold cash.

Strategic asset allocations are valid as at 1 October 2018. Visit lucrf.com.au for the latest asset allocations.

Investment options


Asset class options (continued)Each option invests in a single asset class.

Property Cash


Australian listed property trusts 100^


Cash# 100



N/A


Approx. 7 Expected frequency of negative annual returns in any 20-year period

Negligible

Risk band (1–7) 7 Risk band (1–7) 1

Risk label Very high Risk label Very low

Investment objectiveTo achieve a return (gross of tax and investment expenses) that equals the change in the S&P/ASX300 Property Trust Index over rolling 3-year periods.

Investment objectiveTo achieve a return (gross of tax and investment expenses) that is equal to the UBS Australian Bank Bill Index.

Investment strategyTo invest totally in listed Australian property trusts on a passive basis.

Investment strategyTo invest in a portfolio consisting primarily of bank deposits, but may include other short-term securities such as highly liquid fixed-interest investments or money market securities.

^From time to time the investment managers may hold cash.

#The money invested in your cash option is invested in Members Equity Bank Limited deposits, up to the limit as specified in the Financial Claims Scheme (which, as at 1 October 2018, is $250,000). The amount above this level is invested in highly rated cash management trusts.

Strategic asset allocations are valid as at 1 October 2018. Visit lucrf.com.au for the latest asset allocations.

Investment options


2018/2019 2017/2018 2016/2017 2015/2016 2014/20155 year average

2015/2019

Pre-mixed %

MySuper Balanced* 6.06 9.22 10.10 1.94 8.45 7.11

High Growth 7.37 11.54 12.10 2.02 9.92 8.53

Targeted Return 6.66 4.78 6.08 4.97 5.25 5.55

Moderate 6.35 7.35 7.29 3.25 6.46 6.13

Conservative 4.82 5.65 5.28 3.19 5.14 4.81

Asset class %

Australian Shares 7.18 12.59 10.72 2.26 5.16 7.52

International Shares 10.65 12.05 16.08 -6.08 17.04 9.61

Indexed Shares 12.02 14.09 13.54 1.65 13.69 10.89

Property 17.17 11.51 -5.36 21.96 16.83 11.99

Cash 1.98 1.88 1.63 1.91 2.30 1.94

* This is the investment option that most members are in and the option which your superannuation investment automatically defaults to, unless you instruct otherwise.

Super

2018/2019 2017/2018 2016/2017 2015/2016 2014/20155 year average

2015/2019

Pre-mixed %

Balanced* 6.06 9.22 11.35 2.40 9.64 7.69

High Growth 7.37 11.54 13.63 2.52 11.62 9.26

Targeted Return 6.66 4.78 6.93 5.94 6.40 6.14

Moderate 6.35 7.35 8.24 3.94 7.71 6.71

Conservative 4.82 5.65 6.00 3.79 6.16 5.28

Asset class %



Indexed Shares 12.02 14.09 14.80 1.89 15.02 11.45

Property 17.17 11.51 -5.81 23.70 19.94 12.80

Cash 1.98 1.88 1.95 2.28 2.69 2.16


Until 30 June 2017, the TTR investment returns mirror the retirement pension investment returns. From 1 July 2017, however, TTR pensions receive the same investment returns as super accounts due to tax changes.

TTR

2018/2019 and historical

Investment returns


2018/2019 2017/2018 2016/2017 2015/2016 2014/20155 year average

2015/2019

Pre-mixed %

Balanced* 6.90 10.27 11.35 2.40 9.64 8.06

High Growth 8.32 12.74 13.63 2.52 11.62 9.69

Targeted Return 7.28 5.56 6.93 5.94 6.40 6.42

Moderate 7.27 8.18 8.24 3.94 7.71 7.06

Conservative 5.61 6.32 6.00 3.79 6.16 5.57

Asset class %



Indexed Shares 13.09 15.33 14.80 1.89 15.02 11.90

Property 19.17 12.94 -5.81 23.70 19.94 13.47

Cash 2.34 2.23 1.95 2.28 2.69 2.30


Pension

2018/2019 and historical (continued)

Past performance is not a reliable indicator of future investment returns.

Investment returns

Returns are included as part of the daily unit price calculation which reflects the value of a member's account balance, subject to monthly and annual revaluations.


