ANNUAL REPORT 30 June 2019 - NESS Super | Home...Annual Report 2019 7 Certain Directors are also members of the Audit Risk & Compliance, Insurance, Investment and Remuneration Committees

ANNUAL REPORT30 June 2019

2 NESS Super

Contents

NESS Super’s annual reporting to members comprises this Annual Report and your Member Statement for the period 1 July 2018 to 30 June 2019. This Annual Report should be read in conjunction with your Member Statement. Please call 1800 022 067 if you would like to have a copy of this Annual Report sent to you.

About this Report

This Annual Report is issued by NESS Super Pty Ltd ABN 28 003 156 812 AFSL 238945. Trustee of NESS Super ABN 72 229 227 691. MySuper authorisation 72229227691044

Issued 29th November 2019.

This Annual Report contains general advice only and does not take into account any person’s individual financial objectives, financial situation or needs. A NESS Super or NESS Pension member should, before acting on any financial product advice, consider the appropriateness of the advice, having regard to his or her own objectives, financial situation or needs. NESS Super is governed by a legal document called a Trust Deed. If there is any discrepancy between the Trust Deed and this Annual Report, the Trust Deed prevails.

While the Trustee has taken all due care in the preparation of this Annual Report, it shall not be liable for errors and omissions.

Message from your Board 3

The people who look after your super 4

Investment report 8

Your investment options 9

Super investment options 12

Pension investment options 14

Managing your investments 16

NESS Super’s financial statements 18

Additional Information 22

Contact us 23

Annual Report 2019 3

Message from your Board

NESS Super – The Year in Review The financial year saw a few changes to the NESS Super Board. Former Chairman and founding Director, Tony Glossop will depart at the end of 2019. Tony had served on the board of Directors since the fund’s inception in 1986 and was an integral part in shaping the fund’s current strong position. He was elected to the position of Chairman in 1990, a position he held up until February 2018, a remarkable tenure of 28 years.

Dave McKinley resigned having served on the board since being appointed a Director in 2015 and a Chairman in February 2018. I was then honoured to be nominated to the role of Chairman by the board in December 2018.

Furthermore, we farewelled both Mark Buttigieg and John McCrory during the financial year. We also welcomed a few new appointments, firstly, with the appointment of Paul Lahiff as an Independent Director in March 2019. Brad McDougall then joined as a Director in March 2019 with Ben Lister following as an Alternate Director in June 2019. On page 5 we profile our new Board members.

In July 2019, the Federal Government introduced PYSP (Protecting your Super package) designed to protect Australians’ superannuation savings from unnecessary erosion by fees and insurance premiums. The legislation saw the transfer of low balance accounts to the Australian Taxation Office and the cancellation of insurance for inactive members. NESS Super wrote to all members who may be impacted to help make most of the NESS Super offering.

CEO Continuing with Paul’s strong focus on delivering the very best value for all our members, 2019 saw the successful move of the Trustee office and our in-house Contact Centre to new premises at Chullora.

During the year, Paul engineered the review of our current insurance providers with an aim to release a new financial offering to benefit members. The year ahead will also see an increase in our digital presence and communication to members with the focus on the continued growth of the fund.

Investments The 2018/19 financial year was another successful one with all our funds recording a solid MySuper investment return of 7.00% demonstrating our continued commitment. We continue to provide seven investment options for our Super members and six for our Pension members. For more information on our investment performance, please read the investment report on page 8.

REG YOUNG Chairman of the Board

PAUL CAHILL NESS Super CEO

Improved Insurance In November 2019, NESS Super announced the new Insurance offering across our member base. The new insurance changes offering is based on the best possible default, Total and Permanent Disablement (TPD) insurance and Income Protection for our members.

Members were contacted in October 2019 informing them of the changes and how it would impact them. Details on the insurance changes can be found in the ‘NESS Super - Notice concerning Changes to your Insurance’ booklet located on the NESS Super website nesssuper.com.au

The NESS Super Board’s focus is the continued dedication to our members and employers in the electrical and communications industry and strive to bring the strongest returns on investments. We continue to pride ourselves on the premise that ‘we’re big enough to matter and small enough to care.’

We look forward to a prosperous and exciting road ahead for all.

Reg Young | Chairman of the Board

http://nesssuper.com.au

4 NESS Super

Reg Young | Chairman of Board, NECA appointed Director

Reg has been a director of NESS Super since August 2005,and was appointed as Chairman in December 2019. He has worked in electrical contracting since 1967.

