Continuous Disclosure and Important Information
PRODUCT DISCLOSURE STATEMENT (PDS)
The PDS contains detailed information about the Perpetual Private Super Wrap such as the features, benefits, risks fees and costs. Please note that an adviser or account manager registered with the Perpetual Private Wrap is integral to the establishment and ongoing management of a Perpetual Private Super Wrap account.
Product information incorporated by reference
The PDS refers to other information relevant to the product (information which is ‘incorporated by reference’) which can be found below. The incorporated information forms part of the PDS and should be read together with the main PDS document above.
These documents are relevant to the features offered in the Perpetual Private Super Wrap
Fund Annual Report
SIGNIFICANT EVENT TABLE
Significant events and material change notices for the Perpetual Private Super Wrap.
|Notice date||Nature of event or change||Impact of the change|
|1 November 2018||Change to external dispute resolution (EDR) scheme.||
From 1 November 2018 there will be a change to the EDR scheme which unresolved complaints can be referred to. Please refer to this transitional disclosure for more information.
|1 August 2017||New insurers through Super Wrap
References to Macquarie Life in the Perpetual Private Super Wrap Product Disclosure Statement dated 4 April 2016 (PDS) were previously replaced with Zurich Australia Limited from 1 October 2016 (refer to continuous disclosure below). There is now an additional insurer that you may consider.
Effective from 1 August 2017, there will be changes to the insurance cover offered through the Perpetual Private Super Wrap.
In addition to Zurich Australia Limited, AIA Australia Limited (ABN 79 004 837 861, AFSL 230043) will now offer insurance cover through the Perpetual Private Super Wrap from this date.
The PDS is updated with the following changes:
Any references to Zurich Australia Limited in the PDS should now be taken to be read as ‘the Insurer’ or ‘Insurer’.For detailed information about the insurance cover offered through the Perpetual Private Super Wrap from 1 August 2017, please refer to the respective life insurance offer document issued by Zurich Australia Limited or AIA Australia Limited, which can be obtained separately from your adviser.
|7 April 2017
Important note – this section provides information about the rules currently applying to superannuation and the changes applicable from 1 July 2017, which were passed into law in November 2016. Refer to the flyer for further information.
Information on ‘Concessional Contributions’ is now inserted to the ‘Understanding Superannuation’ section of the PDS on page 15.
REDUCTION TO THE ANNUAL CONCESSIONAL CONTRIBUTIONS CAP
The current general concessional contributions cap ($30,000 for the 2016/2017 financial year) and the transitional cap ($35,000 for individuals aged 49 years or over on the preceding 30 June) will be reduced to $25,000 from 1 July 2017. This amount will be indexed in line with Average Weekly Ordinary Time Earnings (AWOTE) once the increase in the indexed amount is greater than $2,500.
NEW PROVISION TO MAKE ‘CATCH-UP’ CONCESSIONAL CONTRIBUTIONS
Members with a total superannuation balance1 of $500,000 or less on 30 June of the previous financial year who have not fully utilised their concessional contributions cap in the 2018/2019 or subsequent financial years will be able to carry forward the unused cap amounts on a rolling five consecutive year basis to make additional concessional contributions. The 2019/2020 financial year will be the first time that additional concessional contributions will be able to be made.
1 Your total superannuation balance is generally the withdrawal value of all of your superannuation, including any accumulation, transition to retirement and pension accounts
Information on ‘Non-Concessional Contributions’ is now inserted to the ‘Understanding Superannuation’ section of the PDS on page 15.
REDUCTION TO THE NON-CONCESSIONAL CONTRIBUTIONS CAP
A lower non-concessional contributions cap of $100,000 (that is, four times the new concessional contributions cap) will apply from 1 July 2017. Where a member has a total superannuation balance of $1.6 million or more on 30 June of the previous financial year, they will not be eligible to make non-concessional contributions in that financial year. Members under age 65 will be eligible to bring forward two or three years of non-concessional contributions depending on their total superannuation balance. Transitional arrangements will apply to ‘bring forward’ amounts triggered in the 2015/2016 or 2016/2017 financial years that are not fully utilised by 30 June 2017 such that your cap will be reassessed on 1 July 2017 to reflect the new annual cap.
