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Coronavirus hub – information for membersWe recently created a Coronavirus information hub to provide members with tailored information relating to various initiatives the Federal Government has announced to help ease the financial effects of the Coronavirus.

This includes information on the changes to minimum pension rates and how members can obtain early compassionate release of some of their super. The hub also contains investment market updates.

The Coronavirus information hub can be accessed here: www.ioof.com.au/covid19-response

SuperView is designed to provide you, our valued employers, with a quarterly update on superannuation and investment markets.

Winter 2020

In this editionCoronavirus hub – information for members 1

What’s coming up in talkingsuper? 2

Early compassionate access to super 2

FE fundinfo Crown Fund Ratings 3

Investment market updates 3

SG amnesty ends on 7 September 2020 4

Enhancements to the Employer Hub 4

Market volatility affecting transaction costs 5

Deadlines for 2019/20 super contributions 5

Changes to certain Government initiatives 5

Investment performance 6

Investment market review 7

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Early compassionate access to superSince 20 April 2020, IOOF has received over 20,000 enquires in relation to early access to super. We’ve managed to answer these queries and process member withdrawals quickly, which helps minimise the financial pressure people may be facing.

Despite the number of calls increasing sharply, call wait times have generally been less than 15 minutes, which compares well to some other super funds.

If your members need information about obtaining early access to super, please direct them to the following link: Early access to super to support you if you’re affected by Covid 191

What’s coming up in talkingsuper?

To keep you informed about what members are reading in talkingsuper, we’ve summarised some of the upcoming articles:

• End of financial year – tax tips and information on contributing to super for members

• Pension phase – a simple guide to what ‘pension phase’ means and what members need to know.

• Early access to super – information for members on what they should consider before applying for early access to their super.

• Go online – encouraging members to make the switch to online statements for their convenience and to save paper.

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Thinking of accessing your super early? Here are the pros and consThe intention of this temporary Government initiative is to help people who are genuinely in financial hardship due to the impact of the Coronavirus.

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Generally, financial hardship is when:

Issued by IOOF Investment Management Limited (IIML) | ABN 53 006 695 021 | AFSL 230524. IIML is a company within the IOOF Group of companies, consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

The money you earn or the money you receive from the Government ...

... does not meet your family’s living expenses such as bills, groceries, rent or mortgage repayments.

ConsiderationsRemember, super is designed to provide you with savings when you retire. If you spend it now, you’ll have less later.

Seek advice before accessing your superBefore making the decision to access your super early, please seek advice from a financial adviser. If you don’t have an adviser, we can put you in touch with one.

Other ways to access financial assistanceHave you accessed other support such as the JobKeeper, JobSeeker or other Government support?

Refer to www.my.gov.au or www. moneysmart.gov.au for further information.

Do you really need to withdraw your super?If you can manage to support yourself financially during the Coronavirus situation without having to access your super, then you will benefit in the longer term by leaving the money in the tax-advantaged

super environment.

If the money is critical to ensure your or your family’s welfare, then you should take advantage of this temporary access to ease the burden.

Estimate of the impact of withdrawing super now, depending on your age if you retire at age 67

Age when withdrawing $20,000 now

Effect on retirement savings at age 67 in today’s dollars

30 $43,032

40 $35,024

50 $28,506Source: www.moneysmart.gov.au/covid-19/accessing-your-super

Calculate your result

Visit the Government’s MoneySmart website www.moneysmart.gov.au/covid-19/accessing-your-super

What about insurance?

If your super falls to a certain level you could lose your insurance held in your super.

This could put you and your family at risk, should the unexpected occur.

Now: short-term benefits.

Future: returns in super could increase your savings further.

1 https://www.ioof.com.au/about-us/news-and-updates/talkingsuper/talkingsuper-articles/early-access-to-super-to-support-you-if-youre-affected-by-covid-19

IOOF Employer Super | SuperView – Winter 2020

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FE fundinfo Crown Fund Ratings – IOOF leads with 9 funds that have scored 5 Crowns IOOF now leads the FE fundinfo Crown Fund Ratings count with nine funds that have scored five crowns in the February 2020 rebalance.2

FE fundinfo is one of the world’s leading providers of investment fund data and analysis.

