Also in this issue:

Rollovers to SMSFs - do we really need the trust deed?
Market update
Manager changes
10 for 2010 - Global Market Update and other new material

Product and service

Pension: new PDS and product changes

The Pension PDS has been revised, effective 1 January 2010, to incorporate the following product changes.

Default investment option changes from Secure-Active to Secure-Index

• Aligns with the Corporate Super and Personal Super default.
• Lower-risk Secure option has been retained due to the average term of the Pension's liabilities.
• Secure-Index has a lower management fee (0.46% pa) than Secure-Active (0.55% pa).

Reversionary beneficiary nomination: new option

• A member can nominate their spouse to continue to receive income stream payments on the member's death.
• The pension reverts to the beneficiary spouse once the trustee has assessed and approved the death benefit claim.
• The pension retains the same start date and components as the member's original pension.
• New members wishing to make a reversionary beneficiary nomination must do so via the member application form at the pension start-up stage.
• Existing members wishing to make a reversionary beneficiary nomination must commute their existing pension and apply for a new pension. There could be social security and tax implications for the member.
• Members wishing to change a reversionary beneficiary nomination must commute their existing pension and apply for a new pension.

You can order print copies of the new PDS.

A great health insurance offer from MBF

Discounted premiums, choice of cover, the chance to win a $10,000 adventure holiday and even skip the usual waiting periods on some extras - MBF have lined up a great offer for Aon Master Trust members. There's a 31 March 2010 deadline for the holiday draw and waiting period waivers, so if any of your clients are interested, they'll need to get on to it. For more info and MBF's contact details, see Member Directions.

Investment

Manager changes: December 2009

Russell International Shares Fund and Russell International Shares Fund $A Hedged

Russell has appointed Pzena Investment Management and Snow Capital Management to the above funds. Institutional Capital (ICAP) will now manage a global mandate in addition to their current US strategy. As a result of these changes, ClariVest is no longer a manager in these funds.

Pzena is a value: market oriented manager with a strength in fundamental stock research and the ability to select stocks that are deeply undervalued on traditional criteria. Snow is a value: large cap manager and looks for stocks that have strong fundamentals and potential for price appreciation.

ICAP's global mandate emphasises multinational, large cap quality companies to implement their thematic investment strategy.

These changes affect the following Aon Master Trust options:

• International Shares - Diversified
• International Shares - Core
• International Shares - Core ($A Hedged)

Market update: quarter ended 31 December 2009

It is far from clear just how strong and sustained the global recovery will be.

At the beginning of 2009

Hindsight makes the past seem simpler than it was but, at the beginning of 2009, two things were clear:

A year on

Markets have rebounded and valuations on most asset classes are back to 'normal' levels. The major economies are moving out of recession, led by the US. It is far from clear, however, just how strong and sustained the global recovery will be. Our view is that the recovery will be a long and drawn out affair. Consumer de-leveraging, the gradual withdrawal of fiscal stimulus, and the ongoing process of bank balance sheet repair will provide strong headwinds.

For a full report, including market sector updates, see our Market update - quarter ended 31 December 2009.

Source: Russell Investments

On the website

Asset allocation calculator

You can use this new calculator to demonstrate to your clients the value of our diversification.

You just select options and percentages and enter the total investment value and the calculator generates printable reports of a member's asset allocation by:

• sector (%)
• high-level manager (%)
• underlying managers/funds ($)

New material

• 10 for 2010 - Global Market Outlook
• Outlook 2010 - Transition to the new normal
• Investment Manager Outlook December 2009
• Reversionary beneficiary nomination in the Aon Master Trust Pension: new factsheet
• Tax on death benefits: factsheet updated with information on tax implications for income streams.

Legislation and other news

Rollovers to SMSFs-do we really need the trust deed?

A number of advisers have queried why, in some cases, we are now requesting a copy of an SMSF's trust deed before we process a rollover to that SMSF.

Last year, the ATO flagged that some illegal superannuation schemes are advertising that (in return for a substantial fee) they can help individuals access their super before retirement by establishing, and transferring their super into, a SMSF. In its SuperUpdate, the ATO outlined the steps being taken to prevent such transfers, and recommended that funds check Super Fund Lookup to make sure that the SMSF is a complying super fund and to have adequate checks in place to identify the SMSF trustee.

More recently, the ATO has announced changes (starting January 2010) that will help prevent non-legitimate SMSFs from being displayed on Super Fund Lookup. Briefly:

• the ATO will take around seven days to show an SMSF on Super Fund Lookup
• the SMSF's status will show as 'registered'
• this status will be updated only when the fund lodges its first annual return and is assessed as being 'complying' or 'non-complying'.

Funds can process rollovers to SMSFs with 'registered' status.

As an additional assurance check of the SMSF trustee's bona fides, we may request documentation (such as a trust deed) if:

• the SMSF is not listed on the ATO register
• the SMSF is only showing as 'registered' on the ATO register
• the trustee details on the rollover request/destination account details do not tally with the SMSF details on the register
• the trustee details are not clear
• the trustee credentials are suspect.