Section 3 – TIC Plan Benefits
 

Benefits of Membership 

Tax Concessions 

Tax concessions make superannuation an effective savings vehicle for long-term retirement planning.

For more information on key tax issues refer to Section 8.

Fees And Premiums

For information on fees and costs refer to pages 5 to 9. The TIC Plan offers competitive insurance premiums with an excellent choice and combination of cover from a large life insurance company. This allows us to offer members excellent terms at competitive premiums.

Insurance cover may be subject to you supplying evidence of health to the Insurer.

For information on any insurance available to you refer to pages 27 to 41.

Investment Choice and Flexibility

As a member of the TIC Plan you can select from up to 5 investment options (refer to Section 4 for further details). This allows you to invest your superannuation contributions according to your choice and your investment profile.

If you would like advice about whether these options are suitable for you, we recommend that you discuss your requirements with a licensed financial adviser.

Choice of Fund

The Choice of Fund requirements of superannuation legislation allows certain employees to choose the superannuation fund to which their employer can contribute their superannuation contributions for them. You can choose the TIC Plan for your contributions. The Plan complies with the default fund requirements of the Choice of Fund legislation.

If you require further information regarding the Choice of Fund requirements, please contact the Plan (details on the inside front cover).

To find out whether you are an eligible employee for the purposes of the Choice of Fund requirements, contact your employer.

Membership

The TIC Plan caters for self-employed or employed individuals. You can become a member by:

• completing the Member Application Form (located at the end of this PDS); and
• making an initial contribution. If you are employed, the initial contribution may be paid by your employer.

Contributions

We accept superannuation contributions from either your before or after-tax salary, regularly or as a lump sum. We also accept spouse contributions and rollovers from other complying funds. There is no minimum contribution level.

To make contributions into the Plan you will need to complete a Member Application Form.

If you wish to roll over funds from another superannuation fund you also need to complete the Transfer Request Authority Form.

CCSL reserves the right to reject or delay applications at its discretion where it believes this to be in the best interests of all members.

The effective date of your initial investment will be the date that your completed Application Form is received by the Administrator’s office, if received by 3.00pm (VIC local time) on any business day. If received after 3.00pm (VIC local time), the effective date will be the following business day.

Superannuation laws have a number of restrictions on superannuation contributions as set out in the table on page 11. The TIC Plan can only accept contributions permitted by law.

Employer Contributions

Your employer can make contributions to the TIC Plan on your behalf, including Superannuation Guarantee contributions, contributions required under an award and additional employer contributions. These contributions are now known as concessional contributions. Your employer can also assist you to make salary sacrifice contributions (see below).

Under the Superannuation Guarantee system, your employer must provide a minimum level of superannuation support, on behalf of most employees. This is based on a set percentage of assessable salary until age 701. The rate is currently 9%2 of ‘ordinary time earnings’ as defined in legislation (subject to a maximum dollar amount).

If you are employed under an industrial award or certified agreement that requires employer contributions, your employer must continue to make superannuation contributions in accordance with that award or agreement regardless of your age and the level of your working hours.

Contributions via Salary Sacrifice

If your employer agrees, it may be possible to arrange salary sacrifice contributions. Salary sacrifice contributions are deducted from your before-tax salary and effectively allow you to pay less income tax. These contributions are now known as concessional contributions.

To make these contributions on or after age 65, you must have worked in paid employment or self employment for at least 40 hours in any period of 30 consecutive days during the financial year in which the contribution is made.

Deductible Personal Contributions

If you are wholly or substantially selfemployed your personal contributions up to age 75 may be deductible.

These contributions are now known as concessional contributions. These contributions are deductible if you provide Section 290-170 Notice to the Trustee that you intend to claim a tax deduction for these contributions. The Notice must be given prior to the lodgement of the TIC Plan tax return following the financial year the contribution is made.

Personal After-Tax Contributions

Personal after-tax contributions are now known as personal non-concessional contributions.

Contributions tax does not apply to these contributions on entry to the TIC Plan and generally there is no tax on withdrawal of these contributions. These contributions may entitle you to the Government co-contribution. To make personal non-concessional contributions, you must provide your tax file number to the Trustee.

It is not compulsory for you to make your own superannuation contributions but, naturally, this can help to increase your super savings. Even a small additional contribution over and above the amount required to be paid by your employer (if you are employed) can make a big difference over time due to the effects of compound interest on investment earnings.

Splitting Contributions with Your Spouse

The TIC Plan offers you the facility of splitting your contributions made during the year with your spouse. You can request to split your contributions at any time during the financial year:

• immediately after the financial year in which the contributions were made; or
• in which the contributions were made if you are closing your account in the TIC Plan.

The maximum amount that can be split for any financial year is 85% of your taxed ‘concessional’ contributions.