Reg is committed to the contracting industry and has been a member of the National Electrical Contractors Association (NECA) NSW since 1988. Reg was awarded life membership of NECA in March 2002 for his service to the industry. Reg has achieved qualifications in Adjudication, Leadership, Risk Management and obtained a Diploma in Superannuation in 2014.

He also currently holds the following positions:

• Chairman of NECA Foundation;

• Director of Beech Pty Ltd, Daydaze Pty Ltd, Ingleburn Pty Ltd, Cliff Road Pty Ltd

• Member of the OBEIL Industry Group

NESS Super Board Committee Membership

• Audit Risk & Compliance Committee member

• Chair of Insurance Committee

Tony Glossop | NECA appointed Director

Tony is a founding Director of NESS Super, having served on the Board of Directors since the fund’s inception in 1986. Tony held the position of Managing Director of the Glossop Group of companies for over 25 years until 2005. Tony held long-term positions as a Board Member of the Building Service Corporation, National Electrical & Communications Association, Board Member, President and Treasurer of the National Electrical & Communications Association NSW.

Currently he is the Chairman of Directors of Wiljon Developments Pty Ltd.

NESS Super Board Committee membership

• Audit Risk & Compliance Committee member

• Chairman of Investment Committee

• Remuneration Committee member

Steve Robinson | ETU appointed Director

Steve was appointed as a Director of NESS Super in October 2015, having previously served as an Alternate Director since July 2015. Steve has 25 years’ experience working as an Organiser/Industrial Officer for ETU NSW and as an Organiser for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia.

Steve currently is a Board member of the NSW Workers Compensation Dust & Diseases Board, current member of the ICARE Dust and Diseases Board and is a qualified aircraft avionic engineer.

Steve currently sits on the Trades Assessment Panel for Training Services NSW.


• Member of the Audit & Compliance Committee

• Member of the Remuneration Committee

• Member of the Insurance Committee

The people who look after your super


Brad McDougall | ETU appointed Director

Brad was appointed as a Director of NESS Super in March 2019. He has worked in the electrotechnology industry for 25 years. Brad has worked as an Organiser for ETU NSW and in negotiating Industrial Agreements in several industries including construction, service, mining, rail and maintenance. Brad has also been responsible for conducting on-site construction safety.


• Member of the Audit Risk & Compliance Committee

• Member of the Insurance Committee

Paul Lahiff | Independent Director

Paul was appointed as the Independent Director to the NESS Super Board in March 2019. In November 2018, Paul was appointed as Chairman of the Cuscal Board. Previously Paul was the inaugural Chair of NPP Australia Limited and has also served on the boards of Sunsuper, Cancer Council NSW, House With No Steps and Thorn Group. Paul runs his own consultancy business specialising in strategy formulation, executive coaching & mentoring and Board governance. Paul has almost forty years’ experience in banking and finance including managing director roles with Mortgage Choice, Permanent Trustee and Heritage Building Society as well as senior executive roles with Westpac in Sydney and London.

He also currently holds the following positions:

• Independent Chairman of the Australian Retail Credit Association

• Independent Non-Executive Director of Sezzle Inc

• Non-Executive Director of AUB Group Limited


• Chairman of the Audit Risk & Compliance Committee

• Chairman of the Remuneration Committee

• Member of the Investment Committee

The people who look after your super (cont.)

6 NESS Super

Chris Madson | Alternate Director (NECA appointed)

Chris was appointed as an Alternate Director of NESS Super in September 2015. Chris is a qualified accountant with a wealth of experience in the electrical contracting industry. He has held the role of Company Managing Director at Stowe Australia since 2007, and prior to this worked at Goldman Sachs and Arthur Anderson. Chris is an Executive Committee Member of the National Electrical Contractors Association (NSW branch) and the Electrical Contractors Association of NSW. He is an Audit Committee Member and has held the role of Treasurer since 2013.

He also currently holds the following position:

• Director, Mechanical & Electrical Redundancy Trust

Ben Lister | Alternate Director (ETU appointed)

Ben Lister was appointed as an Alternate Director of NESS Super in June 2019. Ben has worked in the electrotechnology industry for 20 years. He commenced work with Ausgrid in 1999 as a linesman, then became a high voltage live linesman and later an apprentice trainer.

Ben is the Assistant Secretary of the Electrical Trades Union (ETU) NSW and ACT Branch. He previously worked as an Organiser for the ETU, negotiating Industrial Agreements in industries including construction, service, mining, rail, supply and maintenance. Ben has also been responsible for conducting on-site construction safety.

He also currently holds the following position:

• Director, Mechanical & Electrical Redundancy Trust



Certain Directors are also members of the Audit Risk & Compliance, Insurance, Investment and Remuneration Committees.

