WealthFocus Investment Funds - Perpetual Mortgage

WealthFocus – Perpetual Mortgage (Investments, Super and Pensions)

Important changes

We have decided to commence returning capital to investors/members and to close the Fund/Investment Options on 17 October 2011. This also means we are no longer offering quarterly withdrawals.

There will be no withdrawal payments for September 2011. You will not be required to submit any further quarterly withdrawal requests.

How long will the return of capital take?
We will be aiming to return capital to all investors/members on a six monthly basis with the first payment being in March 2012. With the first payment, you can expect to receive at least 20 per cent of your investment. We expect to return the majority of your capital to you by mid-2014.

Will I still get monthly income/return?
While the assets in the Fund/Investment Option continue to generate income, you will continue to receive monthly income/returns.

How will capital be returned to investors
Return of capital may be paid into another Fund / Investment Option offered on WealthFocus. For Super and Pension clients the default Investment Option will be the Perpetual Cash Investment Option. For Investments, clients can also choose to have the return of capital payments paid into their bank account.

Will I still be able to withdraw under financial hardship?
Perpetual has received special relief from the regulator to allow us to make hardship payments for the Fund’s in certain cases of hardship.

Hardship criteria

The following cases of hardship will be considered:

• severe financial hardship
• unemployed for at least three months
• 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
• permanent incapacity
• other compassionate grounds
• investor is deceased and beneficiary of the estate is suffering from one of the above grounds of hardship

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

Our handling of your personal information will be administered in accordance with our Privacy Policy.

How to make a hardship claim

You must complete the statutory declaration and submit relevant supporting documentation. 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.

Our handling of your personal information will be administered in accordance with our Privacy Policy.

How claims are processed

1. We will consider hardship claims on a case by case basis according to the hardship criteria.
2. The maximum payment allowed by the regulator is $100,000 per calendar year (for investment funds). 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 four hardship claims each calendar year as an investor in a mortgage fund (for investment funds), or where you are a beneficiary of a deceased estate invested in a mortgage fund (for investment funds) and you meet the hardship criteria. This is subject to the overall cap of $100,000 per calendar year.
4. We will process claims as they are received.
5. You will still have your first return of capital processed to you in March 2012.

Payment amounts

Whether we can make a hardship payment will depend on the amount of cash available. Therefore, we cannot guarantee to make a hardship payment even if your hardship claim is approved.

Will my pension payments be affected?
If you currently receive a pension payment, this will continue to be paid from the available funds in other Investment Options.

For members with significant investments in this Investment Option, alternative arrangements will be made to ensure pension payments continue to be made. We will contact you if this is the case for you.

Beware of unsolicited offers to purchase your investments

Over the past few months, investors in Perpetual WealthFocus Investment Funds - Perpetual Mortgage Fund have received unsolicited offers to purchase their units for substantially less than their current value. These offers were made by Direct Share Purchasing Corporation whose sole director and company secretary is David Tweed.

Please beware of any unsolicited offers to purchase your investments and scrutinise such offers very carefully before accepting them. If you receive such an offer we urge you to obtain financial and/or legal advice. 

Special transaction processes for three funds/options

WealthFocus Investment Funds, Super Plan, Pension Plan - three funds/options have suspended applications and withdrawals on demand. Distributions are unaffected. Quarterly withdrawal processes have been established based on the level of money we have been able to withdraw through the underlying manager’s withdrawal process during each quarter.

Affected funds/options:

• APN Property for Income
• Australian Unity Mortgage Income
• Challenger Howard Mortgage

