annual report 2002-2003 - superannuation...local government superannuation scheme 1 a note from the...

ANNUAL REPORT

2002-2003

LOCAL GOVERNMENT SUPERANNUATION SCHEME

1 A note from the Chair

3 Our Mission Statement

4 Your Superannuation Scheme at a glance

6 Providing a quality service for you

8 Your Superannuation Schemes explained

Pool A

8 Accumulation Scheme

9 Executive Scheme

10 Rollover and Allocated Pension Plan

11 Investment strategies for Pool A

16 Investment strategies (Executive Scheme only)

Pool B

17 Retirement Scheme

17 Basic Benefit

17 Defined Benefit Scheme

18 Investment strategies for Pool B

19 Financial services now available to you

20 Investment framework

21 Taxes, fees and charges

24 Financial overview

26 Your Trustee

27 Scheme Governance

28 Changes to your Superannuation Scheme

29 Enquiries and complaints

30 Further information

31 Transfer-in authority form

33 Frequently asked questions

Local Government Superannuation Scheme

(Pool A) ABN 74 925 979 278(Pool B) ABN 28 901 371 321

Ground Floor, 28 Margaret Street, Sydney

P.O. Box N835, Grosvenor Place NSW 1220Phone 1300 369 901 Fax 02 9279 4131 Website: www.lgsuper.com.au

ANNUAL REPORT 2002-20031

A NOTE FROM THE CHAIR

I am delighted to presentthe 2002-2003 AnnualReport for the LocalGovernmentSuperannuation Scheme.The solid financial resultsof the year complementour six years ofindependent operation,

where your Superannuation Schemes’ assetshave increased to nearly $3.3 billion.

As you may be aware, your Local GovernmentSuperannuation Scheme together with theEnergy Industries Superannuation Scheme, isa joint owner of Superannuation ServicesCompany, an organisation that manages theday to day operation of the two Schemes. In addition your Scheme and the EnergyIndustries Superannuation Scheme haveownership of two financial servicescompanies, FuturePlus Financial Services PtyLimited and Chifley Financial Services Limited,making us one of the largest superannuationgroups in Australia.

Source: Blue Book 2003/04 as published on

http://www.bluebook.com.au/mediakit/TOP300superfunds_2003.pdf

on 22 October 2003 and internal information.

I am also pleased to advise that for the 2002-2003 year most scheme members received apositive investment outcome1. In fact our topperformer, Capital Guarded, recorded a returnof 5.2%. All this in a year when many othersuperannuation funds reported negativereturns and the Australian share market lost2.4%2 of its value!

1 Almost 85% of our members had a positive return.2 The Australian Financial Review 2 July 2003.

(Continued overleaf)

2LOCAL GOVERNMENT SUPERANNUATION SCHEME

A NOTE FROM THE CHAIR (CONTINUED)

The Local Government SuperannuationSchemes’ (LGSS) returns versus MercerMedian for the 2002-2003 financial year

1LGSS High Growth and Pool B compares to Mercer’s GrowthFunds. 2LGSS Balanced and Diversified compares to Mercer’sBalanced Funds. 3LGSS Capital Guarded compares to Mercer’sCapital Stable Funds. 4LGSS Cash Plus compares to Mercer’s ShortDuration Credit (adjusted notionally for a 0.75% fee and 15% tax).Whilst this is a reasonable comparison, the asset allocation of theMercer Median will not exactly replicate the asset allocations of theinvestment strategies adopted by the Local GovernmentSuperannuation Scheme.

Our goal is to provide you, the member, withthe very best service we can.

Our service commitment means that ourMember Services officers and AccountManagement staff are there for you. And whileother financial institutions are closing branchesand reducing access to their staff, ourMember Services resources are expanding.For instance, over the 2002-2003 period weopened three new branches.

In addition we implemented an extensivefinancial services training and developmentprogram for our Member Services andAccount Management staff – to enhance ourability to provide you with the very best serviceand information. The group handled nearly200,000 calls last year and visited over 17,000members at their workplace. This commitmentmeans better service to you. In fact, when weasked you to rate our service, you rated us as37% better than the average rating given bymembers of other schemes to theirsuperannuation scheme.

Our commitment to service and our ability toleverage off our size also means, that we canprovide you with some of the best

superannuation products in the industry at acost that, at times, is half that of retailofferings.

