Also in this issue:

Benefit statements: a call to action
Our Pension is a real (5) star!
Vanguard appointed as index fund manager
We're one of the best investment performers
Market update
Russell's new Head of Investment Consulting
AIG Life re-brands as AIA

Product and service enhancements

Super education? We’ll come to you

Now more than ever, members are looking for helpful information on one of the most important aspects of their financial life: their super. Our account managers and advisers can:

• present free workplace seminars on super, investments, insurance, and retirement strategies
• run ‘consolidation days’ to help members who want to bring their super together
• help your HR and payroll staff with new ways of managing your super arrangements
• give you super or fund-related articles for your staff newsletter
• arrange other super communications specific to your workplace.

For more information on the many ways we can help your members, call your Account Manager or 1300 880 588.

Thanks for your feedback

In August 2009, Aon Consulting launched a major initiative to listen to what you have to say about the Aon Master Trust. The survey has been designed to help us understand what you think of the Aon Master Trust and our support services, and the response so far has been very encouraging. Our commitment to you is to take notice of your feedback. Thank you for your contribution – your thoughts and comments will help us serve you better into the future.

We’ve upped the ante on insurance cover

Higher cover – maximum levels
Increases we’ve made from 1 July 2009 put the maximum levels of cover available in the Aon Master Trust among the highest available in the market: unlimited cover for death, $3 million for total and permanent disablement, and $25,000 per month for income protection.

Higher cover – minimum level default
There are changes in the minimum level of default cover too, with a 5% increase from 1 July 2009 helping it keep pace with the cost of living. The new minimum, which will apply automatically to members with the minimum default, is $220,500 to age 42 reducing to nil at age 65.

Lower rates for long-term income protection
We have also negotiated lower premium rates for income protection cover with a long-term (up to 5 years or to age 65) benefit payment period. The new rates took effect from 1 July 2009.

Insurance transfer now a permanent offer
The success of our insurance transfer offer has led us to adopt it as a permanent option for all our members. That means there is more scope to transfer other insurance into the Aon Master Trust, and no additional health evidence is required. Provided the member meets eligibility and other conditions, all they need to do is complete a transfer form and send it to us.

See our factsheet for more information on these and other insurance enhancements.

Benefit statements: a call to action

Reading their annual benefit statement can be the nudge a member needs to get into ‘super mode’ and take action. With statements going out by the end of September, we’ve taken the opportunity to remind members (in the Member Directions they’ll get with their statement) of the benefits of consolidating their super and transferring other insurance into the Aon Master Trust.

If your members need personal advice on their super, investment, insurance or other financial decisions, talking to an expert is the way to go. Our website explains the different services available and we can put members in touch with an adviser if they don’t already have one.

Our Pension is a real (5) star!

The Heron Partnership has awarded the Aon Master Trust Pension 5 Heron Quality Stars in their 2009/10 ratings. This is Heron’s first rating of pension products so we’re delighted to see our Pension receiving the highest award right off the bat.

Aon Master Trust Corporate Super and Personal Super have once again been awarded Heron’s highest rating: 5 Heron Quality Stars.

New factsheets and guides

You’ll find some new material on our website:

Member online services – user guide – everything a member needs to know about registering for access, making transactions and generating reports

Contributions – explains the different types of contributions that can be made into super and how they can help members reach their financial goals.

Investment volatility: what to expect and how to find your match – a kick start for members wanting to find an investment match for their financial risk tolerance.

Vanguard appointed as index fund manager

The Aon Master Trust has appointed Vanguard Investments Australia Ltd as index fund manager, replacing State Street Global Advisors (SSgA). While this transfer means a minor revision in the investment strategies of our affected Sector options and in some benchmark indices, there is no change to our options’ objectives, strategic asset allocations, management fees, risk profiles or suggested minimum timeframes. Our website has more information on Vanguard and the transfer itself.

ATO – super news for employers

A recent edition of the ATO’s Workplace education news includes two articles that will be of interest to all employers.

