MLC Business Superannuation How to Guide MLC MasterKey Business Super Preparation date: 1 April 2009 Issued by: The Trustee, MLC Nominees Pty Limited (MLC) ABN 93 002 814 959, AFSL 230702 The Universal Super Scheme ABN 44 928 361 101 Insurance is issued by: MLC Limited (The Insurer) ABN 90 000 000 402, AFSL 230694 on behalf of MLC. The purpose of this document is to give you enough information to manage your account. If you want more information please contact us on 132 652. References to mlc.com.au in the online copy link directly to the additional information available. The information in this guide may change from time to time. Contents What is covered in this guide Adding to your super – the rules 1 This section outlines the basics of who can contribute to your super. Adding to your super 3 – the mechanics This section outlines how you go about making contributions to your super and what we do with them. Transferring your super to MLC 6 It makes sense to put your super in one place, so you can keep track of how your retirement nest egg is growing. Transition to retirement pensions 7 8 It’s important to know when you can access your money. Accessing your money 9 – the mechanics This section outlines how you can access your money. 11 Ultimately you will want to know just how much your super is worth in dollar terms. This section gives you an understanding of how your account value is calculated. Changing investment 12 options (switching) Just as you change over time, so too will your investment needs. We outline how you can change your investment options and what happens when you do. Fees & costs How to take a pension if you haven’t retired. Accessing your money – the rules How your account is valued All our fees are outlined in the Member Guide. This section advises how you can receive fee refunds on your investments. Tax – the rules MLC MasterKey Business Super Insurance 23 Information you need to know on applying for insurance, changing insurance and making a claim. You can stay with MLC even if you leave your employer 26 When we are advised you have left your employer or they stop making contributions, the balance of your account will be transferred to MLC MasterKey Personal Super. 14 Appointing someone 27 to act on your behalf 16 You may need to let someone else transact on your account so it’s important to know how you can arrange this. This section provides a broad outline of how your super investment is taxed. Additional information28 you need to know Tax – the mechanics This section outlines how 18 This section provides a broad outline of some of the tax issues for you to consider. Nominating a beneficiary 21 This section outlines how and what you need to do to take control of who your super money is paid to if you die. • we keep you informed • we resolve complaints • you keep your personal information up-to-date • we deal with transfers to an eligible rollover fund. Adding to your super – the rules Who can contribute to your super account? Check your eligibility Most commonly, contributions can be made by you, your spouse or your employer to your super account. The type of contribution, and whether it can be accepted, will depend on your age and work status. You may also be able to grow your super faster with strategies that include: The table below is a quick guide to help you decide whether you or others can contribute to your super account. Please note that you can transfer other super money from most other funds to your account at any time. • government co-contributions based on your personal contributions and subject to income, or • salary sacrifice contributions by arranging with your employer to salary sacrifice some of your pre-tax salary. Your financial adviser will be able to help you decide what contribution strategies are suitable for you. Some useful definitions Mandated employer contributions are those required to be paid under the Superannuation Guarantee laws, a certified award or a registered workplace agreement. Voluntary employer contributions include salary sacrifice contributions. The rules around contributions may change, so you will need to speak to your financial adviser. If you are aged between 65 and 75 all contributions, except mandated employer contributions, can only be made provided you have been gainfully employed on at least a part-time basis. Alternatively you can visit apra.gov.au, ato.gov.au or call us. This means having worked for at least 40 hours over a 30 day period in the financial year in which the contribution is made. Eligibility to contribute Employer contributions Mandated Voluntary Contributions from you Contributions from your spouse Under 65 65 but less than 70 70 but less than 75 ✗ 75 and over ✗ ✗ ✗ Your age Page 01 MLC MasterKey Business Super How to Guide Splitting contributions with your spouse You may be able to split particular types of contributions with your spouse by requesting us to pay these contributions into your spouse’s super account. To do this you and your spouse need to complete a Contributions splitting application form. You can obtain this form and an Instruction Guide on mlc.com.au or by calling us. As there are some limitations and tax implications, we recommend you speak with your financial adviser or go to ato.gov.au Are you over 65 and less than 75 years of age? We need an Eligibility declaration! Once you reach 65, we are required by law to confirm that you are eligible to make or receive contributions (and the type of contributions that can be made to your super) each year. If we do not have a completed Eligibility declaration we are required, by law, to reject any contributions and we will have to return the money to the source of the payment. To do this, we’ll send you an Eligibility declaration a month before you turn 65. When we receive your completed declaration we’ll update your records and send you a confirmation letter. From age 75, only mandated employer contributions (those required by an award or registered workplace agreement) can be made for you. Then, at the start of each financial year, we’ll send you another Eligibility declaration for that year. Further information on contributions can be found in the Tax Section under the heading ‘Contribution types and limits for tax purposes’. If we receive a contribution and haven’t got your Eligibility declaration, we’ll send you one to complete. You’ll need to send this back to us within 30 days so that we can allocate the contribution to your super account. MLC MasterKey Business Super How to Guide Page 02 Adding to your super – the mechanics How you can make contributions Once you have started your account, one-off and regular contributions can be made. Your employer can make Superannuation Guarantee (SG) contributions and any other required contribution types into your account. Method All contributions will be shown on your Annual Statement. You can also view your most recent transactions and contributions by viewing your account via mlc.com.au There are conditions applicable to making contributions; for further information please see ‘Adding money to your super – the rules’. All forms are available on mlc.com.au or by contacting us. All forms and/or written requests can be faxed or mailed to us. For all telephone requests, we will need to verify your identity before processing your request. Who and What How Bpay ® Paying contributions from a bank or similar account You, your employer or your spouse for one-off or regular contributions. 1.Contact your financial institution by either calling them or use internet banking. You do not need to complete any forms if you are using Bpay®. 2.You will need to use the following information. Bpay ® Biller Code 919688 Bpay ® Customer Reference Number (CRN) To obtain the customer reference number, you will need to call us so we can provide the Bpay® CRN to you. You will need to add a number to the end of the Bpay® CRN to identify the type of contribution being made. This information is provided below. Type of contribution Employer compulsory Employer voluntary Salary sacrifice Personal Spouse Additional number 1 2 3 4 5 Direct Debit Paying contributions from a bank or similar account You, your employer or your spouse for one-off and regular contributions. 