Transaction processes for suspended funds/options

Transaction request	WealthFocus Investment Funds – Perpetual and other managers’ funds	WealthFocus Super Plan – Perpetual and other managers’ funds	WealthFocus Pension Plan – Perpetual and other managers’ funds
Applications –new	suspended – money returned	suspended – money returned	suspended – money returned
Applications	current clients invested in Perpetual's Cash Fund/Option*	invested in Perpetual's Cash Fund/Option*	invested in Perpetual's Cash Fund/Option*
Savings plans or regular contributions	invested in Perpetual's Cash Fund/Option*	invested in Perpetual's Cash Fund/Option*	not applicable
Withdrawals including regular withdrawals	quarterly (based on money available)	quarterly (based on money available)	quarterly (based on money available)
Switches in	invested in Perpetual's Cash Fund/Option*	invested in Perpetual's Cash Fund/Option*	invested in Perpetual's Cash Fund/Option*
Switches out	suspended - included in quarterly withdrawal process	suspended - included in quarterly withdrawal process	suspended - included in quarterly withdrawal process
Distribution reinvestments	being paid to Perpetual's Cash Fund/Option unless investor requests reinvestment	not applicable	not applicable
Dollar cost averaging plan	invested pro-rata into investor’s open options, OR suspended if only invested in affected options	invested pro-rata into investor’s open options, OR suspended if only invested in affected options	invested pro-rata into investor’s open options, OR suspended if only invested in affected options
Super to pension or pension to super transfers	not applicable	Super to pension transfers considered case by case, based on the amount invested in affected investment options	will be processed on a monthly basis
Auto-rebalancing	suspended - not available	suspended - not available	suspended - not available
Pension payments	not applicable	not applicable	Arrangements have been made to allow pension payments to continue. Affected members were notified of these arrangements in May/June 2010
Adviser service fee (ASF)	Where the client also holds non-suspended options, the total ASF will be proportionally allocated across the non-suspended options. Where the client only holds suspended options, the ASF will be cancelled	Where the client also holds non-suspended options, the total ASF will be proportionally allocated across the non-suspended options. Where the client only holds suspended options, the ASF will be cancelled	Where the client also holds non-suspended options, the total ASF will be proportionally allocated across the non-suspended options. Where the client only holds suspended options, the ASF will be cancelled
Trail rebates	Will continue to be paid into affected options	Will continue to be paid into affected options	Will continue to be paid into affected options

*New investments that have been invested in Perpetual’s Cash Fund/Option may be switched to other available options at any time by notifying us in writing.

Please note – this table does not cover all types of transactions. It will be updated with any changes.

The usual superannuation rules and pension rules on access to benefits apply. For example preserved benefits must satisfy a condition of release such as reaching age 65.

Where a request is made to rollover to another superannuation fund we will complete the rollover for unaffected investment options and include the request for any affected investment options in the quarterly withdrawal process.

WealthFocus – quarterly withdrawal process for affected funds/options

Withdrawal payments are based on the level of cash available from each affected Fund/Option at the end of each quarter and are paid the following month.

Any withdrawal requests received before 3pm on the last business day of the quarter will be eligible to participate in that quarter’s withdrawal process, subject to eligibility. You may make one withdrawal request each quarter and if we receive more than one in a quarter we will only accept the most recent one received.

A withdrawal request will only be eligible for the quarter in which it is received unless no withdrawals are paid for that quarter, in which case it will be carried forward to the following quarter.

Please notify us in writing if you wish to cancel a withdrawal request before quarter end.

If there is not enough cash available in the Funds/Options to fully meet withdrawal requests then you will receive a pro-rata amount. For example, if a Fund had $50 million available cash and we received requests totalling $100 million then you would be paid 50% of your withdrawal request.

Investors' withdrawal requests are pooled and treated equally (unless hardship grounds apply). The payout ratio is calculated by dividing a fund's available cash as follows: 

Per cent of withdrawal requests paid (payout ratio) = total cash available from fund / total investor withdrawal requests

Any investor in the following funds/investment options:

• WealthFocus Challenger Howard Mortgage Fund/Investment Option
• WealthFocus APN Property for Income Fund/Investment Option
• WealthFocus Australian Unity Mortgage Income Fund/Investment Option

who submits a full withdrawal or switch request and has an account balance of $1,000 or less, will be paid out in full. This avoids ever-diminishing amounts being paid to investors with small account balances. We don’t anticipate these payments having any material impact on the withdrawal amounts paid to other investors.

Withdrawals for the external Investment Options will depend on the level of money we have been able to withdraw through a fund manager’s withdrawal process for that quarter as well as the level of withdrawal requests we receive. The timing and process for us to request withdrawals is different for each manager. For some quarters we may not receive any money from a manager, in which case no withdrawals can be paid.

Payout ratios for quarter ended 30 September 2011

	WealthFocus Investment Funds	Super Plan	Pension Plan
APN Property for Income	35%	35%	35%
Australian Unity Mortgage Income	41%	41%	41%
Challenger Howard Mortgage	100%	100%	100%

WealthFocus Pension Plan - pension payments

We have made arrangements to continue to make regular pension payments for people invested in affected options.

For investors invested in other unaffected options we will continue to pay regular income in proportion to their investments in those options. For investors only invested in suspended investment options we have made other arrangements to continue regular payments. 

How we keep you informed

We continue to update this website with further information and detail about transaction arrangements for the affected funds. We have written directly to all investors in the funds, as well as advisers.