Also in this issue:

May 2010 Federal Budget
Our 'new' PO Box address
Indexed fee increase
Market update

Product and service

Profits, people and the value of long service leave

Did you know that the way you handle long service leave can jeopardise your company's bottom line and your ability to retain top talent?

Companies are required by law to put a best-estimate value on their long service leave liability for their financial accounts. If your valuation of this benefit is too low, your company is at risk of holding inadequate reserves. If your valuation is too high, you are holding reserves that are not actually required - this could reduce the potential for company profits.

While many companies use a nominal value in their accounts, an actuarial valuation can provide a more realistic picture for you by considering the timing of long service leave payments and your company's demographic profile.

Despite its important place in an employee benefits program, long service leave is the benefit that employees most often forget about. Raising employee awareness of their entitlements can be a useful staff retention tool.

• An employee who is about to qualify for long service leave is more likely to stay until they become entitled to the benefit.
• An employee who is already entitled to long service leave effectively has close to an extra week's leave each year - an important consideration if they're comparing job offers from other companies.
• Given that the entire long service leave benefit will increase with a salary rise, this benefit can become an integral part of remuneration packages.

Through our consultative and risk management-driven approach to long service leave, Aon can help you to:

• efficiently meet your statutory reporting requirements
• understand the drivers behind your long service leave liability
• position long service leave as a valuable employee benefit
• develop HR strategies to raise employee awareness.

We'd be happy to put you in touch with Aon's Employee Benefits and Actuarial Consulting team, or you can contact them directly by email or call 02 9253 7790.

Do it for your employees

Employer response to our 'Give your employees a consolidation day' invitation has been great, giving many members the opportunity to simplify their super. The invitation's still open, so how about your workplace?

To organise your super consolidation day, contact your account manager, email us or call 1300 880 588. Just let us know the date, time and workplace location that's best for you, and we'll take it from there. See the invitation in Employer Directions March 2010.

Housekeeping

Processing freeze 1-6 July

Please note that transaction processing will be put on hold between Thursday 1 July 2010 and Tuesday 6 July 2010 (inclusive), allowing us to test, check and audit final unit prices. This hold applies to all transaction requests, including contributions, rollovers, investment switches, benefit quotations and payments and online services.

Transaction requests received after Wednesday 30 June will be processed as quickly as possible, in order of date received, once processing resumes.

See Member Directions for more information.

Updating employee details for benefit statements

Benefit statements for the year ended 30 June 2010 are scheduled to go out in August. Ensuring that we have up-to-date membership information will help ensure correct benefit entitlements and efficient delivery of the statements and other member communications.

A critical step in our annual review preparation is obtaining membership updates from our participating employers. To that end, we are sending every employer a listing of their employee members, with a request to update it for salaries and new and exited employees. Your assistance in returning your updated listing to us by Friday 25 June is much appreciated.

Contributions in by 25 June please

As you'll appreciate, the end of financial year is a very busy time and so we encourage you to submit contributions (and supporting documents) to us by Friday 25 June. This will help us ensure that members’ accounts are up to date for 30 June 2010 benefit statement purposes.

Our 'new' PO Box address

It's not really that new, but some mail is still being addressed to our old one. So, here's a reminder of our correct PO Box address:

Aon Master Trust
PO Box 1949
Wollongong NSW 2500

Indexed fee increase

The trustee has approved an increase in the standard annual member fee (in line with Average Weekly Ordinary Time Earnings) from 1 July 2010. The fee will increase from $66.50 to $70.32. Details of all fees will be set out in the 1 July 2010 Product Disclosure Statements. Please note that the May issue of Member Directions notifies members of this increase.

Exceptions

If you have a current non-standard member fee agreement with the Aon Master Trust, the 1 July 2010 increase will not apply. We will be in touch with you in due course regarding the application and timing of the member fee increase for your employees, and will notify your employees separately and in advance of any changes.

Investments

Market update: quarter ended 31 March 2010

Uncertain prospects for the rest of 2010

The market started to recover in March 2009 but there are still a number of uncertainties around the outlook for the rest of this year.

These uncertainties, which include the sustainability of the global recovery, the robustness of China's economic strength, and the ongoing concerns about the risk of national governments defaulting on loan payments, are all interlinked.

When governments begin to remove emergency economic stimuli, it could jeopardise economic recovery from the global recession. China's economic growth benefited Australia last year but a slowdown in that growth could mean reduced demand for Australian resources. While Greece's challenges in managing its sovereign debt (government borrowing) will not harm the global economy, it's a reminder that other nations - including the US and UK - have their own debt problems that could influence global capital markets for years to come.

For a full report, including market sector updates, see our Market update - quarter ended 31 March 2010.

Source: Russell Investments

Legislative and other news

May 2010 Federal Budget

The Aon Master Trust has produced a summary of the key budget decisions. To understand how the budget may affect you and your employees, please talk to your Aon account manager or your financial adviser.