1.Check your financial institution account can accept direct debits. 2.Complete and sign a Direct debit request schedule. 3.Send the schedule to us. You will need to ensure you have sufficient cleared funds available in your financial institution account on the due date of each direct debit. Changes to direct debits You can change your financial institution account details by completing a new Direct debit request schedule available from mlc.com.au or by contacting us. You can suspend or cancel direct debit contributions or change the amount of your contributions by mailing or faxing a written request to us. ® Registered to Bpay Pty Ltd ABN 69 079 137 518 Page 03 MLC MasterKey Business Super How to Guide Method Who and What How Changes to direct debits cont’d Banks may take up to seven days and building societies and credit unions may take up to 21 days to process any changes made to direct debit facilities. We may cancel regular direct debit drawings if three consecutive drawings are dishonoured by your financial institution. We will contact you if this happens and ask you what course of action you wish to take. Credit Card You, your employer or your spouse can make one-off contributions from your MasterCard or Visa card. 1.Complete and sign a Credit card authority or the Additional superannuation contribution form. 2.Send the form to us. We will contact you if we receive a dishonour and ask you what course of action you wish to take. We will send you a letter confirming the contribution. Cheque You, your 1.Attach a cheque payable to ‘MLC Nominees Pty Limited’ crossed ‘Not Negotiable’. employer or your 2.Ensure all relevant information, including your account number accompanies the cheque spouse for one-off so we can process your contribution without delay. This includes the type of contribution contributions being made (eg personal, employer, spouse etc). 3.If it is a ‘personal’ cheque ensure you have sufficient cleared funds in your financial institution account to enable us to bank the cheque. We will send you a letter confirming the contribution. How you can make sure your contributions go smoothly In some cases, where you are making personal contributions you may need to provide us with additional information or forms at or before the time the contribution is made. When you make a contribution please ensure you have identified the correct type of contribution for your payment. These include cases where you: All contributions are required to be identified as either: • Employer compulsory. • Employer voluntary. • Salary sacrifice. • Personal. • Spouse. • want to have capital gains tax (CGT) exempt contributions arising from the sale of a qualifying small business asset counted towards your CGT contribution limit • are eligible to make contributions that are exempt from the contribution limits under the personal injury rules If the contribution type is not provided when it is paid, we will contact you or your financial adviser. If we are unable to get the information we need, then the processing of the contribution may be delayed or not accepted. Please check your Annual Statement to ensure all contributions made to your account have been correctly classified. Contributions classified incorrectly may be taxed incorrectly. • arrange a transfer of an amount from a foreign superannuation fund and elect that the amount on which you would otherwise have to pay tax, be taxed in the fund. MLC MasterKey Business Super How to Guide Page 04 Adding to your super – the mechanics How we process your contributions What happens if we are unable to process your contributions? Contributions received before we close off processing on a business day (generally 3pm Sydney time) will usually be processed using the effective unit price for that day; which is calculated as at the end of the day. Contributions received after we close off processing will usually be treated as having been received on the next business day. There are many reasons why we may not be able to process a contribution. It could be due to insufficient information or some outstanding requirements haven’t been met. All contributions will be invested in line with your last nominated investment strategy unless you advise us otherwise. Until this is done, we hold the money in trust for up to 30 days. After this, monies will be returned by cheque to the source of the payment. If this is the case, we’ll try our best to contact you, or your financial adviser to find out any extra information we require. The only exception to this is a credit card payment as this is refunded to the relevant card. Please note you won’t earn interest on these monies while held in trust. Once we have the complete information we will process the contribution as usual with that day’s effective unit price. Page 05 MLC MasterKey Business Super How to Guide When a contribution is dishonoured While MLC does not currently charge a fee for dishonoured contributions, please be aware your financial institution may. Transferring your super to MLC Transferring your super is easy with MLC Keeping your super in one place makes sense because you’ll reduce your paperwork and it will be easier to keep track of your investments. You also may save on fees. All you need to do is complete and sign a Request to transfer superannuation benefits form available from mlc.com.au or by calling us. You can then either: What happens next? • send the form to us and we’ll arrange to have your super balance transferred to MLC, or If you want to invest your money differently, you will need to let us know before your funds are transferred. • send the form directly to your other super fund and it will then arrange for your super balance to be transferred to MLC. Once we have received your money from the other fund, we will write to you confirming the amount and details. We will invest your money according to the instructions you have given us for your existing balance or your regular contributions (if applicable). Before you make a decision on transferring your super make sure you: compare benefit and investment options check any differences in the insurance you may have work out any differences in fees you may be charged. MLC MasterKey Business Super How to Guide Page 06 Transition to retirement pensions Taking a pension if you haven’t retired If you have reached your preservation age (at least age 55) you may want to consider starting a transition to retirement pension. This means you can retain your super account and access some of your super money at the same time. We recommend you talk to your financial adviser, go to ato.gov.au or contact us to see if this strategy is suitable for you. You may want to leave some money in your MLC MasterKey Business Super or MLC MasterKey Personal Super account to: • make additional contributions to your super, • pay your insurance premiums. Page 07 MLC MasterKey Business Super How to Guide If you start a transition to retirement pension with MLC you may receive the MasterKey Fee Refund on your pension account (if applicable). More information on this rebate is provided in ‘Fees and costs’ on page 14. Accessing your money – the rules Because super is a long term investment, there are strict rules around how and when you can access your money (including any lump sum insurance payment). You will only have access to your super when you have: • reached age 65 • reached your ‘preservation age’ (at least 55 years old) and are permanently retired • reached your ‘preservation age’ and are starting a transition to retirement pension • been granted access due to financial hardship • been granted access on compassionate grounds, approved by APRA The restrictions on access to your super are usually referred to as the ‘preservation rules’. You can find out more by visiting apra.gov.au, ato.gov.au or speaking to your financial adviser. You can transfer your super account balance at any time to another eligible super fund. If you request a partial withdrawal, you need to make sure that there are sufficient funds in your account to pay any insurance premiums (if applicable) and/or fees. • a permanent disability (as set out in law) • a terminal medical condition (as set out in law) • temporary residency (holding a specified class