Changes to Monthly Income and Mortgage Funds, Term Fund and WealthFocus options

Update

• Perpetual's Monthly Income and Mortgage Funds – open for new and additional investments. Distributions continue unaffected. Quarterly redemption process established. More
• WealthFocus Investment Funds, Super Plan, Pension Plan – applications not being accepted and quarterly redemption process established for four funds/options . Distributions continue unaffected.  More
• Term Fund – withdrawal offer now open until 3pm 29 May 2009. Fund closed to new and additional investments. More
  

Why have the changes been made?

The changes were made to protect the interests of investors. Following the introduction of the Federal Government’s bank deposit guarantee in October 2008, there was a marked increase in redemptions in mortgage and some income funds across the industry. Perpetual, along with a number of other fund managers, changed redemption and/or application processes to manage redemptions in an orderly way and ensure the fund assets are managed in the interests of all investors.                                                                                                                        Return to top

How is Perpetual protecting your interests?

Since 1886, Perpetual has been managing and administering the assets of generations of Australians. Our 122 years in trustee and financial management have given us the experience and expertise to work through different market cycles. We’ve helped clients manage their wealth through recessions and market downturns, as well as times of prosperity.

We will continue to act in the best interests of our clients through the current challenging market conditions with the aim of improving investor access to affected funds.

As responsible entity/trustee we have a duty to ensure all investors are treated equally and informed about such significant events. In carrying out our duties, we are subject to the Corporations Act 2001 and must always:

• act honestly and in the best interests of all investors
• exercise care and diligence
• treat all investors equally.

The affected Perpetual investment products are closely regulated by the relevant regulatory authorities – ASIC for investment funds and APRA for superannuation and pension funds.  The funds’ assets are held completely separate to the assets of Perpetual’s business. Perpetual does not have the right or ability to access clients’ investment money for our own use.

How will we keep you informed?

We will continue to update this website with further information, including detail about transaction arrangements for the affected funds. We will communicate about any changes directly to all investors in the affected funds, as well as advisers.

Hardship claims for mortgage funds

Perpetual has received special relief from the regulator to allow us to pay redemptions for mortgage funds with restricted redemptions in the following cases of hardship:

• severe financial hardship
• medical costs
• accommodation or transport modifications
• funeral and related expenses
• care for the terminally ill
• home mortgage foreclosure
• binding financial obligation made prior to suspension
• other compassionate grounds
• permanent incapacity.

The specific criteria to meet these hardship conditions of release are detailed in the statutory declaration that you will need to complete in order to be considered.

How to make a hardship claim
You must complete the statutory declaration, explaining why you need to withdraw funds to meet a financial hardship. To make a claim you must have exhausted all other means of accessing funds to meet your needs including, realising other liquid assets, applying for financial hardship through your superannuation fund and applying to Centrelink for assistance.

How claims are processed
1. We will consider hardship claims on a case by case basis according to the ASIC hardship criteria.
2. The maximum payment allowed by ASIC is $20,000 plus half of your remaining balance, if any. We will pay a lesser amount if we determine that the hardship being experienced can be addressed by a lesser amount.
3. You can only make one hardship claim for each mortgage fund you invest in.
4. We will process claims as they are received. However, to enable us to manage the cash available for all hardship claims, we will only make payments monthly.
5. If there is not enough cash to meet all claims in a month (see ‘Payment amounts’ below), we may pay some claims in full and defer payment of others.  We may also pay claims on a partial basis, the remainder of which will be paid in the following months as further cash becomes available.
6. You can still participate in the quarterly withdrawal process for your mortgage fund while your claim is being assessed.

Payment amounts for Perpetual mortgage funds
Whether Perpetual can make a hardship payment will depend on the amount of cash available in the mortgage fund. Therefore, we cannot guarantee to make a hardship payment even if your hardship claim is approved.

Payments for WealthFocus underlying funds
If you are invested in a suspended fund through a WealthFocus product, you are investing in an underlying fund. Our ability to make a hardship claim will be based on the underlying fund’s ability to provide hardship payments. Where hardship payments are not made available from an underlying fund, any cash received by us through the underlying fund’s withdrawal process will be paid for hardship claims prior to any payment to other investors.

Your rights to make a hardship claim will be based on the underlying fund’s ability to provide hardship payments.
If we receive any withdrawal proceeds through an underlying fund’s withdrawal process, we will use these to pay hardship claims prior to any payments to other investors.

Please note that hardship claims are not available for APN Property for Income Fund as ASIC has only granted relief in relation to mortgage funds. If ASIC extends relief to the APN Property for Income Fund we will seek to make hardship claims available for this fund.

We expect money to be available for hardship claims from the Challenger Howard Mortgage Income Fund at the end of March 2009. The reason for this is that the ASIC relief so far obtained by Challenger does not extend to indirect investors via platforms such as WealthFocus and that Challenger's first withdrawal offer will not be made until early 2009.

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