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2019 Annual Report

Contents

Message from the Chairman and CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2019 year in review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

5 years in review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Investment update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Our investment options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

How we invest your money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Fund update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Our community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Super changes from 1 July 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Age Pension changes from 1 July 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

2019 Federal Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Trustee Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Executive Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Scheme information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Fees and costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

This report is issued by Energy Industries Superannuation Scheme Pty Limited ABN 72 077 947 285, RSE Licensee L0001373 and AFS Licence 441877 as trustee for Energy Industries Superannuation Scheme Pool A ABN 22 277 243 559, RSE R1004861 and Pool B ABN 64 322 090 181, RSE R1004878, and trading as EISS Super and EISS Financial Planning .

Throughout this document references to Pool A include EISS Super and EISS Pension while references to Pool B include the Retirement Scheme and Defined Benefit Scheme . References to the Scheme or Fund is a reference to both Pool A and Pool B . The Scheme is governed by a Trust Deed dated 30 June 1997 (as amended) . Please note the financial statements in this report are an abridged version . If you would like a full copy of the financial statements, please visit eisuper .com .au/AnnualReports .

This information is current as at the date of issue, of a general nature only and has been prepared without taking account of your objectives, financial situation or needs . Before acting on this information or making an investment decision about whether to acquire, hold or sell a financial product, you should consider its appropriateness having regard to your financial objectives, situation and needs and read the relevant Product Disclosure Statement, available at eisuper .com .au/pds or by contacting us on 1300 369 901 . 1047 .6 10 /19 ISS6

We’re here to help 1300 369 901 | 8am to 8pm (AEST) Monday to Friday eisuper.com.au

http://eisuper.com.au/annual-reports


https://www.eisuper.com.au

Annual Report 2019

Value for moneyWe are one of the lowest cost super funds in the market1 and offer competitively priced, Death and TPD, Death only and Salary Continuance Insurance. All our members also have access to our Loyalty Rewards program.

Outstanding serviceTo help our members achieve their retirement goals we provide information, education and financial advice online, over the phone and face to face.

Solid investment returnsWe consistently deliver solid long-term investment performance through our professionally managed investment options. For the year ending 30 June 2019 all our diversified investment options performed above the industry average, and our High Growth option was one of the top 10 across the industry.2

Community involvementThere is a responsibility that comes with being part of a community. We give back to our members by helping to support and develop their local communities now and for the future.

1 Super Ratings, Top 10 lowest fees, June 2018. Fees are based on a $50,000 account balance invested in a MySuper option.

2 Super Ratings, Fund Crediting Rate Survey, June 2019. Past performance should not be regarded as an indication of future performance.

Our awards

2

Message from the Chairman and CEO

Protection and growth of member savingsOur membership is unique, and our approach to managing investments has been built to suit the needs of our members . The average account balance of our members is three times higher than the industry super fund average1 and protecting those balances against downturns in the market is an important part of our job .

We protect members’ retirement savings during market downturns, like the one we experienced in December 2018, by taking less risk . The success of this approach has been verified by independent research from Rainmaker Information2 that shows our MySuper product has, over the past 3 years, had the lowest volatility of all MySuper products in the Australian superannuation industry . For our members, this means more consistent returns and less exposure to unnecessary risk .

Our investment performance over the past financial year speaks to the effectiveness of this approach with all our diversified investment options performing above the industry average . Most notably, our High Growth option was one of the Top 10 performing options across the whole industry3 . We’re also very proud to have delivered returns to members above our performance objectives for all investment options for the year and for their target timeframes, while taking less risk .

The importance of insurance Many of our members work in high risk occupations . The default insurance cover we provide through their super account is tailored to their needs and ensures they are protected for the work they do, even when that means working above 10 metres . The terms and conditions of insurance vary from fund to fund and the type of default cover we provide is not easily accessible through other super funds .

Insurance through super was under the spotlight during the year when the Protecting Your Superannuation Package (PYS) legislation was introduced by the Federal Government . Among other things, PYS required the cancellation of insurance provided through super

accounts that had not received a contribution or rollover for 16 months or more . This focus on insurance is likely to continue during 2019/20 and we expect further legislation will be passed relating to the provision of default cover to members with account balances under $6,000 or under the age of 25 .

We agree with the Government’s view that members should not pay for insurance cover they do not need but we also understand that for many Australians the insurance they have through their super is the only safety net they have . We encourage our members to take the time to fully understand their cover conditions before changing their cover or allowing it to be cancelled .

Challenges continue for the NSW energy industryThe Australian Energy Regulator announced the latest determinations for the New South Wales (NSW) energy industry in the second half of 2018/19 . The major employers within the industry employ many of our members and we have been working closely with employers to ensure our members have access to the information and advice they need through our Customer Relationship Managers and Financial Planners .

Our staff have been making extra visits to affected workplaces to ensure our members understand their entitlements and any redundancy offer they receive, as well as the impact it may have on their super and their finances more broadly .

Royal Commission outcomesThe final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was released in February 2019 .

Some of the poor practices that were highlighted during the Commission and in the final report included charging customers for services that were not provided and the use of remuneration structures that directly conflict with putting the best interests of members first . At EISS Super we do not charge fees for any service that we have not provided . In addition, all staff at EISS Super, including our CEO and our

1 Australian Prudential Regulation Authority, Annual Superannuation Bulletin, June 2018.

2 Rainmaker Information, RMetrics MySuper report, March 2019.

3 Super Ratings, Fund Crediting Rate Survey, June 2019. Past performance should not be regarded as an indication of future performance.

3

Annual Report 2019

financial planners, are paid a salary only and do not receive any commissions or bonuses .

We are supportive of this Government initiative that aims to ensure all super funds are held to the highest standards and act in the best interests of their members .

Building member knowledgeSuperannuation is an important part of every Australian’s future but all the rules and legislation around it can make it difficult for members to know if the decisions they’re making are the right ones . We’re committed to educating our members about their super and arming them with the knowledge they need to make well informed decisions, build long term super savings and achieve the retirement they deserve .

During the year we held over 40 member information sessions with nearly 1,000 attendees and presented 135 information sessions in workplaces across metropolitan and regional NSW .

In the coming year, we’ll be providing you with the ability to learn about managing your super and your finances in general through our new online educational platform .

Making EISS Super even betterAt EISS Super we strive every day to deliver greater value to our members while improving the services we provide . In October 2018, we changed the Administrator of our fund to Mercer (Australia) Pty Ltd .

Since we transitioned to Mercer we’ve removed a number of fees from members’ accounts while also providing you with enhanced services including:

�� Extended operating hours – 8am to 8pm, Monday to Friday .

�� New and enhanced online accounts .

�� The ability for you to make more transactions online and over the phone .

For us to make this change we did have to limit the services we provided for a short period of time . We know this was a period of inconvenience and on behalf of the EISS Super Board and management we’d like to thank you for your patience and hope the benefits you’ve experienced since, and those still to come, will make up for it .

We’d also like to thank you for your continued loyalty and our staff for their efforts in helping us deliver another year of superior performance, service and innovation .

You can rest assured your super is in safe hands with EISS Super .

