Transition to retirementcase study

page 5

What’s new at QSuperpage 6

A solid performance2010/2011 report card

page 11

Is it the

right timeto retire?

page 2Martin Krippel, member since 2009

AUGUST 2011 FOR MEMBERS AGED 50 AND OVER

SuperScoop

FOR MEMBERS AGED 50 AND OVER

Life is full of important moments,

often leading to new and

exciting stages of your life;

leaving school, getting married,

the birth of your first child. And

one of the biggest you’ll probably

be considering in the next

decade is retirement. So how do

you know when is the right time?

Retirement is an individual choice;

what’s right for your colleague or your

friend might not be right for you. And

it’s not just your financial situation you

should consider; it’s just as important to

know whether you are emotionally and

psychologically ready for retirement.

Money mattersWorking out if you are financially ready

for retirement may be the easier part of

the equation, but the answer will depend

on your expectations for your retirement

lifestyle. Consider the following

questions, as they should help you get

a feel for whether you’re heading in the

right direction.

How much is enough?Like so much about retirement, knowing

how much you will need is not an

exact science and depends on your

personal circumstances. One common

rule of thumb is that in retirement you

might need roughly two-thirds of your

current income to maintain your current

standard of living.1 A more precise

method is to design a future budget,

taking into account the lifestyle goals just

considered – you may find the Budget

Planner in the Calculators section of our

website a helpful place to start.

Once you’ve figured out how much

you need, the next step is to work out

whether you’re on track to hit that target.

To help you estimate the retirement

income your super and other investments

may provide, you can use QSuper’s new

Retirement Income Calculator. This tool

will also help you identify the different

actions you can take to improve your

retirement income. For more info on the

Retirement Income Calculator see page 4.

Ready, set,

ririghght didirerection.

Q4. Do I have time to grow my

super if I don’t have enough?

Q3. Is it enough to fund the

lifestyle I want?

Q2. How much do I have

invested already and what

income will that provide me?

Q1. What sort of lifestyle do I

want in retirement?

Contacting QSuperContact Centres70 Eagle Street Brisbane63 George Street Brisbane

Ph 1300 360 750+617 3239 1004 (international) Fax 1300 240 602+617 3239 1111 (international)

Monday to Friday 8.30am to 5.00pm AEST

GPO Box 200Brisbane Qld 4001

qsuper.qld.gov.au

SuperRatings Platinum awards 2011, QSuper

Accumulation and QSuper Pension accounts,

www.superratings.com.au.

Super Scoop August 2011

is printed by a certified

ISO14001 company

promoting sustainable

forest management.

Important information This document is issued

by the Fund Administrator, QSuper Limited

(ABN 50 125 248 286, AFSL 334 546), on

behalf of the QSuper Board of Trustees

(ABN 32 125 059 006). The QSuper Board of Trustees

is the issuer of interests in the QSuper Fund

(ABN 60 905 115 063). Where the term ‘QSuper’ is

used in this document, it represents the QSuper

Board of Trustees, the QSuper Fund, and QSuper

Limited, unless expressly indicated otherwise. The

content of this document is aimed at providing

general background information on a range of

subjects. The information has been prepared for

general purposes only, without taking into account

your financial objectives, situation, or needs, so it

may not be appropriate for your circumstances. You

should read the product disclosure statement (PDS)

and consider your circumstances before you make

an investment decision. You can download a PDS

from our website at qsuper.qld.gov.au, or call us

on 1300 360 750 and we’ll send you a copy. Before

acting on any of the information, you may wish to

consider obtaining personal financial advice.

Visit our website from September 2011 to download the other versions.

Did you know there are four different versions of Super Scoop tailored to different member audiences?

2 QSuper Super Scoop August 2011

retireIt’s not just about the financesA less tangible, but equally important, factor

in retirement planning is your emotional and

psychological readiness. On the surface it may seem

like a strange thing to worry about – who wouldn’t

look forward to swapping the daily grind for a life of

leisure? The reality can be very different however.

Some people find that when they are no longer

working they have little to define their lives. This

can be especially true for people who have held

high-powered positions and filled their life with

their work. However anyone who is unprepared

for retirement can fall victim to boredom and a lack

of purpose that can lead to health problems and

even depression.