We have progressively been offering ourmembers products from our co-ownedcompanies, FuturePlus and Chifley. Theseoffers include Home Loans and otherinvestment products.

This year we are launching the ‘Fair Go’ loyaltyprogram. This program provides memberswith special rates on a variety of services thatwe have negotiated on your behalf, at no costto your Scheme. I urge you to use thesebenefits, because as you make use of themwe will be able to expand our offers.

In the past year we have also changed ourVoluntary Insurance supplier to Lumley LifeLimited1, creating a partnership that we trustwill deliver a higher level of service to ourmembers.

Our continuing goal is to focus on members’financial wellbeing in retirement and we areimplementing measures to ensure that we cancontinue to improve upon this. During 2002-2003, our own Financial Planners wrote morethan 500 plans for retiring members, ensuringour members receive sound guidance as theyapproach retirement.

I look forward to 2003-2004 with greatoptimism, secure in the knowledge that yourScheme will continue to provide memberswith the best service, great products and acommitment to help members plan today for abetter tomorrow.

Peter Woods OAM

CHAIRLocal Government SuperannuationScheme

1 Voluntary Insurance is available to members of Divisions A and E of Pool A.Effective 1 January 2004, Lumley Life Limited will be renamed PrefSure Life Limited.


OUR MISSION STATEMENT

What does the ‘Mission Statement’ meanfor you?

The Mission Statement focuses managementand staff of your Scheme on the key values ofthe organisation.

More importantly, it communicates exactlyhow these key values aim to benefit thefinancial security of our members.

Our Service Promise

Firstly, to ensure the financial security of your Scheme.

Secondly, to provide you with the best servicewe possibly can.

Thirdly, to deliver the products and featuresyou need at competitive prices.

We are here toprotect andenhance members’wealth throughquality serviceand competitiveproducts


The Local Government SuperannuationScheme was established on 1 July 1997,to specifically cater for the superannuationrequirements of NSW Local Governmentemployees. Previously, these employees weremembers of various NSW public sectorsuperannuation funds.

The Scheme is divided into two different assetpools (Pool A and Pool B). A graphicalrepresentation and overview of the differentschemes within these pools has beenprovided in this report to allow you to seewhere your Division is placed in relation toyour Scheme’s structure.

Further details of each Division is providedin the section ‘Your SuperannuationSchemes explained’.

Superannuation Services Company assists theTrustee to manage the day to day operationsof your Scheme.

Superannuation Services Company is50% owned by your Scheme.

YOUR SUPERANNUATION SCHEME AT A GLANCE

6

The Trustee is responsible for all decisionsconcerning the management of your Schemeand is required by law to act in the best interestsof all stakeholders.

To us that means not only providing the mostcompetitive products, but continually improvingthe quality of our service.

We have listed a few examples ofhow our focus on service isbenefiting you.

For example we have significantlyincreased our personal contact andreach with our members, through ourpersonal interview program andregional worksite visits.

Our Member Services officersanswer calls in less than 30 secondson average.

Our Internet site has been upgradedto allow for the increase in interestand usage. Access is available24 hours a day, every day and as aresult registration has doubled in thelast 12 months.

Accessibility for our regional membershas vastly improved, with the opening

of offices in Orange, Wagga Wagga, Wollongong,Lismore and shortly Newcastle. We also havesatellite offices in Albury* and Goulburn*.

*By appointment only


PROVIDING A QUALITY SERVICE FOR YOU

■ Nearly 20,000membersattendedvariousseminars andpresentations

■ Nearly 200,000calls handledwith less than30 secondscall waiting(on average)

■ 34% of ourmemberscalled us

■ 1,000 Regionalwork site visits

■ 12,500 Membersregistered foronline access

■ 4,500 Personalinterviews

NB: Figures quoted are for the Group (Local Government Superannuation Scheme, Energy Industries Superannuation Scheme and Chifley Financial Services Limited).


Through FuturePlus Financial Services, we have provided local access to financeprofessionals, who can offer you an impartialfinancial planning service. As FuturePlusPlanners do not receive any commission, theycan best serve your financial needs in anunbiased, objective manner.

‘FAIR GO’

We are also proud to announce the launch ofthe ‘Fair Go’ Program. The ‘Fair Go’ loyaltyprogram provides members with a suite ofspecial offers on products and services – atno cost to your Scheme – which can beaccessed through the ‘Fair Go’ membership.See page 19 for more information on the ‘FairGo’ Program.