Terence DowningChairman

Alexander HutchisonChief Executive Officer

4

Our services

4,400Members assisted by

our Financial Planners & Customer Relationship

Managers

135Information

sessions held at members’ work

places

99,300Unique visitors welcomed to our website

2019 year in review

22,000+Members

2,500+Employers

77%Male

23%Female

54%50 years of age or younger

Our customers

35%Metropolitan NSW

53%Rural & regional NSW

+ 88%In NSW

=

22,100Member and

employer enquiries responded to

by our call centre

5

Annual Report 2019

Five years in review

Growing retirement savings for members

June 15 June 16 June 17 June 18

$4.8$5.3

$5.6$5.9

June 19

$4.9

Funds under management ($Billion)

Over

23%Growth

$ 1.5 Billion

Member benefits paid

$ 1.8 Billion

Investment returns added to members’ accounts

$ 1. 5 Billion

Contributions made by members and their employers

107%Defined benefit funding ratio (up from 99% in June 2015)

6

Investment update

The 2018/19 financial year was a roller coaster for investors with share markets falling sharply towards the end of 2018, only to rebound strongly during the first six months of 2019, eventually delivering another strong year for your retirement savings .

Share markets were the main driver of returns in 2018/19, however fixed income markets also had a very strong year, as did unlisted commercial property assets due to vacancy rates remaining low . Offsetting these strong markets, cash rates remained at historically low levels and are expected to remain so for years to come .

EISS Super achieved above average returns for our members over the past year . Our focus on diversifying risks and protecting capital was pivotal in this and remains a key philosophy behind our investment strategy going forward .

Diversification remains importantOverall, performance for the past financial year was positive, but at various times during the year there were bouts of volatility that created some concerns . The volatility was generally driven by political issues such as US/China trade tensions, Brexit and the US Federal Reserve hinting at raising interest rates in December 2018 only to reverse their view in early 2019 . Domestically, the Federal election in May also created uncertainty, although markets reacted positively once the result was known .

The Australian share market returned 11 .5% for the year while global shares retuned 11 .9% in Australian dollar terms . But it wasn’t all smooth sailing . Global markets fell over 15% between September and December, only to reverse those losses in the first six months of 2019 .

Real assets such as property produced solid returns over the year, particularly the Sydney and Melbourne office markets . On the other hand, the retail sector was soft off the back of lower shopping centre sales due to consumers looking to save income as house prices fell .

The Reserve Bank of Australia (RBA) cut rates by 0 .25% in both June and July leading to very low returns for cash investments and term deposits . The potential for further cuts in the cash rate is a signal that returns from cash are expected to remain at very low levels for a number of years . Nevertheless, cash provides the security and liquidity that is valuable when investment markets decline .

Australian bonds had an exceptionally strong year returning 9 .7%, which is well above the long term average of around 5% . These returns were the result of the RBA reducing cash rates and signaling that there may be more to come, which in turn pushed up the value of bond markets . While pleasing, it is unlikely bonds will continue to produce such high returns in 2019/20 .

Overall, maintaining a balanced investment approach has been key to the strong returns we’ve delivered to you over the past year while avoiding significant negative impacts from market events . This diversified approach remains very important in a world where uncertainty is high and geopolitical risks can dominate investment markets in the short term .

Australian marketsThe Australian economy continued to tick along nicely with unemployment remaining low and inflation under control . However, wage increases have been lower than the RBA would like, resulting in interest rate cuts to a historically low 1% in early July 2019 .

The Australian housing market continued to fall during the year with Sydney and Melbourne the hardest hit (down around 12%) . However, there were signs of the market stabilizing with auction clearance rates improving . Lower interest rates should also provide confidence in meeting mortgage payments and help further stabilize the market .

Overall, the Australian economy is in good shape and continues to grow with large infrastructure programs, particularly in NSW, providing good employment which should lead to solid spending in the year ahead .

The US still leads global marketsDespite the rise of China as an economic powerhouse, the US still drives global share markets . The US market returned 8 .2% for 2018/19, driven by technology and property stocks . European share markets lagged other developed countries as the area continued to struggle to lift itself out of a slow growth period, despite having interest rates at 0% or even negative in some countries like Switzerland . Europe have a long path ahead of them as they strive to bring unemployment down, boost wages and increase spending in a cautious environment .

7

Annual Report 2019

The Australian dollar fell around 5% against the US dollar, which provided a boost to returns for Australian investors in international shares .

Investment risks to watch forThe 2018/19 financial year provided pleasing investment returns and continues the strong post Global Financial Crisis period for investment markets . However, risks are always present, and we remain vigilant to ensure your hard-earned retirement savings are protected . At EISS Super we do this first by gaining exposure to a wide and diverse set of investments that can withstand any specific market shocks and secondly, by continually observing market trends and developments to keep on top of risks that may disrupt markets . Some risks that are currently top of mind are:

�� Deterioration of US/China trade negotiations, resulting in further tariffs .

�� A ‘No Deal’ Brexit outcome in October .

�� Conflicts in the Middle East disrupting oil supplies .

While important, to date, none of these issues have significantly impacted investment markets but they do have the potential to cause disruption should they flare-up again .

Protection and responsibility for your moneyAt EISS Super we remain focussed on protecting your money while also growing your savings to help meet your retirement goals . Our cautious approach provides the most efficient manner of balancing investment risks to protect capital while also capturing the market upside . In this respect, we continue to invest across property and infrastructure assets that boost investment returns in a controlled manner .

Responsible investing (or Environmental, Social and Governance (ESG) investing) helps guide the decisions we make across our investment portfolio and informs the strategies and investment managers we employ .

Investments need to be sustainable in the long term . To ensure this is the case for our portfolio, ESG factors are integrated into our risk assessment process when considering an investment . Thorough due diligence is also conducted before we appoint an investment manager to ensure they have an appropriate responsible investment policy that is adhered to throughout their investment processes .

As part of our integration of and commitment to ESG, we have been a signatory to the Principles of Responsible Investment since 2010 . These are set of principles that instill on signatories such as EISS Super “a duty to act in the best long-term interests of our beneficiaries” . In this fiduciary role, we believe that ESG issues can affect the performance of investment portfolios and we act to mitigate those risks wherever possible .

Finally, be assured that while investment markets will always move up and down, the team at EISS Super are managing your money responsibly and prudently to smooth out fluctuations and help you meet your retirement goals . We thank you for the privilege of managing your retirement savings .

Ross EtheringtonChief Investment Officer

8

1 The 3, 5 and 10 year figures are rolling, reflect an annualised compound rate and are after tax and fees. Past performance should not be regarded as an indication of future performance.

Our investment options

High GrowthInvestment objectiveThis option aims to achieve a return of CPI + 4% p .a . over 10 years (after fees and taxes) .

Level of investment riskRisk band 6: High risk . The estimated number of negative returns in a 20 year period is 4-6 years .

Performance1

Actual asset allocation

2%

4%

6%

8%

10%

12%

14%

1 year % 3 year % p.a. 5 year % p.a. 10 year % p.a.

9.4

3%

10.4

4%

8.9

6%

9.7

9%

10

.92

%

9.58

%

8.30

%

8.96

%

8.11

%

9.21

%

10.0

7%

9.21

%

EISS Super EISS Pension(Account Based Pension)

Retirement Scheme EISS Pension (Transition to Retirement pension)

9.43

%

10.2

7%

8.57

%

9.87

%

Growth/Defensive Allocation

Growth Assets 93.6% Defensive Assets 6.4%

Asset Class Allocation

��Australian Equities 38.4% ��Alternatives 2.8%

��International Equities 46.5% ��Private Equity 3.1%

��Infrastructure 2.9% ��Fixed Income 0.0%

��Property 5.4% ��Cash 0.9%

9

Annual Report 2019

1 The default MySuper investment option for EISS Super will change from Conservative Balanced to Balanced from 18 November 2019.


