prs003 prime super annual report v6 finalart · web primesuper.com.au important information about...

Annual Report for the year ended 30 June 2015

Issued by the Trustee:Prime Super Pty Ltd ABN 81 067 241 016; AFSL No. 219723; RSE Licence No: L0000277Prime Super ABN 60 562 335 823; RN 1000276

WE’RE AN

SUPER INDUSTRY

FUND

2 Prime Super Annual Report 2015 Prime Super Annual Report 2015 3

Important information about this report ..............................................................................................2

Message from the Chairman & CEO ....................................................................................................4

The future’s looking bright for the new Prime Super ..........................................................................6

Investment performance ......................................................................................................................10

Investment strategy ..............................................................................................................................14

Our investment options ........................................................................................................................16

Reserving policies .................................................................................................................................18

Investments of the Fund .......................................................................................................................20

Abridged Financial Statements ...........................................................................................................24

Important information about your membership with Prime Super .................................................26

Your Trustee Board ................................................................................................................................28

Remuneration ........................................................................................................................................32

Part of your community ........................................................................................................................34

Your Regional Managers ......................................................................................................................40

Your Financial Planners .........................................................................................................................42

This report is a summary. The rules governing Prime

Super are contained in a Trust Deed and the relevant

law. A copy of the Trust Deed can be made available

on request. In the event of a dispute, the Trust Deed

and relevant law will prevail over this report.

Information in this report was up-to-date at the time

of preparation. However, information can change from

time-to-time.

You can obtain additional information or a copy

of our current Product Disclosure Statement (PDS)

online at primesuper.com.au or by contacting us

on 1800 675 839.

How to contact us

The Trustee will assist you with any questions you

may have about the Fund and your membership.

Information available includes, but is not limited to,

annual reports, documents such as the Trust Deed,

audited fi nancial statements, auditor’s reports,

investment policy information, information on enquiries

and complaints procedures, insurance policies and the

risk management plan. This information is available on

the website or you may request it in hard copy.

You can request information and answers to any questions

by contacting us by mail, phone, fax or email.

Post Prime SuperLocked Bag 5103Parramatta NSW 2124

Phone Freecall 1800 675 839 (8am-8pm Sydney time Monday – Friday)

Fax Freefax 1800 023 662

Email [email protected]

Web primesuper.com.au

Important information about this report Contents


Welcome to the 2015 Annual Report for

Prime Super. You may notice that Prime

Super has a new look. Following on from

last year’s successful merger with Health

Industry Plan (HIP), we’ve taken stock

and had a think about what we want for

Prime Super in the future. We’re excited

to announce that we’re embarking on a

long-term transformation – from a provider

of superannuation products – to eventually

offering a range of fi nancial services.

This is great news for you and our new

identity represents the beginning of that

journey. You’ll see our new brand across

all of our communications, including our

website, from now on.

Merger – one year on

We have worked hard this past year to consolidate

the gains from the merger with HIP and we continue to

make inroads into the health, aged care and related

industries. We have a number of exciting new relationships

with some large health and aged care providers and

look forward to building on these relationships in

the future.

Positive returns for fund members

We are pleased to report that our MySuper product –

our default investment option – has posted a strong

return of 10.84% for the fi nancial year. This is an excellent

result and places us in the top 10% of Australian

super funds.

Our Property investment option also performed

exceptionally well posting an annual return of 23.74%.

The Board

In recognition of our ongoing commitment to the

health and aged care industries, after our merger

with Health Industry Plan, we’ve welcomed two new

board members this year. Martin Day was appointed

on 28 October 2014, and Jacqueline Kelly was

appointed on 24 February 2015.

Martin is the CEO of St Vincent’s Private Hospitals,

the fourth largest private hospital group in Australia.

He was previously CEO of St Vincent’s Private Hospital

Melbourne and has held leadership roles in the health

services industry for over 20 years including senior

positions with Mayne Health in Victoria, Western

Australia and Tasmania.

Jacqueline is the CEO of Lutheran Community Care

(LCC), which provides accommodation, aged care,

youth, disability, mental health, and chaplaincy services

to 2,000 Queenslanders annually. Jacqueline has more

than 20 years’ experience across the public, private

and not-for-profi t sectors including senior roles at

PricewaterhouseCoopers, Queensland Treasury and

Lend Lease Advisor Services.

Thank you

Lastly, on behalf of the Prime Super team we would

like to thank our employers for their ongoing support.

We look forward to continuing to be of service to you

in the future.

Alan Bowman Lachlan Baird

Chairman Chief Executive Offi cer

Message from the Chairman & CEO


In a competitive market like superannuation

it’s important to have the right approach

not only to keep existing members but to

attract new ones. With this in mind we’ve

been working on a new brand strategy that

will position us well for future growth.

After months of examining how we look, how we

engage with members, and also how we talk to each

other, we’re thrilled to announce the launch of our

new brand. The new look and feel incorporates key

elements of the Fund’s past with a view to a bright

and successful future.

We’re the same Prime Super – the fund members

know and trust – with a new straightforward approach

to super and investing.

We are a truly independent profi t-to-members super

fund which continues to offer personal service and

an uncomplicated approach to investing.

We understand that super and investing can be

bamboozling but by removing the complexity, we

aim to make it less daunting for members.

We are committed to helping members make the

most of their money by providing straightforward

super and retirement solutions to empower them

to grow, manage and protect their wealth and

retirement income.

The future’s looking bright for the new Prime Super

Our promise to you

From now on, when we say we’re ‘surprisingly straightforward’ we mean it.

We know this won’t be easy, especially in such a highly regulated industry, but we’re committed.

From the way we write documents, to the way we talk to members, even down to the way we talk amongst ourselves, being straightforward will be at the heart of everything we do.


Investment performance

The year in review

Overall, the global economy continued to slowly strengthen over the last year, despite some economic and share market volatility. Overall share markets delivered positive performance over the 2014-15 fi nancial year, although performance was weaker than in prior years.

Our Australian economy continues to face a

number of economic headwinds: below-trend

growth, higher unemployment and low infl ation.