The FE Crown Fund Ratings are quantitative ratings ranging from one to five designed to help investors identify funds which have displayed superior performance in terms of stockpicking, consistency and risk control. Rebalanced twice a year in February and August, the rating takes into account three key measurements to derive a fund’s performance: alpha, volatility and consistently strong performance.

Five FE fundinfo CrownsOnly the top 10% of funds score highly enough to be awarded Five FE fundinfo Crowns. Recognising an outstanding achievement in three key measurement areas, an FE fundinfo Crown Fund Rating of Five is a powerful symbol of quality, representing a fund’s demonstrable ability to add long term value whilst managing risk in a highly effective manner.

Five previous five-crowners:

• IOOF Balanced Investor Trust (IBIT)

• IOOF MultiMix Balanced Growth Trust

• IOOF MultiMix Growth Trust

• Strategic Cash Plus Fund

• Specialist Property Fund

Four new five-crowners:

• IOOF MultiMix Moderate Trust

• IOOF MultiSeries 50

• IOOF MultiSeries 70

• IOOF MultiSeries 90

For more information about the methodology behind the FE fundinfo’s Crown Fund Ratings visit: https://www.moneymanagement.com.au/fe-crown-fund-ratings

Investment market updatesAs investment markets continue to be volatile many members can feel concerned and worried.

To help them manage these understandable concerns, Dan Farmer, Chief Investment Officer at IOOF, is providing regular updates on how the IOOF Investment Team are managing investments in the current environment.

These market updates are available on the Coronavirus information hub3

2 ©2020 FE. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of FE, (2) may not be copied or redistributed, (3) do not constitute investment advice offered by FE, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. FE shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. FE does not guarantee that a fund will perform in line with its FE Crown Fund Rating as it is a reflection of past performance only. Likewise, the FE Crown Fund Rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund or of its underlying securities and should not be used as the sole basis for making any investment decision.

3 https://www.ioof.com.au/about-us/news-and-updates/coronavirus-news

IOOF Employer Super | SuperView – Winter 2020

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Enhancements to the Employer HubIn response to your feedback, we’ve recently made some enhancements to the Employer Hub.

We’ve added a ‘New starter checklist’ section to help introduce Employer Super to your staff. This new section contains information about joining Employer Super and the various insurance options which are available.

To make sure we stay in touch with members, we’ve created a new section called ‘Annual review’ which details the latest information about your employees which we will ask you for on an annual basis to ensure our member records are correct.

We’ve created two new Q&As to accompany both the Induction video and the Understanding insurance video.

To help you quickly find what you need, and following feedback, we’ve renamed the IOOF Choice of Fund form to differentiate it from the Australian Taxation Office Choice of Fund form which will help avoid confusion.

We’re committed to continually enhancing the tools and resources we provide you and your members.

You can access the Employer Hub here: www.ioof.com.au/employerhub

SG amnesty ends on 7 September 2020On 24 February 2020, the Government passed the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019. This Bill provides an amnesty for employers who have underpaid super guarantee obligations to their employees in the past.

The amnesty means employers can have penalties waived and claim a tax deductionEmployers who voluntarily approach the Australian Taxation Office (ATO) and notify them of historical underpaid super guarantee (SG) obligations can pay the shortfalls and interest, including the General Interest Charge, to the ATO. They will have administration fees and penalties waived and be able to claim a tax deduction for the shortfall. Employers must use the specific ATO form for this purpose. The ATO will then distribute the underpaid amount to the relevant employee’s active super account. Employers who are unable to make these payments can talk to the ATO about payment plans, however, tax deductibility will only apply for payments made during the amnesty period.

Excess concessional contributionsAs underpaid amounts can go back for many years, the Government is aware these shortfall amounts, when redistributed to employees’ accounts, could exceed the employee’s concessional contributions cap for the 2019/20 tax year. The ATO has decided it will automatically either disregard the excess contribution or allocate it to the year it was supposed to be paid, without the employee having to apply for a determination. The ATO will only do this automatically for shortfall amounts paid to the ATO. If the employer pays the contribution directly to the super fund, employees will have to apply for a determination to disregard it or to allocate it to the appropriate year or years.

The amnesty period starts from 24 May 2018 and ends on 7 September 2020.