We recommend that you consult a licensed financial adviser for information about contributions splitting before making an application to split your contributions.

To request a contribution split, complete and return the Contributions Splitting Application Form. You can obtain this form by calling our Client Service Line (details on the inside front cover).

Spouse Contribution

The TIC Plan offers you the facility to make non-concessional contributions directly to the account of your spouse and in certain circumstances you can claim a tax offset.

You can make contributions on behalf of your spouse regardless of your age provided your spouse is:

• under age 65; or
• aged 65 to 69 inclusive and gainfully employed for at least 40 hours in any period of 30 consecutive days during the financial year in which the contribution is made.

Spouse contributions are considered non-concessional contributions and count against the non-concessional contributions cap applicable to your spouse.

Refer to the Summary of Key Tax Issues on page 49, for the circumstances where you can claim a tax offset.

Contribution Limits

There are limits on the amount of contributions you can make to your super each year without incurring additional tax, summarised in Section 8. You should speak to your financial adviser for more information on these limits.

Government Co-Contribution

If your assessable income (plus reportable fringe benefits and salary sacrifice superannuation contributions) does not exceed $61,9201 p.a. and you make personal non-concessional contributions into your superannuation account, you may be entitled to receive the Government co-contribution. The Government co-contribution is paid at the maximum matching rate of $1.00 for each eligible $1.00 contributed up to the maximum co-contribution of $1,000 each year. The co-contribution matching rate reduces for incomes over $31,9201 and phases out when your income level exceeds $61,9201. Self-employed persons who make personal non-concessional contributions may also be eligible to receive the Government co-contribution.

Contact the Australian Taxation Office on 13 10 20 or visit www.ato.gov.au/super for more information on the Government co-contribution scheme.

Low Income Earners Government Contribution

In addition to the Government co-contribution, the Government has proposed the introduction of a Government contribution of up to $500 for individuals with an adjusted income of up to $37,000 which will be calculated at a 15% matching rate to the individual’s concessional contributions. The contribution is proposed to apply for the 2012-13 financial year onwards. As at the date of this PDS, this proposed change has not been legislated.

Benefit Payments

The Benefits

The TIC Plan provides accumulationstyle benefits that may be payable on retirement, death and disability subject to the preservation requirements explained in the ‘Preservation’ section on page 15.

Your Plan benefits may also include additional insured Death and/or Total and Permanent Disablement (TPD) benefits (refer to Section 5).

Generally, these benefits can be paid as a lump sum or transferred to TIC Pensions and paid as a pension. If you have Salary Continuance insurance (refer to Section 5), any Salary Continuance benefits up to 75% of your Declared Earned Income to which you may become entitled will be paid to you directly monthly in arrears after the completion of the waiting period. Any amount in excess of 75% of your Declared Earned Income (up to a maximum of 10% of your Declared Earned Income) is paid as a superannuation contribution to the TIC Plan.

Superannuation benefits may also be payable on grounds of financial hardship, on compassionate grounds if approved by the Australian Prudential Regulation Authority or if you satisfy another Condition of Release (refer to the ‘Preservation’ section).

The Trustee reserves the right to delay or suspend benefit payments, including where unit pricing information is unavailable or unreliable, the payment involves an illiquid investment option or it would not be in the best interests of other members of the TIC Plan.

Retirement Benefits

Retirement benefits may be paid when you:

• reach age 65;
• reach age 60 and cease gainful employment; or
• reach preservation age and retire from the workforce.

The benefit payable will be equal to your superannuation account balance. A Transition to Retirement Pension may also be available if you have reached your preservation age and not yet retired from the workforce, refer to page 44.

Total and Permanent Disability Benefits

If you become totally and permanently disabled you will receive a benefit equal to the sum of your TIC Plan superannuation account balance(s) plus any insured TPD benefit that is payable. Your benefit can only be paid to you if the Trustee is satisfied that you have suffered permanent incapacity (as defined in superannuation legislation), meaning that you are unlikely to ever engage in gainful employment again, for which you are reasonably qualified by training, education or experience.

Please refer to Section 5 for more information about your insured benefits payable on total and permanent disablement.

Total and Temporary Disability Benefits

If you become totally and temporarily disabled and you have Salary Continuance insurance, you may be entitled to receive a benefit of up to 85% of your Declared Earned Income (75% will be payable as a benefit and up to 10% as a superannuation contribution). There is a 30 or 90 day waiting period to be eligible for this benefit. The benefit is payable monthly in arrears (if approved by the Insurer). Your benefit can only be paid to you if the Trustee is satisfied that you suffer temporary incapacity (as defined in superannuation legislation).

Please refer to Section 5 for more information about your insured benefits payable on total and temporary disability.