Think positivelyThere are some simple steps you could take to

try and avoid this happening, such as taking up a

new hobby, joining a group or club, or engaging in

volunteer work. You may also want to think about

easing into retirement gradually by cutting back

from full-time to part-time work before ’clocking

out’ for the last time.

Making the decision to leave the workforce

permanently isn’t always an easy one, but if your

finances are in order and you feel emotionally and

mentally ready to make a change, then it might

be time to make the leap into retirement and start

enjoying the next stage of your life.

1. ASIC’s Moneysmart website at www.moneysmart.gov.au ‘Is your

super on target’.

2. Q Invest Limited (Q Invest) ABN 35 063 511 580 AFS licence 238274.

Q Invest is wholly owned by the QSuper Board of Trustees, and is a

separate legal entity which takes full responsibility for the financial

services and products it provides.

The next step

Come along to a Retirement Preparation seminarThis two-day seminar provides a comprehensive approach to retirement

planning, and gives you the opportunity to get answers on anything

from super and investment matters to social, health and lifestyle issues.

Entry is free, so go to our website for more info or to book your seat.

See a Q Invest2 Adviser As a QSuper member you have access to subsidised advice about

your QSuper benefit. A Q Invest Adviser can help you look at your

situation and help you work out if you’re financially ready to retire,

and suggest strategies if you are not. Call Q Invest on 1800 643 893

and make an appointment.

Don’t have enough? What are your options?

Put more inDepending on how many years you have until your planned retirement,

contributing more into your super now can have a significant impact on

your end result – check out QSuper’s Retirement Income Calculator to see

what difference various contribution strategies could make. If you are

aged 55 or over, you may be able to get more super, pay less tax and still

maintain your current income by taking advantage of the transition to

retirement strategy. See the case study on page 5 for more information.

Work longerIt may not be an option you want to consider, but if you’re way off your

target, working longer, even in a part-time capacity, has the dual advantage

of giving you longer to contribute to super and reducing the length of time

you need your retirement lump sum to last.

Adjust your expectationsIf your desired goal just doesn’t seem achievable, you may need to

review your budget and see if there are things that you can live without.

While downsizing your dreams isn’t ideal, for some people it is a reality,

and reviewing your retirement budget might make your figures stack up.

Of course it’s not all or nothing, and you may find that a

combination of the above may work best for you.

3QSuper Super Scoop August 2011

We know from talking to members that

two of the most important questions

people have about their super and

retirement are:

How much you are on track to receive is

the easier question to answer - naming

the actual dollar amount you’ll need

to live on can be more difficult, and

the answer will vary considerably from

person to person. However, having

enough to live comfortably and to at

least maintain their current lifestyle is the

common theme that runs through many

members’ responses.

To help you answer these important

questions more accurately, QSuper

has launched a new online Retirement

Income Calculator. The new calculator

will help you answer these questions,

and also let you explore the effects of

taking a career break, making additional

contributions, or entering your partner’s

details to estimate a combined

retirement income.

If there is a gap between the result you

wanted and the result you are on track

for, you can use this tool to explore

various options and see the effects of

making some changes.

Visit the QSuper website today at

qsuper.qld.gov.au/retirementincome

to see how the new calculator can

help you!

QS

UP

ER

ON

LIN

E

Easy steps to use the Retirement Income Calculator

Step 1.Go to

qsuper.qld.gov.au/

retirementincome

Step 2.Enter your

details.

Step 3.Select the annual

income you think you’ll

need to fund the lifestyle

you want in retirement

(our online tool can help

with this).

Step 4.Click ‘Show results’

to receive your

retirement income

estimate.

How much income am I on track to receive?

What income will I need to fund the lifestyle I want in retirement?

What else is new?

The QSuper website

has had a facelift!

To improve your online experience,

and to make it easier for you to get

the info you want, we’ve given our

website a new look and feel.

Check it out today!