of visa) and are leaving Australia permanently • terminated employment after age 60 • terminated employment at any age with restricted non-preserved benefits in the account and your employer has contributed to your account. MLC MasterKey Business Super How to Guide Page 08 Accessing your money – the mechanics How to make a withdrawal or super transfer You can choose where your money is paid You can take a lump sum withdrawal or transfer all or part of your super (assuming you are eligible) by: Lump sum withdrawals can be paid: Transfers can be made: to another MLC account: to another MLC account: • MLC MasterKey Investment Service, • MLC MasterKey Pension & MLC MasterKey Pension Fundamentals (prior to starting your pension), or • completing a Withdrawal/Rollover form available at mlc.com.au or by contacting us. • visiting mlc.com.au and logging into your account. Unless the payment is a transfer, your money will be paid to the financial institution account you have provided us previously in writing. Any change to your nominated financial institution account must be received by us prior to your withdrawal request. • writing to us including your name, address, account number, withdrawal amount, the investment option(s) you wish to withdraw from (for partial withdrawals and roll overs), and the financial institution account you want it paid to (if different to the account on our records). You will also need to sign this letter. • MLC MasterKey Investment Service Fundamentals or, • MLC MasterKey Cash Management Trust. • MLC MasterKey Super & MLC MasterKey Super Fundamentals. directly to your nominated financial institution account: to your nominated rollover institution: • the account can be in your name or a joint account where you are an account holder, or a financial institution account of a third party nominated by you. by cheque: • payable to you. It will be forwarded to the address recorded on our system unless you notify us otherwise in writing. All forms and written requests can be mailed to us. We may need to verify your identity before we can process your request. Page 09 MLC MasterKey Business Super How to Guide • will be paid by cheque to the rollover institution nominated by you. How we calculate withdrawals and transfers Your withdrawal or transfer amount is calculated by multiplying the number of units to be withdrawn by the unit price. If you request a specific dollar amount, the number of units withdrawn will be determined using the unit price. For all partial transfers and withdrawals, we will sell the units from your investment options either on a pro-rata basis in accordance with your current investment strategy or as indicated by you at the time of your request. There may be deductions from or additions to withdrawal proceeds to allow for fees, costs and taxes. What happens if we are unable to process your request? How we process your request All complete requests received before we close off processing on a business day (generally 3pm Sydney time) will usually be processed using the effective unit price for that day, which is calculated as at the end of the day. Requests received after this time will usually be treated as having been received on the next business day. We reserve the right to refuse or vary the terms for processing a request in certain circumstances, such as when: • there are significant falls in investment markets • we have difficulty in completing transactions due to low liquidity which could occur with investment options that use higher risk strategies such as gearing. Sometimes there will be reasons why we can not process your request. It could be because we don’t have enough information or some outstanding requirements haven’t been met. If this is the case we will try our best to contact you, or your financial adviser, to find out any extra information we require. Once we have received the outstanding information, we will process your request as usual, with that day’s effective unit price. We will send you a letter confirming the transaction. In these circumstances we will advise you as soon as possible of any change. MLC MasterKey Business Super How to Guide Page 10 How your account is valued When money is paid into your account, units are allocated to your account and when money is paid out, units are deducted from your account. The value of your account is based on: • the number of units in your chosen investment option(s), and • the price of those units. The overall value of your account will change according to the unit price and the number of units you hold. We calculate the unit price as at the end of each business day and use robust unit pricing policies to do this. The unit price will reflect the performance of the underlying assets, income earned, fees, expenses and taxes paid and payable. The performance of the underlying assets is influenced by movements in investment markets such as local and overseas share markets, bond and property markets. Page 11 MLC MasterKey Business Super How to Guide If you would like to find out more about our unit pricing philosophy, go to mlc.com.au Changing investment options (switching) Not ready to select your investments? If you haven’t selected an investment strategy, all contributions will be invested in MLC MasterKey Horizon 5 – the growth portfolio. This portfolio is a complete diversified portfolio designed to grow your wealth over the long-term. It will, however, experience some periods of high volatility in its returns. Investments that make sense How to change investment options online With MLC, you can choose a complete portfolio solution to implement your investment plans. Changing existing investment options (switching) And, if you want to customise your portfolio further, we also offer a range of specialist funds. Whatever your investment plans, we have a solution to suit. Information on each investment option is provided in our Investment Menu. To select an investment strategy, other than MLC MasterKey Horizon 5, you can complete the New enrolment details form, or you can request this online or by telephoning us. Changing investment options (switching) Login to mlc.com.au and click on Transact my portfolio then select Change the current balance (switch). You can then select the investment options and the percentage of your account you would like invested in each. Changing your investment strategy for future contributions – Login to mlc.com.au and click on Transact my portfolio then select Change to investment of future contributions. You can then select the investment options and the percentage of your contribution you would like invested in each. As your needs change over time, you can also change your investment options. You can make changes at any time. Type of change What you need to do Changes to your existing investment options. Complete a Switch and change of investment strategy form. How your future contributions are invested (includes the sequence for deducting fees and crediting fee refunds on your account). •Send us a signed letter including your full name, account number and your instructions •Telephone us •Login online. All forms and written requests can be faxed or mailed to us. For all telephone requests, we will need to verify your identity before processing your request. MLC MasterKey Business Super How to Guide Page 12 Changing investment options (switching) How we process changes to your investment options If you request a change to your investment options, units will be redeemed from your current investment option(s) and allocated in the new investment options using the applicable unit prices. All completed requests received before we close off processing on a business day (generally 3pm Sydney time) will usually be processed using the effective unit prices for that day; which are calculated as at the end of the day. Requests received after this time will usually be treated as having been received on the next business day. What happens if we are unable to process a change of investment options request? Sometimes there will be reasons why we may not process your request. It could be due to insufficient information or some outstanding requirements haven’t been met. If this is the case, we’ll try our best to contact you, or