NESS Super’s governing rules are set out in its Trust Deed and product information is set out in the relevant Product Disclosure Statements. The Trustee’s rules are contained in its Constitution.

NESS Super is regulated by ASIC (Australian Securities and Investments Commission) and APRA (Australian Prudential Regulation Authority). NESS Super is also regulated by the ATO (Australian Taxation Office) and AUSTRAC (Australian Transaction Reports and Analysis Centre). NESS Super is also subject to laws applicable to superannuation and financial services products.

The Trustee Board has taken out indemnity insurance to protect its Directors and Executives and NESS Super against most of the financial liabilities that can be incurred during the management of NESS Super.

Chief Executive OfficerPaul Cahill, CEO, is responsible to the Trustee for the efficient running and day-to-day management of NESS Super.

Paul works closely with the Trustee Board to make sure that all decisions made by it are implemented effectively. He also manages a team of dedicated staff members and expert service providers to make sure that they are delivering to the required standard and provide value for money to the members of NESS Super.

NESS Super’s expert service providersA professional team made up of an administrator, auditors, investment consultant, insurer and other service providers help the Trustee to fulfil its responsibilities. As at 30 June 2019, NESS Super’s service providers were:

ADMINISTRATIVE SERVICES Australian Administration Services ABN 62 003 429 114

AUDITOR (EXTERNAL) AND TAX ADVISER Ernst & Young ABN 75 288 172 749

AUDITOR (INTERNAL) KPMG ABN 51 194 660 183

CONSULTANT Deloitte Touche Tohmatsu ABN 74 490 121 060

ELIGIBLE ROLLOVER FUND AUSfund ABN 85 945 681 973

EMPLOYER CLEARING HOUSE The Superannuation Clearing House Pty Ltd ABN 15 086 576 721

FINANCIAL ADVISER Link Advice Pty Ltd ABN 36 105 811 836, AFSL 258 145

INSURER* Hannover Life Re of Australasia Ltd ABN 37 062 395 484

INVESTMENT CONSULTANT Russell Investment Management Ltd ABN 53 068 338 971

LEGAL ADVISER Henry William Lawyers Pty Ltd ABN 81 615 850 425

*From 30 November 2019, Hannover Life Re of Australia Ltd will continue to provide Death and TPD Insurance but cease from providing Temporary Salary Continuance (TSC) and Salary Continuance Insurance (SCI). From 30 November 2019, NESS Super’s new Income Protection Insurance will be provided by Chubb Insurance Australia Limited ABN 23 011 642 020.


8 NESS Super

OverviewGlobal markets have been strong through the first half of 2019, with Central Banks both here and abroad lowering interest rates and Chinese authorities announcing stronger-than-expected stimulus measures. However, there are concerning signs on the horizon, with an ongoing trade war between China and the USA and questions being raised as to how strong the Australian and global economies are. To add to this, the questions of what shape Brexit will take and what impact it will have has resulted in further uncertainty.

Whilst there appears to be likely further interest rate cuts in Australia and the USA, further Chinese stimulus and even a possible US-China trade deal to help, we remain cautious to the downside risks to equity markets. Expectation is that the current US expansion will continue through 2019, before plateauing in the face of increasing risks of a US recession in late 2020 or early 2021. Overall, we expect global growth to remain modestly positive in the next 12 months.

Australian real estate was the strongest performing major asset class, returning 19.4% over the past 12 months whilst cash (on the back of lower interest rates) was the weakest performing major asset class, returning 2.0%.

Global SharesGlobal share markets performed well over the past 12 months, returning 6.6% in local currency terms. In unhedged Australian dollar (AUD) terms, stocks returned 11.9%. Most of the gains were driven by global central banks lowering rates, with share markets benefiting from another round of encouraging US earnings results and promise of resumed trade talks between the US and China.

Australian SharesThe Australian share market performed well over the period, with the S&P/ASX 300 Accumulation Index closing the year 11.4% higher. Much of the local market’s gains came in the second half of the year, driven by a reduction in rates by 50 basis points by the Reserve Bank to 1.00% and strong gains by the ‘Big Four’ banks, recovering from impact of the Royal Commission, and major miners.

PropertyAustralian real estate investment trusts (A-REITs) performed very well over the past 12 months, closing the period up 19.4%. Local property stocks gained as investors sought higher-yielding assets in the face of declining interest rates, with long-term domestic bond yields falling to record lows late in the year.

