Garnet Superannuation Fund by dkh16703


									Garnet Superannuation Fund

  A disciplined and structured solution
        for wealth accumulation

   Product Disclosure Statement

       Personal Superannuation
         Lump Sum Benefits
           Pension Benefits

                Issued 31 March 2006
           by Garnet Superannuation Pty Ltd
                 ABN 33 217 041 228
Important points for you to know

       What this document is about
      This document is a product disclosure statement and contains important information about the
      superannuation product being offered: the Garnet Superannuation Fund. In this document we often
      refer to the Garnet Superannuation Fund as ‘the Fund’.

      The information contained in this document is general advice only. It does not take into account
      your individual objectives, financial situation or needs. The Trustee recommends that you seek
      advice from a licensed financial adviser before investing.

      This guide dated 31 March 2006 is issued by Garnet Superannuation Pty Ltd, ABN 33 217 041 228,
      Registrable Superannuation Entity Licence No. L0000857, RSE No. R1001785.

       Applying for membership of the Garnet Superannuation Fund
      To apply for membership of the Garnet Superannuation Fund you should complete and submit the
      application form attached to this product disclosure statement. Applications will only be received

               Grant Thornton Investment Management (Vic) Pty Ltd
               Level 35, South Tower
               Rialto Towers
               525 Collins Street
               Melbourne VIC 3000
               GPO Box 4369
               Melbourne VIC 3001

      Investment in the Garnet Superannuation Fund is offered by Grant Thornton Investment
      Management (Vic) Pty Ltd, ABN 49 006 854 637, AFS 237 661.

      Grant Thornton Investment Management (Vic) Pty Ltd also acts as the manager of the

      Investments in the Garnet Superannuation Fund are subject to investment risk. There is no
      guarantee of the performance of any of the investments or the repayment of capital.

      Cheques should be made payable to ‘Garnet Superannuation Pty Ltd’.

Contents                             Page

Who manages the Fund                   1

Superannuation described               2

Features of the Fund                   3

Size of the Fund                       3

Investment philosophy and policies     4

Risks                                  5

Historical performance                 6

Withdrawal of benefits                 7

Death of a member                     10

Ongoing costs of the Fund             12

Taxation                              16

Contributions to the Fund             19

Allocated pension payments            20

Cooling off period                    22

General information for members       23

Inquiries and complaints              26

Privacy                               27

How to complete your application      28


Who manages the Fund

The Trustee, Garnet Superannuation Pty Ltd, is responsible for
managing the Fund.

We contract with Grant Thornton Investment Management
(Vic) Pty Ltd to conduct the administration and investment
management of the Fund.

The Trustee sets the investment policy of the Fund.

All the investments of the Fund are held by a Custodial
Trustee. The Custodial Trustee is Equity Trustees Ltd:

GPO Box 2307V
Level 2
575 Bourke Street
Melbourne VIC 3000

The Auditor of the Fund is:

Mr Peter Corrigan
Chartered Accountant
563 Bourke Street
Melbourne VIC 3000

Grant Thornton Investment Management (Vic) Pty Ltd is the
exclusive distributor of the Garnet Superannuation Fund.

Name and contact details of the Trustee
Garnet Superannuation Pty Ltd
Level 35, South Tower
Rialto Towers
525 Collins Street
Melbourne VIC 3000
GPO Box 4369
Melbourne VIC 3001
T +61 3 9611 6611
F +61 3 9611 6666

                                                                          Superannuation described

When you think about superannuation or retirement income,        Tax concessions
you should bear in mind that:
                                                                 Tax concessions apply to contributions to superannuation
        Wealth accumulation                                      funds which, like this one, comply with rules set out in
                                                                 superannuation law. Tax deductions are available for some
        Superannuation is specifically aimed at assisting you
                                                                 contributions. Tax concessions also apply to fund earnings and
        to accumulate wealth in order to maintain your
                                                                 to benefit payments.
        quality of life when you retire. Superannuation funds
        pool contributions and invest them for the benefit of
                                                                 Under current laws, if you roll over your superannuation
        members. When you retire, you can roll over your
                                                                 benefit into an allocated pension, you pay no lump sum tax
        superannuation into a pension or withdraw a lump
                                                                 unless your benefit includes an untaxed element. Once in the
                                                                 allocated pension, there is no tax on investment earnings.
        Allocated pensions                                       While tax is payable on your pension payments, you may be
                                                                 entitled to tax and social security incentives.
        Allocated pensions are designed to use
        superannuation monies in retirement to pay a flexible
        and tax-effective regular income. In addition, you can   Payment of benefits
        make lump sum withdrawals. Within certain
                                                                 Members can normally only withdraw their investment in a
        government limits, you can decide the amount of
                                                                 superannuation fund (called a ‘benefit’) when they retire.
        income you want each year, providing you have
                                                                 Benefits can also be paid if a member dies or becomes totally
        sufficient funds in your account. The annual pension
                                                                 and permanently disabled.
        you need will depend on your expected cash flow
        needs and life expectancy.
                                                                 This means you should only consider investing money in
                                                                 superannuation that you can afford to put away until you

Features of the Garnet Superannuation Fund

The Fund is designed to enable you to save for and fund your
retirement. We offer:

         A low-cost structure, with no sales fees or
         commissions payable to anyone under any

         The unique investment management of Grant
         Thornton Investment Management (Vic) Pty Ltd
         (refer Investment strategy on page 4)

         All the investments of the Fund are held by Custodial

Benefits are provided through:

         Lump sum accumulation
         Designed to accumulate a lump sum for retirement in
         a tax-effective environment.