Payment of Terminal Illness

If you suffer from a terminal medical condition (as defined in superannuation legislation), the benefit payable from the Plan is generally your total account balance plus any insured Terminal Illness benefit payable, (if approved by the Insurer).

Please refer to Section 5 for more information about your insured benefits payable on terminal illness.

Payment of Death Benefits

On death, your dependants and/or legal personal representative will receive the balance of your account plus any insured Death benefit (if approved by the Insurer).

Please refer to Section 5 for more information about insured benefits payable on death.

When you join the TIC Plan, you will be asked to nominate the dependant/s to whom your super benefit should be paid in the event of your death (see the section on nominating a beneficiary on page 56). You can make a binding nomination or non-binding nomination.

If you make a binding death benefit nomination, and it is valid at the time of your death, your death benefit will be paid according to your binding nomination. If you make a non-binding nomination, the Trustee will exercise its discretion to decide to whom your death benefits will be paid. The Trustee will use your nomination only as a guide to determine your wishes.

For this reason, it is important that you update your binding or non-binding nomination when your circumstances change.

Leaving the Service of Your Employer

If you are a TIC Employer Sponsored Super member and leave the service of your employer, the Trustee will send you details of your account balance. Your account balance may be transferred to TIC Personal Super until you request payment of your benefits and you meet a Condition of Release (refer to the ‘Preservation’ section). You may request to roll over your benefit to another complying superannuation fund at any time.

Refer to Section 5 for the consequences of changing employer for any insurance cover you have in TIC Employer Sponsored Super.

Choosing Another Fund 

If you are a TIC Employer Sponsored Super member and you instruct your employer to pay your future Superannuation Guarantee contributions to another super fund under Choice of Fund legislation but retain an account balance in the Plan, that account balance will be transferred to TIC Personal Super. Your account balance will be retained in TIC Personal Super until you request payment of your benefits and you meet a Condition of Release (refer to ‘Preservation’ section). You may request to roll over your benefit to another complying superannuation fund at any time.

Refer to Section 5 for the consequences of exercising Choice of Fund for any insurance cover you have in TIC Employer Sponsored Super.

Withdrawal from the Plan

You can withdraw all or part of your account balance at any time, provided that:

• for benefit payments - you meet a Condition of release (see below for information on preservation);
• for rollovers or transfers to another superannuation fund - you meet the requirements set out in the ‘Portability’ section below.

You will generally receive your withdrawal proceeds no later than 30 days after we have accepted your withdrawal request with the required information.

A longer period may apply in the case of illiquid investment options. See the ‘Portability’ and ‘Illiquid investment option’ sections below.

To make a withdrawal, complete a Withdrawal Form by calling our Client Service Line or download the form from our website (details on the inside front cover). Please mail or fax the completed form to us.

Portability

Portability arrangements enable you to roll over or transfer your superannuation accounts to a complying superannuation fund of your choice. The Trustee may refuse a request if a similar request has been met in the previous 12 months or if, after transferring the money, the account will remain open and contain less than $5,000.

If you decide to roll out your entire account balance from the TIC Plan, your insurance will cease, even if the Plan subsequently receives an employer contribution on your behalf.

For more information, call the Client Service Line (details on the inside front cover). You will be required to provide certain information prior to a portability request being processed. Additional information may be required in the case of transfers to a self managed superannuation fund. Portability requests must generally be processed within 30 days from the receipt of requisite information.

However, where you have selected the TIC Diversified Australian Residential Property Fund investment option, the Trustee may not be able to roll over or transfer benefits from your TIC Plan account (in whole or in part) within 30 days. In these circumstances, the rollover or transfer will be effected within 180 days. Please refer to the ‘Illiquid investment option’ information below.

You can also roll over or transfer your superannuation benefits from other complying superannuation funds (or other permissible source) into TIC; or into TIC Pensions to commence a pension.

Illiquid investment option

An investment option is an illiquid investment if is of a nature that produces either of the following outcomes:

• it cannot be converted to cash in less than the prescribed 30 day period for rolling over or transferring a withdrawal benefit under the ‘portability’ rules; or
• converting it to cash within the prescribed 30 day period would be likely to have a significant adverse impact on the realisable value of the investment.

The TIC Diversified Australian Residential Property Fund investment option has been identified as an illiquid investment option. For more information on the reasons this investment option is illiquid, please refer page 24.

As noted above, the Trustee must generally give effect to any rollover or transfer requests within 30 days of receiving all required information. However, in the case of an illiquid investment option, the Trustee is not required to roll over or transfer the whole of your withdrawal benefit (or any partial amount you request to be transferred) within 30 days, provided that the Trustee has complied with the relevant superannuation regulations. In these circumstances, the rollover or transfer will be effected within 180 days.