Bonds and cashInternational bonds performed strongly for the year, returning 7.2%. Major long-term bond yields fell sharply over the period as investors favoured the asset class’s traditionally defensive properties. Australian bonds outperformed their global counterparts over the year, gaining 9.6%. Cash returned 2.0% over the past 12 months, underperforming all the other major asset classes (due to the RBA cutting rates to a historic low for Australia).

Investment reportfor the year ended 30 June 2019

Solid returns to continue in 2019/20, but dark clouds are looming


This graph compares the return target with past returns for the NESS Super MySuper option for a representative member.

• The blue columns represent the annual net return of a representative member for each financial year in the comparison period;• The red dotted line represents the 10 year moving average return target; and• The green line represents the 10 year moving average net return of a representative member.

When the green line is above the red line, it indicates that the NESS Super MySuper option’s 10 year moving average net return for the representative member has outperformed the 10 year moving average return target.

NESS Super offers members a range of seven investment options and six pension options that can be mixed to suit your personal investment and retirement needs.You can choose a mix of defensive and growth investments, that give you different degrees of exposure to underlying assets such as cash, fixed assets, shares and property.

The crediting rates for each investment option for the 2018/19, net of tax and fees, are shown on page 10.

On the following pages you’ll find details of each of NESS Super’s investment options, underlying investments and a history of returns.

If you want to change your investment option(s), you can switch via MemberAccess or by completing a Change My Investment Choice Form from our website – www.nesssuper.com.au or by requesting one from us by phoning 1800 022 067. Your investment switch will occur in accordance with the guidelines outlined in the current NESS Super PDS and NESS Super – Additional Information Booklet or if you are a pension member as outlined in the current NESS Pension PDS.

If you need help choosing the right investment option for your personal situation please call us on 1800 022 067 and we will be able to refer you to receive obligation-free advice.

The graph below provides the MySuper (default) dashboard.

Your investment options

10 NESS Super

2018/19 Crediting ratesThe rates shown, in the following table, are the annual crediting rates of all NESS Super’s investment options for the 2018/19 year, net of tax, fees and costs.

Crediting rates for NESS Super members – 2018/19

Cash 2.10%

Stable 5.50%

MySuper 7.00%

Property 13.10%

High Growth 7.50%

Australian Shares 6.90%

Overseas Shares 8.00%

^Formerly known as the Balanced option.

Crediting rates for NESS Pension members – 2018/19

Cash 2.55%

Conservative 5.95%

Cautious 6.20%

Moderate 5.95%

Assertive 6.40%

Aggressive 6.85%

The NESS MySuper option is the default option for NESS Super members. If you have not made an investment choice, your super will automatically be invested in this option.

Pension members must select their investment options.

If your account was invested in the same investment option for the whole financial year, you will receive the total annual rate for that option, allowing for the movement of cash into and out of your account. If you switched options during the year, you will receive crediting rates for those options based on the timing of the investment switch.

For details on NESS Super’s investment performance, see pages 12 to 15 and the information included with your Member Statement.

Your investment options (cont.)


12 NESS Super

NESS Super Members and NESS Transition to Retirement (TTR) MembersThe charts below detail NESS Super’s investment options and asset allocations as at 30 June 2019.

OPTION CASH STABLE NESS MYSUPER

Profile An investment with maximum security but low potential for growth after taking into account inflation.

An investment with good security and potential for some growth

For growth above inflation over the medium term. Default option for members who do not make a choice.

Risk Profile Very low risk. The most conservative investment, likely to produce both the lowest volatility and the lowest long-term returns. It invests exclusively in cash investments.

Low risk. A conservative investment, likely to produce both low volatility and lower long-term returns. The majority of the Stable option is invested in defensive assets such as cash, Australian and overseas fixed interest.

Moderate risk. A diverse mix of investments, providing more of a balance between risk and return than the Stable option. It should experience less short-term return volatility than the High Growth option but not achieve the same long-term returns.

Investment Objective To achieve a return after fees and tax in line with the UBS Australia Bank Bill Index.

To achieve a return after fees and tax over rolling three-year periods of at least 1% per annum above inflation, as measured by the CPI.

To achieve a return after fees and tax over rolling ten-year periods of at least 3% per annum above inflation, as measured by the CPI.