QSuper Super Scoop August 20114

Current

Transition to retirement strategy

Gross income $60,000 $60,000

Salary sacrifi ce into super $0 -$17,350

Taxable income $60,000 $42,650

Tax & Medicare Levy -$12,000 -$5,840

After tax super contributions

-$3,000 $0

Take home pay $45,000 $36,810

Transition to retirement pension income

- $8,190

Total income $45,000 $45,000

Total super contributions: Jennifer’s and her employer’s contributions

$10,650 $25,000

Contributions tax -$1,148 -$3,750

Transition to retirement pension drawdown

$0 -$8,190

Net gain in super $9,502 $13,060

TRANSITION TO RETIREMENT

Jennifer wants to maximise her super over

the next five years before she retires. She

has heard about a transition to retirement

strategy that may allow her to do this

without reducing her current take-home pay,

so she decides to visit a Q Invest Adviser to

understand how this could work for her.

The Q Invest Adviser shows Jennifer how she

might be able to boost her superannuation

savings by over $30,000 in today’s dollars

after just five years, with absolutely no impact

on her current income level.

Recommended strategy1. Jennifer transfers her $135,000 super

balance to a QSuper Pension account.

This saves Jennifer money as she no

longer pays tax on investment earnings.

2. She then salary sacrifices her 5%

member contribution into her

Accumulation account ($3,000), plus an

additional annual voluntary contribution

of $14,350. This means less tax on her

income, but reduces her take-home pay.

3. To ensure she receives the same

take-home pay, Jennifer takes a pension

of just over $8,000 each year from her

QSuper Pension account. Because

Jennifer is over 60, the income from her

QSuper Pension account is tax-free.

4. As a result Jennifer saves over $3,500 in

tax in the first year, enabling her to boost

her super by this same amount.

5. Following this strategy for five years

could boost her final super balance

by approximately $30,000.

Calculations Here are Q Invest’s calculations for the first year of the

transition to retirement strategy.

Assumptions for the case study: • Gross earnings rate 6.6% • CPI 2.5% • AWOTE 3.8%

• Marginal tax rate for 2010/2011 year • Medicare included in calculations • Concessional

contributions cap of $25,000 has been used • Concessional contributions cap increases

to $30,000 in years four and five • Insurance has not been considered • Jennifer is

exempt from having to pay the recently introduced flood levy.

This article is brought to you by Q Invest Limited (ABN 35 063 511 580, AFSL 238274)

and is for general information only. It does not take into account individual goals, financial

situation, or needs. You should consider these before you make any investment decision based

on this information. Q Invest is wholly owned by the QSuper Board of Trustees, and is a separate

legal entity which takes full responsibility for the financial services and products it provides.

Jennifer’s StoryAge: 60Salary: $60,000 p.a.Superannuation account balance: $135,000Personal superannuation contributions: 5% of salary (after tax)

$3,558 p.a. more going into super

Take home pay stays the same

JJJJJJJJeeeeeeeennnnnnnnnnnnnnniiiiiiiiifffffffffffffeeeeeeeeeeerrrrrrrrrrr

Jennifer’s decisionJennifer can see the benefits of a transition to retirement pension for someone

in her situation, and decides to implement the recommended strategy.

Brought to you by

QSuper Super Scoop August 2011 5

The year in reviewAs you’ll see in “The year at a glance”

summary, we’re continuing to deliver on

our commitment to provide you with

great value and service, solid returns, and

the information you need to understand

your options.

While QSuper received industry recognition

in the form of a platinum rating from

SuperRatings for the fifth year running,

I believe the real test is how well we’re

meeting the needs of our members.

That’s why we’ve been working on how

we can improve the products and services

we offer you.

A new way of thinkingAs you would have seen when you

opened this newsletter, QSuper has a

new logo and fresh look and feel to its

communications. But the changes we’re

undergoing are far deeper than a new

look; we’re rethinking the way in which we

help members accumulate enough super

to live their desired lifestyle in retirement.

It’s an unfortunate fact that many older

Australians retire with insufficient funds to

live comfortably. Increased life expectancy

also means that some people have to face

the additional worry of their money

running out too soon.

Everyone has different needs These factors have led the QSuper Board

of Trustees to consider whether we need

to change the way we look at super, and

how we can better meet the needs of

members. Events such as the global

financial crisis (GFC) have certainly

highlighted that the environment can shift

unexpectedly, and there is not a ‘one size

fits all’ approach to saving for retirement.