New reporting obligations and 2009–10 payment summaries

If your employees salary sacrifice into super or if you make additional employer super contributions, you may need to report these amounts to the ATO and on the employee’s 2009–10 payment summary. These amounts are called 'reportable employer super contributions.'

The changes will not affect the individual’s assessable or taxable income and will only apply to income tests for tax benefits and obligations such as super co-contributions and the Medicare levy surcharge.

New payment summaries will include a new label to show reportable employer super contributions. These changes will also affect your payroll system.

You should have received more information from the ATO in June, along with your PAYG withholding payment summary stationery package. The ATO website has more information on reportable employer super contributions.

Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages'

From 1 July 2008, employers have been required to use ‘ordinary time earnings’ (OTE) to work out their employees’ minimum superannuation guarantee (SG) contributions. Where an employer has not provided the required level of minimum superannuation support, ‘salary or wages’ is used to calculate the SG shortfall.

A new ruling, effective from 1 July 2009, explains how different payments are categorised as ‘ordinary time earnings’ and ‘salary or wages’ and includes easy-to-follow examples. You can download this for your reference or pass it onto payroll.

Source: Australian Taxation Office, Workforce education news: Issue 8, June 2009.

Investment performance

We’re one of the best investment performers

In what has been a very difficult period for super funds and their investments, our default investment option, Balanced – Index (Pre-Mixed), has beaten the all fund, not-for-profit fund, and master trust medians for 1-year returns, and the master trust median for 3-year returns.*

A return of -8.93% for the year ranks us 9th out of 113 balanced super fund options in the SuperRatings survey.

Market update (quarter ended 30 June 2009)

The rebound in global share markets since early March is a welcome relief after the relentless downtrend that followed the Lehman collapse last September. However, we’re not quite out of the woods.

Globally, the high level of market volatility and prospects for more bad economic news put a large question mark over the sustainability of the share rally in the second quarter of 2009. There may be more bad news in the form of disappointing corporate earnings, defaults on corporate debt payments and US home foreclosures. On the other hand, optimistic scenarios are based on the tremendous amount of fiscal and monetary policy stimulus in the pipeline, and business and consumer confidence indicators that the seeds of recovery are taking root.

The next few months are likely to remain challenging and some sort of market pull-back seems inevitable. However, investment markets around the world offer opportunities benefiting investors with a long-term horizon.

The Australian economy is looking strong compared to other developed economies, with positive real GDP growth (the basic measure of economic growth) over the March quarter. The unemployment rate has risen steadily over the past year to a six-year high of 5.8%, but this is low compared to the US and Eurozone. In July the Reserve Bank of Australia maintained the official cash rate at 3% – the level set in April 2009.

For the full report, including market sector updates, see our Market update – quarter ended 30 June 2009.

Source: Russell Investments

Partnership news

Russell’s new Head of Investment Consulting

Our investment management partner, Russell, has announced the appointment of Greg Liddell as its new Head of Investment Consulting for Australia. According to Russell’s media release, this announcement "reinforces Russell’s move to focus even greater energy and expertise on managing the evolving investment challenges faced by the world’s most sophisticated institutional investors."

AIG Life re-brands as AIA

Our group life insurer, AIG Life, has announced its change of brand to AIA, reflecting its brand alignment with the rest of the AIA Group across the Asia region. The company has also changed its name to AIA Australia Limited.

The re-brand means a change to AIG Life’s name and brand (including logo, signage and the appearance of its website and material). AIA has confirmed that the re-brand has no impact on pricing, terms or conditions for current rate guarantees in place with clients. Business operations and capital investment in service improvement initiatives are also unaffected.

AIA Group CEO and President, Mark Wilson said, “This important re-branding will unify our business activities under one strong pan-Asian identity. Our new refreshed visual identity is an iconic statement of AIA as a leading contemporary Asian brand, while continuing to demonstrate the heritage and financial strength our customers trust.”

There is no obligation on the Aon Master Trust to reissue its PDSs as a result of the brand change. We will, of course, reflect the AIA brand as and when we update our disclosure, marketing and communication material.

www.aia.com.au
AIG Life announces name change