Target Asset Mix Defensive Assets: 100% Growth Assets: 35%Defensive Assets: 65%

Growth Assets: 70%Defensive Assets: 30%

Crediting Rates Year Ended 30 June

2019 2.10% 2018 1.80% 2017 1.98%2016 1.99% 2015 2.25%

2019 5.50% 2018 5.50% 2017 5.64%2016 3.45% 2015 5.66%

2019 7.00% 2018 8.65% 2017 9.90%2016 3.10% 2015 8.91%

Compound Average Returns

5 year: 1.96%10 year: 2.91%

5 year: 4.95%10 year: 6.17%

5 year: 7.25%10 year: 7.98%

Allocations at 30 June 2019

Cash 100% (100%) Cash 34%Australian Shares 15%International Shares 13%Property 11%Alternatives 1%Fixed Interest 26%

Cash 5% Australian Shares 35%International Shares 29%Property 16%Alternatives 2%Fixed Interest 13%

The performance of investment options is not guaranteed. Their values rise and fall, reflecting the variable performance of investment markets NESS Super is required by law to set an investment objective for the Fund and each underlying investment option. The investment objectives do not constitute a forecast or guarantee of future returns. Past performance is not an indicator of future performance. Crediting rates are net of fees and taxes.

Super investment options


PROPERTY HIGH GROWTH AUSTRALIAN SHARES OVERSEAS SHARES

For growth above inflation over the medium term.

For significant growth above inflation in the longer term.



Moderate to high risk. The Property option invests in direct and listed property. It is expected to provide higher long-term returns than the Stable option, but with more volatility.

High risk. This has the highest long-term return expectation and is also the highest risk strategy producing very volatile returns over the short term.



To achieve a return after fees and tax over rolling five-year periods of at least 2% per annum above inflation, as measured by the CPI.

To achieve a return after fees and tax over rolling seven-year periods of at least 4% per annum above inflation, as measured by the CPI.



Growth Assets: 100% Growth Assets: 70%Defensive Assets: 30%

Growth Assets: 100% Growth Assets: 100%

2019 2018 2017 2016 2015

13.10% 10.90% 7.71%

11.73% 9.19%

2019 2018 2017 2016 2015

7.50% 11.20% 13.66% 2.13%

11.26%

2019 2018 2017 2016 2015

6.90% 13.10% 13.96% 2.65% 6.51%

2019 2018 2017 2016 2015 2014

8.00% 10.80% 16.32% -0.96% 18.13% 20.38%

5 year: 10.12%10 year: 10.14%

5 year: 8.89%10 year: 9.95%

5 year: 8.39%10 year: 10.05%

5 year: 10.06%10 year: 10.77%

Property 100% (100%) Cash 0%Australian Shares 44%International Shares 43%Property 0%Alternatives 1%Fixed Interest 2%

Australian Shares 100% (100%) International Shares 100% (100%)

Super investment options (cont.)

14 NESS Super

NESS Account Based Pension (ABP) MembersThe charts below detail NESS Super’s investment options and asset allocations as at 30 June 2019.

OPTIONS AGGRESSIVE ASSERTIVE MODERATE

Target Asset Mix Growth Assets: 95%Defensive Assets: 5%



What is the objective of the portfolio?

To outperform CPI + 5% per annum over rolling 7 year periods.

To outperform CPI + 4% annum over rolling 4 year periods.


What are the main investments?

Between 95% and 100% invested in a range of Australian and international shares, property and alternative assets.

Between 78% and 88% invested in a range of Australian and international shares, property, with the balance in alternatives, diversified fixed interest investments and cash.

Between 68% and 78% invested in a range of Australian and international shares, property, with the balance in alternatives, diversified fixed interest and cash.

Members who typically invest

Members who feel comfortable accepting short-term volatile returns in order to achieve higher capital growth in the long term.

Members who feel comfortable accepting short-term volatile returns in order to achieve higher capital growth in the long term, but do not wish to have their benefits fully invested in growth assets.

Members seeking a diversified investment over a broad range of asset classes, in order to achieve higher capital growth in the medium term with a moderate level of risk.

Indication of level of short-term volatility in performance

High Moderate to high Moderate

Crediting Rates – Year ended 30 June

2019 2018 2017 2016 2015

6.85% 10.20% 15.14% 2.90%

12.04%

2019 2018 2017 2016 2015

6.40% 8.80%

11.91% 2.58%

10.91%

2019 2018 2017 2016 2015

5.95% 7.60%

10.28% 2.96%

10.00%

Compound Average Returns

5 year: 9.13%10 year: 10.55%

5 year: 7.84%10 year: n/a

5 year: 7.10%10 year: 8.58%

Asset allocation at 30 June 2019

Cash 0%Australian Shares 45%International Shares 44%Property 5%Alternatives 6%Fixed Interest 0%



The performance of investment options is not guaranteed. Their values rise and fall, reflecting the variable performance of investment markets.The investment objectives do not constitute a forecast or guarantee of future returns.