your financial adviser to find out any extra information we require. Once we’ve received the outstanding information, we will process your request as usual with that day’s effective unit price. When any changes are processed, you’ll receive a letter of confirmation. We reserve the right to refuse or vary the terms for processing a request in certain circumstances, such as when • there are significant falls in investment markets • we have difficulty in completing transactions due to low liquidity which could occur with investment options that use higher risk strategies such as gearing. In these circumstances we will advise you as soon as possible Page 13 MLC MasterKey Business Super How to Guide Frequent changes to investment options You should not invest in this product if you intend to switch your investment options frequently in the pursuit of short-term gains. We monitor all investment options for abnormal transaction activity because this sort of activity can have adverse impacts for other investors. To maintain equity the Trustee has the right to deal with members who frequently switch by: • delaying, limiting or rejecting their future switch requests • cancelling membership and transferring their account balance to the Australian Eligible Rollover Fund. Fees and costs The current fees are provided in the Member Guide and the Investment Menu which are available on mlc.com.au/pds/mkbs If we make changes to fees we will generally write to you at least 30 days prior to any change. You can also find out more information about fee changes on mlc.com.au, in our Annual Report, or call us. MasterKey Fee Refund Changing linking details If you have other accounts with MLC you may also be eligible for the MasterKey Fee Refund. This is a refund of the Administration fee. If you are eligible, the refund will automatically be applied to the relevant accounts. You or another eligible investor can change, add or remove accounts at any time by writing or telephoning us. For all telephone requests, we will need to verify your identity before processing your request. Your MLC MasterKey Business Super account or MLC MasterKey Personal Super account is counted towards the calculation of the refund, but the refund is only applied to other MLC MasterKey accounts that you have. If you nominate a new investor for linking purposes, this will override any previously established linking arrangement. For more information on the rebates available on your MLC MasterKey Business Super or MLC MasterKey Personal Super account, you should refer to the Member Guide. Linking with another eligible investor You can also link with another eligible MLC investor and use your combined MLC MasterKey account balances to receive a refund. An eligible investor includes your spouse, defacto spouse, parent, child, sibling, a business or trust. You can only link with one other MLC MasterKey account investor. You can do this by completing a Member linking, beneficiary and authorised representative nominations form available on mlc.com.au or by contacting us. This form can be faxed or mailed to us. When any changes are processed you’ll receive a letter of confirmation. Fee rebates for small super account balances Government regulations limit the amount of fees that can be deducted from your account if, at any time, the value of your account is less than $1,000 and it includes or has included Superannuation Guarantee or award contributions made by your employer. If this applies to you, we will refund your account so the total fees deducted directly from your account during the year do not exceed the investment earnings on your account. The refund is calculated around 30 June each year and paid directly into your account by purchasing additional units. We may cancel the link if you or a nominated investor no longer satisfies the criteria for account linking. MLC MasterKey Business Super How to Guide Page 14 Fees and costs Which MLC MasterKey products are eligible for the fee refund? The following table confirms which MLC MasterKey products will be included in your fee refund calculation, and whether a fee refund is paid for each of these products. Included in MLC MasterKey portfolio Eligible for MLC MasterKey fee refund MLC MasterKey Cash Management Trust ✗ MLC MasterKey Unit Trust * MLC MasterKey Investment Service * MLC MasterKey Investment Service Fundamentals * MLC MasterKey Super MLC MasterKey Super Fundamentals MLC MasterKey products MLC MasterKey Superannuation MLC MasterKey Allocated Pension MLC MasterKey Term Allocated Pension MLC MasterKey Pension MLC MasterKey Pension Fundamentals MLC MasterKey Investment Bond MLC MasterKey Annuity ✗ MLC MasterKey Rollover MLC MasterKey Business Super ✗ (Large plan rebate may apply) MLC MasterKey Personal Super ✗ (Large account rebate may apply) * Except the MLC Cash Fund For more information on the fee refund, please refer to the PDS for the relevant products. Page 15 MLC MasterKey Business Super How to Guide Tax – the rules Contribution types and limits for tax purposes This section is not a comprehensive and complete tax guide. As the taxation treatment of superannuation is complex, we recommend that you contact your financial adviser, tax adviser or the Australian Tax Office (ATO) at ato.gov.au for further details and expert advice in relation to your own personal circumstances. There is no limit on the actual amount that can be contributed to your super account while you are eligible to make contributions. However, there is a point where it is not tax-effective. Your eligibility to contribute or have contributions made for you is outlined in the section ‘Adding money to your super – the rules’. For tax purposes, contributions to super are generally assessed against one of two limits: • The Concessional contribution limit – the main contributions counted against this limit are those made by your employer (including salary sacrifice) or if you are eligible and choose to claim a deduction, your personal deductible contributions • The Non-concessional contribution limit – generally the amounts counted to this limit include personal contributions where you don’t claim a tax deduction and contributions made by your spouse directly to your super account. Because additional tax may be paid if the contribution limits are exceeded, you might need to take into consideration other less common types of contributions and the limits which apply. The following table outlines some of these contribution types and the limit against which they may count. Contribution type These include Relevant limit Small business CGT exempt asset sale proceeds Amounts that relate to the disposal of certain small business assets which qualify for CGT concessions. These may count toward: •The Concessional or Non-concessional limit depending upon whether a deduction is claimed, or •A CGT contribution limit if an election notice is sent before or with the contribution (provided it has not been used up previously). Personal injury payments Certain amounts that you receive from a structured settlement payment, a court order for a personal injury payment or a workers compensation payment (taken as a lump sum). These will be excluded from the contribution limits provided a valid election notice is sent before or with the contribution. Directed termination payments Certain lump sum termination payments made by your employer to you, that you are able to contribute to your super, or to start your pension (if eligible). The taxable parts of these amounts above a threshold of $1 million count towards the Concessional contribution limit. Transfers from an overseas pension or retirement scheme Super or pension monies that you have in overseas funds that you want to transfer to your Australian super or pension accounts. In general, most of the amount transferred will count to the Non-concessional contribution limit. If you elect that part of the transfer is taxable in your account this amount does not count to either limit. Government co-contributions Payments made by the Government to your super account based on your personal contributions and your income. Not applicable. MLC MasterKey Business Super How to Guide Page 16 Tax – the rules If a single contribution, other than an employer