After the amnesty period has finished higher penalties will apply if employers have not voluntarily approached the ATO to disclose underpaid SG obligations.

IOOF Employer Super | SuperView – Winter 2020

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Market volatility affecting the transaction costs of investment optionsThere have been significant changes in transaction costs due to increased market volatility arising from the COVID-19 pandemic. Fund managers are regularly reviewing the buy/sell spreads for their managed investments and some are making frequent adjustments to them.

What is a buy/sell spread? Some managed investments have a difference (a buy/sell spread) between their entry (purchase) and exit (sale) unit prices. This is an allowance made by the fund manager for the transactional and operational costs of buying and selling the underlying investments.

The list of investment options currently affected by changed transaction costs is available at the following link: IOOF Buy-Sell Spread Update 14 May 20204

We have recently written to all members who could be potentially affected by increased transaction costs.

Deadlines for 2019/20 super contributionsAs the end of the financial year approaches, we’ve produced a summary of our important processing deadlines.

Please ensure your instructions, including schedule data files for contributions and payment, arrive at IOOF by the date indicated to ensure they are processed in the correct financial year.

For further information please see the cut-off dates at the below link: End of financial year cut-off dates for 2019/205

4 https://www.ioof.com.au/__data/assets/pdf_file/0009/394947/IOOF-Buy-Sell-Spread-Update-flyer-14-May-2020.pdf

5 https://www.ioof.com.au/__data/assets/pdf_file/0006/395871/EOFY-2020-IOOF-cut-off-dates-flyer.pdf

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End of financial year processing deadlinesThe negative impacts of the Coronavirus (COVID-19) are continuing to impact the global economy and the wellbeing of Australians. We are following the Government’s advice about the most effective and appropriate actions to take with our highest priority being the safety, health and welfare of our people, advisers, clients and business partners.

We remain committed to delivering what matters to our clients and business partners during this difficult time and have the people, technology and systems in place to support you.

With the end of financial year approaching, we’ve put together a summary of our important processing deadlines. Please ensure your instructions, including schedule data files for contributions and payment, arrive at IOOF by the date indicated to ensure they are processed in the correct financial year.

Type Needs to be with IOOF before Further information

Contributions by cheque Tuesday 30 June 2020 Cheques cannot be delivered to IOOF offices in person and should be mailed with enough time to reach IOOF by June 30.

Contributions by Bpay® 5:00pm AEST Tuesday 30 June 2020

Check with the Bpay® provider for information about their processing turnarounds, as payments may take some time to be transferred to IOOF.

Contributions by electronic fund transfer (EFT) for IOOF Employer Super (including sub-plans) and AustChoice only

5:00pm AEST Tuesday 30 June 2020

Check with your provider for information about their processing turnarounds, as payments may take some time to be transferred to IOOF.

Contributions using a clearing house, such as super guarantee, salary sacrifice and other contributions to employees’ superannuation funds.

2:00pm AEST Friday 12 June 2020 for Transact Choice of Fund Members

2:00pm AEST Friday 19 June 2020 for Transact Default Fund Members

Clearing houses can take up to 10 business days or more to pay contributions from the date of lodgment, especially ‘choice of fund’ contributions. Therefore, employers should allow sufficient lead time to ensure the contributions are received by IOOF by the cut-off date.

Withdrawals to individuals or rollovers to other super funds

5:00pm AEST Friday 5 June 2020

To allow payment before 30 June, withdrawal requests should be received by close of business 5 June 2020. We are reliant on investment manager unit pricing however we will endeavor to meet client expectations.

Interdivisional transfer (IDT) 5:00pm AEST Friday 12 June 2020

Interdivisional transfers include transfers within the same product suite eg. Pursuit to Pursuit

In-specie transfers 5:00pm AEST

Friday 15 May 2020

NOTE – In-specie transfers also include Pursuit to eXpand and Essential transfers. Managed investments can take up to five weeks to finalise and listed investments up to five working days.We are reliant on investment manager confirmations and unit pricing for in-specie transfers. We will endeavor to complete by 30 June.