Pension investment options


CAUTIOUS CONSERVATIVE CASH






To outperform the UBS Australia Bank Bill Index.



100% in short-dated fixed interest investments and cash.

Suitable for members seeking moderate capital growth.

Suitable for members seeking some capital growth whilst placing a high importance on the protection of capital.

Suitable for members who are seeking a high level of security and who are prepared to accept lower returns, after taking inflation into account.

Moderate Moderate to low Low

2019 2018 2017 2016 2015

6.20% 5.80% 7.94% 3.33% 7.99%

2019 2018 2017 2016 2015

5.95% 3.85% 5.59% 2.96% 6.32%

2019 2018 2017 2016 2015

2.55% 2.00% 2.34% 2.25% 2.56%

5 year: 5.92%10 year: n/a

5 year: 4.80%10 year: 6.50%

5 year: 2.24%10 year: 3.36%



Cash 100%

Pension investment options (cont.)

16 NESS Super

Managing NESS Super’s investments is one of the key responsibilities of the Trustee.In formulating, reviewing and giving effect to the investment strategy for the whole Fund and each investment option, the Trustee will have regard to:

a. The risk and likely return of investments;

b. Liquidity and the ability of the Fund to discharge its existing and prospective liabilities, having regard to the expected cash flow requirements of the Fund;

c. The availability of reliable valuation information;

d. Expected tax consequences for the Fund;

e. Costs that might be incurred by the Fund;

f. The results of any relevant due diligence undertaken; and

g. Any other matters the Trustee deems relevant.

h. The Trustee exercises due diligence in developing, offering and reviewing regularly each investment option.

The Trustee has had regard to the factors highlighted above in the development, offering and review of each investment option. The Trustee employees the service of an independent professional Investment Consultant to assist the Trustee to assess that each factor has been appropriately considered and that the risks taken are appropriate in the context of the objectives, cash flow requirements, liquidity requirements and consistent with the communications made to the beneficiaries of each option.

Investment Managers at 30 June 2019Russell Investment Management Ltd provides implemented investment consultant services to NESS Super.

Reserving policyNESS Super operates three reserves that are governed by the Scheme’s Reserving Policy, being the Operational Risk Reserve, Group Life Reserve and Contingency Reserve.

The Operational Risk Reserve, currently valued at 0.25% of Funds Under Management, protects NESS Super in the event that a loss is incurred from an operational risk event occurring. All APRA regulated funds are required to meet an Operational Risk Financial Requirement.

The Group Life Reserve finances group life premiums and insurance administration costs with levies on members.

The Contingency Reserve meets any operational or associated costs incurred which are not met by the fees deducted from member accounts.

Use of derivativesWhile the Trustee does not directly invest in derivative securities, investment managers are permitted to use futures, options and other derivative instruments to assist with the effective management of NESS Super’s assets, consistent with the Trustee’s Investment Policy. However, these instruments may not be used to gear the portfolio.

The Trustee expects that, over the long-term, the use of these instruments will enhance the returns of NESS Super’s investment options.

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The link between risk and return

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urn

Risk Higher

Generally, investment in high risk assets will produce higher returns over the long term, with a greater chance of a negative return over the short term.

Each of the four main asset classes – shares, property, fixed interest and cash – has different levels of risk and different potential for returns.

Managing your investments


Investment products used by NESS Super at 30 June 2019NESS Super used professional fund managers whose performance is regularly monitored. Over the past two years, NESS Super’s assets have been invested in the following products.

30 June 2019 ($)

% of total 30 June 2018 ($)

% of total

Pooled Superannuation Trusts

Russell Investments Pooled Superannuation Trust 803,372,290 97.91% 742,735,720 98.21%

Unlisted Unit Trusts

Russell Investments Balanced Fund 8,541,039 1.04% 7,747,327 1.02%

Russell Investmetns High Growth Fund 381,245 0.05% 179,060 0.02%

Russell Investments Growth Fund 1,152,515 0.14% 698,002 0.09%

Russell Investments Diversified 50 Fund 3,009,455 0.37% 2,164,021 0.29%

Russell Investments Conservative Fund 1,866,387 0.23% 2,242,312 0.30%

Russell Investments Australian Cash Fund 508,838 0.06% 508,065 0.07%

Russell Investments Australian Cash Enhanced Fund 1,663,961 0.20% - 0.00%

Total Investments 820,495,730 100.00% 756,274,507 100.00%

Managing your investments (cont.)

18 NESS Super

The tables on pages 18-21 contain information extracted from the fund’s audited financial statements.