These factors coupled with China’s economic

slowdown, and a sharp deterioration in our terms

of trade and national income led the Reserve Bank

of Australia (RBA) to reduce interest rates on two

occasions to a new record low of 2%.

One silver lining is that low interest rates have

stimulated signifi cant construction activity, with

building approvals much higher than they have

been in recent years. However, there is also concern

that low interest rates are fuelling a property market

bubble, particularly in some Australian capital cities.

In Europe structural economic headwinds remain

and an unresolved economic crisis in Greece is a

continued risk to the region. One key event saw

the European Central Bank announce in January

2015 that it would commence a €60 billion a month

bond buying programme. This announcement was

intended to aid the Eurozone economy, as well as

prevent the area from slipping into defl ation. Most

share markets reacted favourably to this program,

which provided a boost to European consumer and

business confi dence and also resulted in a weaker

Euro. Despite this, uncertainty remains as the

Greek crisis remains unresolved.

Elsewhere, growth in the US and UK was strong

while growth in Asia continues to occur at a

reasonable pace. However China has experienced

weaker than expected growth resulting in lower

interest rates and bank lending reforms.

In the US, economic indicators continue to point to

a gradual recovery, although GDP growth to date has

been below market expectations. The US unemployment

rate continued to improve and the markets remain

focussed on when the US Federal Reserve can be

expected to announce its fi rst interest rate increase

since 2008. The US dollar also strengthened against

other major currencies during the year in anticipation

of the increase.

Economic data from China continues to point to a

slowdown. Chinese policymakers have a diffi cult

balancing act of supporting economic activity while

controlling debt growth. China’s central bank has

reduced interest rates and taken other steps to free

up money for banks to lend. The government also

continues to take steps towards opening up the

Chinese fi nancial system. In November 2014, it

launched Shanghai-Hong Kong Stock Connect, an

equity shares link which makes it easier for foreign

investors to purchase mainland China shares, which

were previously restricted to domestic investors or

subject to a quota system. Chinese share markets

benefi tted through most of the fi nancial year from

a retail-investor led rally, although both local

exchanges gave back part of their gains by the

end of the fi nancial year.

Investment performance

The tables on the pages to follow show the historical

rates of return for each investment option for the

super fund and income stream for the fi ve years to

30 June 2015. All returns are net of investment-related

costs such as fees charged by investment managers,

investment expenses incurred by the Fund, and any

applicable tax. Please note that no income tax is

levied on an income stream account.

SUPER FUND : Crediting rates

SUPER FUND : Historical performance

1 The compound average effective rate of net earnings of the investment option for the period of 10 years ending 30 June 2015. Where the option has been in operation for less than 10 years, the date of inception is shown. 2 The compound average effective rate of net earnings of the investmentoption for the period of 5 years ending 30 June 2015. 3 The compound average effective rate of net earnings of the investment option for the period of 3 years ending 30 June 2015.

INVESTMENT OPTION 2015 2014 2013 2012 2011

Pre-mixed options

MySuper 10.84% 12.65% 15.40% 0.77% 10.30%

Managed growth 14.02% 13.76% 18.26% -0.42% 10.49%

Conservative 8.70% 7.31% 8.28% 3.73% 7.04%

Alternatives 20.58% 12.56% 15.10% 0.77% 10.51%

Sector options

Australian shares 6.88% 15.75% 21.93% -4.22% 11.45%

International shares 17.39% 18.19% 25.23% -0.63% 10.64%

Property 23.74% 1.69% 12.31% 8.01% 6.10%

Fixed interest 4.22% 5.96% 3.35% 10.04% 4.87%

Cash 2.47% 2.72% 3.27% 3.38% 4.14%

INVESTMENT OPTION INCEPTION DATE

10 YEAR RETURN OR

SINCE INCEPTION 1

5 YEAR RETURN 2

3 YEAR RETURN 3

1 YEAR RETURN

Pre-mixed options

MySuper 5.44% 9.88% 12.95% 10.84%

Managed growth 4.45% 11.04% 15.33% 14.02%

Conservative 3.51% 7.00% 8.10% 8.70%

Alternatives 1 July 2007 2.00% 11.71% 16.03% 20.58%

Sector options

Australian shares 1 January 2006 5.53% 10.00% 14.69% 6.88%

International shares 1 January 2006 4.79% 13.82% 20.22% 17.39%

Property 1 January 2006 5.40% 10.13% 12.22% 23.74%

Fixed interest 1 January 2006 5.06% 5.66% 4.50% 4.22%

Cash 1 January 2006 3.82% 3.20% 2.82% 2.47%


Please note that past performance should not

be taken as an indication of future performance.

The returns stated for each investment option in

the super fund and income stream are those

achieved by the particular option over the year

and are not necessarily the return a member will

receive. A member’s actual rate of return will

depend on the timing of any transactions, any

deductions, any switches made during the period,

and the actual mix of investment options that makes

up the member’s account. Your actual rate of return

is shown on your Member Benefi t Statement.

Crediting rates

Each month (generally around the 12th business day)

the Trustee calculates a ‘crediting rate’ for each

investment option. The crediting rate can be positive

or negative depending on the performance of the

investment option. It is usually calculated within two

weeks of the end of the month and is posted on the

Prime Super website.

For members who remain with the Fund for the full fi nancial year

Investment earnings are calculated on members’

account balances on a monthly basis after deductions

for insurance premiums (if applicable) and all applicable

taxes, fees and charges. Super fund members have

returns allocated to their account at 30 June each year

while income stream members have returns allocated

to their account on a monthly basis. The total investment

gains or losses added to a member’s account equals

the compound effect of monthly crediting rates less

all applicable taxes, fees and charges.

For members who leave the Fund during the fi nancial year

If a member leaves the Fund during the year, the

member’s account balance will be credited (or debited)

with the monthly crediting rates up to the end of the

month of the last declared monthly crediting rate.

For the period from this date to the date of withdrawal,

the Trustee applies an interim crediting rate which

refl ects the relevant market at that time.

If you need more information about how earnings are

applied to your account, please contact Prime Super

on 1800 675 839.