NB: Figures quoted are for the Group (Local GovernmentSuperannuation Scheme, Energy Industries SuperannuationScheme and Chifley Financial Services Limited).

Online sessionsat our websitesincreased by30% in the last12 months

“Annual Statementsare the way wefind out how theyear went.

“The regular fieldvisits are muchappreciated!”

Patricia Avis

What our members have to add…

As we get olderthe Statements arebecoming moreimportantto us.”Jannette & Phillip Gee

“By contributing ata level of 6%I have achievedthe maximumemployer payoutavailable to me”

Stephen Keevers


YOUR SUPERANNUATION SCHEMES EXPLAINED

The Local Government SuperannuationScheme is divided into two Pools, whicheach have a number of Divisions.

Pool A has three Divisions: Division A Accumulation SchemeDivision E Executive SchemeDivision F Allocated Pension and Rollover Plan

Pool B has three Divisions:Division B Retirement SchemeDivision C Basic BenefitDivision D Defined Benefit Scheme

Further information on each Pool and eachDivision can be found on your websitewww.lgsuper.com.au, the MemberInformation Booklet, or by calling MemberServices on 1300 369 901.

Pool AACCUMULATION SCHEME (DIVISION A)

Who can be a member?

When new employees commence employmentwith a Local Government employer, they begintheir membership with the AccumulationScheme. Certain new employees may beeligible to be a member of a Pool B Scheme.See page 17 for details. Your employer willmake contributions to the AccumulationScheme in accordance with the SchemeRules. You also have the option of makingpersonal contributions. In addition, the spouseof a member is entitled to open a spouseaccount.

Summary of the Scheme

The Accumulation Scheme is a way ofinvesting for retirement on a regular basis.Your contributions (if any) and those of youremployer, together with any rollovers fromother funds, are allocated to an accountestablished in your name.

Your account accrues with investmentearnings (less fees, charges and taxes) until asuperannuation benefit becomes payable. Themore you contribute and the better theinvestment performance, the greater yourbenefit will be.

The Accumulation Scheme provides 5 differentinvestment options to choose from: HighGrowth, Diversified, Balanced, CapitalGuarded and Cash Plus.

The investment strategies have been designedto suit members at different stages of theirworking lives. Each strategy targets a differentpotential rate of return and degree of volatilityand has strict guidelines which the investmentmanagers are required to follow.


EXECUTIVE SCHEME (DIVISION E)


Membership of the Scheme is voluntary andis available to employees nominated bytheir employer.

To be eligible to be nominated, an employee must:■ Have the skills and responsibilities and

receive a salary equivalent to or greaterthan the Executive Band of the LocalGovernment (State) Award; and

■ Be on a fixed-term contract of employment.

An “Executive” officer may be eligible to applyto join the Scheme, even if he or she is amember of another superannuation scheme(including other Divisions within the Scheme).


This Scheme was originally established as anaccumulation style scheme, to provideexecutives with more flexible superannuationarrangements through which they canmaximise the opportunities provided under the‘salary packaging’ concept.

The Executive Scheme is a way of investingfor retirement on a regular basis. Yourcontributions (if any) and those of youremployer, together with any rollovers fromother funds, are allocated to an accountestablished in your name. Your account growswith investment earnings (less fees, chargesand taxes) until a superannuation benefitbecomes payable.

Investment options are the same as the fiveAccumulation Scheme options, but in additionyou also have access to the BT RetirementFund and the BT Capital Stable Fund.

The investment strategies have been designedto suit members at different stages of theirworking lives. Each strategy targets a differentpotential rate of return and degree of volatilityand has strict guidelines that the investmentmanagers are required to follow.

10

ROLLOVER AND ALLOCATED PENSIONPLAN (DIVISION F)


Any existing member of the Scheme canbecome a member of the Rollover Plan.

To join the Allocated Pension Plan you mustmeet the above requirements and generally beover 55 and invest a minimum of $25,000.

Summary of the Plans

The Rollover Plan provides a flexible andconvenient way for you to invest yoursuperannuation benefit previouslyaccumulated in the Scheme or anothersuperannuation fund. The Rollover Plan allowsyou to leave your superannuation entitlementsin a tax-effective superannuation environment,and draw upon these funds as and whenrequired (subject to preservation rules andcashing restrictions).