You can view a copy of the audited financial statements and auditor’s report on our website at nesssuper.com.au under the the Financial Information tab on the Governance page.

A hard copy can be obtained free of charge by phoning us on 1800 022 067.

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019 2019 ($) 2018 ($)

Assets

Cash and cash equivalents 7,465,310 7,464,868

Receivables 37,453 28,829

Investments 820,495,730 756,274,507

Property plant and equipment 47,598 14,697

Deferred tax assets 156,169 98,057

Prepayments 34,215 –

Total Assets 828,236,475 763,880,958

Liabilities

Payables 1,196,162 983,952

Income tax payable 2,806,744 2,308,329

Total Liabilities excluding member benefits 4,002,906 3,292,281

Net Assets available for member benefits 824,233,569 760,588,677

Benefits allocated to members 820,394,242 757,463,620

Benefits unallocated to members 192,055 17,134

Total member liabilities 820,586,297 757,480,754

Net Assets 3,647,272 3,107,923

Equity

Reserves 3,647,272 3,107,923

Total Equity 3,647,272 3,107,923

NESS Super’s Financial Statements


INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2019 2019 ($) 2018 ($)

Superannuation Activities

Interest 83,751 97,628

Distributions from unit trusts 828,478 47,780,125

Changes in assets measured at fair value 52,982,655 13,453,379

Other investment income 1,138,634 695,675

Other income 2,652 3,027

Total superannuation activities income 55,036,170 62,029,834

Liabilities

Investment expenses – 112,531

Administration expenses 1,054,913 1,062,795

Operating expenses 2,471,373 1,945,965

Total Liabilities excluding member benefits 3,526,286 3,121,291

Net result from superannuation activities 51,509,884 58,908,543

Profit from operating activities 51,509,884 58,908,543

Less: Net benefits allocated to member's accounts 51,514,785 58,705,026

(Loss) / Profit before income tax (4,901) 203,517

Income tax benefit / (expense) 544,250 (397,866)

Profit / (Loss) after income tax 539,349 (194,349)

NESS Super’s Financial Statements (cont.)

20 NESS Super


STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2019 2019 ($) 2018 ($)

Cash flows from operating activities

Interest received 83,751 97,628

Other investment income 1,138,634 695,675

Insurance proceeds 3,878,071 3,972,028

Administration expenses (1,205,375) (937,233)

Operating expenses (1,971,909) (2,001,360)

Investment expenses – (123,531)

Other income 12 3,398

Insurance premiums (4.852,487) (4,828,564)

Income tax refund / (paid) 989,759 (2,340,672)

Net cash outflows from operating activities (1,939,544) (5,462,631)

Cash flows from investing activities

Purchase of investments (25,984,124) (849,207,822)

Proceeds from sale of investments 15,574,032 842,192,685

Purchase of fixed assets (40,484) (10,266)

Net cash outflows from investing activities (10,450,576) (7,025,403)

Cash flows from financing activities

Employer contributions 54,521,244 51,679,575

Member contributions 5,253,844 3,525,852

Transfers from other superannuation plans 13,623,272 7,309,123

Government co-contributions 35,726 41,114

Benefits paid to members / beneficiaries (53,486,700) (43,053,116)

Income tax paid on contributions (7,556,824) (7.067.106)

Net cash inflows from financing activities 12,390,562 12,435,442

Net decrease in cash and cash equivalents 442 (52,592)

Cash and cash equivalents at the beginning of the financial year 7,464,868 7,517,460

Cash and cash equivalents at the end of the financial year 7,465,310 7,464,868



STATEMENT OF CHANGES IN MEMBER BENEFITS FOR THE YEAR ENDED 30 JUNE 2019 2019 ($) 2018 ($)

Opening balance of member benefits 757,480,754 613,467,509

Employer Contributions 54,521,245 49,930,770

Member Contributions 5,253,844 3,692,323

Transfer from other superannuation plans 13,623,272 8,979,495

Government co-contributions 35,726 41,593

Income tax on contributions (7,556,824) (6,676,811)

Net after tax contributions 65,877,263 55,967,370

Benefits to members/beneficiaries (53,412,172) (43,067,520)

Insurance premiums charged to members’ accounts (4,749,233) (4,808,973)

Death and disability insurance benefits credited to members’ accounts 3,874,900 3,972,400

Benefits allocated to members’ accounts, comprising:

Net investment income 53,557,667 60,672,000

Administration fees (2,042,882) (1,966,974)