Statement of financial positionAs at 30 June 2019

2019 $'000

2018 $'000

Assets

Investments

Cash at bank 2,696 9,652

Trade and other receivables 34,706 32,399

Investments:

Cash and cash equivalents 477,642 429,956

Fixed interest 882,602 844,626

Australian equities 1,654,583 1,610,402

International equities 1,881,439 1,724,581

Property 576,345 593,116

Alternatives 1,358,816 1,213,506

Current tax asset 14,702 2,190

Total assets 6,883,530 6,460,427

Liabilities

Trade and other payables (43,706) (15,480)

Benefits payable (2,492) (1,195)

Deferred tax liability (94,740) (85,114)

Total liabilities excluding member benefits (140,937) (101,789)

Net assets available for member benefits 6,742,593 6,358,638

Member liabilities (6,669,101) (6,289,497)

Net Assets 73,492 69,141

Equity

Operational risk financial reserve 21,861 21,297

Capital adequacy reserve 51,631 47,845

Total equity 73,492 69,141

Financial statements


Income statementFor the year ended 30 June 2019

2019 $'000

2018 $'000

Superannuation activities

Income

Interest income 20,192 16,911

Distributions and dividends income 238,857 197,004

Changes in assets measured at fair value 166,648 368,337

Other investment income 3,656 4,272

Other revenue 2,020 1,102

Total Income 431,373 587,626

Expenses

Trustee service fees (50,436) (54,743)

Other expenses (3,364) (4,102)

Total expenses (53,800) (58,845)

Result from superannuation activities before income tax expense/(benefit) 377,573 528,781

Income tax (expense)/benefit (10,689) (29,325)

Result from superannuation activities after income tax expense/(benefit) 366,884 499,456

Less: Net benefits allocated to members' accounts (362,384) (495,327)

Operating result after income tax 4,500 4,129



Statement of changes in member benefitsFor the year ended 30 June 2019

Statement of changes in equityAs at 1 July 2016 and 30 June 2017, 30 June 2018 and 2019

2019 $'000

2018 $'000

Opening balance of member benefits 6,289,497 5,656,487

Contributions received from:

Employers 386,348 375,427

Members 42,192 47,483

Government co-contributions 4,827 5,523

Transfer from other superannuation funds 164,153 155,186

Income tax on contributions (58,394) (56,338)

Net after tax contributions 539,127 527,281

Benefits paid to members (523,045) (390,765)

Net Insurance premiums charged to members (19,004) (20,559)

Death and disability proceeds credited to members 20,142 21,726

Benefits allocated to members' accounts comprising:

Net investment income 405,790 542,365

Trustee fees (43,406) (47,038)

Benefits allocated to members' accounts 362,384 495,327

Closing balance of member benefits 6,669,101 6,289,497

Operational Risk Financial Reserve

$'000

Capital Adequacy Reserve

$'000

Total Equity

$'000

Balance as at 1 July 2016 18,080 34,120 52,200

Operating result 937 11,875 12,812

Net transfers 186 (186) –

Balance as at 30 June 2017 19,203 45,809 65,012

Operating result 622 3,508 4,129

Net transfers 1,472 (1,472) –


Operating result – 4,500 4,500

Transfer to member account (150) – (150)

Net transfers 714 (714) –



Note: If you wish to obtain a copy of the auditor's report and the full audited accounts, please contact us on 1300 130 780.


The past 40 years have been a culmination of growth, learning and enrichment and we’re proud of all the work that’s supported the LUCRF Super Community Program – an initiative which has gone from strength to strength and is a true reflection of our values.

Since 2010, the Community Program has worked hard to make a positive difference in the communities where our members live and work by supporting not-for-profit community organisations, thereby enriching the lives of the most vulnerable and disadvantaged to encourage them to develop skills and attitudes that will assist them throughout their lives.

We're very proud of the contribution the Community Program makes and happily report that, to date, the program has made a positive impact to over 120,000 people.

To read the 2018/19 LUCRF Super Community Program Annual Report, head to lucrf.com.au/communityprogram

Our Community Program


We partner with community organisations that share our values

Focus areasWe support our partner organisations so they can deliver programs addressing the

needs of communities in one of four focus areas:

Basic needsCommunity

building

Skills development Health

Key facts about the Community Program

over 120,000people benefitted

34 partners 43 projects

Self belief Friendly customer service

Standing up for one another

Fairness Members first Integrity


Enquiries and complaints Enquiries and complaints may be made in a variety of ways (i.e. in a letter, by email, by telephone or in person).

Any written complaint should be addressed to:

The Complaints Officer LUCRF Super PO Box 211, North Melbourne VIC 3051 Or email [email protected]

Complaints may be made by a range of parties such as a fund member, a previous member, a non-member spouse (for family law split agreements), or by the beneficiary (beneficiaries) or legal personal representative(s) of a deceased member.

For complaints related to your super or pension account As required by legislation, we will respond within 90 days, although we will aim to reply earlier. If you are not satisfied with our response or the handling of your complaint, you may be able to lodge your complaint with the Australian Financial Complaints Authority (AFCA). This service is free to access.

AFCA GPO Box 3, Melbourne VIC 3001 Phone: 1800 931 678 Email: [email protected] Website: afca.org.au

Government supervision LUCRF Pty Ltd ABN 18 005 502 090 is the Trustee of the Labour Union Co-operative Retirement Fund (LUCRF Super) ABN 26 382 680 883 and complies with the requirements of the Superannuation Industry (Supervision) Act 1993, the Corporations Act 2001 and other relevant legislation.