contribution, rollover or transfer, from an eligible fund, exceeds the Non-concessional limit we are generally required by the law to reject it. The Concessional, Non-concessional and CGT contribution limits are set out below. Age on last day of the financial year Concessional contributions annual limit 2008/2009 Less than 50 $50,000 50 and over $100,000 applies to 30 June 2012. From 1 July 2012, the limit will be the same as for those aged less than 50. Age on first day of the financial year Non-concessional contributions limit 2008/2009 Less than 65 $150,000 annually or $450,000 over a 3 year period Between 65 and 74 $150,000 annually 75 and over Non-concessional contributions cannot be made. CGT contribution limit Lifetime indexed limit Up to age 75 $1.045 million. Except for the Concessional contribution limit for those aged 50 or over, the limits may be increased from time to time. Once you have started using the three-year Non-concessional contribution limit, it is not increased for that three year period. Tax on your super – a quick summary We have broadly outlined the tax treatment of super below. Tax treatment in your account Contributions Investment earnings Taxed at a rate Most Concessional contributions – taxed of up to 15%. at a rate of 15%. Non-concessional contributions – not taxed. Additional tax may be payable if you exceed the contribution limits, see page 18. Page 17 MLC MasterKey Business Super How to Guide Tax treatment on payments to you Lump sum withdrawals Tax-free component: Nil Taxable component •If under age 55, tax is paid at 21.5% (including Medicare Levy at 1.5%). •If aged between 55–59, tax-free on first $145,000 (this is a lifetime limit which may be increased periodically), then tax is paid on remainder at 16.5% (including Medicare Levy at 1.5%). From age 60, tax-free. Tax – the mechanics While you can contribute as much as you like, you pay additional tax when you exceed the contributions limits. Additional tax you will pay How to pay the additional tax If you exceed the contribution limits, additional tax applies to the excess amount at the following rates: The ATO will let you know: • excess Concessional contributions 31.5% • when you have exceeded the limits • the amount of additional tax to be paid • the due date for payment. • excess Non-concessional contributions 46.5% It is your responsibility to pay the tax by the due date. In addition, all contributions that exceed the Concessional contribution limit are also counted as Non-concessional contributions. So if you exceed both limits you will have to pay both lots of additional tax. Any excess Non-concessional contributions tax must be withdrawn from your super account. While not compulsory, you may choose to withdraw any excess Concessional contributions tax amount. We recommend that you speak to your financial adviser if you are close to the limits. Alternatively you can visit ato.gov.au or call us. The ATO will explain your options and will provide the relevant forms including a Release Authority which you can submit to us to withdraw the additional tax amount. MLC MasterKey Business Super How to Guide Page 18 Tax – the mechanics Claiming a tax deduction on your super contributions What we do when we receive your notice You may be eligible to claim a tax deduction in your personal income tax return for personal super contributions you make to your account in a financial year. Once we receive and accept either of the above notices, we will send you a Tax Deduction Acknowledgment Advice for your tax records. Working out whether you can claim a tax deduction If we are unable to accept your declaration we will send you a notice advising why and any information we may need in order to accept it. Generally, if you earn less than 10% of your total income from employment as an employee you can claim a deduction for your personal contributions but there may be other criteria. You should speak to your financial adviser or tax adviser to work out your eligibility. Information can also be obtained from ato.gov.au How do you tell us you are claiming a tax deduction? If you intend to claim a tax deduction, you will need to notify us in one of the following ways: • Complete, sign and return the Notice of intent to claim a tax deduction declaration that we send to you around August each year if personal contributions and no employer contributions have been received for your super account. This form will include a statement of the personal contributions received in your super account for the previous financial year. • Complete and sign a Notice of intent to claim a tax deduction form available on mlc.com.au or by contacting us. In some cases, the law prevents us from accepting a notice. For example, if you have used your account balance containing the personal contributions to start a pension or if you have made a withdrawal. You cannot claim a deduction if you have not received a formal Tax deduction acknowledgement form from us. Tax on contributions you are claiming as a deduction Any personal contributions you claim as a tax deduction will have 15% contributions tax deducted by us which we are required to send to the ATO. This will be deducted from your account once we acknowledge acceptance of your Notice of intent to claim a tax deduction. If you do not intend, or are ineligible to claim a tax deduction then you do not need to do anything. If we don’t hear from you, we will assume you will not be claiming a tax deduction for personal contributions in that financial year. Page 19 MLC MasterKey Business Super How to Guide Due to certain restrictions under the law, you should take extra care to check your eligibility for a deduction especially before submitting your tax return, transferring or withdrawing all, or even part of your super, or before starting a pension. You must return your completed notice to us before the earlier of the: • date you lodge your tax return for the financial year in which the contributions were made, or • end of the financial year immediately following the year in which the contributions were made. Reducing the amount you have told us you are claiming Tax may be payable on transfers from an overseas pension If you wish to reduce the amount of a previous tax deduction claim, you will need to complete and return the Notice of intent to claim a tax deduction form. Australian law defines This must be done before the earlier of the: Your overseas scheme will determine whether your pension account can be transferred. • date that you lodge your tax return in relation to the year the contributions were made, or • end of the financial year immediately following the year in which the contributions were made. In some cases, you may reduce the amount you claimed outside this time frame if the ATO has disallowed your claim for a deduction. However, as with claiming a deduction, the law prevents us from accepting a variation in certain circumstances. This is a complex area, so we recommend you talk to your financial and tax advisers before taking any action. • your eligibility to make these transfers • the timing of these transfers, and • how tax is charged. Tax on withdrawals made by temporary residents Certain temporary residents can access their super benefit upon leaving Australia. If applicable, the benefit can generally only be paid as a single lump sum from which we must deduct tax. In some circumstances if you do not claim your benefit, we are required to pay it directly to the ATO. Further information can be found at ato.gov.au Tax on payments made to your beneficiaries Tax may be charged on amounts paid to your beneficiaries on your death. The tax payable will depend on the type of payment being made (lump sum or pension), timing and the dependency status of your beneficiaries. Tax File Number (TFN) Notification If you are under age 60 and haven’t provided a valid Tax File Number, we are required to deduct tax at the top marginal tax rate (plus Medicare levy) from any payments made to you from your account. In addition, if you do not provide us with your TFN the law requires us to reject certain contributions. The main exception relates to employer contributions which are subject to additional tax at 31.5% if you have not provided your