         Designed to provide you with a regular, tax-effective
         retirement income stream.

Please note, a lump sum benefit will be paid unless a pension is

Size of the Fund

What is the size of the Garnet Superannuation Fund?
As at 30 June 2005, the total of accrued members’ benefits was

                                                                   Investment philosophy and policies

The following is a summary of the investment policy of the             Funds will be invested in the following three sectors:
Fund. Full details are available to members upon request.
Investment objectives
The objective of the investment policy is:                                      Equities

‘ maximise the amounts payable to members upon their                       Fixed interest.
retirement, whilst taking all proper and prudent steps to
minimise the risk of investment losses.’                               The Trustee acquires interests in businesses for long-term
                                                                       investment, availing itself of the long-standing investment
Investment strategy                                                    process of Grant Thornton Investment Management (Vic) Pty
The Trustee’s investment strategy is based on the following            Ltd.
three principles:
                                                                       Crediting policy and reserves
         The costs of conducting the Fund will be minimised            The Garnet Superannuation Fund does not maintain reserves
         by taking long-term positions in investments rather           for smoothing investment returns or any other purpose. The
         than seeking short-term gains by trading of shares,           net investment return each year is allocated proportionately to
         properties etc. It is a principle of the Trustee that         each member's account on the basis of the balance of their
         short-term trading of investments leads to high               account.
         brokerage charges and thereby impairs long-term
         performance.                                                  Strategic asset allocation
                                                                       The strategic asset allocation of the Fund, as outlined in the
         In line with the above principle, all investments will be     investment policy, is as follows:
         assessed on the basis of a 10-year investment
         timeframe. It would be expected that, given normal
         circumstances, investments would be held for
         the long term.

         Risk Aversion - the assets of the Fund will be invested
         on the basis of 'balanced portfolio theory'.

                                                                        Strategic asset           Actual asset allocation
                 Sector                                                    allocation                 30 June 2005

                  Equities (domestic and international)                     40-50%                         34%

                  Property                                                  15-25%                         10%

                  Interest-bearing securities, deposits and cash            30-45%                         56%


What are the significant risks?                                      In general, the significant risks for this Fund are:

All investing involves risk.                                                  Individual investment risk
                                                                              Individual investments we buy can (and do) fall in
The value of the investments in the Garnet Superannuation
                                                                              value for many reasons such as changes in the entity's
Fund can fall as well as rise. General factors that can affect the
                                                                              internal operations or management, or in its business
performance of an investment include the state of world
economics, interest rates, inflation or deflation, consumer
sentiment, company performance, exchange rate fluctuations,                   Market risk
changes in the supply and demand for investments and changes
                                                                              Economic, technological, political or legal conditions,
in government policies, laws and taxation.
                                                                              and even market sentiment, can (and do) change, and
                                                                              this can mean the investments we buy in those markets
These risks may result in loss of income and/or capital. You
                                                                              can change in value.
could receive back less than you invested.
                                                                              Interest rate risk
Our investment policy is to mitigate risk where possible.
                                                                              Changes in interest rates can have a negative impact
Please refer to page 4 of this document for a summary of the
                                                                              directly or indirectly on investment value or returns.
investment policy and to page 6 for a commentary on historical
                                                                              For example, the cost of a company's borrowing can
                                                                              increase, or the income return on a fixed interest
What can I do to reduce the impact of risk?                                   security can become less favourable.

You can do some things to reduce the impact of risk. Most                     Currency risk
importantly, get professional advice - advice suited to your
                                                                              We invest in other countries and, if their currencies
particular investment objectives, financial situation and needs.
                                                                              change in value relative to our dollar, the value of the
Nothing in this product disclosure statement can do that and
                                                                              investment can change.
the Trustee does not provide personal investment advice.

                                                                                                               Historical performance

What has been the historical performance of the Fund
and how does it compare to our appropriate benchmark?

Performance for the period ended 30 June 2005:

                          The Garnet Superannuation Fund                                                                              Five years

                          Investment return after investment                                                                            9.7% p.a.
                          management costs and tax

                          Benchmark after investment                                                                                    5.4% p.a.
                          management costs and tax

Historical performance is not a reliable guide to future                                       In general, high returns are associated with high risk. The
performance. We do note, however, that for the past five years                                 Garnet Superannuation Fund does not seek high returns. We
not one of the Fund Managers included in the Mercer                                            seek consistent wealth accumulation through long-term
Investment Consulting Pooled Fund Survey has bettered our                                      investment philosophies that reduce risk. We do this by
return.                                                                                        spreading our investments across the equities, property and
                                                                                               fixed investment sectors and by spreading our investments
                                                                                               within those sectors across a number of selected investments.
                                                                                               We do not trade (short-term buy and sell) in securities, thus
                                                                                               minimising brokerage costs. Nor do we take speculative
                                                                                               positions. We do not use futures, put or call options or other
                                                                                               derivative instruments.

1 The investment performance quoted is that of the Garnet Superannuation Fund
  (Accumulation Division) after fully providing for all income tax and capital gains tax and
  an investment management charge which is directly comparable to the Benchmark, which
  is the return of the median fund in the Mercer Investment Consulting Pooled Funds
  Survey, June 2005.