Closing balance of member benefits 820,586,297 757,480,754

STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 30 JUNE 2019

Other Reserves $

Operational Risk Reserve $

Total Reserves $

Opening balance at 1 July 2018 1,468,597 1,639,326 3,107,923

Net transfers (to)/from reserves (400,000) 400,000 –

Profit after income tax 514,714 24,635 539,349

Closing balance as at 30 June 2019 1,583,311 2,063,961 3,647,272

Opening balance at 1 July 2017 1,734,188 1,568,084 3,302,272

Net transfers (to)/from reserves (50,000) 50,000 –

Profit after income tax (215,591) 21,242 (194,349)

Closing balance as at 30 June 2018 1,468,597 1,639,326 3,302,272

22 NESS Super

Our partners providing benefits to members NESS Super has arranged for a number of additional benefits to members including:

• Discounted health insurance through NIB

• Access to low interest home loans

• Obligation free financial advice through Link Advice

How we protect your privacy The Privacy Act 2000 outlines standards for the collection, maintenance and disclosure of information about individuals, and the consequences of an individual not providing information when requested and provides for the destruction of personal information once it is no longer required. These policies, documentation and administrative procedures are necessary to ensure compliance with the requirements of the Act has been achieved. Please see the current NESS Super PDS for more information.

If you would like a copy of the NESS Super Privacy Statement, please contact us on freecall 1800 022 067 or visit our website www.nesssuper.com.au

Enquiries and complaints NESS Super has established a procedure for the prompt handling of member enquiries and complaints.

If you have a general enquiry about NESS Super or about your account:

Phone our member hotline: 1800 022 067 (toll-free)

Or write to: NESS Super Administration Locked Bag 20 Parramatta NSW 2124

Alternatively you can email your complaint to: [email protected]

If you think NESS Super has treated you unfairly:

Write to: NESS Super Complaints Officer Locked Bag 20 Parramatta NSW 2124

Or phone: 1800 022 067 (toll-free)

There is no fee for lodgement or management of your complaint. NESS Super will respond in writing to your complaint within 90 days of receipt. Once the complaint has been considered by the Trustee and will advise the decision within 30 days.

Australian Financial Complaints AuthorityIf an issue has not been resolved to your satisfaction, you can lodge a complaint with the Australian Financial Complaints Authority or AFCA. AFCA provides fair and independant financial services complaint resolution that is free for members.

Website: www.afca.org.au Email: [email protected]: 1800 931 678 (free call)In writing to: Australia Financial Complaints AuthorityGPO Box 3, Melbourne VIC 3001

Additional Information


Make sure your employer is paying your superGenerally, the law requires your employer to pay 9.5% super contributions for you in addition to your salary or wages.

These contributions are credited to your NESS Super account.

These contributions are shown on your NESS Super Annual Member Statement and half-yearly transaction report.

You can also access your account online at www.nesssuper.com.au using MemberAccess to check the payments your employer has made.

If you are concerned your employer isn’t making super payments for you, you can write to the Australian Taxation Office and ask it to check with your employer on your behalf.

Information available on requestYou can inspect other documents on request, for example:

• the Trust Deed

• the Investment Policy Statement

• the latest audited accounts and auditor’s report

• details of how Trustee Directors are appointed

• the inquiries and complaints procedure

• NESS Super’s Privacy Policy

• NESS Super’s Risk Management Strategy

• NESS Super’s Insurance Policies.

Call us to arrange for an inspection of these documents at our office.

If you have any questions about this Report, you can address them to the Fund Secretary at [email protected].

Stay in touch if you moveIf you change address, don’t forget to let us know so you can continue to get the information issued by NESS Super. You can advise us online through our website or you can call, email or write to NESS Super.

Contact us

There are four easy ways to contact NESS Super if you have a question or want more information about your super.

Members who wish to inspect the full audited accounts of the Fund, the Trust Deed, the Annual report to APRA or the Auditor’s certificate should contact:

Simon Horrod Senior Member Services Officer Telephone: (02) 8039-1384

For enquiries relating to annual member statements, benefit payments, rollovers, insurance and pensions, please contact a Helpline Officer on: 1800 022 067

Monday to Friday, between 8.30am to 6.00pm (Sydney time)

We are ready to help you with any information you need about your account.

Write to us: NESS Super Administration Locked Bag 20 Parramatta NSW 2124

E-mail us: [email protected]

Website and online access: www.nesssuper.com.au

Simply logon to access up-to-date news and information. You can also download the latest member publications and forms.

Additional Information (cont.)

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ANNUAL REPORT 30 June 2019 - NESS Super | Home...Annual Report 2019 7 Certain Directors are also members of the Audit Risk & Compliance, Insurance, Investment and Remuneration Committees