The Allocated Pension Plan offers an effectiveway of receiving your superannuationentitlements as an income stream, instead ofone lump sum. It is a simple, flexible andconvenient way for you to convert youraccumulated superannuation into a tax-effective income — your own pension.

The Allocated Pension Plan allows you tocontrol your retirement income, by simply pre-selecting how often and how much youwish to receive as a pension (withinGovernment set limits).

Both Plans offer you a choice of fiveinvestment strategies that can be usedseparately or in combination, to create anindividual investment portfolio, to best suityour needs. Each investment strategy targetsa different potential rate of return and degreeof volatility and has strict guidelines that theinvestment managers are required to follow.

The current investment strategies from whichyou can choose are: High Growth, Diversified,Balanced, Capital Guarded and Cash Plus.

For further information on the Rollover andAllocated Pension Plans please contactMember Services on 1300 369 901 and askfor a Product Disclosure Statement or tospeak to a Financial Planner.


YOUR SUPERANNUATION SCHEMESEXPLAINED (CONTINUED)


INVESTMENT STRATEGIES FOR POOL A

High GrowthFor high growth above inflation over thelonger term.

DEFINITIONThe High Growth strategy generally invests90% of its funds in traditional growth assets,such as Australian and International Sharesand Property. This combination aims to earnhigh growth above inflation over a minimumperiod of 5 years. Because the emphasis is ongrowth, you should keep in mind that theremay be ‘short-term volatility’ in this strategy. Inother words, the value of the investment mayfluctuate over the short term.

OBJECTIVE5.5% investment return per annum aboveinflation over 10 years.

RISKSThere is a significant chance that the investmentmay decrease in the short term. The chance of anegative nominal return in any year is 1 in 3.

RISK PROFILEHigh.

High Growth Annualised Returns

High Growth Investment Returns for theAccumulation and Executive Schemes*

High Growth Investment Returns forRollover Plan*†

High Growth Investment Returns forAllocated Pension Plan*†

High Growth Strategic Asset Allocation 2003

High Growth Actual Asset Allocation 2002**

High Growth Actual Asset Allocation 2003**

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%

* After tax rate (no tax on Allocated Pension) of return for financial yearending 30 June. Past performance is not necessarily an indicator offuture performance.

† The Rollover and Allocated Pension Plan did not commenceuntil April 1999, therefore only 4 year returns are represented.

Annualised Annualised4 year returns 5 year returns

Division A and E 1.38% 2.77%

Rollover Plan 0.46% N/A(Division F) †

Allocated Pension 0.50% N/A(Division F) †

**

** As at 30 June.





For real growth above inflation overlonger periods.

DEFINITIONThe Diversified strategy generally invests 70% ofits funds in growth assets, such as Australianand International Shares and Property. Thiscombination aims to earn real growth aboveinflation over a period of 5 years. Because theemphasis is still on growth, you should keep inmind that there may be ‘short-term volatility’ inthis strategy. In other words, the value of theinvestment may fluctuate over the short term.This volatility should not be as great as it is in theHigh Growth strategy.


RISKSThere is potential for the value of the investmentto decrease in the short term. The chance of anegative nominal return in any year is 1 in 4.

RISK PROFILEHigh/Medium.

Diversified Annualised Returns

Diversified Investment Returns for theAccumulation and Executive Schemes*

Diversified Investment Returns forRollover Plan*†

Diversified Investment Returns for AllocatedPension Plan*†

Diversified Strategic Asset Allocation 2003**

Diversified Actual Asset Allocation 2002**

Diversified Actual Asset Allocation 2003**

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%





Diversified

** As at 30 June.





For real growth above inflation over themedium term.

DEFINITIONThe Balanced strategy generally invests 50% ingrowth assets and 50% in income-producingassets, such as cash and fixed interest. Thiscombination offers real growth above inflationover 5 years. There are more assets that produceincome, such as interest-bearing securities,which makes the strategy more stable, thaneither the High Growth or Diversified strategies.


RISKSAlthough the emphasis is on spreading yourinvestment over various asset classes, there isa possibility that the value of the investment willdecrease in the short term. The chance of anegative nominal return in any year is 1 in 5.

RISK PROFILEMedium.