Withdrawal of Benefits

Superannuation                                                    Preservation rules
You can withdraw your benefit from the Fund:                      Accessing your superannuation benefits depends on the make-
                                                                  up of your benefit. It may be divided between:
        If you satisfy a condition of release (the law does not
        let you cash your benefit otherwise, please refer to               Preserved benefits that cannot generally be accessed
        preservation rules below)                                          until the end of the your working life

        By transferring your benefit to another                            Restricted non-preserved benefits that can generally
        superannuation fund or to a retirement savings                     be accessed upon termination of employment (if your
        account at any time.                                               employer has contributed to the Fund)

You must withdraw your benefit from the Fund if:                           Unrestricted non-preserved benefits that can be
                                                                           accessed at any time.
        You reach 75 years of age and are not gainfully
        employed for at least 30 hours per week                   Since 1 July 1999:

        You are aged 65 or over but are not yet 75 and have not            All investment earnings are preserved
        been gainfully employed for at least 240 hours during
        the financial year.                                                All contributions are preserved

However, mandated employer contributions made from age 65                  The amount of non-preserved benefits will normally
(and earnings on these contributions) can remain in the Fund               have been capped at their 1 July 1999 levels.
until such time as the mandated employer contributions have
ceased.                                                           Under circumstances where negative earnings occur, the
                                                                  amount of non-preserved benefits can be permanently reduced.
                                                                  The table on page 8 outlines when each type of benefit can be

                                                                                              Withdrawal of benefits - continued

                           Type of benefit                               Prior to preservation age            At or after preservation age

                           Preserved                                          Permanent incapacity              On genuine retirement
                                                                              Severe financial hardship         At age 60 if ceasing
                                                                              Compassionate grounds             employment but not retiring
                                                                              Death                             In all circumstances that
                                                                              Non-residents permanently         apply to members prior to
                                                                              departing Australia after         preservation age
                                                                              1 July 2002

                           Restricted                                         Upon ceasing employment           In all circumstances that
                           non-preserved                                      In all circumstances where        apply to members prior to
                                                                              preserved benefits are able       preservation age
                                                                              to be released                    In all circumstances where
                                                                                                                preserved benefits are able
                                                                                                                to be released

                           Unrestricted                                       At any time                        At any time

What is my preservation age?

                           When were you born?                                                                                   Preservation age

                           Before 1 July 1960                                                                                                   55
                           Between 1 July 1960 and 30 June 1961                                                                                 56
                           Between 1 July 1961 and 30 June 1962                                                                                 57
                           Between 1 July 1962 and 30 June 1963                                                                                 58
                           Between 1 July 1963 and 30 June 1964                                                                                 59
                           After 30 June 1964                                                                                                   60

1 Subject to you satisfying the definition of 'permanent incapacity' as outlined in the
  superannuation legislation.

2 Release of benefits on the grounds of severe financial hardship is subject to strict criteria.
  This includes demonstrating to the Trustee that you are unable to meet reasonable and
  immediate family living expenses.

3 The Australian Prudential Regulation Authority may allow compassionate grounds
  release in order for you to meet certain expenses (for example, cost of treatment of a life-
  threatening illness for you or your dependants, or to make mortgage repayments to prevent
  the forced sale of your family home).

Withdrawal of benefits - continued

Can you roll over my benefit without my consent?                     Lump sum withdrawals will be subject to any superannuation
                                                                     legislation restrictions and there may be taxation implications
Yes, we will roll over all of your benefit to an eligible rollover
                                                                     in making such withdrawals.
fund (a special superannuation fund which protects the value of
your benefit) if:
                                                                     Allocated pension payments can only, and will only, be made
                                                                     while there is sufficient money in your member account for the
         Your account falls below $1,500 and has been
                                                                     pension provided by the Fund to be paid.
         dormant for more than 12 months
                                                                     Marriage breakdown
         We lose contact with you and classify you as 'lost'.
                                                                     Following recent changes in the law:

You will be classified as 'lost' if we have sent you two items of
                                                                              Your spouse can access information about your
written communication and they have been returned as
unclaimed mail or your address details have never been
provided to us. You will not be classified as 'lost' if we have
                                                                              Part or all of your superannuation benefit might
recently verified your address and have no reason to believe it is
                                                                              become payable to your spouse (or former spouse) in
                                                                              accordance with a court order or a superannuation
The eligible rollover fund we have nominated is National
Preservation Trust (ABN 15 759 987 889). If you wish to claim
                                                                     We are entitled to charge fees to you or your spouse if we need
a transferred benefit, you will need to contact the National
                                                                     to provide information about your benefits, or split or
Preservation Trust directly:
                                                                     otherwise deal with your benefits. Our current fees (which
                                                                     may change over time) including GST are:
GPO Box 2163T
Melbourne VIC 3001
                                                                              $100 charged to your spouse for providing
T 1800 331 210
                                                                              information about your benefits
Allocated pension
                                                                              $55 to each of you and your spouse if benefit is split.
If you take out an allocated pension, you must receive a
payment from your allocated pension each financial year. The
amount of payment is subject to the minimum and maximum
limits set by the Government. These limits may be affected if
you appoint a Reversionary Beneficiary to continue to receive
pension payments after your death. You may wish to speak to
your adviser before deciding whether to appoint a
Reversionary Beneficiary.

If you purchase the allocated pension after 1 June in any year,
you are not required to receive a payment in that financial year.

You can make lump sum withdrawals in addition to your
pension payments at any time, or you can transfer your
investment to another complying superannuation fund or
allocated pension.