Information on ‘Government Co-Contribution’ is now inserted to the ‘Tax’ section of the PDS on page 43.
For the 2017/2018 financial year, the lower income threshold is $36,813 with a higher income threshold of $51,813.
ADDITIONAL ELIGIBILITY REQUIREMENTS
Members will not be eligible for Government co-contributions if they exceed their non-concessional contributions cap for that year or where the member has a total superannuation balance of $1.6 million or more on 30 June of the previous financial year.
Information on ‘Low-Income Superannuation Contribution’ is now inserted to the ‘Tax’ section of the PDS on page 44.
LISC REPLACED BY LOW INCOME SUPERANNUATION TAX OFFSET (LISTO)
From 1 July 2017, the LISC will be replaced by the LISTO. The LISTO retains the same limits and rates as the LISC and will generally operate in the same way.
Information on ‘Concessional Contributions Tax Deductions’ is now inserted to the ‘Tax’ section of the PDS on page 43.
EXTENSION OF TAX DEDUCTIONS FOR PERSONAL CONTRIBUTIONS
From 1 July 2017, tax deductions for personal contributions up to the concessional contributions cap, currently available only to the self-employed, will be extended to all individuals under the age of 75 (subject to meeting the work test if you are aged 65 or over).
Information on ‘Additional Contributions Tax’ is now inserted to the ‘Tax’ section of the PDS on page 43.
DECREASE IN INCOME THRESHOLD FOR ADDITIONAL CONTRIBUTIONS TAX TO APPLY
The income threshold (including concessional contributions) from which tax of 30% will apply instead to concessional contributions (within the concessional contributions cap) will be reduced from $300,000 to $250,000 from 1 July 2017.
Information on ‘Spouse Contributions’ is now inserted to the ‘Tax’ section of the PDS on page 44.
INCREASE TO INCOME THRESHOLD FOR SPOUSE CONTRIBUTIONS
From 1 July 2017, access to the low income spouse superannuation tax offset will be expanded by increasing the income threshold for the low income spouse from $10,800 to $37,000. The offset will remain at 18% of the amount of eligible spouse contributions up to a maximum of $3,000, therefore remaining capped at $540 per year.
Information on ‘Tax on Death Benefits’ is now inserted to the ‘Tax’ section of the PDS on page 45.
REMOVAL OF ANTI-DETRIMENT PAYMENTS ON DEATH BENEFITS
The anti-detriment provisions for death benefits paid as a lump sum to certain eligible beneficiaries will be removed for members who died on or after 1 July 2017 and for all members where the death benefit is paid after 30 June 2019.
Information on ‘Establishing Your Pension’ is now inserted to the ‘Operating Your Account’ section of the PDS on page 28.
NEW INCOME STREAM TOTAL ACCOUNT BALANCE LIMIT
From 1 July 2017, a transfer balance cap of $1.6 million will apply to the total amount of accumulated superannuation that a member can transfer into the retirement (income stream) phase. Subsequent earnings on balances in the retirement phase will not be capped or restricted. The general transfer balance cap will be indexed in line with the Consumer Price Index (CPI) in $100,000 increments.
Where a member accumulates amounts in excess of $1.6 million in their superannuation account, they will be able to maintain the excess amount in their superannuation accumulation account where earnings will continue to be taxed at the concessional rate of 15%.
Members already in the retirement phase with total account balances above $1.6 million will have to reduce their retirement phase balance to $1.6 million by 1 July 2017 by either transferring the excess back into a superannuation accumulation account or withdrawing the excess amount. Transition to retirement (TTR) pensions do not count towards your transfer balance cap since these amounts are not considered to be in the retirement phase.