Balanced Annualised Returns

Balanced Investment Returns for theAccumulation and Executive Schemes*

Balanced Investment Returns forRollover Plan*†

Balanced Investment Returns for AllocatedPension Plan*†

Balanced Strategic Asset Allocation 2003**

Balanced Actual Asset Allocation 2002**

Balanced Actual Asset Allocation 2003**

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%





Balanced

** As at 30 June.

14

Capital Guarded





For short-term investment with goodsecurity and some potential for growth.

DEFINITIONThe Capital Guarded strategy generally invests30% in growth assets and 70% in income-producing assets. This combination aims tomaintain value and reduce fluctuations.


RISKSAlthough the emphasis is more on security,returns and the value of the investment can stillfluctuate. The chance of a negative nominalreturn in any year is 1 in 8.

RISK PROFILEMedium/Low.

Capital Guarded Annualised Returns

Capital Guarded Investment Returns for theAccumulation and Executive Schemes*

Capital Guarded Investment Returns forRollover Plan*†

Capital Guarded Investment Returns forAllocated Pension Plan*†

Capital Guarded Strategic Asset Allocation 2003**

Capital Guarded Actual AssetAllocation 2002**

Capital Guarded Actual AssetAllocation 2003**

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%





** As at 30 June.

Cash Plus


For very short-term investments.

DEFINITIONThe Cash Plus strategy invests 100% ofavailable assets in short-term securities, suchas cash deposits, and bank, government andsemi-government securities. Returns should bemore than inflation and personal bank depositrates. It offers maximum security to those veryclose to retirement.

OBJECTIVE2.3% investment return per annum aboveinflation over 1 year.

RISKSThere is a chance that your investment will notkeep up with inflation and its real value willdecrease over time. The prospect of under-performance and loss of value due to inflationincreases the longer you leave your investmentin cash.

RISK PROFILELow.

Cash Plus Annualised Returns

Cash Plus Investment Returns for theAccumulation and Executive Schemes*

Cash Plus Investment Returns forRollover Plan*†

Cash Plus Investment Returns for AllocatedPension Plan*†

Cash Plus Strategic Asset Allocation 2003**

Cash Plus Actual Asset Allocation 2002**

Cash Plus Actual Asset Allocation 2003**

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%








** As at 30 June.

For consistent returns over the medium tolong term.

DEFINITIONThe BT Retirement Fund is a ‘balanced’ fund,which invests across a broad range of assetsectors including shares, property, fixedinterest and cash.

OBJECTIVETo achieve moderately high and consistentreturns over the medium to long term, while atthe same time reducing the probability of anegative return in the short term.

RISKSThere is potential for the value of theinvestment to decrease in the short term.

RISK PROFILEHigh/Medium

BT Retirement Fund Annualised Returns

BT Retirement Fund Investment Returns*

BT Retirement Fund Strategic AssetAllocation†**

For stable returns over the shorter period.

DEFINITIONThe BT Stable Capital Fund invests primarily infixed interest investments, but can hold up to30% in other assets including shares andproperty.

OBJECTIVETo achieve competitive and a relatively stablepattern of returns over the short term, while atthe same time reducing the probability of anegative return in any one year.

RISKSAlthough the emphasis is more on securityreturns, the value of the investment can stillfluctuate.

RISK PROFILEMedium/Low

BT Capital Stable Fund Annualised Returns

BT Capital Stable Fund InvestmentReturns*

BT Capital Stable Fund Strategic AssetAllocation†**

-10%

-5%

0%

5%

10%

15%

20%

-10%

-5%

0%

5%

10%

15%

20%


INVESTMENT STRATEGIES FOR POOL A (EXECUTIVE SCHEME ONLY)

16

* After tax rate of return for financial year ending 30 June.

Past performance is not necessarily an indicator of future performance.

† For more information on Actual Asset Allocations contact the Executive Scheme

Relationship Manager - Member Services on 1300 369 901.

BT Capital Stable FundBT Retirement Fund

All performance figures in relation to the Executive Scheme are supplied by BT.

Annualised5 year returns

BT Retirement Fund 1.31%

Annualised5 year returns

BT Capital Stable Fund 4.45%

** As at 30 June 2003.

POOL B EXPLAINED

Pool B Further information on the following divisions isavailable on our website www.lgsuper.com.au,the Member Information Booklet or by callingMember Services on 1300 369 901.