                                                                                  Death of a member

In the event of your death, we will pay all your benefits within   Life insurance risks
Garnet Superannuation Fund (less any applicable taxes or
                                                                   There is a risk that your insurer may fail to meet a
                                                                   claim. In this circumstance the Trustee is not
                                                                   empowered to make a payment to a claimant. It is
Issues with respect to the selection and nomination of the
                                                                   your responsibility to satisfy yourself as to the
recipients of your death benefits are very complex and can
                                                                   suitability of any insurance policy to your own
produce very different outcomes, both in respect of taxation
and the amount ultimately paid to beneficiaries.
You should seek professional advice for the most appropriate
                                                                   Where you have nominated a Reversionary
solution to your needs before making your selection.
                                                                   Beneficiary, we will pay your benefits in the form of a
                                                                   continuing pension to your Reversionary Beneficiary.
The following are our guidelines:

         Personal superannuation                                   Where you have not nominated a Reversionary
                                                                   Beneficiary, we will pay the balance of your member
         We will pay the balance of your member account to
                                                                   accounts to your legal personal representative or to
         your legal personal representative or to one or more
                                                                   one or more of your dependants or otherwise as
         of your dependants or otherwise as permitted by law.
                                                                   permitted by law.
         The Trustee may exercise its discretion in deciding to
         which of those recipients amounts will be paid.           Non-binding nomination

         Life insurance benefits                                   You may nominate one or more dependants to whom
                                                                   you would like the Trustee to pay your death benefit,
         Life insurance benefits will be paid to your legal
                                                                   and can specify the proportion each will receive.
         personal representative or to one or more of your
                                                                   Unless there are adverse taxation consequences or
         dependants or otherwise as permitted by law. The
                                                                   other compelling reasons, such as the bankruptcy of a
         Trustee may exercise its discretion in deciding to
                                                                   dependant, the Trustee will normally follow your
         which of those recipients amounts will be paid.
                                                                   instructions. In all cases, the benefits will be paid to
                                                                   your legal personal representative or one or more of
                                                                   your dependants.

Death of a member - continued

        Dependants           Definition

       Spouse                Husband or wife or de facto husband and wife. The law says that a
                             same sex partner is not a spouse or de facto spouse.

       Child                 Includes step-child and adult child.

       Financial dependant   Anyone who is partially or wholly financially dependent on you at
                             the time of your death. They do not need to be a relative.

        Legal personal
        representative       Definition

       Executor              The person appointed by you in your will.

       Administrator         The person appointed by the court to administer your estate if you do not
                             have an executor.

                                                            Ongoing costs of the Fund

 Consumer advisory warning

 Did you know?
 Small differences in both investment performance and fees and costs can have a substantial impact
 on your long-term returns.

 For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce
 your final return by up to 20% over a 30-year period. (For example, reduce it from $100,000 to

 You should consider whether features such as superior investment performance or the provision
 of better member services justify higher fees and costs.

 You may be able to negotiate to pay lower contribution fees and management costs where
 applicable. Ask the fund or your financial advisor.

 To find out more
 If you would like to find out more, or see the impact of the fees based on your own circumstances,
 the Australian Securities and Investments Commission (ASIC) website (
 has a superannuation fee calculator to help you check out different fee options.

Note: This statement is required by law. The figures used
in the example do not relate to Garnet Superannuation
Fund’s actual fees. The actual fees are shown on the
following pages. Please be aware that Garnet
Superannuation Fund does not charge contribution fees
and so there is no ability to negotiate lower fees.

Ongoing costs of the Fund - continued

       Fees and other costs
       This document shows fees and other costs that you may be charged. These fees and costs may be
       deducted from your money, from the returns on your investment or from the fund assets as a whole.

       Taxes are set out in another part of the Product Disclosure Statement.

       You should read all the information about fees and costs because it is important to understand their
       impact on your investment.

        Type of fee or cost                                    Amount                         How and
                                                                                             when paid

        Fees when your money                        Accumulation         Pension
        moves in or out of the fund                   Division           Division

        Establishment Fee
        The fee to open your account in the fund.       NIL                 NIL             Not applicable

        Contribution Fee
        The fee on each amount contributed to           NIL                 NIL             Not applicable
        your investment – either by you or your

        Withdrawal Fee
        The fee on each amount you take out of          NIL                 NIL             Not applicable
        the fund.

        Termination Fee
        The fee to close your account.                  NIL                 NIL             Not applicable

                                     Ongoing costs of the Fund - continued

Type of fee or cost                                      Amount                     How and
                                                                                   when paid

Management costs - the fees and         Accumulation              Pension
costs for managing your investment        Division                Division

Trustee’s Fee
Includes administration and                   1.7% of investment under              Monthly in
communication costs, Custodial           management, less a rebate of 0.7%           arrears.
Trustee’s fee and all investment          of each member’s account balance
management costs.                              in excess of $100,000.

Expense Recoveries
Includes audit fees, bank charges,           0.1% of investments under            As and when
legal fees and regulators’                          management                      incurred.
requirements and levies.

Member Fee
This is the account-keeping fee        $1.25 per week         $1.25 per week         Monthly.
charged by the fund.

Pension Division Fees

      Pension establishment fee         Not applicable            $1,000       At commencement
                                                                                   of pension.
      Annual pension fee                Not applicable            $1,000           At 1 January
                                                                                    each year.
      Pension recalculation fee         Not applicable             $500            Each time a
                                                                               withdrawal of capital
                                                                                     is made.
Marriage breakdown fee

      For providing information                 $100 to your spouse
      about your benefits.

      For splitting your benefits.               $55 to each of you

Ongoing costs of the Fund - continued

       This table gives an example of how the fees and costs of the fund can affect your superannuation
       investment over a one-year period. You should use this table to compare this product with other
       superannuation products.

                                                                     Balance of $50,000 with total contributions
         Example                                                             of $5,000 during the year.

        Contribution Fees                                            NIL               There is no charge or advisor fee
                                                                                        taken from your contribution.

        Management Costs                                         1.1% to 1.8%       For every $50,000 you have in the fund
                                                                   plus $65         you will be charged between $550 and
                                                                                  $900 each year plus $65 in member fees.

