"Police Superannuation Scheme www policesupersa gov au MICHAEL HOGG"
Police Superannuation Scheme www.policesupersa.gov.au MICHAEL HOGG Obtain full details of Funds SA’s investment strategy and performance by: Investment performance for • Ph: 204 2355 • Fax: 8204 2366 • www.funds.sa.gov.au the ﬁnancial year 2006-07 • firstname.lastname@example.org F unds SA, a statutory body period and hence solidly ahead of Crediting Rates achieved for the Pension and established under the the investment target. At the end of each ﬁnancial Lump Sum schemes by Funds SA 36 Superannuation Funds Table 1 below shows the year, the Police Superannuation as at 30 June each year. Management Corporation investment returns (net of fees) Board is required to declare rates For the ﬁnancial year 2006-07, Po l i c e J o u r n a l October 2007 j o u r n a l . p a s a . a s n . a u Act 1995, is responsible for the achieved by Funds SA year on year of return to be credited to the the Board declared crediting rates management and investment and the average return over the various accounts of members of of 19.1 per cent for the Pension of the assets of the Police period, compared to the rate of the Pension and Lump schemes. and 18.2 per cent for the Lump Superannuation Scheme. inﬂation. The investment returns (net of Sum schemes respectively, to be It is important to understand investment fees and the Board’s applied to voluntary contribution, Investment objective that investment markets can administration expenses) achieved rollover and co-contribution The investment objective set experience periods of extreme by Funds SA are used by the Board accounts. The above table shows for the Pension and Lump Sum volatility from time to time. This to calculate end-of-year crediting crediting rates for voluntary schemes is to provide an average volatility may impact the Pension rates. contribution, rollover and co- return of 4.5 per cent per annum and Lump Sum returns. As shown Table 3 below shows the contribution accounts over the in excess of the rate of inﬂation in the table below, annual returns investment returns, net of past ﬁve years. over an investment time horizon are volatile, ranging from 5.4 per investment fees and the of eight years or longer. There cent to 19.5 per cent, nevertheless Police Superannuation Board’s Member contribution is a likelihood of two negative providing a strong annualized administration expenses over the accounts annual returns over the eight-year return of 10.4 per cent per annum past ﬁve years. These investment The end-of-year crediting rate period. over the eight-year period. returns are used to calculate calculation is based on the average annual crediting rates. of the net rates of return (money Fund performance Asset mix The Board has determined the weighted return net of investment For the 12 months to 30 Central to Funds SA’s investment following policies in respect of fees and administration June 2007, Funds SA achieved approach is the rigorous end-of-year crediting rates to be expenses) achieved for the Police investment returns (net of implementation of the concept applied to members’ accounts. Superannuation Fund (Pension investment fees) for the Pension of diversiﬁcation. Funds SA has and Lump Sum scheme divisions), and Lump Sum schemes of 19.5 built diversiﬁcation into all levels Voluntary contribution, by Funds SA over the previous per cent. of the Police Superannuation roll-over and three years. Over the past eight years, the Scheme: diversiﬁcation of asset co-contribution accounts For the ﬁnancial year 2006-07, funds have earned an average classes (as shown below in table The end-of-year crediting rate the Board declared crediting rates 10.4 per cent per annum. This is 2), investment style, investment is the net rates of return (money for the Pension and Lump Sum 7.0 per cent per annum in excess managers and underlying weighted return net of investment scheme divisions of 17.9 per cent of the rate of inﬂation over the investments. fees and administration expenses) and 17.5 per cent respectively, to be applied to member contribution Table 1 - Investment returns (net of fees) to June 2007 accounts. Table 4 below shows Scheme 2000 2001 2002 2003 2004 2005 2006 2007 8 years crediting rates for member annualized contribution accounts over the Pension 17.0% 3.4% -5.4% -0.7% 17.9% 15.2% 19.4% 19.5% 10.4% past ﬁve years. Lump Sum 17.0% 3.4% -5.4% -0.7% 17.9% 15.2% 19.4% 19.5% 10.4% 3.2% 6.0% 2.8% 2.7% 2.5% 2.5% 4.0% 2.0% 3.2% Table 2 Inﬂation Australian Equities 32% Table 3 Property 10% Scheme 2003 2004 2005 2006 2007 5 years annualized Diversiﬁed Strategies (Growth) 6% Pension -0.8% 17.9% 15.2% 19.4% 19.1% 13.9% -0.4% 17.9% 15.1% 19.2% 18.2% 13.8% Fixed Interest 5% Lump Sum International Equities 32% Table 4 Inﬂation Linked Securities 8% Scheme 2003 2004 2005 2006 2007 5 years annualized -1.0% 3.9% 10.7% 17.5% 17.9% 9.5% Diversiﬁed Strategies (income) 5% Pension Lump Sum -1.0% 4.0% 10.9% 17.4% 17.5% 9.5% Cash 2%