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Investment objectives

There are specific objectives that guide how we invest your super money. It's important to keep in mind, that the investment returns only affect Member Savings (Employee, Spouse, Rollover Accounts) and Pensions, and not your Defined Benefit entitlements in the APSS.

Defined Benefit Assets

The Trustee’s general investment objective for Defined Benefit assets is to formulate and implement an investment strategy that will, in conjunction with the APSS sponsoring employers’ funding strategies, enable the APSS to pay benefits as well as other costs as they become due. In particular, the Trustee aims to formulate a strategy that has:

  • a high likelihood that the APSS will have adequate liquidity to pay benefits and costs at all times as they become due, and
  • an expected long-term average investment return, as explained in more detail in the Product Disclosure Statement for Employee Members.

The Trustee accepts that, to achieve a relatively high long-term investment return, the annual investment return is likely to be relatively volatile. In particular the Trustee accepts the likelihood that:

  • the investment return is estimated to be negative 4 to less than 6 out of every 20 years
  • the APSS Vested Benefit s Index (VBI) is likely to fluctuate in a tolerance range of 90% to 110%.

Market Return Member Savings

The Trustee's objective for Market Return Member Savings is to credit returns over the long-term that exceed both the rate of inflation and exceed the rate of returns credited to Cash Return Member Savings after all taxes and costs are allowed for, while accepting that the annual return will be relatively volatile.

The Crediting Rates for Market Return Member Savings are determined by reference to the investment returns of a diverse portfolio of assets in the APSS, known as the Market Return Portfolio.

The Trustee expects that the Market Return Crediting Rates over the long-term will exceed the Cash Return Crediting Rates by a margin of 3-4% each year, on average over the long-term. The investment return is estimated to be negative 4 to less than 6 out of every 20 years.

The Trustee cannot guarantee that its long-term expectation will be met, because investment markets are unpredictable. Historically, the markets for long-term investments like those in the Market Return Portfolio have had greater rises than falls in the long run, but this is not necessarily a guide to the future. You should consider your long term investment objectives and personal financial circumstances. You should consider whether you have enough time before you need to access your Market Return Member Savings to withstand any periods when the investment markets may go down.

 

Cash Return Member Savings

The Trustee's objective for Cash Return Member Savings is to avoid any reduction in the dollar value of your Member Savings at all times, while also earning a rate of return that aims to at least keep up with inflation over the long term.

The Crediting Rates for Cash Return Member Savings are determined by the investment returns of the Cash Portfolio.

The Trustee expects Crediting Rates for Cash Return Member Savings to be similar to the cash interest rates set by the Reserve Bank of Australia (RBA), less investment costs and tax on investment earnings of up to 15% (not currently applicable to APSS Pension accounts).

Cash Return Member Savings are protected by the Capital Guarantee, which means that the Crediting Rates for Cash Return Member Savings cannot be negative. However, the Capital Guarantee does not cover the risk that inflation may reduce the future purchasing power of your Member Savings.