Balanced1

Investment objectiveThis investment option aims to achieve a return of CPI + 3% p .a . over 7 years (after fees and taxes) .

Level of investment riskRisk band 5: Medium to high risk . The estimated number of negative returns in a 20 year period is 3-4 years .

Performance2


2%

4%

6%

8%

10%


7.6

1%

8.4

7%

7.1

2%

7.8

3%

8.6

0%

7.5

1%

6.9

7%

7.4

1%

6.4

0%

8.01

%

8.71

%

7.68

%

7.6

1%

8.1

3%

7.1

2%

8.5

6%










10

Conservative Balanced1

Investment objectiveThis investment option aims to achieve a return of CPI + 2 .5% p .a . over 5 years (after fees and taxes) .

Level of investment riskRisk band 4: Medium risk . The estimated number of negative returns in a 20 year period is 2-3 years .

Performance2

2%

4%

6%

8%


6.47

%

7.16

%

6.3

2%

6.5

7%

7.3

5%

6.4

0%

5.8

7%

6.3

7%

5.6

9%

7.2

6%

7.9

6%

7.3

4%

6.5

7%

6.6

8%

6.0

9%

7.8

1%




1 The default MySuper investment option for EISS Super will change from Conservative Balanced to Balanced from 18 November 2019.









11

Annual Report 2019


ConservativeInvestment objectiveThis investment option aims to achieve a return of CPI + 1 .75% p .a . over 5 years (after fees and taxes) .

Level of investment riskRisk band 3: Low to medium risk . The estimated number of negative returns in a 20 year period is 1-2 years .

Performance1

1%

2%

3%

4%

5%

6%

7%


5.0

4%

5.4

7%

5.0

2%

4.7

8%

5.1

7%

4.7

3%

6.1

4%

7.0

3%

6.0

7%

6.11

%

6.66

%

6.28

%

6.1

4%

5.0

4%

4.9

1%

6.5

2%











12


CashInvestment return objectiveThis investment option aims to achieve a return of the RBA Cash Rate over 1 year (after fees and taxes) .

Level of investment riskRisk band 1: Very low risk . The estimated number of negative returns in a 20 year period is nil .

Performance1

1%

2%

3%

4%


1.5

3%

1.75

%

1.3

0%

1.6

3%

1.71

%

1.4

0%

1.6

8%

1.8

1%

1.5

4%

2.5

3%

2.6

8%

2.6

1%

1.5

3%

1.5

6%

1.7

2%

2.6

3%







��Cash 100%

13

Annual Report 2019

Growth (only available in the Retirement Scheme)Investment objectiveThis investment option aims to achieve a return of CPI + 3 .5% p .a . over 7 years (after fees and taxes) .

Level of investment riskRisk band 6: High risk . The estimated number of negative returns in a 20 year period is 4-6 years .

Performance1

2%

4%

6%

8%

10%

12%


8.15

%

8.46

%

7.2

9%

8.48

%

Retirement Scheme










14

Defined Benefit Selection (only applicable to the Defined Benefit Scheme)Investment objectiveThis investment option aims to achieve a return of 5 .2% p .a . over 10 years (after fees and taxes) .

Level of investment riskRisk band 5: Medium to high risk . The estimated number of negative returns in a 20 year period is 3-4 years .

Performance1

2%

4%

6%

8%

10%

12%


10.7

5%

8.30

%

6.9

3%

7.85

%

Defined Benefit Scheme










15

Annual Report 2019

Level of investment riskThe Standard Risk Measure (SRM) is based on industry guidance to allow the comparison of investment options that are expected to deliver a similar number of negative annual returns over any 20 year period .

The SRM is not a complete assessment of all forms of investment risk, for instance, it does not detail the size of a negative return or the potential for a positive return to be less than a member requires to meet their objectives . Further, it does not take into account the impact of fees and costs or tax on the likelihood of a negative return .

Members should ensure they are comfortable with the risks and potential losses associated with their chosen investment option(s) .

The table below outlines the labelling used in the SRM .

Risk band Risk labelEstimated number of negative annual returns over any 20 year period

1 Very low Less than 0 .5

2 Low 0 .5 to less than 1

3 Low to medium 1 to less than 2

4 Medium 2 to less than 3

5 Medium to high 3 to less than 4

6 High 4 to less than 6

7 Very high 6 or greater

16

How we invest your money

Investment earningsAt EISS Super we allocate net earnings to members’ accounts daily . The allocated earnings rate is based on the applicable unit prices of the underlying investment options that the member is invested in . These unit prices are derived from the market value of the investments in the underlying investment option after adjustments for taxes, fees and expenses .

Any contributions tax or other direct costs such as insurance premiums, are deducted directly from a member’s account balance and are not taken into consideration when determining the applicable unit prices .

DerivativesDerivatives are instruments which enable EISS Super to gain exposure to a particular asset or asset class without physically owning it . The cost of derivatives can be lower in some instances than holding the actual asset .

We use derivatives for the purposes of portfolio and risk management as well as to optimise investment strategy implementation . More specifically, derivatives are used to protect the value of investments, hedge foreign currencies, achieve an indirect exposure to an asset in a cost-effective manner and to minimise transaction costs .

The EISS Super Derivative Risk Statement (DRS) provides controls on how we use derivatives . Our DRS allows us to invest in derivatives directly or through our investment managers . Our DRS does not permit the use of derivatives for gearing or speculative purposes .

Where our investment managers use derivatives, we consider the risks and controls in place by reviewing each investment manager’s DRS and receive regular reports of the investment manager’s compliance with their DRS .

The derivatives charge ratio (the percentage of the Fund’s assets being used as security for derivative investments) did not exceed 5% of EISS Super’s assets at any time during the year .

17

Annual Report 2019

1 Please note this investment is only utilised by EISS Super within the Defined Benefit Scheme and Retirement Scheme.

Who manages your super?We have a panel of investment managers who have been selected for their expertise and track record in managing particular asset sectors .

Investment managers as at 30 June 2019

Asset class Investment managers

Australian EquitiesAlphinity Investment ManagementLazard Asset ManagementState Street Global Advisors

International Equities

Baillie Gifford OverseasCauseway Capital ManagementMFS Institutional AdvisorsNeuberger Berman AustraliaState Street Global Advisors

Infrastructure

Colonial First State Infrastructure Managers (Australia)GardiorMagellan Asset ManagementUBS Global Asset Management

Property

AMP Capital InvestorsCharter Hall Investment ManagementDEXUS Wholesale PropertyGPT Funds Management

AlternativesKapstream CapitalWestern Asset Management

Private Equity

Bain CapitalNikko Asset Management AustraliaOaktree CapitalQuentin AyersWilshire Australia

Fixed IncomeNew South Wales Treasury Corporation (TCorp)1

Western Asset Management Company

Cash

Endeavour Mutual BankG&C Mutual BankKapstream CapitalUnity Bank

18

1 Pool A includes EISS Super and EISS Pension while Pool B includes the Retirement Scheme and Defined Benefit Scheme.

2 This investment is in a pooled vehicle with underlying investments in international equity holdings all of which are less than 5% of the total value of the assets held by the Fund.