® Registered to Bpay Pty Ltd | ABN 69 079 137 518

Changes to certain Government initiatives The Government has announced some changes to its initiatives to provide financial support to people and businesses during the Coronavirus situation. There are changes to childcare subsidies and the instant asset write-off scheme for businesses has been extended until the end of December 2020. You can find the latest information on Government initiatives on the Coronavirus hub

IOOF Employer Super | SuperView – Winter 2020

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Investment performanceReturns for the IOOF Balanced Investor Trust (MySuper option), IOOF MultiMix and MultiSeries as at 31 March 2020.

Returns 3 months (%)

6 months (%)

1 year (%) 3 years (% pa)

5 years (% pa)

IOOF Balanced Investor Trust* -9.61 -8.13 -1.65 4.50 4.53

IOOF MultiMix Capital Stable Trust -2.93 -2.65 1.48 3.31 3.46

IOOF MultiMix Conservative Trust -2.85 -2.37 2.12 4.06 3.97

IOOF MultiMix Balanced Growth Trust -8.00 -6.27 1.35 5.83 5.24

IOOF MultiMix Moderate Trust -6.15 -5.09 0.66 4.62 4.45

IOOF MultiMix Growth Trust -10.69 -8.47 0.20 5.95 5.53

IOOF MultiMix Cash Enhanced Trust -0.18 0.13 1.02 1.81 2.09

IOOF MultiMix Diversified Fixed Interest Trust -1.38 -1.67 3.08 3.54 3.33

IOOF MultiMix Australian Shares Trust -23.60 -21.15 -8.66 2.11 2.76

IOOF MultiMix International Shares Trust -7.73 -3.54 3.85 8.58 7.79

IOOF MultiSeries 30 -3.01 -2.48 2.52 4.39 –

IOOF MultiSeries 50 -5.98 -5.05 0.96 4.66 –

IOOF MultiSeries 70 -8.92 -7.54 -0.95 4.97 4.20

IOOF MultiSeries 90 -12.29 -10.61 -3.61 4.23 –

* The IOOF default fund for MySuper Source: IOOF

Past performance is not a reliable indicator of future performance. Performance is net of fund manager fees and charges. Performance is based on exit price to exit price for the period and assumes that all distributions are reinvested. Investment management fees, other fees, expenses and tax (where applicable) are accounted for in the exit prices. Unit prices may rise and fall in line with the value of the underlying assets. Neither IOOF, the investment managers, nor any of their related bodies corporate, guarantee the performance or any rate of return of the investments.

IOOF Employer Super | SuperView – Winter 2020

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Investment market review Quarter-ended 31 March 2020

Australian sharesThe S&P/ASX 300 Accumulation Index underperformed global markets in the March quarter, falling 23.4%.

Most sectors performed poorly with Energy the worst (down 48.9%). Defensive sectors outperformed the market with Utilities (down 10.3%), Consumer staples (down 4.3%) and Healthcare (up 1.5%) performing relatively strongly. Consumer staples were supported by consumer hoarding behaviour who were fearful of shortages due to the Coronavirus situation. This saw Metcash (ASX: MTS), which operates IGA stores, become one of the top performers during the quarter. In addition, healthcare stocks were supported by both their defensive characteristics and increased usage of their products which counter the Coronavirus. Fisher and Paykel Healthcare (ASX: FPH) was a key beneficiary of this trend with its ventilator products in strong demand globally given how the Coronavirus attacks the respiratory system.

Separately, we saw the Reserve Bank of Australia (RBA) cut interest rates by 0.5% during the quarter. This decision impacts bank profits negatively by reducing the spread between the rate they lend at and the rate they pay savers. This is called their ’net interest margin’ and a lower rate environment implies weaker bank profits (and dividends) in the future. This contributed to the weakness in the Financials sector (down 28.7%).

1 year (%) 5 year (% pa) 10 year (% pa)

Australian shares -14.5 1.4 4.8

Listed property trustsThe Australian real estate investment trust (A-REIT) fell by -34.3% during the March quarter.

The Coronavirus lockdowns were a key factor for the decline with consumers staying at home rather than shopping or seeking entertainment such as going to the movies following the Government’s instructions. Retail A-REITs were amongst the worst affected with Westfield operator Scentre Group (ASX: SCG) having only 39% of its retail store tenants open according to their most recent update. In addition, commercial landlords are facing restrictions on tenant evictions and rental increases per a new Code of Conduct issued by the Government.