TFN. MLC MasterKey Business Super How to Guide Page 20 Nominating a beneficiary Your account balance and any applicable insurance payment is paid to your beneficiaries or your estate in the event of your death. • change the portions of your account to be paid to beneficiaries. • someone in an interdependency relationship with you. This is a close personal relationship between two people who live together, where one or both of them provide for the financial and domestic support and personal care of the other. This type of relationship may still exist if there is a close personal relationship but the other requirements are not satisfied because of some physical, intellectual or psychiatric disability. Who can you nominate? Types of nominations Under superannuation law, you can nominate the following: A non-lapsing nomination which is binding on the Trustee However the law restricts who can be a beneficiary. Once you have opened your account you can: • nominate beneficiaries • change, cancel or remove existing beneficiaries • change the type of nomination • your spouse, de-facto spouse and same-sex partners • children including step and adopted children • individuals who are financially dependent on you at the time of your death • your legal personal representative (either the executor under your will or a person(s) granted letters of administration for your estate if you die without having left a valid will) Ensures your account balance is paid as you have directed as long as the nomination is and remains valid. A nomination subject to Trustee discretion The Trustee will decide who receives your account balance and will consider your preferred beneficiaries. No nomination The Trustee will decide who receives your account balance. Please note that contrary Court orders may override your nomination. Page 21 MLC MasterKey Business Super How to Guide How to make or change a nomination What we do when we are notified of your death You can nominate or change existing beneficiaries at any time by completing a Member linking, beneficiary and authorised representative nominations form available on mlc.com.au or by contacting us. Your revised form must be mailed to us. Your super account balance will be switched into the MLC Cash Fund on the date we receive notification of your death. If your nomination is unclear or incomplete, we will write to you requesting the information or documentation required to process your request. Once we have processed your request, we’ll send a confirmation letter. Details of your nomination(s) are also confirmed each year in the Annual Statement we send to you. You can also view your nomination(s) online at any time by accessing your account via mlc.com.au If you have made a nomination binding on the Trustee, which is still valid, the account balance will be paid to your beneficiaries as you have directed. Where you have made a nomination subject to Trustee discretion or if you haven’t nominated a beneficiary or if your nomination is no longer valid, the Trustee uses a formal process to make a decision. The process involves the identification of any potential beneficiaries and communication with them. The Trustee then gives careful consideration to what it believes is an appropriate distribution of the account balance, paying particular regard to your recorded preferences. Anti-detriment payments An additional payment may be made to broadly compensate for contributions tax charged on certain contributions made to your account. This is known as an ‘anti-detriment’ payment and only applies where your account balance is paid as a lump sum directly to your spouse or child. For information on estate planning and in particular, the tax implications, we recommend you speak to your financial or legal adviser. MLC MasterKey Business Super How to Guide Page 22 MLC MasterKey Business Super Insurance Your insurance options You can select from the following types of insurance with MLC MasterKey Business Super: Death A lump sum is paid if you die or are diagnosed with a terminal illness. Death and Total and Permanent Disablement (TPD) A lump sum is paid if you die, are diagnosed with a terminal illness, or become totally and permanently disabled. Income Protection A monthly amount is paid for total or partial disability. Your employer may have arranged to have insurance with another insurance provider. In some cases, the premiums for this insurance may be paid from your MLC MasterKey Business Super account. For information on any external insurance you have, you will need to contact your Plan adviser or your employer. Changing your insurance If you want to apply for additional insurance or increase your existing insurance, you will need to complete a Request for Insurance form including, any additional medical forms that may be required. These forms are available from your Plan adviser or mlc.com.au We will review your request and contact you if you need to supply medical evidence. What you must tell us It is important that you disclose every matter that you know, or could reasonably be expected to know, that could be relevant to MLC’s decision to accept your application. You must also let us know if any of the information you provide changes prior to your application being accepted (for example you become ill or have an accident) or if your existing insurance is extended, varied or reinstated. If you don’t, your insurance may not be valid. Assessing an application for insurance Notifying MLC of a change in your personal details MLC will assess your application and, based on the information you provide, decide on what terms the insurance can be offered to you. If your personal details change, such as a change in your occupation, you need to notify MLC within 130 days. If you don’t notify us within this time: We will let you know if medical information or a medical examination is required and will pay for the medical information requested during the assessment process, unless you are advised otherwise. • any future claim may be declined, or In some cases, you may: • not be eligible for the insurance you have requested • be offered the insurance at a higher premium or with an exclusion, or • be declined on the basis of medical evidence provided. If you don’t supply evidence of health when we request it, it may affect your ability to increase insurance at a later date. Page 23 MLC MasterKey Business Super How to Guide • where you later request to increase your insurance, you will also need to supply medical and/ or financial information. Premiums for additional insurance If you have an Accident and you die or become Totally and Permanently Disabled while your application is being assessed, you or your loved ones will be paid a lump sum. If you have an Accident and become disabled while your application is being assessed, you’ll be paid the lesser of either (a) the monthly benefit requested, (b) the monthly benefit we would allow under our normal assessment guidelines or (c) $15,000 per month, for a maximum of two years. You can only receive one benefit (for one accident) under this insurance. A copy of the Interim Accident Certificate is available on mlc.com.au The premium is based on your individual circumstances including factors such as: • Your age. Premiums generally increase with age. • Your occupation. MLC or your financial adviser can provide you with more information. • Medical history (including smoking status). • Lifestyle and leisure activities. The greater the risk of the activities you undertake, the higher the premium. • Any financial arrangement your employer has made with your Plan adviser. If you have MLC’s basic insurance and you apply for additional insurance you will be assessed based on the employer provided insurance eligibility criteria. You should refer to the Insurance Guide on mlc.com.au to determine eligibility. Any request for additional insurance to MLC’s basic insurance will be assessed on your individual factors and will increase your premium accordingly. Making a claim To make a claim, you or your representative can call or write to MLC and we will send the necessary forms and instructions for completion. Any claim should be lodged as soon as possible. If a claim is lodged more than 12 months after the date