RETIREMENT SCHEME (DIVISION B)


The Retirement Scheme is closed to newmembers. However, members taking upemployment with a Local GovernmentSuperannuation Scheme employer, whotransfer from the State AuthoritiesSuperannuation Scheme, the PoliceSuperannuation Scheme, or the EnergyIndustries Retirement Scheme may be eligibleto be a member.


The Retirement Scheme is a split benefitscheme into which both you and your employercontribute. Your superannuation benefits aredetermined in accordance with the Scheme’sTrust Deed and Rules.

The main features of the Retirement Schemeare listed below. Upon leaving the Schemeyou are entitled to certain benefits. You maybe entitled to three broad categories ofbenefit, as follows:

■ The Contributor-Financed Benefit. This isthe money you contribute to the Scheme,which accumulates together with earningsin an account in your name.

■ The second benefit to which you may beentitled is the Employer-Financed Benefit.The amount of this lump-sum benefit1 iscalculated according to a specific formula.The amount of the benefit is influenced by anumber of factors, including the number ofyears you have been contributing to theScheme, the percentage rate of your salarythat you have contributed to the Scheme,your salary, and your reason for leavingthe Scheme.

■ The third benefit to which you may be entitledto is the Basic Benefit (Division C). See aboveright for further details.

BASIC BENEFIT (DIVISION C)


The Basic Benefit is an additional definedbenefit, accruing to members of theRetirement and Defined Benefit Schemes only.


The Basic Benefit is fully paid for by yourEmployer and accrues at a rate of 3%2 ofsalary for each year of service from 1 April 1988.

The Basic Benefit is payable in a lump sum,following exit from employment, provided youhave reached the Commonwealth“preservation age” which ranges from 55-60 years, depending on your date of birth.

DEFINED BENEFIT SCHEME (DIVISION D)


The Defined Benefit Scheme is closed to newmembers. However, members taking upemployment with a Local GovernmentSuperannuation Scheme employer, whotransfer from the equivalent StateSuperannuation Scheme, Energy IndustriesSuperannuation Scheme, or PoliceSuperannuation Scheme, may be eligible tobecome a member.


Members have a range of benefits payable upon:

■ Retirement;

■ Retirement due to ill health;

■ Death;

■ Resignation or dismissal; or

■ Retrenchment.

Benefits paid on retirement may be taken inthe form of a fully indexed pension (adjustedannually in line with inflation), a lump sum, or acombination of both. You are also entitled tothe Basic Benefit (Division C).

1 Some members may have the option to take all or part of this

amount as a pension.

2 Because of the contributions tax, the effective rate of accrual from

1 July 1988 is 2.55%.



INVESTMENT STRATEGIES FOR POOL B

Pool B1

For high growth above inflation over thelonger term.

DEFINITIONPool B generally invests 80% of its funds intraditional growth assets such as Australianand International Equities and Property. Thiscombination aims to earn high real growthabove inflation over a minimum period of 5years. Because the emphasis is on growth,there may be some short term volatility in thisselection. In other words the value of theinvestment may fluctuate over the short term.

OBJECTIVE5% investment return per annum above inflationover 5 years.

RISKSThere is a significant chance that the investmentmay decrease in the short term. The chance ofa negative nominal return in any year is 1 in 3.7.

Pool B Annualised Returns

Pool B 5 Year Return Rates*

Pool B Strategic Asset Allocation 2003**

Pool B Actual Asset Allocation 20022**

Pool B Actual Asset Allocation 20032**

2 Total of Asset Allocations may not add up to 100 percent due todecimal rounding.

-10%

-5%

0%

5%

10%

15%

20%

1 Please note that the investment return only affects the Contributor

Financed Benefit for Division B members and Division D pensioners.

* After tax rate of return for financial year ending 30 June.

Past performance is not necessarily an indicator of future performance.


Pool B 3.93% 5.17%** As at 30 June.

CHIFLEY HOME LOANS

With the booming housing industry, homeloans were a hot topic this year. You can nowbuy your home with a low interest home loanfrom Chifley Home Loans, a product offeredthrough Chifley Financial Services (a companyco-owned by Local Government and EnergyIndustries Superannuation Schemes and theLabor Council of NSW). With such financialownership and resources at hand, we are ableto provide our members with home loans atvery competitive rates. There is no time likethe present to take advantage of a fantasticChifley Home Loan!

For more information on the right home loanfor you, call Chifley on 1800 800 002.