Everyone has a different view on what

constitutes a comfortable retirement, as

the quotes on the right from our members

by Rosemary Vilgan, Chief Executive Officer

Making super work for you

illustrate, and it is this individuality in

situation and outlook that makes it

all the more important for QSuper to

keep improving.

Growing your super together While every member’s superannuation

journey is different, QSuper is committed

to being your partner on this journey. To

help improve this partnership with our

members, QSuper is proactively looking

at all aspects of the Fund to see what we

can do to better support you and help you

reach your retirement goals.

Over the next few years we are looking

to make our communications even

more relevant to ensure you are always

receiving information that’s better

targeted to your situation so you can

make better decisions about your super.

So what’s new?We also recognise that to achieve your

‘retirement lifestyle goal’ you first need

to understand how much you will need

to fund that lifestyle, then work out how

much you are likely to have accumulated

by the time you stop working. This is

why we have created our new online

Retirement Income Calculator. This exciting

new tool will help you answer these

questions, as well as provide you with the

information and help you need if you’re

currently falling short.

This is just the first of many services that

will be rolled out over the next eighteen

months, so keep an eye out in future

editions of Super Scoop for more details.

This has been a year of growth

and development for QSuper as

we continue to deliver on our

commitment to helping members

achieve better retirement

outcomes. It has also been a year

of challenges, as the floods that

devastated much of Queensland

earlier this year also forced the

temporary closure of our Brisbane

CBD office. However, I’m pleased

to say we continued to provide the

quality service you have come to

expect from us over this period.

Rosemary V i l ganmember s ince 1982

The year at a glance

FuFuFundndndss s ununundeddeder r r mamammanannan gegegegemememementntntn iincncnn rerereeeasasssasedeedde

bybyby 17.7.7.71711% % % tototoo $$$$32323232.4.444466 6 bibibb llllllioiooi n,n, aaaandndnddd ttthehehhe

nununuumbmbmbbererr oooooff f memememembmbmbmbereerrs ss ininii crcrcreaeaee sesesess d d ddd tototo

ovovovererere 555404040,000, 0000000..

1 Awarded by SuperRatings. SuperRatings is an independent superannuation ratings agency.

OvOvOverere 113,33,3,00000000 00 nonoon n-nnn-QuQuQQ eeeeeee nsnsnsslalaandndd

GoGoGovevevernrnnmemementntntt eeeempmmmplololol yeyeyey rsrrsr aaaareree nnnnowowwww

rereregigigistststs erere ededed tto ooo cococoonnntntrirrir bububub tetetete ttto o QSQSSSupuppuperererr..

StStStrororongngng iinvnvvnvesesestmtmtmtmeneeent tt t rereeetututurnrnrnns s dududd ririr ngnggg aaannnn

ofofofteteten n n vovovolaaal titit lelelee tttimimmime e fofofor rrr mamamaarkrkkkeetete s,s,ss wwwwwititth h hh

thththee e QQSQSQ upuppupererer BBBBalaalalananaancececed ddd (D(DDefefe auauultltttl )) opopopptititiionononon

rereretututurnrnninining g g 7.7.7.8181818 %.%.%.%

CoCoContntntinininueueued d deded vevv lololopmpmpmp enennntt ofofo iin-n-hohohohoususssse e e

ininnvevev ststs memementntt cccapapabababililiii ity,y,y wwwhihih chch hhheleelpspspsp

kekekeepepep cccososststs aandndnd ffeeees s looow.w.w

PlPlP atatatinininumummu rratataatinini gggg awawaawaraara dededed d tototot ooooururrr

AcAcAccucuumumumulalaatititionononon aaaccccccouuouuntntnt fffororrr tthehheh fffifififi ththh

yeyeyeararr rrrununnninin ngngngn ..11

ThThThe e e QSQSQSSupupupererer PPPenene sissionononn aaaccccccououuuntnnt wwwwasasas oooncnncn e e ee

agagagaiaiain n n nonon mimimiinanananateteet d dd foofoor r PePePePensnssioionn n FuFuuF ndndnnn oooof f

thththe e YeYeYearara .11

ThThThe e e nununumbmbmberererr ooof f memememembmbmm erererss ss whwhww o o o

hahahaveveve rregegeggisissteteeereeered d dd aa nonononon-n--QuQuQueeeeee nsnsn lalaaandndd

GoGoGovevevernrnnmemementntnt eeempmpmpmploloyeyeyeyer r totott ccccononnntrtrribibii ututute ee ee

totoo tttheheheiirir QQQSuSuSupepepep r r r acaccccocoooununnnttt dodoood ububu leleeleed d tototto

nenenearararlylyy 2220,0,,0000000.000.