        Cost of Fund                                                                If you put in $5,000 during a year and
                                                                                   your balance was $50,000, then for that
                                                                                   year you will be charged fees of $965*.

       * Additional fees may apply:

         All investment management fees are included. There
         are no establishment or withdrawal fees, and no
         commissions or trails are payable to anyone under any
         circumstances. For members of the pension division
         there are annual fees of $1,000 and pension
         recalculation fees of $500 each time a withdrawal is
         made by a pension member.


General                                                        These contributions are tax-deductible for your employer, up
                                                               to certain age-based limits. You can find current limits on the
We do not give taxation advice and you should obtain your
                                                               Australian Taxation Office website or ask your adviser. No tax
own professional independent taxation advice.
                                                               is paid on contributions you make from your after-tax income
                                                               or on spouse contributions.
Where GST is payable on the costs of the Fund it will
ultimately be borne by the members.                            What tax is paid on Fund income?

Lump sum benefits                                              The Fund pays tax of up to 15% of fund income. Fund income
                                                               is made up of:
Tax is paid on:

                                                                        Income from its investments (such as dividends and

         Fund earnings
                                                                        Capital gains (when the Fund realises investments).

                                                               The 15% rate is reduced by items like franking credits on share
What tax is paid on contributions?                             income and the concessional capital gains tax rate which is
                                                               available to superannuation funds.
15% tax is paid on contributions to the fund by:

                                                               Will I be liable for tax when I withdraw my benefit from the
         Your employer                                         Fund?
                                                               Yes, though substantial concessions normally apply. Under
         You if you are self-employed.
                                                               current taxation laws, you will receive part of your benefit tax-
                                                               free; a further part is concessionally taxed. If your benefit
There are no limits on the amount of contributions which can
                                                               exceeds current limits, it is taxed at the highest marginal rate.
be paid into the Fund by your employer including salary
sacrifice contributions made under your salary packaging
                                                               Speak to your adviser about how much tax will be deducted
arrangements, and contributions pursuant to your employer's
                                                               from your benefit when you receive it.
superannuation guarantee obligations.

                                                               Will I be personally liable for tax if I roll over my
                                                               investment to another fund?
                                                               No. However, capital gains tax may be payable by the Fund
                                                               and this would generally be deducted from your benefit

Taxation - continued

Pension                                                              How is the tax rebate calculated?
                                                                     In the year of your initial investment, your deductible amount
What tax is paid on my initial investment?
                                                                     is adjusted proportionately to the number of days remaining in
Generally, there is no tax payable, unless your investment           the year to 30 June.
includes an untaxed amount (such as an employer golden
handshake).                                                          If you are 55 years or over, you may be entitled to a tax rebate of
                                                                     15% of your assessable pension income (your gross pension
What tax is paid on the Fund income?
                                                                     income less any deductible amount). This further reduces the
While your funds are invested in a pension, no tax is paid by the    tax paid on your pension payments.
Fund on the earnings.
                                                                     If your allocated pension includes an excessive component, the
Although no tax is paid on earnings in this category, it is still    portion of the pension payments that relate to the excessive
possible for the Fund to claim imputation credits on any             component will not be entitled to a 15% rebate. The 'excessive
relevant dividends. Where investment options in this category        component' refers to an amount of the pension payment
receive imputation credits, this will be reflected in your account   relating to that part of your investment which is above your
balance.                                                             Reasonable Benefit Limit (RBL). See page 18.

What tax is paid on pension payment?
                                                                     Your specific circumstances could affect how the rebate is
Pension payments you receive generally form part of your             applied and you should seek professional advice on how it will
assessable income and are taxed at your marginal tax rate. Pay       apply to you.
As You Go (PAYG) tax is deducted from pension payments in a
similar way as would apply to an employee's salary. However,
the amount of tax you pay may be reduced by:

         Any 'deductible amount' (tax-free)

         Applicable tax rebate on the taxable portion of the
         assessable income (15% rebate).

How is the deductible amount calculated?
Your deductible (tax-free) amount is established when you first
invest in the allocated pension category. The deductible
amount is based upon your undeducted contributions and
other tax-free amounts, which are divided by your life
expectancy as published by the Australian Government

The life expectancy factor is based on either your life or the
longest life of either you or any person nominated as a
reversionary beneficiary of the pension.

                                                                                        Taxation - continued

Lump sum benefits and allocated pensions Reasonable               What happens if I don’t provide my tax file number?
Benefit Limits
                                                                  If you do not provide us with your TFN we may deduct tax
Government regulations restrict the level of concessionally       from your benefit at a higher level than you are required to pay.
taxed superannuation benefits that you may receive.               If so, you can claim this back from the Australian Taxation
‘Concessionally taxed’ means tax rates that are generally lower   Office. It also may be more difficult to find all of your
than the tax rates payable on other taxable income.               superannuation benefits in the future if you do not provide us
Concessional rates apply up to your RBL.                          with your TFN. These consequences may change.

Everyone has RBLs. In some cases, you may have applied for a
transitional RBL. The RBLs are indexed each year in line with
movements in Average Weekly Ordinary Time Earnings.

A higher pension RBL applies if at least 50% of the qualifying
portion of all benefits is taken in the form of a complying
annuity or pension. An annuity or pension is 'complying' if it
complies with certain rules. An allocated pension is not a
complying annuity or pension.

Do I need to give you my tax file number?
It's up to you, but we recommend it.