of your injury, illness or death, MLC may not be able to pay your claim. What happens when you make a claim? MLC will assess your claim. If your claim is approved, payments will be made in line with instructions provided. If you make a claim under Income Protection, a monthly payment is made in arrears after the waiting period and completion of assessment. The payment will continue while you remain disabled until the earlier of: • you return to work • the end of the payment period, or • you or reach age 65. Insurance for family members Members of your family who join your employers’ Plan may also apply for insurance if they are Employed. If you are on claim and you have superannuation contributions insurance, when you cease employment with your employer, your superannuation contribution payments cease. MLC MasterKey Business Super How to Guide Page 24 MLC MasterKey Business Super Insurance Replacing your existing MLC MasterKey Business Super insurance Whenever you change insurance providers, you need to make sure you compare the different products. This way you can make sure that you have the right amount of insurance for your individual needs. And most importantly, only cancel your existing insurance once your new insurance has been confirmed. How you cancel your insurance Keeping your insurance with MLC You can cancel or decrease your insurance at any time. Your insurance will cease on the date your request is received. If you cease employment with your employer and choose another super provider, you may be able to continue the same level of insurance with another MLC insurance product, subject to certain conditions being met. Reinstating your insurance If you cancel or decrease your insurance and later change your mind, MLC will consider whether to reinstate your insurance. Information on when MLC may cancel your insurance is available from the Insurance Guide on mlc.com.au You can request a continuation option within 60 days from the date that we receive notification from your employer that you have left employment. You will need to complete and send the relevant forms to MLC along with the first premium. You can contact your financial adviser or the MLC Service Centre to obtain the relevant forms. What happens when you want to start a pension? You can only have insurance while you are still accumulating retirement savings in an MLC MasterKey Business Super or MLC MasterKey Personal Super account. If you start a pension and wish to continue your insurance, you will need to keep some money in your super account in order to pay the premiums for your insurance. Alternatively, you may be able to transfer your insurance to another MLC insurance product. Page 25 MLC MasterKey Business Super How to Guide You can stay with MLC even if you leave your employer Maintaining your investments When we are advised you have left your employer or they stop making contributions, the balance of your account will be transferred to MLC MasterKey Personal Super. Once the transfer is complete, we’ll confirm all the details in writing. This account has similar features and services as your Plan. The information on this page relates to members who have been transferred to MLC MasterKey Personal Super. Fees, costs and rebates The fees, costs and rebates will vary from those you pay with MLC MasterKey Business Super. The fees applicable are outlined in the Member Guide. The exact fees and costs for MLC MasterKey Personal Super will be confirmed in writing at the time of the transfer. Maintaining your financial adviser Your Plan adviser is available to continue to assist you with your financial planning needs. They will continue to receive remuneration from your account unless you advise us otherwise. If you have your own financial adviser they will continue to be attached to your account and receive the Adviser Service fee as you had agreed with them. When you transfer you can continue to have the same investment options, unless you request otherwise. You can also elect to switch your investment options at any point in time. Transferring your insurance Your MLC Death or Death and Total and Permanent Disablement insurance will continue however, the insurance premium rates will change and the definitions and conditions may also change if your circumstances have changed. While any Income Protection insurance you have will cease 60 days from the date you left employment, you may be able to continue this insurance to another MLC solution. We will include this in the confirmation we send you when you transfer. More information on how to continue this insurance with a continuation option is available on page 25. If you have insurance through another provider, premiums will cease to be paid from your account. You will need to ask them whether your insurance can continue since you have left your employer and if so, about alternative payment arrangements. More information on insurance is available from the Insurance Guide. MLC MasterKey Business Super How to Guide Page 26 Appointing someone to act on your behalf Power of Attorney You may appoint another party to act on your behalf in relation to your account. Details of the other parties you can appoint and the authority they have are detailed below. Authorised Representative You may appoint an authorised representative, replace or cancel an existing authorised representative at any time. Only one authorised representative can be nominated on your account at any one time. An authorised representative is authorised to: • access information on your account • change investment options (switching) • change your personal details except for bank account details • contribute to your account on your behalf. Appointing or changing an authorised representative To appoint a new, or change an existing, authorised representative just complete an Updating your account details form or Member linking, beneficiary and authorised representative nominations form. All forms are available on mlc.com.au or by contacting us and can be faxed or mailed to us. Cancelling an authorised representative To cancel an authorised representative you will need to write to us. Once we have processed your request, we’ll send a confirmation letter. Page 27 MLC MasterKey Business Super How to Guide You can appoint an Attorney to act on your behalf by giving us: • A certified copy of the original Power of Attorney document. Certification that the copy is a true and complete copy of the original must appear on each page and may be made by the person effecting the Power of Attorney or by a solicitor or any of the people shown in Certification of personal documents, and • A declaration signed by the Attorney stating that the document has not been cancelled. If we receive a Power of Attorney document established outside of NSW or Australia, we also require a written declaration by a qualified legal practitioner (in the state or country that the document was created) certifying that the document was made in accordance with the requirements of the law of the state or country in which it was made. An Attorney’s authority is determined by you. You can continue to manage your account even if you have appointed an Attorney. You (or your Attorney) should inform us of any changes or of the cancellation of a Power of Attorney. You can cancel your Attorney’s authority to act on your behalf in relation to your account at any time by writing to us. If you want more information please contact us or seek professional advice. Additional information you need to know Accessing your account information You can choose how you want to access your account information. Speak to a real person on 132 652 Call us between 8am and 6pm (Sydney time), Monday to Friday with any questions or to obtain information about your account. mlc.com.au View your account information, make switching and requests and change your contact details in one secure location. You will need your customer number and a password. Setting up is easy! To obtain your logon details, call the MLC Service Centre on 132 652, where an MLC Customer Service Representative will guide you through your first login. InfoDial 133 661 This automated telephone service tells you your account balance, unit prices and details of recent