ThThThe e e QSQSQSSupupuperere sssemememiinni araara s ss prprp ogogoggraraamm wawawaw ss

enennhahahancnccededd ttto o o bebebbeetttttterre mmmeeeeet t tththee e neneeedededss s

ofoff mmmememembebebersrsr ...

6 QSuper Super Scoop August 2011

Gemma Riversmember s ince 2005

The way forwardLike any organisation, QSuper needs to evolve to ensure we continue to

deliver good value and are meeting the changing expectations of our

members. Going forward this means we will be placing a greater focus

on your individual needs, so we can help you make better decisions

about your financial future.

As always, any changes we make will be carefully considered and

focused on helping you achieve your retirement goals. In practical terms

this may mean creating new products, rethinking investment strategies

or improving the way we communicate with you. We are currently

developing our next strategic plan and I look forward to sharing it with

you in the near future.

Bob Scheuber,

Chairman of the QSuper Board of Trustees

Read the complete Chairman’s report in the Annual Report to Members

on the QSuper website at qsuper.qld.gov.au/annualreport

Bob Scheubermember s ince 1974

“To continue to live the way we have lived and not have to rely on the Age Pension.”

wwwwwnnnnnnnnnAAAAAAAAA

“Retirement to me isn’t about just trying to stay alive, it’s about learning how to live more.”

“Retirement to me means being able to live comfortably and go on holidays and do what I want to do without worrying if I can afford it.”

Jean Dwyermember s ince 199 1

Pab l o Fernandezmember s ince 2006

Mart in Kr ippe lmember s ince 2009

Nata l i e C larkemember s ince 1989

ererrreee 1919191999199999999919911999191191991991991911919911911919191919919919999999999999999999999999999999999999999999999999999999999

Duncan McKe l lar

member s ince 1989

pp lKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKr ir ir ir iiir iiiiir ir iiir ir ir ir ir ir ir ir ir ir iirrr ir irrrrrrrrrrrrrrr ppppppppppppppppppppppppppKKKKKKK

Gemma Riversmember s ince 2005

e le le le le lll alalll alalllllllllllllllllllllllllllllllllllllllllllllllllcKcKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKele le lee le le lllceeeeeeeeeeeeeeeininnccccececececccccecccccccccccccccccccc

Sarah-Jayne Lofthouse member s ince 2008

Nata l i e C larkemember s ince 19889

GGGGGGGGGGeGeGeGeGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGmmmmmmmmmmmmmmmmemememeemmmmmmmmmmmmmmmemmmmmmmmmmmmmmmmmmmmmmmemmmm mmmm

Garry Dwyer

member s ince 1983

7QSuper Super Scoop August 2011

The investment priority of the QSuper Board of

Trustees is to achieve the long-term targets for

our investment options with the least

amount of investment risk. That’s

why the last few years have

seen us diversify into

infrastructure

assets.

What are infrastructure assets?In simple terms, infrastructure can be defined as the

fundamental facilities and networks serving a community.

Infrastructure assets can include toll roads, ports, and

water distribution networks. The revenue from these assets

comes from the people using these facilities. Alternatively,

infrastructure investments can involve the provision of just

the physical asset, while a third party provides the services.

Due to our size and ability to meet the capital outlay often

necessary when investing in infrastructure, QSuper has

access to investments that in many cases are not available

to individual investors. For example, in 2006 an interest in

established British company Thames Water was acquired on

our behalf by QIC, who are one of our investment managers

(see right for more information).

Why does QSuper invest in infrastructure assets?The recent global financial crisis highlighted the importance

of diversification as a way to reduce the impact of a period of

volatility on investment returns. Infrastructure is particularly

attractive to QSuper because of the steady, long-term nature

of its revenue stream.1

QSuper first started investing in infrastructure in 2006 as

part of a careful strategy to smooth out the volatility in our

multi-asset class Ready Made investment options. Over the

past few years a slow and measured approach has been

taken to build QSuper’s infrastructure portfolio as suitable

investments have become available.