INCOME STREAM : Crediting rates

INCOME STREAM : Historical performance

Investment performance (cont’d) How investment earnings are allocated to members’ accounts

1 The compound average effective rate of net earnings of the investment option for the period of 10 years ending 30 June 2015. Where the option has been in operation for less than 10 years, the date of inception is shown. 2 The compound average effective rate of net earnings of the investmentoption for the period of 5 years ending 30 June 2015. 3 The compound average effective rate of net earnings of the investment option for the period of 3 years ending 30 June 2015.

INVESTMENT OPTION 2015 2014 2013 2012 2011

Pre-mixed options

Balanced 12.66% 14.70% 18.05% 0.85% 11.70%

Managed growth 16.41% 16.00% 21.44% -0.50% 12.26%

Conservative 10.23% 8.50% 9.74% 4.32% 8.18%

Alternatives 24.13% 14.66% 17.74% 0.87% 12.10%

Sector options

Australian shares 7.92% 18.32% 25.77% -4.67% 12.47%

International shares 19.85% 20.64% 28.93% -0.79% 12.28%

Property 27.46% 2.05% 14.22% 8.93% 6.79%

Fixed interest 4.97% 6.92% 3.95% 11.55% 5.58%

Cash 2.92% 3.09% 3.86% 3.99% 4.89%

INVESTMENT OPTION INCEPTION DATE

10 YEAR RETURN

OR SINCE INCEPTION1

5 YEAR RETURN2

3 YEAR RETURN3

1 YEAR RETURN

Pre-mixed options

Balanced 1 July 2006 4.82% 11.43% 15.11% 12.66%

Managed growth 1 July 2006 3.62% 12.87% 17.93% 16.41%

Conservative 1 July 2006 3.66% 8.18% 9.49% 10.23%

Alternatives 1 July 2007 2.33% 13.64% 18.78% 24.13%

Sector options

Australian shares 1 July 2006 5.73% 11.48% 17.11% 7.92%

International shares 1 July 2006 5.55% 15.74% 23.07% 19.85%

Property 1 July 2006 5.52% 11.56% 14.11% 27.46%

Fixed interest 1 July 2006 6.11% 6.56% 5.27% 4.97%

Cash 1 July 2006 4.49% 3.75% 3.29% 2.92%


Prime Super’s investment strategy

is to grow the real value of member

contributions to provide retirement

income to members. We do this by

building a diversifi ed portfolio of

growth and defensive assets that

balances investment returns and risks.

Our investment choice options comprise a

balance between growth investments (such as

shares, infrastructure and property) and defensive

investments (such as cash and fi xed interest).

Determining an appropriate investment mix for

each option involves taking into consideration

our investment objectives, sustainability of the

investment strategy, the liquidity position, equity

among members, business risk and the likely

medium-term investment environment.

As responsible investment managers we review

the future prospects of investment markets on an

annual and ongoing basis. As a result of reduced

medium-term expectation, the Fund has revised

the investment risk and return objectives for all

investment choice options, as well as increasing

the minimum suggested time horizons.

Full details on how each investment option is

managed are contained in the Prime Super

Investment Strategy. This document is available

to members on request by calling 1800 675 839.

Derivatives

The Trustee may directly buy or sell derivative

instruments and permits investment managers

to use them. However, derivative investments

may not be used by the Trustee or investment

managers for speculative purposes.

The use of derivatives is monitored and a

derivatives risk management statement has

been prepared by the Trustee that limits use

of derivatives to reducing costs, risk and

arbitrage, and for other defensive purposes.

Investment strategy

At a glance – Storrun Wind Farm

In December 2014, Prime Super acquired a

majority interest in the 30MW Storrun wind farm

in Jämtland, Sweden. Storrun is an onshore

wind farm with a fi ve year operating history

and great long-term investment potential.

Why we chose to invest:

We entered into a fi xed price; 10 year Power

Purchase Agreement for all power produced

by the wind farm, regardless of merchant power

prices which means we are paid a set amount

regardless of what happens to energy prices

in Sweden.

Sweden has an attractive renewables regime,

whereby renewable generators are entitled to

15 years of electricity certifi cates for every

MWh of electricity produced.

The wind farm is expected to receive

additional revenue support by optimising

cross-border subsidies.


All members have access to a range of

investment options. You can choose any

combination of these options, and can

direct future contributions into the same

options or a different combination of

options. To increase effi ciency and decrease

transaction costs across all investment

options, the cash fl ow for all options is

managed through the MySuper

investment option.

Our investment options

INVESTMENT OPTION RISK

MySuper (accumulation)Balanced (income stream)

Medium - High

Conservative Low - Medium

Managed growth High

Alternatives High

Australian shares Very high

International shares Very high

Property High

Fixed interest Medium

Cash Very low

OVERVIEW INVESTMENT OBJECTIVE TIME HORIZON

For members who seek moderate to high returns over the medium to long-term and are prepared to accept some fl uctuation in returns over the short-term. This option invests in a diversifi ed range of investments.

To outperform (after tax and investment expenses) CPI by at least 3% p.a. over the long-term. To limit the likelihood of a negative return to less than four in 20 years.

Seven or more years

For members who value security over returns. This option invests primarily in defensive assets with the aim of protecting the value of a member's net investment.

To outperform (after tax and investment expenses) CPI by at least 1.5% p.a. over the medium-term. To limit the likelihood of a negative return to less than two in 20 years.

Five or more years

For members who seek moderate to high returns over the medium to long-term and are prepared to accept some fl uctuation in returns over the short-term.

To outperform (after tax and investment expenses) CPI by at least 4% p.a. over the long-term. To limit the likelihood of a negative return to less than fi ve in 20 years.

10 or more years

For members who seek strong returns over the long-termand are prepared to accept a higher level of risk to achievethis. This option invests primarily in unlisted assets and as such investment performance is not expected to closely follow listed share markets.


10 or more years

For members who seek strong returns over the long-termand are prepared to accept a higher level of risk to achievethis. This option invests in Australian listed companies and returns are expected to vary signifi cantly year to year.