Where we invest your moneyTop 10 equity holdings as at 30 June 2019

Top 10 Australian equity holdings Top 10 international equity holdings

Commonwealth Bank of Australia Visa Inc

BHP Group Ltd Thermo Fisher Scientific Inc

CSL Ltd Medtronic PLC

Westpac Banking Corp Amazon .com Inc

Australia & New Zealand Banking Group Ltd LVMH Moet Hennessy Louis Vuitton SE

Woodside Petroleum Ltd Comcast Corp

Rio Tinto Limited Accenture PLC

National Australia Bank Ltd Walt Disney Co

Transurban Group Nestle SA

Telstra Corporation Ltd Microsoft Corp

Substantial holdings

All investments are made through the Energy Investment Fund (EIF) . Investments through EIF that have a value in excess of 5% of the total assets held by the Fund are as follows:

Investment Pool A1 Pool B1

State Street International Equities Index Trust2 11 .48% 12 .71%

19

Annual Report 2019

Fund update

Making EISS Super even betterTo ensure we continue to improve the services we provide to our members, we changed our Administration service provider to Mercer (Australia) Pty Ltd on 1 October 2018 . This allowed us to make a number of enhancements to benefit members including:

�� Extended call centre hours – 8am to 8pm (AEST), Monday to Friday .

�� A new, enhanced and mobile-friendly online account .

�� More transactions available online and over the phone .

�� Removal of the Exit fee and some other fees from your account .

For further details about all the changes that were made at this time please refer to the Significant Event Notice that was sent to members in August 2018 which is available at eisuper.com.au/SEN .

Have you logged into your new online account? There are lots of new features available through your online account including learning about your investment risk profile using our Risk Profile Quiz and being able to make changes to your investment options .

You can also find and combine any other super accounts you have in a few simple clicks .

Log in today at eisuper.com.au/login .

Getting to know our membersUnderstanding our members is key to identifying how we can continue to deliver high quality products and services that help you achieve the retirement you deserve .

We conducted our annual member research in August 2018 with nearly 1,000 members participating . This year’s results reinforced the importance of good customer service, a strong reputation and the need to continue engaging with you about the importance of managing your super .

Many of you told us that while you understand the importance of super you were concerned that you were not managing it properly and may not have enough super for your retirement . This year we’ve delivered improved online services and transactions while also extending our call centre operating hours . We know our members live busy

lives and we’re very pleased that we’ve been able to make it easier for you to manage your super when it suits you .

Since launching our new online accounts to members in October 2018 nearly 60% of you have logged into your new online accounts, with many of you using it to better manage your super . In just nine months, we’ve seen:

�� Nearly 1,000 members use our online Find and Combine tool to consolidate their super into their EISS Super account .

�� Over 800 members complete our Risk Profile Quiz and gain a better understanding of their attitude to risk .

�� More than 1,000 members make at least one change to their investments .

There were many other insights from the research and throughout 2018/19 we’ve identified and started work on a number of initiatives that we look forward to releasing to members this year including Money Matters, our new online educational platform .

Keeping members informedKnowledge is power when it comes to saving for retirement . We’re here to help you make the most of your super and we’re passionate about guiding you through the twists and turns of superannuation at every stage of your life .

In both October 2018 and April 2019 we held member days at seven different locations that provided you with the opportunity to learn about some of the enhancements we made to EISS Super including how to log into and use your new online account .

At each member day we also held two information sessions . One designed to guide members who were still working through building their super and the other to help members who were already retired make the most of their retirement .

In addition, between February and May 2019 we held 16 information sessions to help those of you who are approaching or already retired to better understand the Age Pension .

All the sessions were well received and attended by nearly 1,000 members . Remember, it’s never too late or too early to get your super sorted, so keep an eye out for your invitation to our next round of member events .

20

Enhancing our investment optionsDuring the year we made a number of enhancements to our investment options seeking to improve returns for members . These enhancements have not changed our conservative investment philosophy which focusses first on protecting and then growing your money to help meet your retirement goals .

Asset allocation changes to diversified investment options During the year we reviewed the asset allocations for our diversified investment options . Based on the review, we adjusted some of our asset allocation targets and widened the asset allocation ranges of some asset classes from 1 May 2019 .

We also reviewed our Defined Benefit Selection option (which is only available in the Defined Benefit Scheme and to invest employer funded reserves) and made changes to the asset allocation targets and ranges of some asset classes from 1 June 2019 .

These changes were made to provide more flexibility and greater opportunity to take advantage of investments that improve member and employer outcomes . The new targets and ranges are available in our current Product Disclosure Statements which are available at eisuper.com.au/pds .

Please note, these refinements did not change the overall exposure to growth (e .g . Australian and international shares) and defensive assets (e .g . fixed income and cash) or the

level of investment risk for any investment option .

Changes to the Cash investment option From 1 May 2019 the fee charged on the Cash investment option reduced by 0 .10% p .a .

At this time we also revised the return objective for the Cash option from CPI + 0 .25% (after fees and taxes) to the RBA Cash Rate (after fees and taxes) . This change allows members to make investment decisions based on a more achievable objective for the Cash option .

Direct Investment Option closure Our Direct Investment Option, which was available in our EISS Super and EISS Pension products, was closed on 14 September 2018 due to the service provider deciding that they would no longer offer the service .

Voluntary insurance code updateThe Insurance in Superannuation Voluntary Code of Practice (the Code)1 commenced on 1 July 2018 and EISS Super has committed to complying with the Code .

Some of the key objectives of the Code are to:

�� Better tailor insurance arrangements to members .

�� Improve communications to members around insurance .

�� Simplify the claims process and provide better transparency to members about how the process works .

Compliance with the Code is voluntary and we already follow many of the requirements .

In December 2018, we published our transition plan on our website . The transition plan outlines how we will adopt key requirements of the Code by the implementation deadline which is 30 June 2021 . Our transition plan is available at eisuper.com.au/news .

Rewarding members today!In December 2018, we provided EISS Super members with an early Christmas gift with the launch of EISS Super Loyalty Rewards .

Our Loyalty Rewards program offers you real benefits today while you save for your future .

You can access a range of discounts and special offers that help you and your family get more out of every day .

Start saving today at eisuper.com.au/LoyaltyRewards .

1 The Code was developed by the Insurance in Superannuation Working Group which is comprised of the leading superannuation industry and finance sector advocacy bodies, the Australian Institute of Superannuation Trustees, the Association of Superannuation Funds of Australia, and the Financial Services Council.

21

Annual Report 2019

Our community

At EISS Super we put our members and their communities at the centre of everything we do.

Not only do we want to inspire you to make smart financial decisions, we also want to positively impact your communities in the process. All of our partnerships align with our values and provide an opportunity to give something back to the community.

Our community partners

22

Super changes from 1 July 2019

Protecting Your SuperLegislative changes known as the Protecting Your Superannuation Package came into effect from 1 July 2019 . The aim of these changes is to ensure your super is not eroded by unnecessary insurance premiums and fees . The changes include:

�� The cancellation of insurance if your account has been inactive (has not received a contribution or rollover) for more than 16 months, unless you choose to keep your insurance .