Members who breach the transfer balance cap will be subject to penalty arrangements and the Australian Taxation Office (ATO) can issue a commutation authority to the Fund which requires us to transfer the amount determined by the ATO (the reduction amount) back into a superannuation accumulation account. Transitional arrangements, generally with reduced penalties, will apply for the six months from 1 July 2017 to 31 December 2017.
Information on ‘Tax on Investment Earnings’ is now inserted to the ‘Tax’ section of the PDS on page 44.
EARNINGS ON TTR PENSIONS TO BE TAXED
The earnings on assets supporting TTR pensions are currently not subject to tax. From 1 July 2017, these earnings will be taxed at the maximum rate of 15%, which is the same as the concessional tax rate applying to fund earnings on superannuation accumulation accounts.
Information on ‘Tax on Benefit Payments’ is now inserted to the ‘Tax’ section of the PDS on page 44.
TAX TREATMENT OF INCOME PAYMENTS
Members are currently able to elect that TTR pension amounts paid from the taxable component be treated as lump sums for tax purposes. These payments are then received tax-free to the extent that they are within the member’s low rate cap up to age 59 (currently $195,000). Members will no longer be able to make this election from 1 July 2017, which means that members under age 60 who had not previously fully utilised their low rate cap will incur tax at their marginal tax rate (less a 15% tax offset if aged 58-59) on all TTR pension income amounts paid from the taxable component.
TAX ON LUMP SUM BENEFITS –
TAX ON PENSION BENEFITS –
|1 October 2016||Change to the insurer||
Effective from 1 October 2016, part of the business of Macquarie Life was transferred to Zurich Australia Limited (ABN 92 000 010 195, AFSL 232510).
As a result of this change the insurance cover previously offered through the Perpetual Private Super Wrap by Macquarie Life will now be offered by Zurich Australia Limited.
Any references to Macquarie Life in the Perpetual Private Super Wrap Product Disclosure Statement should now be taken to be read as Zurich Australia Limited.
For detailed information about the insurance cover offered through the Perpetual Private Super Wrap from 1 October 2016, please refer to the life insurance offer document issued by Zurich Australia Limited, which can be obtained separately from your adviser.
|1 July 2015||Qualifying Recognised Overseas Pension Schemes (QROPS)||
The United Kingdom (UK) Government introduced changes to the tax and pension rules governing UK pension schemes, which came into effect from 6 April 2015. Changes were made in regards to the Pension Age Test, which will impact Australian Qualifying Recognised Overseas Pension Scheme (QROPS). The new rules require that QROPS do not offer access to transferred UK funds before the age of 55, unless the member retires due to ill-health. Whereas under Australian legislation, there are limited circumstances in which a member may request payment of a benefit prior to age 55.
We're currently reviewing the impact of the Pension Age Test requirements for Perpetual Super Wrap, and, as an interim measure, we're placing a hold on the completion of any further paperwork with UK pension schemes until we have clarity around the impact of these changes. Many UK pension schemes have also placed a hold on transferring UK pension benefits to QROPS.
We will keep you updated of any progress and we appreciate your patience with this industry wide issue.
|1 July 2015||Changes to release condition ‘Terminal Medical Condition’||Effective from 1 July 2015, the Government has amended the ‘terminal medical condition’ definition of release. The life expectancy period which enables members’ tax-free access to their superannuation benefits where a member is suffering a terminal illness (as certified by two medical practitioners, at least one of whom must be a specialist) has changed from less than 12 months to 24 months.
Under the insurance policy available through the Super Wrap a terminal illness benefit is payable where you are diagnosed with a terminal illness and have less than 12 months to live.
As a result a member may meet the terminal medical condition of release and be entitled to withdraw their investment benefit but may not qualify to receive their insured benefit amount under terminal illness definition of the insurance policy until their life expectancy is less than 12 months.
In this circumstance in order to continue the insurance cover in your Super Wrap account you will need to ensure a sufficient balance is maintained in the Perpetual Cash Account to meet ongoing insurance premiums and any other fees and taxes.