We are entitled to collect your tax file number (TFN) under
superannuation law. If you provide your TFN to us we will use
it only for legal purposes including:

         Finding your superannuation benefits where other
         information is insufficient

         Calculating tax on your benefit

         Providing information to the tax office (including
         your TFN)

         Providing it to another fund if your benefit is
         transferred (unless you tell us not to).

These purposes may change.

Contributions to the Fund

What are the contribution rules?                                                                 You must satisfy contribution rules that may vary between the
                                                                                                 personal superannuation and pension categories. You can also
The Fund may accept contributions:
                                                                                                 roll over a benefit from another superannuation fund or some
                                                                                                 termination payments from your employer.
              From your employer

              From you personally

              As eligible spouse contributions.

                                                                                                 Mandated     Voluntary
                          Contribution rules                                                     Employer     employer       You       Spouse1

                           Under 65

                           65 to 69 and gainfully employed on at least a
                           part-time basis2

                           70 to 74 and gainfully employed on at least a                                          X                       X
                           part-time basis

                           75 and over                                                                            X           X           X

    Your spouse includes your de facto spouse. You must be living together at the time the
    contribution is made. A tax rebate may be available for some spouse contributions.

    A part-time basis means you have worked for at least 40 hours in a period of not more than
    30 consecutive days during the final year.

                                                                       Allocated pension payments

Allocated pension payments                                        You can change the frequency of your income payments. To
                                                                  alter the frequency of your income payments or the payment
Your allocated pension may be purchased with any eligible
                                                                  details we must receive your written instructions at least 21
transfer that consists of an 'unrestricted non-preserved'
                                                                  business days before the date of the pension payment.
amount. Eligible transfers include a transfer or rollover from:

                                                                  Your pension payments will have any applicable income tax
         Personal superannuation
                                                                  deducted. Your pension payments will not be subject to any
         Any other regulated superannuation or rollover
                                                                  withdrawal tax.
         Any eligible termination payment paid as a lump sum.     How do I calculate my annual income?
                                                                  The Government applies minimum and maximum annual
When can I receive my income payments?
                                                                  limits for allocated pension payments. These are based on
You must receive at least one pension payment from your
                                                                  either your life expectancy or that of the Reversionary
account each financial year unless you invest after 1 June that
                                                                  Beneficiary (where the person’s life expectancy is longer than
year. Payments are made on or around the 15th day of the
                                                                  your own).
month and can be paid into a bank, building society or credit
union account with a branch in Australia.
                                                                  You can calculate your annual income by dividing your account
Can I change my pension payments?                                 balance in the allocated pension by the relevant pension factor.
                                                                  These limits are calculated when you invest and at 1 July, the
You can change your payment levels each year within the
                                                                  beginning of each financial year. In the year of your initial
minimum and maximum annual limits. Your pension
                                                                  investment, your limits are adjusted proportionately to the
payments can be set in the following ways:
                                                                  number of days remaining in the year to 30 June.

         At a fixed amount you select on investment
                                                                  If you invest on or after 1 June, you are not required to receive
         An amount you advise each year
                                                                  any pension payment until the following financial year.
         At the minimum or maximum annual limit.

In the absence of a specific request from you, the Trustee will
pay a pension of the minimum annual amount.

Allocated pension payments - continued

How long will my pension payments continue?
Your allocated pension makes payments each year until your
balance is reduced to zero. However, once your balance falls
below $5,000 we would normally require you to make a full

It is important to understand that the amount of time your
pension will last depends on how much you request to be paid
each year and the amount of your original investment. The
lower the pension payments requested, the longer your
allocated pension will last. The earning rate of your investment
is also an important factor.

How do I make withdrawals?
You can send us a completed benefit payment request form to
receive part or all of your benefits. To obtain a copy of this
form please call us.

Partial withdrawals
You can make lump sum partial withdrawals at any time
provided you take at least $10,000. Following a withdrawal, we
will need to recalculate your minimum and maximum pension.
A charge of $500 will be made to your member’s account for
each such withdrawal and recalculation.

These withdrawals will be treated as lump sum withdrawals
and taxed accordingly. The lump sum tax rules can be complex
so you may wish to speak to your adviser prior to withdrawing.

Full withdrawal
Where a full withdrawal occurs, we will ensure your minimum
pension payment obligations are met first before paying the
rest of the payment as a lump sum withdrawal. You will need to
notify us if you wish a higher amount to be paid as a pension
payment subject to the maximum limit.

                                                                                           Cooling off period

You have a period of 14 days during which you can cancel your    Any money paid by you on your behalf, including
membership of the Fund by notifying us in writing. The 14-       contributions, transfers and rollovers, will be returned as
day cooling off period starts from (whichever occurs first):     directed by you (subject to preservation requirements) within
                                                                 one month of notifying us of your desire to cool off. If the
        The date you receive confirmation of your investment     benefits are subject to preservation requirements, you must
        in the Fund                                              nominate a superannuation entity (or a retirement savings
                                                                 account) into which such benefits are to be paid. If the
        Five days after you become a member.                     nomination by you cannot be effected, this may result in
                                                                 benefits being transferred to an eligible rollover fund.
It does not depend on whether any money had been invested in
the fund by you or on your behalf.