�� Consolidation of multiple accounts that you may hold by transferring inactive accounts with no insurance and a balance of less than $6,000 to the Australian Taxation Office . For this purpose, an inactive account is defined as an account that, for more than 16 months, has not had a change to insurance arrangements, investment option change, amendment or making of a binding nomination, or has not received a rollover or contribution .

�� Protection of low balance super accounts by implementing a 3% fee cap and abolishing exit fees .

The changes relating to fee caps and exit fees do not impact EISS Super members as we already provide one of the lowest cost super products in the market1 (well below the 3% cap) and had previously removed exit fees . If you become impacted by the other changes you will be notifed directly and advised of your options .

Work test exemption From 1 July 2019 new legislation allows individuals aged 65 to 74 to make both concessional and non-concessional voluntary super contributions without meeting the work test . However, the work test must be met in the previous financial year and the individual must have a super balance less than $300,000 at the previous 30 June . The exemption can only be used once and the normal contribution caps apply .

Catch up concessional contributionsYou may be able to increase your concessional contributions cap in a financial year by applying previously unused concessional contribution cap amounts from the previous five financial years . 2019/20 is the first year you can access any unused cap amounts that have carried forward .

The following rules apply:

�� You can start accruing unused concessional cap amounts from 1 July 2018 .

�� You can carry forward unused cap amounts if your total super balance was less than $500,000 on 30 June of the previous financial year .

�� You can carry forward unused cap amounts for up to five years .

Preservation age and permanently retiringYour preservation age, the age at which you can access all of your super if you have permanently retired, is between 55 and 60, depending on your date of birth, as follows:

Date of Birth Preservation age

Before 1/7/1960 55

1/7/1960 - 30/6/1961 56

1/7/1961 - 30/6/1962 57

1/7/1962 - 30/6/1963 58

1/7/1963 - 30/6/1964 59

After 30/6/1964 60

Superannuation GuaranteeThe Superannuation Guarantee (SG) rate increases are enacted into law . The SG rate remained at 9 .5% for the 2018/19 financial year and will remain so until 2020/21 . Annual increases towards 12% will commence as below:

Year Scale

2021/22 10 .0%

2022/23 10 .5%

2023/24 11 .0%

2024/25 11 .5%

2025/26 onwards 12 .0%

1 Super Ratings, Top 10 lowest fees, June 2018. Fees based on a $50,000 account balance invested in a MySuper option.

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Annual Report 2019

Age Pension changes from 1 July 2019

Eligibility age increaseThe Age Pension eligibility age increased to 66 on 1 July 2019 . This will continue to increase by 6 months every 2 years until the Age Pension eligibility age reaches 67 on 1 July 2023 . These increases only affect people born on or after 1 July 1952 . The scheduled increases are as below .

Your birthdate Your Age Pension eligibility age

Before 1/1/1954 65 years and 6 months

1/1/1954 - 30/6/1955 66 years

1/7/1955 - 31/12/1956 66 years and 6 months

1/1/1957 onwards 67 years

Means testing of annuity productsChanges to how lifetime income streams, such as lifetime annuities are treated for Centrelink assessment purposes came into effect from 1 July 2019 .

The changes mean that:

�� Income tests for Age Pension eligibility will only count 60% of income payments from lifetime annuities towards an income assessment . For example, if you receive $10,000 a year only $6,000 will be assessed .

�� Asset tests will only count 60% of the purchase price of a lifetime annuity as an asset until age 84 (current life expectancy of a 65 year old male) after which only 30% will be assessed .

Work Bonus increaseThe Work Bonus increased from $250 to $300 per fortnight from 1 July 2019 . This means if you receive the Age Pension and work for an employer, you can earn an extra $50 per fortnight without your entitlement being affected . The maximum amount you can accrue also changed to $7,800 .

From 1 July 2019, the Work Bonus also applies to self-employment income earnt from active participation .

Expansion of the Pension Loan SchemeFrom 1 July 2019, the amount you can receive per fortnight from the Pension Loan Scheme increased from 100% to 150% of the maximum fortnightly pension rate . This means if you qualify for an eligible pension (which includes the Age Pension) you can now get up to 1 .5 times the maximum rate of pension each fortnight .

In addition, the scheme has been extended to maximum rate pension recipients and individuals who qualify for an eligible pension but have a payment rate of nil for either the asset or income test .

We’re here to help

Changes to the rules and legislation around super and the Age Pension can be difficult to keep up with . An EISS Super Financial Planner can help you identify your options and the best solution for you . To make an appointment, call us on 1300 369 901 (and select option 2) or visit eisuper.com.au/appointment .

http://eisuper.com.au/appointment

24

2019 Federal Budget

Personal tax cuts for low, middle and high income earners were the focus of the 2019 Federal Budget .

The Government also announced some minor changes to superannuation, aimed at helping older Australians who can afford to make additional contributions but, compared to previous budgets, the changes were modest .

Tax cuts for Australian workersBroad income tax cuts were proposed in the 2019 Federal Budget and were legislated in early July 2019 . The changes will be implemented over a five-year period with three key start dates as below .

From 1 July 2019: An increase to the low and middle income tax offset providing up to $1,080 for singles and up to $2,160 for dual income families . The offset applies to people earning up to $126,000 a year and was back dated to the 2018/19 financial year .

From 1 July 2022: An increase in the income tax threshold for the 19% tax rate from $41,000 to $45,000 plus an increase in the low income tax offset from $645 to $700 .

From 1 July 2024: A decrease in the 32 .5% tax rate to 30% for Australians earning between $45,000 and $200,000, which includes 94% of tax payers .

Super changes for older AustraliansThere were three changes proposed to super all of which will benefit older Australians who can afford to make additional voluntary super contributions .

Voluntary contributionsPeople aged 65 and 66 years will be able to make both concessional and non-concessional voluntary super contributions without meeting the work test .

Bring-forward ruleThe bring-forward rule, which currently allows those aged less than 65 years to make three years’ worth of non-concessional contributions in one year will be extended to those aged 65 and 66 . This will allow these people to make voluntary non-concessional contributions of up to $300,000 in a single year .

Spouse contributionsMembers will also be able to make voluntary contributions for a spouse aged up to 74, up from the current cut-off age of 69 years .

Pensioner benefitsThe Government proposed (and has since provided) a one-off Energy Assistance Payment of $75 for single pensioners and $125 for couples .

The Government also proposed additional funding of $5 .9 billion over two years from 1 July 2020 for the Commonwealth Home Support Program (CHSP) and an additional 10,000 home care packages to help support older Australians who wish to stay in their home longer .

25

Annual Report 2019

Trustee Board

The role of the EISS Super Trustee Board is to ensure that the Scheme is operated and managed in the best interests of all members in line with its governing rules and superannuation legislation.

Terence DowningChair

Appointed by Endeavour Energy

Terry joined the EISS Super Board in 2008 and was appointed Chair in

2017 . Terry has significant experience in investments, accounting, risk and financial advisory . Terry’s 24 years’ experience on boards and corporate governance has been gained as a director of various public, private and not-for-profit organisations . Prior to his non-executive director roles, Terry has extensive experience as a senior executive in insurance and superannuation .