To moderately outperform (before tax and investment expenses) the ASX 300 Accumulation Index. To limit the likelihood of a negative return to approximately seven in 20 years.

10 or more years

For members who seek strong returns over the long-termand are prepared to accept a higher level of risk to achievethis. This option invests in international listed companies and returns, which are subject to foreign exchange risks, are expected to vary signifi cantly year to year.

To moderately outperform (before tax and investment expenses) the weighted average of MSCI World (ex-Australia) Index (in A$) and MSCI Emerging Markets Index (in A$) (before hedging). To limit the likelihood of a negative return to approximately seven in 20 years.

10 or more years

For members who have a preference for seeking moderate to high returns through investing in property. Investment is via listed and unlisted property vehicles.


10 or more years

For members who seek moderate returns for a low level of risk. This option invests in domestic and international fi xed interest securities. Losses however are still likely to occur over some periods.

To moderately outperform (before tax and investment expenses) the weighted average of major Australian and international bond indices and global fl oating rate credit (targeting outperformance above the Bloomberg AusBond Bank Bill Index). To limit the likelihood of a negative return to less than three in 20 years.

Three to fi ve years

For members who place the security of their assets over returns. This option invests solely in short-term, low risk money market securities and is expected to produce returns that are moderately higher than infl ation.

To perform in line (before tax and investment expenses) with the Bloomberg AusBond Bank Bill Index. To limit the likelihood of a negative return to approximately 0.4 in 20 years.

Any time period


The Trustee operates three reserves:

the Administration Reserve, the Investment

Reserve and the Operational Risk Reserve

(ORR), which are all invested in the

MySuper investment option.

Reserving policies

YEAR ENDED

ADMINISTRATION RESERVE

% OF FUM

INVESTMENT RESERVE

% OF FUM

OPERATIONAL RISK RESERVE

% OF FUM

2015 $12,845,000 0.44% $19,425,000 0.67% $6,952,000 0.24%

2014 $6,071,000 0.24% $2,073,000 0.08% $6,383,000 0.25%

2013 $3,818,000 0.25% $2,834,000 0.19% - -

Administration Reserve

All member fees are paid into the Administration

Reserve and are used to pay costs. As the Trustee

operates the Fund on a not-for-profi t basis, any

surplus after payment of current costs is applied to

the benefi t of members at the Trustee’s discretion.

Investment Reserve

Investment returns earned by the Fund for all

investment options are held in an Investment Reserve

between the time they are received by the Fund, and

the time they are credited to members. Any returns,

positive or negative, achieved on the Investment

Reserve are considered investment earnings of the

Fund and will also be distributed to members.

Due to occasional unexpected investment

distributions, or estimated tax liabilities and rounding

of investment returns to whole cents, it is not practical

to distribute the entire Investment Reserve. The balance

of any carry-forward investment reserve is likely to be

between zero and around 0.5% of the Fund’s assets

which is available for distribution to members in

subsequent years.

Operational Risk Reserve

The Operational Risk Reserve (ORR) is legislatively

required to specifi cally cover potential losses arising

from operational risks that may affect the Fund’s

business operations. It is set at a target amount of

0.25% of the total value of the Fund (as at 30 June

each year).

The ORR has been fully funded. However the Trustee

has the discretion to top up the ORR in the future with

a deduction from members’ accounts if required.

The balance of the Administration Reserve, Investment

Reserve and Operational Risk Reserve accounts are:


The investments of the Fund at 30 June

2015 are as follows. Investments that make

up more than 5% or more of the value of

the Fund are indicated with an asterisk (*).