The nuts and bolts of by Brad Holzberger, Chief Investment Officer.

The benefits of investing in infrastructure

BENEFIT 1 :

A reliable, steady income streamas many utilities have a monopoly status and are

regulated by government bodies, and other infrastructure

assets such as privatised airports have natural limitations

on competition. This means customer demand can

be predicted with relative certainty for assets that are

already operating.

BENEFIT 2 :

More predictable cash flowsmeans the capital risk of investing in mature infrastructure

is typically low compared to investments in shares.

BENEFIT 3 :

Creates diversification in an

investment portfolio because there is less sensitivity to the cyclical swings that

can create volatility in sharemarkets. For example, people

continue to use essential services like clean water through

a recession.

BENEFIT 4 :

New infrastructure developmentsmay offer attractive long-term capital growth. In general,

projects can be expected to increase in value as they move

from the planning and construction stage to becoming

fully functional and revenue earning.

8 QSuper Super Scoop August 2011

infrastructureINVESTMENTS

What do we look for in infrastructure investments?The most important factor when making any

investment is whether it is likely to increase the

chances of an investment option achieving its

return objective. When it comes to infrastructure

investments, the key is to invest in the right assets at

the right time for the right price. QSuper’s investment

managers analyse many opportunities, but only a

handful of these assets are ultimately acquired.

There are certain characteristics that are viewed

more favourably. Established assets are generally

less risky than investing in a project from scratch, as

usage and income data is factual and historic rather

than projected. Additionally, investing in an existing

asset that has previously been undermanaged offers

the possibility of higher returns through growth and

improved efficiencies.

As with all investments, it comes down to striking the

right balance and choosing assets that complement

each other and the other asset classes in the portfolio.

To minimise risk and optimise returns, a balanced

approach is taken. For example, it is not ideal to

have too many assets in one industry in a particular

country, as risk exposure would increase if that sector

underwent a demand downturn.

The majority of QSuper’s infrastructure investments

are unlisted equity investments, which means we

have part ownership of an infrastructure company

that is not listed on the stock exchange. This

normally requires a larger capital outlay than listed

infrastructure investments, and we are able to do

this due to our scale as an institutional investor.

This approach is likely to deliver investment

opportunities not available in listed investments

and the ability to directly control assets, both of

which can benefit members.

Where are the future opportunities?

Looking ahead, our investment experts will

continue to source quality infrastructure investment

opportunities. We anticipate that some of these

opportunities may come from overseas, as

international governments with high levels of debt

may decide to privatise infrastructure to release much

needed funds.

As always, we will consider each opportunity on its

own merits and choose only those we believe will

offer the best results for members.

Asset Profile Thames WaterIn 2006 QSuper’s infrastructure manager, QIC, acquired an interest in Thames Water, providing QSuper members with an equity stake in the largest water and wastewater services company in the United Kingdom.

Thames Water provides services to millions of users across London and the Thames Valley, and employs almost 5,000 people. Its revenues are regulated, which provides comparatively stable and predictable cash flows set on a five-yearly cycle. Its asset base continues to grow, and it is this asset base which provides the company with its returns.

With its transparent regulation, predictable cash flows and position as a stable, monopoly business providing essential services, Thames Water is a particularly attractive infrastructure investment. It is one that we expect will continue to provide stable returns for the longer-term benefit of QSuper members.1

1. Past performance is not a reliable indicator of future performance. 9QSuper Super Scoop August 2011

be a permanent measure, any member

will only be able to access this refund

option the fi rst time they exceed the cap.

Co-contribution thresholds remain frozenUnder the superannuation

contribution scheme the Government

matches the after-tax contributions

made by eligible members, up to a

maximum of $1,000 a year. Last year

the Government announced that for

the 2011/2012 financial year the lower

income limit (the amount up to which

you are eligible for the full super

co-contribution) and the upper limit

(the amount at which entitlement to

the co-contribution stops) would be

frozen at the 2010/2011 thresholds of

$31,920 and $61,920 respectively. The

Government has now proposed that

these thresholds remain frozen for the

2012/2013 financial year.