Board Committee Memberships

�� Audit and Compliance Committee

�� Risk Committee

Juliet DunworthDirector

Appointed by Essential Energy

Juliet joined the EISS Super Board in 2013 . Juliet has over 30 years’ global

experience in financial markets, banking, investment management and advice, holding senior corporate roles and directorships . Juliet also has 20 years’ experience in not-for-profit boards over various industries in the US and Australia . Juliet has extensive experience in risk management, corporate governance, investment advice and global asset custody and is a member of the Australian Institute of Company Directors . Juliet is currently the Chair of the Sisters Charity Australia Investment Sub-Committee and a member of the Advisory Finance Committee .


�� Investment Committee (Chair)

�� Remuneration and People Committee

Yasemin OnatDirector

Appointed by United Services Union

Yasemin joined the EISS Super Board in 2015 . Yasemin has over 10 years’

experience in the financial services industry in the areas of superannuation, mergers and acquisitions and corporate compliance . Yasemin’s experience and qualifications in financial planning, superannuation and actuarial matters provide an invaluable skill set to the EISS Super Board .


�� Remuneration and People Committee (Chair)

�� Investment Committee

Justin PageDirector

Appointed by Electrical Trades Union

Justin joined the EISS Super Board in 2016 . Justin is the Secretary of the Electrical

Trades Union (ETU) and contributes a wealth of industry knowledge and experience to EISS Super . Justin has over 7 years experience with the ETU and has extensive knowledge and experience in industrial awards, enterprise agreements and industrial relations . Justin has over 5 years’ experience on industry boards and bodies .


�� Risk Committee (Chair)


26

Mike RocheDirector

Appointed by Ausgrid

Mike joined the EISS Super Board in 2016 . Mike has over 40 years’ experience

in the finance sector including the provision of strategic, financial, merger and acquisition and capital advice to major corporate, private equity and government clients . Mike’s most recent role was as the Chairman of Mergers and Acquisitions for Australia and New Zealand at Deutsche Bank . Mike currently serves as managing director of M .R . Advisory .


�� Investment Committee


Dr Warren MundyDirector

Appointed by Transgrid

Warren joined the EISS Super Board in 2017 . He has worked extensively in

consulting, aviation, policy development and strategic planning in both the public and private sectors including serving as a Commissioner on the Productivity Commission . Warren is currently an Adjunct Professor at the University of New South Wales School of Aviation and a director on a number of infrastructure-related and for-purpose boards . Warren is a Fellow at the Australian Institute of Company Directors and the Royal Aeronautical Society .


�� Audit and Compliance Committee (Chair)

�� Remuneration and People Committee

Matthew McCannDirector

Appointed by Electrical Trades Union

Matthew joined the EISS Super Board in 2018 . Matthew has over 15 years’

experience with the Electrical Trades Union (ETU) (NSW branch) . He contributes a wealth of industry knowledge and experience to EISS Super . Matthew also has extensive knowledge in enterprise agreements, awards and industrial relations . In addition, Matthew has over 5 years’ experience on industry boards and government advisory boards .




27

Annual Report 2019

Directors’ attendance 2018/19

Directors

Board Investment Committee

Audit and Compliance Committee

Risk Committee Remuneration and People Committee

Eligible to Attend

Attended Eligible to Attend




Attended

Terence Downing 6 6 - - 5 5 4 4 - -

Juliet Dunworth 6 6 4 4 - - - - 4 4

Yasemin Onat 6 5 4 4 - - - - 4 3

Justin Page 6 6 - - 5 5 4 4 - -

Michael Roche 6 6 4 4 - - 4 4 - -

Warren Mundy 6 5 - - 5 4 - - 4 3

Matthew McCann1 3 3 - - 2 2 2 2 - -

Steve Butler2 3 3 - - 3 3 2 2 - -

Mark Morey3 6 5 4 4 - - - - 4 3

1 Matthew McCann was appointed 8 November 2018.

2 Steve Butler resigned 8 November 2018.

3 Mark Morey resigned 23 May 2019.

28

Executive Team

Alexander HutchisonChief Executive Officer

Alexander is the Chief Executive Officer of Energy Industries Superannuation Scheme (EISS Super) and is responsible for the management of EISS Super .

Alexander is also responsible for ensuring that the Board has been provided with expert advice and that decisions made are implemented across EISS Super . Alexander has over 20 years’ experience in the financial services industry having worked in a number of senior leadership roles .

Alexander holds a Bachelor of Laws, Diploma of Financial Services (Financial Planning), Master Stockbroker (SAA) and is a Graduate of the Stanford University Graduate School of Business .

Jodie BaileyChief Customer Officer

Jodie is the Chief Customer Officer and is responsible for the overall customer experience that EISS Super members and employers receive . This includes

developing and implementing strategies to ensure members receive the service and advice they need to help them make the most of their superannuation .

Jodie has over 20 years’ experience in financial services with a strong background in strategy, product, marketing and project management .

Jodie holds a Bachelor of Arts (Major in Law) from the University of Canberra .

Stephanie RedmondGeneral Counsel & Company Secretary

Stephanie is the General Counsel and Company Secretary of EISS Super . In this role, Stephanie is responsible for the

management of the governance, legal and company secretariat functions at EISS . Stephanie has over 12 years’ experience advising on legal, regulatory and corporate governance matters both as in-house counsel at major financial institutions in Sydney and London and as a lawyer in private practice .

Stephanie holds a Master of Laws in Corporate, Securities and Finance Law from the University of Sydney, Bachelor of Arts/Law from the University of New South Wales and is a solicitor admitted to the Supreme Court of NSW .

Ross EtheringtonChief Investment Officer

Ross is the Chief Investment Officer of EISS Super and is responsible for overseeing the investment process, including asset allocation, investment selection and

leadership of the investment team . With over 25 years’ experience in the finance and investment industry, Ross has extensive knowledge of investing assets on behalf of both accumulation and defined benefit superannuation funds .

Ross is a Fellow of the Actuaries Institute, holds a Graduate Diploma in Applied Finance & Investment from FINSIA and a Bachelor of Science degree from Sydney University .

29

Annual Report 2019

Lance FosterChief Financial Officer

Lance is the Chief Financial Officer of EISS Super and is responsible for the finance and tax function within EISS Super . He is accountable for the financial management

of EISS Super and all internal and regulatory reporting . Lance has over 20 years’ experience in the financial services and wealth management industries in both financial and operational roles .

Lance holds a Bachelor of Commerce and is a Chartered Accountant .

Stephanie LyonsChief Risk Officer

Stephanie is the Chief Risk Officer of EISS Super and is accountable for oversight of EISS Super’s risk management framework and compliance management

framework . Stephanie is responsible for ensuring that EISS Super’s risk and compliance program is effectively integrated into daily operational processes and for managing the risk reporting process to the Board, Risk Committee and Audit and Compliance Committee . Prior to joining EISS Super, Stephanie worked as an External Auditor in a large accounting firm specialising in superannuation, funds management, insurance and banking .

Stephanie holds a Bachelor of Commerce (German), is a Chartered Accountant and a Graduate of Harvard Business School (General Management Program) .

Louise GilmartinHead of Investment Operations

Louise is responsible for managing the investment operations function for EISS Super, which includes ensuring our

outsourced service providers consistently deliver high quality contracted services . Louise has over 20 years’ experience in the financial services industry with a strong background in investment operations, transition management and custodial services .

Louise is also a Graduate of the Trustee Director Course, Australian Institute of Superannuation Trustees (GAIST) .