The Australian Prudential Regulation Authority (APRA) approved LUCRF Pty Ltd as the holder of a Registrable Superannuation Entity Licence (L0002981) and LUCRF Super as a Registrable Superannuation Entity (R1067521). LUCRF Super is authorised to offer a MySuper product (unique identifier 26382680883067).

An Australian Financial Services Licence was granted to LUCRF Pty Ltd (AFSL No. 258481) by the Australian Securities Investment Commission (ASIC), which enables personal and general superannuation advice to be provided.

Reserves policyThe following reserves are maintained.

Operational risk financial reserveThe Fund's operational risk financial reserve is invested in the MySuper Balanced option. It's funded up to the target level determined by the trustee in accordance with its reserve strategy and APRA requirements and is maintained to ensure that the Fund has access to adequate financial resources in the event of losses arising from an operational risk event.

Capital adequacy reserve

The Fund's capital adequacy reserve is invested in the MySuper Balanced option and the Trustee's capital adequacy reserve is invested in high grade securities such as Term Deposits. These provide access to adequate financial resources in the event of non-operational risk events and/or other major infrastructure projects in accordance with its reserves strategy.

Legislation requires employers to pay contributions by certain due dates. When an employer fails to do this, we (once aware) will endeavour to resolve these situations within a reasonable period. We identify and follow up on overdue contributions in writing and/or by phone. We may also perform site visits and/ or use the services of a third party to advise employers of arrears.

Identity fraud Identity fraud happens when someone steals (or tricks you into providing) your personal details to commit financial fraud. While this seems to mainly occur with bank accounts, your super could also be a target. Visit the ASIC MoneySmart website at moneysmart.gov.au for useful superannuation information and scam alerts.

Indemnity insurance The Fund has taken out insurance to indemnify the directors and legally responsible officers from loss resulting from any claim or wrongful act by the trustee or any other party. The directors are not indemnified against penalties or fines imposed by law as a result of negligence or dishonest conduct.

Other important information


Important Information

Unclaimed moneyThe Trustee of LUCRF Super is required to transfer your entire benefit to the Australian Taxation Office (ATO) as unclaimed money in certain circumstances. This will occur within four months of the end of each half calendar year if:

• you reach the eligibility age of 65, your account hasbeen inactive for two years or more, and we haven't hadcontact with you for five years

• you've passed away and the trustee is unable (afterreasonable endeavour) to locate a beneficiary to payyour benefit to

• you were in Australia as a temporary resident and youhaven't claimed your benefit after six months from yourvisa expiry or cancellation date

• your balance is less than $6,000 and you're considerednon-contactable (because two pieces of mail we sentto you have been returned undelivered, and we haven'treceived any contributions or rollovers for you within thelast 12 months, and it won't be possible to pay a benefitto you in the future), or

• you're an inactive member (we haven't received anyrollovers or contributions from you in the last five years),and there's been no positive act from you advising thatyou wish to stay with us.

Note: The Trustee relies on ASIC relief to the effect that it is not obligated to issue an exit statement to departed former temporary residents when a benefit is transferred to the ATO. However, the information may be obtained upon request.

Eligible rollover fund Under superannuation legislation, the Trustee of LUCRF Super may transfer a member's account to an eligible rollover fund under certain circumstances. AUSfund is an eligible rollover fund that can receive benefits from other super funds for members with inactive accounts.* LUCRF Super has previously transferred accounts to AUSfund twice a year for the periods ending 30/06 and 31/12. Actual exit date deadlines are 31/10 and 30/04 respectively.^#

We may transfer your account to AUSfund if your account:

• had a balance between $200 and $6,000

• did not receive any deposit in last 16 months from30 June 2019

• did not change their binding death nomination in last16 months from 30 June 2019

• did not change their investment choice in last 16 monthsfrom 30 June 2019.

or if you:

• did not increase your insurance cover in the last16 months from 30 June 2019

• did not opt out explicitly out of Low Balance Inactive (LBI)

• are a member that has not passed away

• are a member that is not over 65 years old and we have lost contact with you

• did not have an income stream/pension account(did not meet a condition of release).

If your account is transferred to AUSfund, you'll no longer be a member of LUCRF Super, and any insurance you had with us will cease.

You can contact AUSfund at the following:

AUSfund Locked bag 5132 Parramatta NSW 2124 1300 361 798 [email protected]

* The conditions of inactive accounts may be subject to change.

^ These dates are in line with the USM and LBI legislation.

# Whether or not the future use of an eligible rollover fund continues to be in the best interests of members will be closely monitored.


1300 130 780

lucrf.com.au

[email protected]

PO Box 211 North Melbourne VIC 3051

2018/19 · 2020. 4. 29. · working in . your community. our community program. we support the...

Documents