The TIC Diversified Australian Residential Property Fund investment option ultimately invests in the TIC Diversified Australian Residential Property Fund managed investment scheme. We may suspend the payment, rollover or transfer of a TIC Plan member’s benefit if we are unable to redeem units in the underlying TIC Diversified Australian Residential Property Fund in order to finance the  withdrawal because of, for example, the suspension of withdrawals from that underlying fund as a result of illiquidity.

Therefore, in deciding whether to select the TIC Diversified Australian Residential Property Fund investment option, you should be aware that you may not be able to withdraw all of your investment from this option within a short timeframe and that any rollover or transfer requests may take substantially longer than 30 days. You should carefully consider, in consultation with your adviser, whether the TIC Diversified Australian Residential Property Fund investment option is appropriate for you.

You will be required to complete a declaration which acknowledges that you understand the above information before you are able to select the TIC Diversified Australian Residential Property Fund investment option.

Transfer to TIC Pensions 

If you transfer your benefit from TIC Employer Sponsored or Personal Super to TIC Pensions and retain the same investment options, you will not incur any transaction costs through any unit price buy/sell spread.

Provided you are eligible to commence a Transition to Retirement Pension, or Account-Based Pension, you can transfer your TIC Employer Sponsored or Personal Super benefits into TIC Pensions at any time.

We recommend that you establish your retirement planning and retirement income strategy with the assistance of a licensed financial adviser.

You will need to:

• -read this PDS and;
• -complete the Pension Member Application Form (included at the end of this PDS).

Refer to Section 7 for further information on the pension options available to you.

Rolling Over Balances from Other Funds

If you have had a few different jobs you may have money in a number of different superannuation funds. Moving all of your balances into one account in the TIC Plan may reduce account-keeping fees, reduce paperwork and make it much easier to keep track of your superannuation.

To transfer account balances from other funds to the TIC Plan, you will need to complete the Transfer Request Authority Form included in the application forms of this PDS, which authorises the Trustee to contact your other funds and arrange for the balances to be transferred to your account within the Plan. You should contact your other fund about any fees that may be incurred or benefits that may be lost (e.g. insurance) as a result of leaving that fund.

Rolling Over Employer Termination Payments 

From 1 July 2007, most Employer Termination Payments will not be able to be rolled over into superannuation funds unless they relate to entitlements on termination of employment specified in existing employment contracts as at 9 May 2006 and the payments are made into superannuation prior to 1 July 2012.

Contact the Australian Taxation Office on 13 10 20 or visit www.ato.gov. au/super if you need information on rolling over an Employer Termination Payment.

Note: There are other amounts that may be paid into a superannuation fund such as certain disablement amounts on settlement of a disability claim (outside of superannuation), proceeds from the sale of a small business, and superannuation sourced from a foreign superannuation fund. Special rules apply to these amounts. If you are going to receive any of these amounts or are considering paying them into superannuation, we recommend you obtain professional advice.

Transferring Your Benefits to TIC’s Eligible Rollover Fund

If your account balance in the TIC Plan falls below $1,000 at the end of a reporting period and you are not making contributions, the Trustee may transfer your benefit to an Eligible Rollover Fund (ERF).

If the Trustee transfers your benefit to an ERF you will cease to be a member of the TIC Plan and all benefits in the Plan will cease, including your insured benefits. Refer to Section 9 for details on the Eligible Rollover Fund.

Preservation

The goal of superannuation is to provide for retirement. It is a long-term investment. To ensure it is used for this purpose, the government has restricted access to superannuation benefits, and has created three categories of benefits: preserved, restricted non-preserved and unrestricted non-preserved.

Restricted non-preserved benefits are subject to the preserved benefit conditions summarised below but with one exception - they may be withdrawn when you cease employment with an employer who is making contributions on your behalf. Restricted non-preserved benefits are typically personal aftertax contributions (i.e. undeducted contributions) made before 1 July 1999.

Unrestricted non-preserved benefits are benefits that have already satisfied a Condition of Release but have remained in the superannuation system. These benefits may be withdrawn at any time.

The bulk of the money in the superannuation system are preserved benefits. Generally, these benefits will only be paid when you satisfy a Condition of Release, including when you:

• reach age 65; or
• reach age 60 and leave your employer; or
• reach preservation age (see below) and retire permanently from the workforce; or
• obtain release on severe financial hardship or compassionate grounds; or
• are a temporary resident leaving Australia permanently for overseas (conditions apply); or
• become permanently incapacitated*; or
• suffer from a terminal medical condition**; or
• die.

Funds may also be made available to enable you to meet a tax liability in the event that you exceed the concessional or non-concessional contribution caps (see Tax on Concessional Contributions in Section 8).

Preservation age is based on your date of birth.