Still committed to super reformMany of the proposals made last year

following reviews of the taxation and

superannuation systems have yet

to be legislated. However after this

year’s Budget was handed down, the

Treasurer reaffi rmed the Government’s

commitment to measures such as the

$500 contribution for low income

earners and, the centerpiece of last year’s

proposed reforms, the gradual increase

of the superannuation guarantee rate

from 9% to 12%.

The Commonwealth Government’s 2011 Budget contained a few superannuation related announcements that may aff ect some members.

Concessional contributions capThe 2011 Budget saw a couple of

proposals in relation to the concessional

contributions cap, which is a cap on

the amount of employer and before

tax (salary sacrifi ce) contributions that

can go into your super. At the moment

the general cap is $25,000 a year, with a

transitional cap of $50,000 for members

aged 50 or over that was due to end on

30 June 2012. The Government has now

proposed that for eligible members aged

50 or over with total account balances

under $500,000, the concessional

contributions cap should be permanently

set at $25,000 higher than the general

cap, eff ective 1 July 2012.

Currently, if your concessional

contributions exceed the cap, these

contributions are taxed at a higher

rate. However, in recognition of the

fact that some people exceed this cap

unintentionally, the Government is

proposing that from the 2011/2012

fi nancial year members will have the

option to have excess contributions up

to $10,000 refunded and taxed at their

marginal tax rate. Although proposed to

The fl ood levy and your super

The Temporary Flood and Cyclone

Reconstruction levy was not released

in the Budget, but it has already been

legislated for eff ect from 1 July 2011,

and will remain in eff ect until 30 June

2012. The levy applies to all taxable

income, including income streams and

lump sum payments, although how

much, if any, levy you pay does depend

on your taxable income. If you are aged

60 or over, any payments from super are

tax free, and so the levy will not apply.

You will also not need to pay the levy

if you were a recipient of the Australian

Government Disaster Relief Payment, or

fall into another exemption category, and

have completed the appropriate form.

You can fi nd more details on these

and other Budget proposals,

including the phasing out of

drawdown relief for pensioners,

in the Annual Report to Members at

qsuper.qld.gov.au/annualreport.

What’s the scoop?

INDUSTRY NEWS

It’s important to remember!Measures announced in the Budget are only proposals, and are dependent on legislation being passed through Parliament. We’ll keep you updated on current and future proposals via our website and in future editions of Super Scoop.10 QSuper Super Scoop August 2011

INV

ES

TM

EN

TS

Report Card 2010/2011

You can read the full report on our investment

options for the year ending 30 June 2011 in

the QSuper Annual Report to Members, which

can be found on our website at

qsuper.qld.gov.au/annualreport.

NOTE:

• Past performance is not a reliable indicator of future performance. Returns may vary considerably over time.

• Each of our options has a different objective, risk profile, and asset allocation. Visit the Investment options page on our website for more detailed information.

• Changes to inflation, fees, asset allocations, option objectives, and risk play a significant part in the return of any investment option.

• On 1 July 2006 alternative investments (such as infrastructure, private equity, managed funds, and commodities) were introduced into the QSuper Balanced (Default), QSuper Moderate and QSuper Aggressive options.

• On 19 August 2010 QSuper renamed six of its nine investment options.

faredfaredsuper

How your

QSuper Annual report to members 1

A N N UA L R E P O R T TO M E M B E R S 2011

QSuper investment options

Management fees for 2010/2011% p.a.

1 year% p.a.

3 year% p.a.

5 year% p.a.

7 year% p.a.

DEFAULT OPTION

QSuper Balanced (Default)

0.66% 7.81% 2.14% 3.24% 6.24%

READY MADE OPTIONS

QSuper Moderate 0.47% 5.87% 3.32% 3.92% 5.44%

QSuper Socially Responsible 0.89% 5.89% 1.45% 2.12% n/a

QSuper Indexed Mix 0.39% 9.19% 3.14% n/a n/a

QSuper Aggressive 0.79% 9.99% -0.32% 1.70% 5.47%

YOUR CHOICE OPTIONS

Cash 0.26% 4.05% 3.90% 4.19% 4.36%

Diversifi ed Bonds 0.40% 5.33% 9.63% 7.35% n/a

International Shares 0.28% 17.18% -1.62% 0.17% n/a

Australian Shares 0.26% 7.09% 0.40% 2.81% n/a

INV

ES

TM

EN

TS

Investment returns

QSuper Super Scoop August 2011 11

INV

ES

TM

EN

TS

It has been an eventful

six months for the world

economy and fi nancial

markets. After encouraging

gains over most of 2010,

global stock markets

(including Australia’s)

advanced more slowly over

the fi rst six months of the

2011 calendar year, with

Australia’s market giving

back some of the gains made

over the previous six months.