Investments of the Fund

Waiting for fi gures on 2015

Waiting for fi gures on 2015

ASSET CLASS / FUND MANAGER

2015 2014

Market Value

$'000

% of Total

Fund

Market Value

$'000

% of Total

Fund

INTERNATIONAL FIXED INTEREST

BlackRock Global Bond Index Fund 38,631 1.33% - -

BlackRock Global Diversifi ed Bond Fund 8,142 0.28% 44,371 1.75%

Total 46,773 1.61% 44,371 1.75%

INFRASTRUCTURE

Angel Trains 60,741 2.09% 17,585 0.69%

Emerging Markets Infrastructure Fund 4,068 0.14% 4,454 0.18%

Gasvalpo 23,564 0.81% 28,776 1.13%

Igasamex 15,733 0.54% 9,851 0.39%

Igasamex Two 28,876 1.00% 18,079 0.71%

International Parking Group 13,555 0.47% 12,441 0.49%

Investec Global Aircraft Fund 5,468 0.19% 5,884 0.23%

Peninsula Link 30,949 1.07% 32,114 1.26%

Peninsula Link Two 18,463 0.64% 19,157 0.75%

Rowville Transmission Facility 12,495 0.43% 13,083 0.51%

Southern Water Cap Ltd 32,281 1.11% 26,984 1.06%

Storrun Vindfraft Onshore Wind 20,110 0.69% - -

Total 266,303 9.18% 188,408 7.40%

PROPERTY

50 Miller Street Trust 36,157 1.25% 32,000 1.26%

ALP Trust No 2 21,202 0.73% 20,664 0.81%

AVELS II Trust 39,358 1.36% 29,392 1.16%

AVELS III Trust 19,576 0.67% 15,959 0.63%

Blackstone Real Estate Partners VI 11,750 0.41% 16,691 0.66%

Gresham Property Fund No 3 1,068 0.04% 1,273 0.05%

ICA Property Development Fund No 3 - - 2 0.00%

JANA Unlisted Property Trust - - 51,729 2.04%

Lend Lease Communities Fund No 1 1,425 0.05% 3,128 0.12%

Macquarie Real Estate Equity Fund No 7 1,053 0.04% 3,027 0.12%

Royale Investment Trust 36,997 1.28% 35,192 1.39%

Tata Realty Initiatives Fund No 1 - - 2,161 0.09%

Total 168,586 5.81% 211,218 8.33%


2015 2014

Market Value

$'000

% of Total

Fund

Market Value

$'000

% of Total

Fund

AUSTRALIAN SHARES

Bennelong Australian Equities 84,730 2.92% 78,784 3.10%

Colonial First State Australian Equities 110,408 3.80% 103,795 4.09%

Macquarie Australian Equities * 226,158 7.80% 213,512 8.40%

Macquarie True Index Australian Equities 8 0.00% 29 0.00%

Vinva Australian Equities * 224,372 7.74% 211,307 8.30%

Total 645,676 22.26% 607,427 23.89%

INTERNATIONAL SHARES

AQR Global Enhanced Equity Fund * 211,940 7.31% 164,713 6.48%

MFS Global Equity Trust 87,860 3.03% 70,046 2.76%

PanAgora Dynamic Global Equity Fund * 207,305 7.15% 164,833 6.49%

Realindex Global Share Fund 85,241 2.94% 70,593 2.78%

Other 3 0.00% 3 0.00%

Total 592,349 20.42% 470,188 18.51%

EMERGING MARKETS

BlackRock Indexed Emerging Markets IMI Equity Fund 106,551 3.67% 91,072 3.58%

Wellington Emerging Markets Equity Portfolio 42,826 1.48% 37,471 1.47%

Total 149,377 5.15% 128,543 5.05%

CASH

CFS Wholesale Cash Fund 94,015 3.24% 91,352 3.60%

CFS Wholesale Premium Cash Fund * 332,031 11.45% 285,290 11.23%

Total 426,046 14.69% 376,642 14.83%

AUSTRALIAN FIXED INTEREST

AMP Capital Wholesale Australian Bond Fund 12,347 0.43% - -

Vanguard Australian Fixed Interest Index Fund * 273,662 9.44% 270,951 10.66%

Total 286,009 9.87% 270,951 10.66%


The following investment managers were appointed in 2014-15:

AMP Wholesale Australian Bond Fund

BlackRock Global Diversifi ed Bond Fund

Storrun Vindkraft Onshore Wind Farm

Alpha Trains Junior Term Notes

Sydney Airport Debt.

The following investment managers were terminated in 2014-15:

Bennelong Long Short Equity Fund

BlackRock FIGA 50/50

GMO Multi Strategy Fund

ICA Property Development Fund 3

JANA Unlisted Property Trust

Tata Realty Initiatives Fund 1

Macquarie True Index Australian Equity Fund.

Prime Super appoints specialist

investment managers for each asset

class and continuously reviews these

appointments.

Investments of the Fund (cont’d)


2015 2014

Market Value

$'000

% of Total

Fund

Market Value

$'000

% of Total

Fund

CREDIT OPPORTUNITIES

Arqiva Junior Medium Term Notes 34,554 1.19% 32,429 1.28%

IFM Super Loans Trust 754 0.03% 986 0.04%

Infrastructure Credit 139,148 4.80% 60,088 2.36%

Alpha Trains Junior Debt 46,025 1.59% - -

Sydney Airport Debt 18,790 0.65% - -

Other - - 3 0.00%

Total 239,271 8.25% 93,506 3.68%

PRIVATE EQUITY

Agriculture Company of Australia Pty Ltd 24,173 0.83% 23,008 0.91%

AIF Capital Asia III LP 8,694 0.30% 7,367 0.29%

AIF Capital Asia IV LP 8,503 0.29% 3,063 0.12%

CM Capital Venture Trust 4A 2,117 0.07% 1,849 0.07%

CM Capital Venture Trust 4B 2,117 0.07% 1,849 0.07%

HarbourVest Dover St VII Cayman Fund LP 5,396 0.19% 5,669 0.22%

HarbourVest IPE Partners IV Partnership Fund LP 2,423 0.08% 3,284 0.13%

HarbourVest Partners VII Cayman Buyout Fund LB 7,051 0.24% 8,673 0.34%

HarbourVest Partners VII Cayman Ventures Fund LP 5,775 0.20% 5,263 0.21%

PA Private Capital Fund 2 203 0.01% 187 0.01%

Partners GP Euro Buyout 2008 (B) LP 13,352 0.46% 13,988 0.55%

Partners GP Secondary 2008 LP 19,516 0.67% 19,002 0.75%

Quadrant Private Equity Fund 2 1,108 0.04% 991 0.04%

Total 100,428 3.46% 94,193 3.72%

OTHER - ALTERNATIVES

Bennelong Long Short Equity Fund - - 21,949 0.86%

BlackRock FIGA 50/50 - - 10,779 0.42%

GMO Multi Strategy Trust - - 21,233 0.84%

Total 0 0.00% 53,961 2.12%

OTHER - DERIVATIVES

Derivatives Assets 781,042 26.93% 705,524 27.77%

Derivative Liabilities (801,485) (27.63%) (704,206) (27.72%)

Total (20,443) (0.70%) 1,318 0.05%

TOTAL FUND 2,900,375 100.00% 2,540,726 100.00%


Unaudited fi nancial statements for the year

ending 30 June 2015 are provided in the

following section.

The audit of the fi nancial statements is planned to

be completed by the end of October 2015 and will

be available to members upon request after that date.

Abridged Financial Statements

2015 $’000

2014 $’000

ASSETS

Cash and cash equivalents 13,245 7,392

Trade and other receivables 4,716 436

Deferred tax assets 0 3,975

Other assets 1,009 579

Total 18,970 12,382

INVESTMENTS

Equity - Australian Shares 645,676 607,427

Equity - International Shares 592,349 470,188

Equity - Emerging Markets 149,377 128,543

Cash 426,046 376,642

Fixed Income - Australian Fixed Interest 286,009 270,951

Fixed Income - International Fixed Interest 46,773 44,371

Infrastructure 266,303 188,408

Property 168,586 211,218

Other - Credit Opportunities 239,271 93,506

Other - Private Equity 100,428 94,193

Other - Alternatives - 53,961

Derivative Assets (20,443) 1,318

Total 2,900,375 2,540,726

TOTAL ASSETS 2,919,345 2,553,108

LIABILITIES

Trade and other payables 13,920 8,747

Derivative Liabilities 0 0

Current tax liabilities 1,683 7,841

Deferred tax liabilities 18,760 -

TOTAL LIABILITIES 34,363 16,588

Statement of Financial Position as at 30 June 2015:

2015 $’000

2014 $’000

NET ASSETS AVAILABLE TO PAY BENEFITS 2,884,982 2,536,520

REPRESENTED BY: LIABILITIES FOR ACCRUED BENEFITS

Members Funds 2,845,760 2,521,893

Reserves 39,222 14,627

�TOTAL 2,884,982 2,536,520

INVESTMENT REVENUE

Investment Income 157,323 80,320

Changes in market values 157,586 142,384

Direct investment expenses (6,935) (9,663)

Total Investment Revenue 307,974 213,041

CONTRIBUTION REVENUE

Employer contributions 226,985 168,267

Members’ contributions and roll-ins 86,523 53,254

Successor Fund Transfer - 767,122

Total Contribution Revenue 313,508 988,643

OTHER REVENUE

Group life insurance proceeds 22,444 12,841

Other 2 1

Total Other Revenue 22,446 12,842

TOTAL REVENUE 643,928 1,214,526

EXPENSES

General administration expenses 16,363 15,227

Group life insurance premiums 23,178 18,916

Total Expenses 39,541 34,143

BENEFITS ACCRUED AS A RESULT OF OPERATIONS BEFORE INCOME TAX 604,387 1,180,383

Less income tax expense 48,326 41,479

BENEFITS ACCRUED AS A RESULT OF OPERATIONS AFTER INCOME TAX 556,061 1,138,904

Operating Statement as at 30 June 2015:


Important information about your membership

with Prime Super

Superannuation guarantee

The SG rate remains at 9.5%.

Concessional contributions cap

If you are aged less than 50, the cap is $30,000.

If you are aged 50 or above, the cap is $35,000.

Non-concessional contributions cap

$180,000 for all individuals or $540,000 using

the ‘bring forward’ option.

Co-contribution matching rate

The co-contribution matching rate remains at

50%. This means that if members are eligible,

the government will contribute $0.50 for every

$1.00 of after-tax dollars members contribute

to their super up to a maximum of $500.

However, the income thresholds have

changed – the upper income threshold will

increase to $50,454 and the lower income

threshold will increase to $35,454.

Low cap rate

The low cap rate is $195,000 for fi nancial year

2015-16.

Division 293 tax

If you earn more than $300,000 your super

contributions will be taxed at 30%.

Refund of excess non-concessional contributions

If you have made excess non-concessional (after-tax)

contributions to your account and have exceeded

the cap, you now have the option of withdrawing

the portion in excess of the cap and any associated

earnings, and having that amount taxed at your

individual marginal tax rate. This applies to

contributions made from 1 July 2013.

Preservation age

Your preservation age is the age at which you can access

your super if you are retired (or have started a transition

to a retirement income stream). Your preservation age

depends on when you were born.

For more information on superannuation rates and

thresholds please visit ato.gov.au.

Superannuation Surcharge

If the Trustee receives a superannuation surcharge

assessment from the ATO regarding your past

contributions to Prime Super, then the Trustee will

be required to deduct the surcharge from your

member account and pay it to the ATO.

Changes to superannuation

Superannuation rates & thresholds for 2015-16

DATE OF BIRTH PRESERVATION AGE

Before 1 July 1960 55

1 July 1960 – 30 June 1961 56

1 July 1961 – 30 June 1962 57

1 July 1962 – 30 June 1963 58

1 July 1963 – 30 June 1964 59

From 1 July 1964 60


The Trustee, Prime Super Pty Ltd, is

responsible for managing the Fund.

The Directors of the Trustee meet

regularly to discuss management of

the Fund and determine important

policies and procedures. Directors

receive fees and are reimbursed for

travelling expenses for attending

board and committee meetings.

Recent changes to our BoardPrime Super had two new additions to its board in

2014-15. Martin Day was appointed on 28 October 2014,

and Jacqueline Kelly was appointed on 24 February

2015. Both appointments were in recognition of our

ongoing commitment to the health and aged care

industries after our merger with Health Industry Plan.

Martin is the CEO of St Vincent’s Private Hospitals,

the fourth largest private hospital group in Australia.

He was previously CEO of St Vincent’s Private Hospital

Melbourne and has held leadership roles in the health

services industry for over 20 years including senior

positions with Mayne Health in Victoria, Western

Australia and Tasmania.

Jacqueline is the CEO of the Lutheran Community

Care (LCC), which provides accommodation, aged

care, youth, disability, mental health, and chaplaincy

services to 2,000 Queenslanders annually. Jacqueline

has more than 20 years’ experience across the public,

private and not-for-profi t sectors including senior

roles at PricewaterhouseCoopers, Queensland

Treasury and Lend Lease Advisor Services.

Your Trustee Board Directors

Trevor Dixon - Deputy Chair

(Appointed 5 April 2004;

Appointed Deputy Chair 28 August 2013)

Alan Bowman - Chair

(Appointed 26 January 2001;

Appointed Chair 1 January 2011)

Duncan Fraser

NFF representative

(Appointed 25 August 2010)

Martin Day

(Appointed 28 October 2014)

Russell Collison

AWU Representative

(Appointed 28 August 2013)

Jacqueline Kelly

(Appointed 24 February 2015)

David Cooper

(Appointed 1 July 2009)


The Trust Deed

The Fund is governed by a Trust Deed which,

amongst other things, sets out the entitlements

of members and obligations of the Trustee.

Complying Fund

Prime Super is a complying superannuation fund

for taxation purposes. All necessary returns and

certifi cates have been lodged with APRA. Once

the audit of Prime Super’s Financial Statements

is complete, returns for the year to 30 June 2015

will also be lodged with APRA.

The Trustee is not aware of any matter which

would cause the Fund to lose its complying status.

No penalties under superannuation law have

been imposed.

The Trustee has established a number

of committees to assist in managing its

functions and responsibilities. Directors

sit on these committees. A list of all

committees and committee members

is listed below.