Lisa EliasHead of People & Learning

Lisa is the Head of People and Learning at EISS Super and is responsible for building the capability of our staff . She has more than 25 years’ experience in

organisational learning and development, recruitment and generalist HR across numerous industries and has worked as a senior program manager at the University of Sydney, lectured with the Institute of Management, University of New England and Australian Institute of Training and Development .

Lisa holds an MBA, a Master of Education and additional postgraduate qualifications in learning & development and management . She is a certified professional with the Australian Human Resources Institute (CAHRI) and a Fellow of the Australian Institute of Training and Development (FAITD) .

30

Scheme information

About the SchemeThe Energy Industries Superannuation Scheme (the Scheme) was established on 30 June 1997 by a Trust Deed made under an Act of the NSW Parliament for the purpose of providing retirement benefits for employees of certain Energy Industry entities in NSW .

The Scheme has assets of approximately $5 .9 billion under management as at 30 June 2019 . The Scheme is regulated primarily by the Superannuation Industry (Supervision) Act 1993 (Cth) and is also subject to regulation under the Superannuation Administration Act 1996 (NSW) and other associated rules, regulations and regulatory standards .

The Trust Deed contains the legal terms that govern members’ interests in the Scheme and is available at eisuper.com.au/GovernanceAndDisclosures or by calling us on 1300 369 901 .

Pool A ABN 22 277 243 559

Pool B ABN 64 322 090 181

Division F – EISS Pension1 Division B2 – Retirement Scheme

Division P – EISS Super Division C2 – Basic Benefit

Division D2 – Defined Benefit Scheme

1 Includes Transition to Retirement Pension2 Closed to new members

Industry regulatorThe operations of the Scheme are supervised by the Australian Prudential Regulation Authority (APRA) .

Representatives of EISS Super meet with APRA regularly, so as to keep the regulator informed about the activities of the Scheme . These meetings also provide an opportunity for the Board to hear APRA’s views about the superannuation industry .

Certain activities of the Scheme are also supervised by the Australian Securities and Investments Commission (ASIC), for instance, the financial planning activities of EISS Financial Planning .

Indemnity insuranceThe Trustee is indemnified by a policy of insurance in respect of its duties as trustee of the Scheme .

About the TrusteeEnergy Industries Superannuation Scheme Pty Limited ABN 72 077 947 285 is the Trustee of the Scheme .

We are responsible for managing the Scheme, including the safe keeping of assets and ensuring the Scheme operates in accordance with the Trust Deed and superannuation laws . We are an APRA Registrable Superannuation Entity Licensee .

Role of the BoardThe Board is responsible for setting the overall strategy for the Scheme and ensuring it is operating in accordance with the Trust Deed and all applicable laws .

The Board meets regularly and receives and reviews reports from its appointed auditors and service providers, such as the administrator, the custodian and investment managers . The Board calls upon specialist advice from advisors, such as solicitors, accountants and the Scheme’s actuary .

The Board operates under a Board Charter which, amongst other things, defines the roles and responsibilities of Directors, training requirements for Board members and sets out a Board meeting calendar .

The Board has appointed the Investment Committee, Risk Committee, Audit and Compliance Committee and the Remuneration and People Committee to allow it to oversee the operations of the Scheme in greater detail .

The Investment Committee meets at least quarterly to monitor the performance of the investment managers and oversee the work of the investment adviser .

The Risk Committee and Audit and Compliance Committee meet quarterly and review the internal controls and risk management of the Scheme and its service providers . Meetings of the Audit and Compliance Committee are also attended by representatives of the Scheme’s internal and external auditors .

The Board continually reviews the Scheme’s governance and compliance processes .

http://eisuper.com.au/governance-and-disclosures

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Annual Report 2019

ComplaintsOn 1 November 2018, the Australian Financial Complaints Authority (AFCA) replaced the Superannuation Complaints Tribunal as the dispute resolution scheme for the superannuation industry and financial services generally .

This means if you make a complaint to EISS Super and you’re not satisfied with the outcome of your complaint, or we have not resolved your complaint within 90 days, you can complain to an independent body that can assist you further with resolving your complaint at no cost to you .

There are some time limits for lodging certain complaints with AFCA . For instance, complaints about the payment of a death benefit, must be lodged with AFCA within 28 days of receipt of a decision letter from us . You may wish to contact AFCA for more information about their time limits .

We strive to provide a high standard of member service . If however, you are dissatisfied with the service you receive or a decision which affects you, you may lodge a complaint with us by writing to:

Complaints Resolution Officer EISS Super GPO Box 7039 Sydney NSW 2001

Alternatively, you can email us at [email protected] or call us on 1300 369 901 .

You can also lodge your complaint directly with AFCA in the first instance by visiting afca.org.au or writing to:

Australian Financial Complaints AuthorityGPO Box 3Melbourne VIC 3001

Alternatively you can email AFCA at [email protected] or call them on 1800 931 678 (free call) .

Temporary residentsEISS Super is obliged to pay any unclaimed superannutaion of non-residents to the ATO . If you are a non-resident you are able to claim these funds from the ATO . EISS Super is not obliged to notify or give an exit statement to a non-resident where we have paid unclaimed superannuation to the ATO . For more information, please visit ato.gov.au .

SurchargeSurcharge tax was abolished from 1 July 2005, however the ATO may issue a surcharge assessment in respect of prior years . If we received and paid a surcharge assessment in respect of a member during the reporting period, the surcharge tax will have been deducted from the member’s account balance and paid to the ATO .

We appreciate your feedbackYour feedback is important to us and we value any comments you have about our service .

To provide feedback, please complete the form at eisuper.com.au/ContactUs or call us on 1300 369 901 .

mailto:[email protected]

http://afca.org.au

mailto:[email protected]

http://ato.gov.au

http://eisuper.com.au/ContactUs

32

Fees and costs

Fees and costs for the year ended 30 June 2019The fees and costs shown in the tables below are not deducted directly from a member’s account (except for the dollar based administration fee charged in the Retirement Scheme), instead these costs indirectly reduce your investment value or return .

The investment fee is a fee that relates to the investment assets of each investment option including investment management fees, costs and performance fees if applicable .

The administration fee is a fee that relates to the administration or operation of the superannuation entity and includes costs that relate to that administration or operation .

The Indirect Cost Ratio is the ratio of the indirect costs for the investment option (not already disclosed as an administration or investment fee), to the total average net assets of the superannuation entity attributed to the investment option .

For more information about our fees and costs, please refer to the relevant Product Disclosure Statement available at eisuper.com.au/pds .

EISS Super

Investment options Investment fee1 Administration fee1 Indirect Cost Ratio (ICR)1

Cash 0 .04% p .a . 0 .29% p .a . 0 .00% p .a .

Conservative 0 .21% p .a . 0 .39% p .a . 0 .17% p .a .

MySuper Conservative Balanced 0 .24% p .a . 0 .39% p .a . 0 .21% p .a .

Balanced 0 .26% p .a . 0 .39% p .a . 0 .30% p .a .

High Growth 0 .28% p .a . 0 .39% p .a . 0 .34% p .a .

EISS Pension — Transition to Retirement


Cash 0 .04% p .a . 0 .29% p .a . 0 .00% p .a .


Conservative Balanced 0 .24% p .a . 0 .39% p .a . 0 .21% p .a .

Balanced 0 .26% p .a . 0 .39% p .a . 0 .30% p .a .