As devastating natural disasters struck

parts of Australia, the south island of

New Zealand and the east coast of Japan,

fi nancial market volatility increased and

investors retreated to less risky assets such

as government bonds and cash.

The uncertainty around the likely economic

impact of these disasters subsided

somewhat over the period to mid May

2011. Since then however, investor doubts

have resurfaced as economic data in

advanced economies has been weaker than

expected, and as the ongoing European

sovereign debt crisis further stretches

investors’ patience.

Concerns over the level of debt in the

United States economy have risen over the

past six months as its politicians struggle to

maintain fi nancial obligations to which they

have committed. Meanwhile, the second

installment of the US Federal Reserve’s

quantitative easing (government bond

buying) program, initiated in November

2010, concluded at the end of June 2011.

Since its inception, this program has been

helpful in supporting global share markets.

However global investors are becoming

more cautious about the future due to

the winding down of this program, along

with mounting concerns regarding the

sustainability of the US economic recovery.

Brad Holzberger, Chief Investment Offi cer, shares his opinion on the fi nancial markets and investment performance for the period January to June 2011.

Looking ahead

We expect the global economic recovery to

remain broadly intact in the period ahead.

However as global policymakers withdraw

previously generous stimulus measures,

and as authorities are less able to inject

additional monetary and fi scal support to

off set ailing economic activity and high

unemployment, we advocate a conservative

approach with respect to fi nancial market

risk taking.

Overall, navigating global markets and

the associated economic cycle has been

diffi cult over the past six months. We have

positioned the QSuper portfolio to refl ect

our cautious view of what the future holds.

This is so we can better balance the risks

we see on the horizon with the returns

expected from our investments.

Australia’s economy and fi nancial markets

have not been immune to the increased

uncertainty about global markets. Although

the Reserve Bank of Australia (RBA) has left

interest rates unchanged since the end

of 2010, rising infl ation, weakening house

prices and falling consumer confi dence

levels have off set a buoyant resources

sector, which is still benefi ting from high

commodity prices.

How has this aff ected QSuper’s investment options?

The QSuper Moderate, Diversifi ed Bonds

and Cash investment options achieved

stronger returns over the past six months,

consistent with the retreat to less risky

assets by global investors during this time.

However the returns for those QSuper

options with greater exposure to equities

– QSuper Balanced (Default), QSuper

Indexed Mix, QSuper Aggressive, QSuper

Socially Responsible, Australian Shares and

International Shares – have generally been

more modest. Despite the challenges of

the past six months, strong returns were

recorded across all nine QSuper investment

options for the 2010/2011 year.

QSuper regularly undertakes member market research to ensure we are off ering the products and services you need.

QSuper has established relationships with professional

research fi rms, and formal agreements require these fi rms to

comply with the strict privacy standards set by QSuper and

state and national privacy legislation. The personal data

supplied to researchers is generally limited to your name and

contact details, and the results QSuper receives never identify you.

Your participation in any research is voluntary. If you have

any questions about any QSuper research, would like a

copy of our privacy policy, or if you would prefer not

to be contacted by our market researchers, call our

Contact Centre on 1300 360 750.

InvestmentUpdate

ket

al

rms to

r and

ta

me and

identify you.

u have

e a

t

It’s your call

About Brad Holzberger

As QSuper’s Chief Investment Officer,

Brad’s role is to oversee and implement

the investment policy of the Fund.

Before his appointment at QSuper in

February 2009, Brad spent 15 years at QIC

as an executive in asset management.

Brad is a Senior Fellow of the Financial

Services Institute of Australasia (FINSIA),

and is also a member of The Association

of Superannuation Funds of Australia

(ASFA) Investment Policy Committee.