1 year (%) 5 year (% pa) 10 year (% pa)

Listed property trusts -31.3 0.5 7.2

International sharesInternational shares also declined but by considerably less than Australian shares. The MSCI World Index in Australian dollar terms fell -9.3%.

Global share markets fell during the quarter (in local currency terms) led by weakness in Europe and the United States (US). European and US weakness reflected the struggles both are facing in handling the Coronavirus outbreak. Europe has, in general, been one of the most adversely affected regions with over 138,000 deaths and 1.27 million confirmed cases (as of early May). This saw substantial business shutdowns and job losses across Europe. The economic damage caused is expected to harm business profits substantially in the short-term. This caused concern among investors who sold global shares, driving prices lower.

The Australian dollar fell 9.3% against major trading partners during the quarter. This added to the performance of unhedged international shares. Hedged international shares by contrast declined by 21.1% as these did not benefit from the fall in the Australian dollar (hedging protects against both good and bad currency movements). The main factor for the Australian dollar was concern over the economic slowdown from the Coronavirus reducing demand for Australian exports, particularly commodities and education services.

1 year (%) 5 year (% pa) 10 year (% pa)

International shares 4 7.9 11

IOOF Employer Super | SuperView – Winter 2020

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DisclaimerThis document contains factual information and general advice only and has been prepared without taking into account your and your employees’ particular objectives, needs, and financial circumstances. Before making any decision based on this document, you and your employees should obtain and consider a copy of the relevant product disclosure statement (PDS) and consider consulting a licensed financial adviser. You and your employees may obtain PDSs from our website www.ioof.com.au or by contacting us directly. The information provided in this document is given in good faith and prepared based on information that is believed to be accurate and reliable at the time of publication. Past performance is not a reliable indicator of future performance.This document is issued by IOOF Investment Management Limited (IIML) ABN 53 006 695 021 AFSL 230524 as Trustee of the IOOF Portfolio Service Superannuation Fund ABN 70 815 369 818, and IOOF Investment Services Ltd (IISL) ABN 80 007 350 405 AFSL 230703 as the Responsible Entity for the IOOF Balance Investor Trust, IOOF Multimix and MultiSeries range of Trusts. IIML and IISL are part of the IOOF Group which consists of IOOF Holdings Ltd ABN 49 100 103 722 and its related bodies corporate.

More information?If you would like more information about any of the topics mentioned in this edition of SuperView, please contact your Workplace Solutions Manager.

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Cash

The Bloomberg AusBond Bank Bill Index rose 0.3% during the March quarter.

The RBA cut interest rates twice during the quarter by 0.5% overall, taking the cash rate to 0.25%.

The lower interest rate means borrowers will be able to repay larger amounts and therefore increase their spending while investors and savers will generally receive lower returns. It’s unlikely the RBA will cut rates again by 0.25% to 0%. This is because of how its policy works. A 0.25% rate cut would effectively ‘tax’ banks with negative interest rates which would discourage lending and impact economic growth.

The RBA has indicated any normalisation of rates will be gradual as the economy recovers and is expected to take a number of years.

1 year (%) 5 year (% pa) 10 year (% pa)

Cash 1.2 1.8 2.8

Fixed interestAustralian fixed interest performed positively with the Bloomberg AusBond Composite Index, rising 3% during the March quarter.

In Australia and globally, the Coronavirus outbreak sparked a major shutdown of non-essential businesses such as tourism and hospitality. This has caused economists to declare that the Australian economy and the global economy was entering a recession.

In response to this, the RBA cut interest rates twice taking its cash rate to 0.25%. It also committed to targeting the 3-year Government bond yield to be 0.25% to keep short-term interest rates low across the economy. This helps corporate borrowers by lowering their financing costs but also lowers the future returns for lenders and investors.

Bond prices were pushed higher (and bond yields lower) by investors seeking safe assets. This ‘flight to safety’ response is something we typically see when share markets decline sharply and contributed to the positive bond returns.

1 year (%) 5 year (% pa) 10 year (% pa)

Fixed interest 6.8 4.2 5.9

IOOF Employer Super | SuperView – Winter 2020

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