transactions on your account. Available from 8am to 9pm (Sydney time), Monday to Sunday. To register, just call the MLC Service Centre on 132 652. Keeping you informed We provide the following information so you can stay up to date about your investments and any opportunities that may arise. Your communications Welcome kit Contains a welcome letter, confirmation of details, the PDS and helpful links to mlc.com.au How to Guide Provides instructions on how to transact on your account and other important information about how your account operates. Available on mlc.com.au/howto/mkbs KeyPoint Quarterly email giving market updates, product enhancements and educational information. Annual Statement Provides a summary of all your transactions and investment details for the financial year. Annual Report Provides an overview of the market and industry activity which may affect your investment, including product changes and Trustee updates. MLC’s Notice of intent to claim a tax deduction Shows amounts of personal contributions made to your super account during the financial year and requests information if you intend to claim a tax deduction on your personal contributions. mlc.com.au Provides information to help build your knowledge on superannuation, retirement and investing. You can also access your account balance and recent transactions. Product, investment option and insurance changes Changes will be made from time to time. Changes that are not materially adverse will be made available on mlc.com.au or you can obtain a paper copy of the changes on request free of charge. Trust deed Governs the relationship between you and MLC and governs the way in which the Trustee can deal with your investment. A copy of this document is available upon request free of charge. MLC MasterKey Business Super How to Guide Page 28 Additional information you need to know Other useful information Resolving complaints You can find more information on mlc.com.au including: We can usually resolve complaints over the phone. If we can’t, or you’re not satisfied with the outcome, then you will need to write to us. • Unit prices • How we manage your money • Investment option performance and asset allocation • Investment market information • Education, tools and calculators • Finding your lost super • Forms and brochures To help us identify your letter quickly, please mark your envelope ‘Notice of complaint’ and send to: The Manager MLC Complaint Resolutions PO Box 1086 North Sydney NSW 2059 We will confirm we’ve received your complaint in writing within two business days. We will work to resolve your complaint as soon as possible, even though the law allows us up to 90 days to respond. If we are unable to resolve the complaint within this time, or if you are not satisfied with the outcome, we encourage you to seek assistance from the Superannuation Complaints Tribunal. This is an independent body and can be contacted by telephoning 1300 780 808 or by emailing [email protected] More information is available at sct.gov.au Changing your personal information You can update your personal details on your account at any time in the following ways: Type of change Who can do it What you need to do Contact details You Your financial adviser Your employer •Email us (via your account at mlc.com.au) •Telephone us • Complete and sign a Updating your account detail form or Change of personal details form •Send us a signed letter including your account number and contact details to be changed. Personal details You Your employer •Complete and sign an Updating your account details form or Change of personal details form, or •Send us a letter including your account number and the personal details to be changed and including your previous and new signatures (if applicable). To confirm your personal details change we also require a certified copy of any of the following documents. Please note we do not accept faxed copies of certified documents. Change of Name: Marriage Certificate, Divorce Decree, Deed Poll. Correction of Date of Birth: Passport, Birth Certificate, Drivers Licence, Deed Poll, Divorce Decree. Further information on the certification of documents is provided on page 30. Tax File Number (TFN) You Your financial adviser Your employer •Email us via your account at mlc.com.au •Telephone us •Complete and sign an Updating your account details form or Change of personal details form, or •Send us a signed letter including your account number and TFN information. Page 29 MLC MasterKey Business Super How to Guide Certification of Personal Documents A person approved to certify identification documents must provide the following information on each photocopy: • An Australian consular officer or an Australian diplomatic officer (within the meaning of the Consular Fees Act 1955) The Eligible Rollover Fund we currently use is the Australian Eligible Rollover Fund and it can be contacted on 1800 677 424. • ‘This is a true copy of the original document(s) which I have sighted’; • An employee of a financial institution with two or more years of continuous service with Financial Institutions (for the purposes of the Statutory Declaration Regulations 1993) (eg bank manager, bank officer) We will advise you in writing at your last known address if we intend to transfer your account balance and will proceed if you don’t respond with instructions regarding an alternative super fund. • A finance company officer with two or more continuous years of service with one or more finance companies (for the purposes of the Statutory Declaration Regulations 1993) Please note, a transfer to an ERF may be detrimental to you as the ERF may have a different fee structure, different investment strategies and may not offer insurance benefits. • Write their -- full name -- contact address and telephone number -- date of certification -- signature • The capacity in which they have certified the document (eg judge, magistrate, police officer etc) • Affix the official stamp or seal of the certifier’s organisation. Who can certify a document? The following people are authorised to certify a document: • A practicing lawyer • A Justice of the Peace • An officer with, or authorised representative of, a holder of an Australian financial services licence, having two or more continuous years of service with one or more licensees (eg financial planner, adviser, broker) • A member of the Institute of Chartered Accountants in Australia, CPA Australia or the National Institute of Accountants with 2 or more years of continuous membership. • A magistrate Transfers to an Eligible Rollover Fund • A Chief Executive Officer of a Commonwealth Court We may transfer your account balance to an Eligible Rollover Fund (ERF) if: • A registrar or deputy registrar of a court • you have not made a contribution within a 12 month period and your balance falls below a minimum amount of $500 or $200 if you have insurance, • A judge of the court • A notary public (for the purposes of the Statutory Declaration Regulations 1993) • A police officer • An employee of Australia Post with two or more years of continuous service to customers • we lose contact with you and cannot locate you, or What happens if the plan doesn’t proceed? Your employer can decide, within 14 days of starting the Plan, not to proceed. If you have made personal contributions or rolled over other super money in this time, you can choose where to direct your account balance. If you don’t make a choice, we’ll transfer your money to an eligible rollover fund. Your account balance will be adjusted for any: • increase or decrease in the unit price • tax payable, and • administration or transaction costs incurred in establishing or closing your account. • your investment switching activity is deemed to be contrary to the interests of other members. MLC MasterKey Business Super How to Guide Page 30 MLC MasterKey Business Super How to contact MLC For more information call MLC from anywhere in Australia on 132 652 or +612 9964 7180 outside Australia. Website: mlc.com.au Fax: (02) 9964 3334 Postal address: PO Box 1315 North Sydney NSW 2059 Registered Office: Ground Floor, MLC Building 105 – 153 Miller Street North Sydney NSW 2060 69902M0209
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