If you cancel your membership during this period, the amount
repaid or transferred is adjusted to reflect:

        Any increase or decrease in the underlying fund assets
        between the time we process your application and the
        time of cooling off

        Any tax or duties payable

        The administrative costs of setting up and terminating

General information for members

Compliance information                                              Term of appointment and removal of member
Ensuring that members' interests are protected is critical to the
Trustee. The Fund complies with Government legislation such         Member representatives will continue their appointment unless
as the Superannuation Industry (Supervision) Act 1993 (SIS)         one of the following occurs in relation to the individual.
and submits annual compliance returns to the industry
regulator - the Australian Prudential Regulation Authority                   Death
                                                                             Mental or physical incapacity
The Fund is a 'complying superannuation fund' for the
purposes of SIS and the Trustee has not at any time incurred                 The person becoming a 'disqualified person' as
any penalties under the SIS Act.                                             defined in Part 15 of the SIS Act (as a result of
                                                                             insolvency, of being convicted of a dishonest conduct
Election rules                                                               office, or being the subject of a civil penalty order
The board of Garnet Superannuation Pty Ltd consists of six                   under the SIS Act)
directors. In accordance with the equal representation rules of
the SIS Act, three directors function as employer                            The Trustee is suspended or removed by the
representatives and three as member representatives.                         Commissioner under Part 17 of the SIS Act (for
                                                                             example, where the Commissioner is concerned about
Rules for election of member representatives                                 the financial position of the Fund)
Member representatives are appointed following an election.
Voting is restricted to members of Garnet Superannuation                     The member representative ceases to be a member of
Fund at the time the election is called.                                     the Fund

Nominations for member representatives are invited from                      The board receives a petition from at least 20 current
members. Membership of Garnet Superannuation Fund is a                       members of Garnet Superannuation Fund requesting
prerequisite for nomination as a member representative.                      the removal of an individual member representative.
Members have 14 days to return nomination forms.
                                                                    Casual vacancy

At the close of nominations the Trustee circulates a ballot paper   A casual vacancy may occur between elections if an elected
listing the candidates. Members vote for up to three candidates     director:
by placing a cross in the box next to a candidate’s name.
Fourteen days following the issuing of ballot papers the                     Resigns
election is closed and votes counted. The candidates with the
highest number of votes are elected.                                         Is removed from office

                                                                             Is ineligible or unable to continue in office for any
                                                                             reason whatsoever.

                                                                    That vacancy must be filled within 90 days by invitation of the
                                                                    remaining directors, firstly from unsuccessful candidates at the
                                                                    immediately prior election (who are still eligible) and , after
                                                                    that, from eligible members of the Fund.

                                     General information for members - continued

Information available to members                                   Keeping you informed
The Annual Report to Members accompanies your annual               We will send you regular information and updates on your
member’s statement and provides you with a concise summary         Garnet Superannuation Fund investments and financial
of the Fund’s operations for the past year.                        markets. Written communications include:

The following additional information is available to members                A confirmation advice of receipt of initial and
on request:                                                                 additional contributions

        Annual Return of the Fund                                           Yearly statements, showing your current balance
                                                                            within the Garnet Superannuation Fund
        Certificate by the Trustee of the Fund in respect of the
        Annual Return                                                       An annual report.

        Notice of compliance from the Commissioner of
        APRA                                                       General information

        Audited accounts and the Auditor's report                  Social security
                                                                   Investing in the Garnet Superannuation Fund may impact on
        Trust Deed.                                                your social security entitlements, including the Age Pension.
                                                                   You should seek professional advice on your social security
Transferring your superannuation accounts to the Garnet            position before making an investment decision.
Superannuation Fund
If you have money tied up in separate accounts in different        Rights and obligations
superannuation funds, you are likely to be paying more than        Your rights and obligations as a member of the Garnet
one set of member charges. When you transfer all your              Superannuation Fund are generally set out in our Trust Deed of
superannuation into the Garnet Superannuation Fund, you will       9 May 1993 as amended, and the SIS Act. A number of the
only pay the one set of member charges and, with just one          more important rights and obligations are summarised below
superannuation account, you'll be able to keep track of your       and elsewhere in this document. A copy of the Trust Deed is
account balance more easily.                                       available from us free of charge.

Staying in touch                                                   Custody of the assets
It is important that we can contact you to keep you up to date     Equity Trustees Ltd is currently the custodian of all Australian
with your superannuation investments. Please advise us of any      investments of the Garnet Superannuation Fund. Other
changes to your personal details such as postal address,           appropriate Trustees hold the international investments of the
telephone numbers and email address as soon as possible. If        Fund.
you wish to alter other membership details such as your
Beneficiary Nomination, you will need to complete forms            General taxation information
available from us.                                                 The Trustee is authorised to deduct any required tax from the
                                                                   Fund, a member’s benefit or a contribution.
Staying in touch also ensures you do not become ‘lost’ and
your superannuation account will not be treated as unclaimed

General information for members - continued

Our responsibilities to you                                                   Our right to invoke minimum limits in regard to
                                                                              matters such as benefit payments, transfers, switches,
The responsibilities and obligations of Garnet Superannuation
                                                                              balances and contributions
Pty Ltd, as the trustee of the Fund, are set out in the Trust Deed
as well as the SIS Act and general trust law.
                                                                              Our right to apportion liabilities and any current or
                                                                              future tax benefit, liability or credit between
The Trust Deed contains a number of provisions relating to the
rights, terms, conditions and obligations imposed on both
Garnet Superannuation Pty Ltd, as the Trustee of the Fund, and
                                                                              Our broad powers to invest and generally manage the
investors. Some of the provisions of the Trust Deed are
discussed elsewhere in this document.