Board meeting attendance

For the year ended 30 June 2015

Trustee Committees

* All board members are permitted to attend Committee meetings even if they are not a member of the Committee.1 Appointed to the Board on 28 October 2014. 2 Appointed to the Board on 24 February 2015.

Participating employers are also entitled to

establish a policy committee to consider the

operation and performance of the Fund and

communicate the views of members and

employers to the Trustee. Policy committees

must be made up of an equal number of

member and employer representatives.

At 30 June 2015 there were no policy committees.

Trustee Liability Insurance

The Trustee has liability insurance to protect it,

and the directors, against any losses arising as

a result of a claim for a breach of their duty.

Wholly-Owned Companies

Alan Bowman, Trevor Dixon, David Cooper, Duncan

Fraser and Russell Collison are all Directors of the

Agricultural Company of Australia Pty Ltd (AGRICO),

a company established and owned by the Fund to

invest a small proportion of Fund assets in the primary

industry sector. All underlying investments of AGRICO

have now been sold and the Company is in the process

of being wound up. The assets of the Company are

now largely cash and cash equivalents.

Confl ict of Interests

The Trustee has established procedures to ensure

any confl ict of interest in respect of the Directors is

disclosed and appropriately dealt with.

DIRECTOR

BOARD MEETINGS INVESTMENT COMMITTEE AUDIT COMMITTEE

Meetings attended

Eligible to attend

Meetings attended

Eligible to attend*

Meetingsattended

Eligible to attend*

Alan Bowman (Chairman) 6 6 6 6 6 0

Trevor Dixon (Deputy chairman) 5 6 5 6 5 6

David Cooper 6 6 6 0 6 6

Duncan Fraser 6 6 6 6 6 6

Russell Collison 6 6 6 0 6 6

Martin Day1 5 5 5 0 5 0

Jacqueline Kelly2 3 3 3 0 3 0

INVESTMENT COMMITTEE

AUDIT, COMPLIANCE & RISK COMMITTEE

DEATH & DISABILITY CLAIMS COMMITTEE

Trevor Dixon (Chair)

Appointed 5 April 2004

Appointed Chair 26 July 2013

David Cooper (Chair)

Appointed 26 October 2010

Appointed Chair 17 June 2015

David Cooper (Chair)

Appointed 1 July 2009

Appointed Chair 28 August 2013

Alan Bowman

Appointed 26 January 2001

Trevor Dixon

Appointed 5 April 2004

Duncan Fraser


Duncan Fraser


Duncan Fraser


Russell Collison

Appointed 28 August 2013

Russell Collison

Appointed 28 August 2013

Jacqueline Kelly

Appointed 17 June 2015


Prime Super is run only to benefi t members.

The Fund’s remuneration practices are set

out in a Remuneration Policy maintained by

the Board.

Remuneration

Director remuneration

Total remuneration received and receivable by Directors and/or relevant organisations during the year was:

SHORT-TERM BENEFITS POST-EMPLOYMENT BENEFITS TERMINATION PAYMENTS

TOTAL

Cash salary1

Additional Remuneration2

Non-monetary benefi ts3

Other short-term

compensation

Pension & superannuation

benefi ts

Other post-employment

benefi ts

DIRECTORS $ $ $ $ $ $ $ $

Alan Bowman

2015 68,493 0 0 0 6,507 0 0 75,000

2014 61,785 0 0 0 5,715 0 0 67,500

Trevor Dixon

2015 61,644 0 0 0 5,856 0 0 67,500

2014 51,533 0 0 0 4,767 0 0 56,300

David Cooper

2015 54,795 4,009 0 0 5,626 0 0 64,430

2014 47,140 4,816 0 0 4,360 0 0 56,316

Duncan Fraser

2015 54,795 0 0 0 5,205 0 0 60,000

2014 47,140 0 0 0 4,360 0 0 51,500

Russell Collison4

2015 59,479 0 0 0 521 0 0 60,000

2014 43,113 0 0 0 368 0 0 43,481

Martin Day

2015 37,324 0 0 0 3,546 0 0 40,870

2014 n/a n/a n/a n/a n/a n/a n/a n/a

Jacqueline Kelly

2015 18,917 0 0 0 1,797 0 0 20,714

2014 n/a n/a n/a n/a n/a n/a n/a n/a

1 Includes any salary sacrifi ce superannuation items. 2 Includes any superannuation guarantee components. 3 Includes any salary sacrifi ce items other than superannuation. 4 Of the remuneration payable to Mr Collison, 90% is paid to his employer, The Australian Workers Union and 10% is paid to his superannuation fund, as a combination of superannuation guarantee and salary sacrifi ce contributions. Please note: No share-based remuneration or long-term benefi ts are paid or payable to Directors.

Executive remuneration

Total remuneration received and receivable by the Executive Management team during the year was:

COMPENSATION BAND NUMBER OF EXECUTIVE MANAGEMENT IN THE BAND

$100,001 - $200,000 1

$201,000 - $300,000 1

$301,000 - $400,000 1


Prime Super is proud of its ongoing support

for Lifeline – the national charity providing

24/7 crisis support and suicide prevention

services. Now in its ninth year, the corporate

partnership has allowed Prime Super to

give back to the community and support

everyday Australians in their hour of need.

Lending a hand to save lives

In Australia, seven people lose their lives to suicide

everyday. That’s twice the national road toll and

amounts to a signifi cant challenge for our society

as a whole.

Prime Super CEO Lachlan Baird said he is proud of

the contribution Prime Super has been able to make

again this year.

“Our members can be proud that their super fund

is making a strong contribution to the social fabric

of Australia, by helping to turn the tide against the

alarming rates of suicide in this country,” said Mr Baird.

About Lifeline

Each day, Lifeline answers about 2,200 calls from

people who are doing it tough, with about 120 of

these from people at a high risk of suicide. In FY16,

Lifeline expects to receive a million calls from

Australians in crisis; more than double the number

received fi ve years ago.

A crisis is considered a very individual reaction to an

event or experience and while one person may be

extremely affected by an event, another person

experiencing the same event may have little or no

negative effects.

However, if a crisis is not dealt with in a healthy way,

it can lead to longer lasting mental health issues,

as well as social and physical problems.