1 Fees and costs are deducted from the assets of the investment option and reflected in the daily unit price. The fees and costs are for the financial year ended 30 June 2019. For further important information about fees and costs, please refer to the relevant Product Disclosure Statement.

http://eisuper.com.au/pds

33

Annual Report 2019

EISS Pension — Account Based Pension


Cash 0 .04% p .a . 0 .34% p .a . 0 .00% p .a .


Conservative Balanced 0 .24% p .a . 0 .47% p .a . 0 .21% p .a .

Balanced 0 .26% p .a . 0 .47% p .a . 0 .30% p .a .


Retirement Scheme

Investment options Investment fee1 Administration fee %1

Administration fee $2

Indirect Cost Ratio (ICR)1

Cash 0 .04% p .a . 0 .47% p .a . $39 p .a . 0 .08% p .a .

Conservative 0 .22% p .a . 0 .47% p .a . $39 p .a . 0 .17% p .a .

Conservative Balanced 0 .24% p .a . 0 .47% p .a . $39 p .a . 0 .21% p .a .

Balanced 0 .26% p .a . 0 .47% p .a . $39 p .a . 0 .30% p .a .

Growth 0 .29% p .a . 0 .47% p .a . $39 p .a . 0 .29% p .a .

High Growth 0 .29% p .a . 0 .47% p .a . $39 p .a . 0 .34% p .a .

Defined Benefit Scheme


Defined Benefit Selection 0 .32% p .a . 0 .47% p .a . 0 .24% p .a .

1 Fees and costs are deducted from the assets of the investment option and reflected in the daily unit price. The fees and costs are for the financial year ended 30 June 2019. For further important information about fees and costs, please refer to the relevant Product Disclosure Statement.

2 Deducted monthly directly from your account.

34

Financial statements

Below is a summary of EISS Super’s financial statements . The complete Financial Report for both Pool A and Pool B including the Auditor’s Report is available at eisuper.com.au/AnnualReports or by calling us on 1300 369 901 .

In the following financial statements, Pool A includes EISS Super and EISS Pension while Pool B includes the Retirement Scheme and Defined Benefit Scheme .

Pool A – Statement of financial position at 30 June 2019

2019 $‘000

2018 $‘000

Assets

Investments 3,820,855 3,574,804

Other assets 44,271 38,511

Total assets 3,865,126 3,613,315

Liabilities

Payables 969 1,027

Tax liabilities 14,069 16,064

Total liabilities 15,038 17,091

Net assets available for member benefits 3,850,088 3,596,224

Member benefits 3,839,384 3,585,719

Net assets 10,704 10,505

Equity

Operational risk financial reserve 9,719 9,533

Other reserve 985 972

Total equity 10,704 10,505

Pool A – Income statement for the year ended 30 June 2019

2019 $‘000

2018 $‘000

Investment income 289,402 231,301

Expenses (24,884) (21,380)

Operating result 264,518 209,921

Income tax expense (4,011) (8,949)

Results after income tax 260,507 200,972

Net benefits allocated to members (260,308) (200,745)

Operating results after income tax 199 227


35

Annual Report 2019

Pool A – Statement of changes in member benefits for the year ended 30 June 2019

2019 $‘000

2018 $‘000

Opening balance of member benefits 3,585,719 3,333,830

Contributions received 193,428 190,697

Transfer from other superannuation plans 112,753 134,089

Income tax on contributions (19,523) (19,305)

Net after tax contributions 286,658 305,481

Benefits to members/beneficiaries (291,562) (250,419)

Insurance premiums charged to members’ accounts (8,831) (9,607)

Death and disability insurance benefits credited to members’ accounts 7,092 5,689

Benefits allocated to members’ accounts 260,308 200,745

Closing balance of member benefits 3,839,384 3,585,719

Pool B – Statement of financial position at 30 June 2019

2019 $‘000

2018 $‘000

Assets

Investments 2,083,574 1,987,137

Other assets 28,411 29,440

Total assets 2,111,985 2,016,577

Liabilities

Payables 32 21

Tax liabilities 11,783 4,893

Total liabilities 11,815 4,914

Net assets available for member benefits 2,100,170 2,011,663

Member benefits

Defined contribution member liabilities 745,641 719,601

Defined benefit member liabilities 1,229,736 1,236,307

Total member liabilities 1,975,377 1,955,908

Net assets 124,793 55,755

Equity

Operational risk financial reserve 5,099 4,996

Other reserves 3,299 6,204

Defined benefits that are over funded 116,395 44,555

Total equity 124,793 55,755

36

Pool B – Income statement for the year ended 30 June 2019

2019 $‘000

2018 $‘000

Investment income 212,592 160,483

Expenses (15,429) (13,593)

Operating result 197,163 146,890

Income tax expense (4,839) (6,422)

Results after income tax 192,324 140,468

Net benefits allocated to members (123,286) (153,101)

Operating results after income tax (69,038) (12,633)

Pool B – Statement of changes in member benefits for the year ended 30 June 2019

2019 $‘000

2018 $‘000

Opening balance of member benefits 1,955,908 1,940,031

Contributions received 43,065 47,584

Transfer from other superannuation plans 676 1,091

Income tax on contributions (5,906) (6,804)

Net after tax contributions 37,835 41,871

Benefits to members/beneficiaries (141,558) (179,062)

Benefits allocated to members’ accounts 123,192 153,068

Closing balance of member benefits 1,975,377 1,955,908

37

Annual Report 2019

Reserves

We hold and maintain reserves to protect member benefits. These reserves can be used for unit price adjustments, taxation or any other event that, in our opinion, is in the best interest of members.

Operational risk financial requirement reserveThe operational risk financial requirement (ORFR) reserve complies with the requirements of SPS114, which is applicable to all APRA regulated funds . The ORFR reserve can only be used for the purpose of rectifying losses to members and/or beneficiaries of the Scheme caused by operational risk events such as incorrect benefit payments due to human or system error, unit pricing errors and loss of data .

Trustee cost reserve The Trustee cost reserve was established as a general reserve to protect member investments against losses resulting from strategic, reputational risk and operational risk events that are not covered by the ORFR reserve . The Trustee cost reserve also covers any small mismatch of assets and liabilities that occur due to the timing of purchases and liquidations of investments not met by fee deductions from member accounts .

Pool A – Statement of changes in reserves for the year ended 30 June 2019

BalanceTrustee cost reserve

$’000Operational risk financial

reserve $’000Total $’000

Opening balance as at 1 July 2016 946 8,464 9,410

Operating result 13 214 227

Closing balance as at 30 June 2017 959 8,678 9,637


Transfer in – 641 641






38

Pool B – Statement of changes in reserves for the year ended 30 June 2019

BalanceDefined benefits

over funded$’000

Trustee cost reserve$’000

Operational risk financial reserve

$’000

Additional benefits reserve

$’000

Total$’000

Opening balance as at 1 July 2016 32,098 1,049 5,389 3,142 41,678

Operating result 25,711 14 132 1,494 27,351

Closing balance as at 30 June 2017 57,809 1,063 5,521 4,636 69,029


Transfer out – – (641) – (641)

Operating result (13,254) 15 116 490 (12,633)



Transfer to Employer Reserve 3,132 – – (3,132) –

Operating result 68,708 14 103 213 69,038


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39

Annual Report 2019

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Notes

41

Annual Report 2019

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