                                                                     The Trust Deed also deals with our liabilities and indemnity in
Provisions that relate to your rights as an investor include your
                                                                     relation to the Fund. For example, we are generally not liable
right to share in any Fund income, and how we calculate it.
                                                                     and, subject to the law, we can recover from the Fund any loss
                                                                     and expenditure we incur, unless we have been dishonest or
Provisions governing our powers and duties, include:
                                                                     have intentionally or recklessly failed to exercise the level of
                                                                     care and diligence required of us.
         The maximum amount of fees we can charge and
         expenses we can recover
                                                                     We can change the Trust Deed. We will give you adequate
                                                                     notice of any changes to the Trust Deed that we think are
         Our power to combine, split or close asset portfolios,
                                                                     important to you before they are made.
         in which case we may reallocate investors into other
         asset portfolios subject to giving them prior notice

         Our right to refuse a contribution without giving any

         Our right to refuse to pay a benefit if we believe it may
         contravene the law

         Our right to defer payment of benefits if we consider
         it appropriate

         Our right to deduct from payments any amount we
         reasonably believe should be deducted for tax

         Our right to determine values more than once per day

         When we can retire as the trustee of the Fund

                                                  Inquiries and complaints

Contact us                           If you have any inquiries relating to the operation or the
                                     management of your membership in the Garnet
T            +61 3 9611 6611
                                     Superannuation Fund, please contact us.

F            +61 3 9611 6666
                                     If you have a complaint, please contact us.

                                     We will acknowledge your complaint in writing within 14 days.
                                     We will then give proper consideration to the complaint and
Post         GPO Box 4369
                                     advise you of the outcome within 90 days of receiving the
             Melbourne VIC 3001

Deliveries   Level 35, South Tower
                                     If you are not satisfied with the handling of your complaint or
             Rialto Towers
                                     our decision, you may lodge a complaint with the
             525 Collins Street
                                     Superannuation Complaints Tribunal, an independent body set
             Melbourne VIC 3000
                                     up by the Federal Government to assist members or
                                     beneficiaries to resolve certain superannuation complaints.

                                     You can phone the Superannuation Complaints Tribunal on
                                     1300 884 114.

                                     It helps us if you have your member number handy when you
                                     contact us. Our business hours are 8.45 am to 5.15 pm on
                                     Melbourne business days.


Why do we collect personal information?                                    Any superannuation fund or arrangement to which
                                                                           your benefits are to be transferred or rolled over
We collect personal information in the application form. In
                                                                           (including the administrator of the fund or
future we may collect additional personal information by other
means and from other people. If you have any questions about
the personal information we collect please contact us.
                                                                           Your spouse or former spouse where required by law

You may ask for access to the personal information we hold
                                                                           Any court or tribunal if and to the extent permitted by
about you. Access requests for personal information must be
made in writing, and will be assessed in accordance with the
National Privacy Principles.
                                                                           In the event of your death, your legal personal
                                                                           representative, any person who may be entitled to
We use personal information to provide you with our product.
                                                                           receive your death benefit, any person contacted in
This includes processing your applications, administering your
                                                                           relation to the processing of the death benefit and
investment, managing the assets comprising your investment
                                                                           their advisers.
and complying with Australian taxation and superannuation
laws, the Corporations Act, in some cases the Financial
                                                                  We are required to collect this information under Australian
Transaction Reports Act, and other laws and regulations.
                                                                  superannuation taxation, family and trust law.

If we do not receive all the information we need, we may be       What to do if our records are wrong
unable to provide the product, process an application and/or
                                                                  If you think our records are wrong or out of date - particularly
administer an investment.
                                                                  your address or email address - it is important that you contact
Who can we give your personal information to?                     us and we will correct them.

The types of organisations or persons to whom we usually
disclose personal information include:

         The Australian Taxation Office and other
         government bodies (for example, if required by law)

         Members' advisers and adviser dealer groups, with
         members’ consent

         Any existing or prospective third party service
         provider we may engage to provide administration,
         technology, auditing, legal, mailing or printing

         Member representatives, for example, legal advisers or
         any attorney

                                                              How to complete your application

Personal superannuation checklist                                       Nomination of beneficiary form
To invest in the Garnet Superannuation Fund you need to send            This form allows members to nominate beneficiaries
us:                                                                     for the payment of benefits in the event of a member’s
                                                                        death. This nomination is not binding on the Trustee
        Member application form                                         and may be changed by the member at any time.
        The member application must be completed and
        signed before contributions can be accepted for the             Individual Tax File Number notification
        member.                                                         We are required by law to ask all members for their
                                                                        TFN. Declining to quote a tax file number is not an
        Remittance of contributions form                                offence. However, it may result in a member’s
        We ask that this form accompany all contributions               superannuation becoming lost should the member
        made to the Fund together with a cheque made                    change address or tax being withheld at the highest
        payable to Garnet Superannuation Pty Ltd. This form             marginal rate on any benefits withdrawn from the
        assists with the correct allocation and recording               Fund.
        of the superannuation contributions.
                                                                Allocated pension checklist
        Transfer of benefits form                               To invest in the Garnet Superannuation Fund - allocated
        Should members wish to transfer existing                pension, you need to send us:
        superannuation entitlements into Garnet
        Superannuation Fund, the Transfer of Superannuation             Allocated Pension Account Application form
        Benefits form will need to be completed detailing the
        name and address of the existing superannuation fund            Transfer of Benefits form
        as well as the appropriate member number.
                                                                        Nomination of Beneficiary form
        On receipt of the completed and signed form we will
        contact the superannuation fund and arrange the                 Tax File Number declaration.
        roll over of benefits into Garnet.

                                                                Cheques must be drawn from a bank, building society or credit
                                                                union with a branch in Australia and sent to:

                                                                Garnet Superannuation Pty Ltd
                                                                GPO Box 4369
                                                                Melbourne VIC 3001
Garnet Superannuation Fund
Level 35, South Tower
Rialto Towers
525 Collins Street
Melbourne VIC 3000
T +61 3 9611 6611
F +61 3 9611 6666

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