The partnership at work

This year, Prime Super’s support of Lifeline’s paid

overnight service helped it signifi cantly increase the

number of calls it answered each night between the

hours of midnight and 6am.

Also in 2015, Lifeline implemented two new essential

help-seeking tools including a wallet card outlining

three practical tools to help people prevent suicide,

and a downloadable mobile app providing a directory

of free and low cost health and community services

available around the country.

“We are pleased to support the incredibly valuable

work of Lifeline and share its vision of an Australia

free of suicide,” said Mr Baird.

The ongoing corporate partnership between Prime

Super and Lifeline helped ensure the national charity’s

13 11 14 crisis line answered more calls this year

than ever before in its 52-year history.

Part of your community

Find out moreFor more information about Lifeline’s crisis support and suicide prevention services, call 13 11 14 or visit lifeline.org.au

2014 Winners

South Australia

Prime Super Community Group of the Year Award

BIL /ACE of Keith

Tasmania

Prime Super Events and Tourism Award

Project U-Turn

New South Wales & ACT

Prime Super Community of the Year Award

(population under 15,000)

Warrae Wanni Muswellbrook South Public School


(population over 15,000)

Byron Bay Community Association Incorporated

Victoria

Prime Super Community Group of the Year Award

Community Leadership Loddon Murray

Queensland


Miles District Hospital Auxiliary

Western Australia


Paupiyala Tjarutja Aboriginal Corporation

South Australian winner

Tasmanian winner

NSW and ACT winner

Victorian winner

Queensland winner

Western Australian winner

Part of your community (cont’d)

Prime Super recognise community

achievers. We were once again the

sponsor of a community award in

every state through our partnership

with Awards Australia.

Each of our award categories recognise the

hard work of groups and individuals who support

and enhance the social, economic, commercial

or environmental prosperity of their region.

Our sponsorship continues in 2015 and 2016 with

two additional awards – Employer excellence in

aged care – in Victoria and New South Wales.

For more information on the awards, visit

awardsaustralia.com.


Prime Super sponsors Australian Rural Leadership Foundation participant

Prime Super was proud to sponsor a scholarship

through the Australian Rural Leadership

Foundation (ARLF).

The Foundation runs a number of programs – its

fl agship being the Australian Rural Leadership

Program (ARLP). This program exists to develop

the men and women who will lead rural Australia

with vision and commitment to shape the future.

The recipient of the Prime Super scholarship was

Sandra Glaister. When Sandra fi rst applied for the

scholarship, she was Manager, Residential Care at

Leading Age Services Australia, Queensland. She

is based in Townsville, Queensland. However Sandra

has taken up a new position as Chief Operating

Offi cer at Freedom Aged Care, a new aged care

service provider, providing aged care facilities in

regional Australia. Sandra is also on the Board of

Directors for Mercy Community Services North

Queensland Ltd and Access Disability Inc. She is

an active member of her local community and has

aspirations to be a CEO in the social health care

sector at a federal or state level.

Sandra sees the ARLP as a chance to expand her

network as well as gain a greater understanding

of the rural and remote environment so that she

can better enable age service staff in regional

Australia and be better equipped to infl uence

policy development.

About the ARLF

The ARLF develops leaders who can work effectively

to ensure a resilient future for the communities,

organisations and industries of rural, regional and

remote Australia.

The ARLP is conducted over 17 months – there are

59 residential days delivered over 6 sessions – and

participants can elect to undertake a Graduate

Certifi cate in Australian Rural Leadership from James

Cook University while participating in the program.

For more information about the Foundation or the

Leadership program, please visit rural-leaders.com.au.

Part of your community (cont’d)

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Image courtesy Ken Eastwood RMW Outback Magazine


Your Regional Managers

One of the things that sets us apart from our

competitors is our team of Regional Managers

(RMs) who are spread around the country.

And we don’t just mean capital cities. Most

of our RMs live and work in regional Australia.

David LUKER

WESTERN & SOUTH EAST

VICTORIA

T: 0400 068 224

E: [email protected]

Scott BOYLE

SOUTHERN NSW, ACT &

NORTH EASTERN VIC

T: 0488 989 444


Ben CASSIDY

SYDNEY & NSW CENTRAL COAST

T: 0428 483 923


Annette MACKAY

NORTHERN NSW

T: 0488 588 161


Rod STEWART

TASMANIA

t: 0428 558 158

e: [email protected]

Nicole LADDS

MELBOURNE METRO

T: 0427 464 526


Geoff HIGGINS

CENTRAL NSW

T: 0488 072 222


Edward ISAAC

NORTH & CENTRAL QLD & NT

T: 0488 999 711


Karen HYLAND

SOUTH EAST QLD

T: 0409 030 722


Wayne WRIGHT

DARLING DOWNS &

SOUTH WEST QLD

T: 0407 777 449


Alisha WILDE

WESTERN AUSTRALIA

T: 0437 049 314


Radek KOTLARCZYK

WESTERN AUSTRALIA

T: 0429 410 426


Chris POLE

SOUTH AUSTRALIA

T: 0488 588 233



Our planners can help you with:

Retirement planning (including pensions,

super income streams and Centrelink)

Transitioning to Retirement (TTR) – drawing

an income from your super while you are

still working

Building your superannuation (including

salary sacrifi ce)

Understanding your investment options

(including options outside super such as

managed funds and shares)

Achieving your fi nancial goals (reducing

debt, saving for your children’s education)

Identifying your personal insurance needs

and succession planning

Managing your tax liability

Self-managed super funds.

Michael Hawthorn

T: 0437 284 234


Noel Hazeldine

T: 0488 991 446


Prime Super fi nancial planners are

authorised representatives of PGW

Financial Services Pty Ltd (PGW)

AFSL384713, ABN 15 123 835 441.

Your Financial Planners

phone Freecall 1800 675 839

fax Freefax 1800 023 662

email [email protected]

web primesuper.com.au

post Prime Super Locked Bag 5103, Parramatta NSW 2124

WE’RE AN

SUPER INDUSTRY

FUND

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