‘FAIR GO’ MEMBER LOYALTY PROGRAM

‘Fair Go’ is a new member rewards programthat gives our members special rates on arange of products and services. By using itsbulk-buying power, your Scheme has beenable to negotiate special rates for members onhotel accommodation, regional airfares, healthinsurance and even Wonderland Sydneytickets, to name a few. With your support ‘Fair Go’ will soon be able to offer even moreadded value to our members.

VOLUNTARY INSURANCE FOR POOL AMEMBERS (DIVISIONS A AND E)

Members have access to voluntary insurance.The Trustee has contracted with Lumley LifeLimited1 (the Insurer) to make insurance coveravailable to members at very competitiverates. There are three types of cover available:

■ A lump sum death benefit;

■ A lump sum death and total and permanentdisablement benefit; and

■ A salary continuance benefit.

Please contact Member Serviceson 1300 369 901 for further details.

1 Effective 1 January 2004, Lumley Life Limited will be renamedPrefSure Life Limited.


FINANCIAL SERVICES NOW AVAILABLETO YOU

Your Superannuation Scheme implemented anew Investment Framework in 2002-2003 toimprove the efficiency and effectiveness ofinvestment management.

LGSS Pty Limited acts as a trustee of twoseparate legal superannuation entities: Pool Aand Pool B.

Pool A is an open scheme providingAccumulation or Defined Contribution stylebenefits to members, whereas Pool B is aclosed scheme providing Defined Benefitbenefits to members. Given the complexitiesand challenges in setting up the Scheme in1997, the assets of the pools were physicallysegregated. This meant that separateinvestment arrangements were negotiated foreach Pool.

The Trustee reviewed the efficiency of thisstructure during the 2001-2002 business yearand resolved to implement a new structure inthe 2002-2003 financial year. The new structureconsolidates the sector pools and investmentarrangements of Pool A and B. Theconsolidation is through a single unit trustknown as the Local Investment Fund (LIF).

Local Investment Fund (LIF) is a wholesaleinvestment trust and the majority of the assetsof the Scheme are invested through LIF.

The Scheme adheres to the guiding principlethat several carefully selected managers will,over any reasonable period, produce a betterresult, more consistently and with lowervolatility than a single manager.

In selecting an investment strategy, you areinstructing the Trustee to invest the amountnominated into a pool of assets, constructed

by the Trustee to give effect to the objectivesof the strategy.

The investment pool of LIF is allocated to arange of investment managers. This is toensure diversification of both investments andinvestment managers. Investment managers(and/or their weightings) are changed atappropriate times.

As Pool A and B are separate superannuationentities the Trustee is still required to maintain aseparate record of all investments held withineach pool. The unit registry of LIF, administeredby its custodian, records the specific unitholdings of Pool A and Pool B in LIF.

DERIVATIVES

Derivatives are utilised to adjust the weightingsof the various portfolios in line with the overallinvestment strategy. Various types may beapplied which include futures and options.Strict investment guidelines are in place whichdetail all limits approved on the use ofderivatives. Currency hedging activities are alsocarried out in relation to the internationalequities portfolio, within strictly definedparameters.

Derivatives may be used to protect againstpossible adverse moves in the markets, toimplement tactical asset allocations or to enteror exit the market at a defined price level.Under no circumstances can they be used togear the investment portfolio or be used forspeculative trading.

During the course of the year, variousmanagers have, at times, made extensive useof derivatives as part of their portfoliomanagement activities.


INVESTMENT FRAMEWORK

20

The superannuation scheme’s Trustee iscommitted to keeping all fees and charges toa minimum.

GENERAL INFORMATION

Taxation of contributions

The Scheme is required to pay tax of up to15% on all employer contributions1 received(whether compulsory or salary sacrifice). Any tax payable in respect of thesecontributions is deducted from your account.Optional personal contributions, which aremade from after-tax income, are not subjectto tax.

Superannuation surcharge taxA surcharge will be levied on tax-deductiblemember contributions and employercontributions where your ‘adjusted taxableincome’ exceeds $94,691 (for 2003/20042).From 1 July 2003, the surcharge commencesat a rate of 0.00001% for those who have an‘adjusted taxable income’ of $94,691 andrises to a maximum of 14.5% for those withan ‘adjusted taxable income’ of $114,981 ormore (for 2003/20042). Due to recentlegislative changes the maximum rate ofsurcharge is being reduced over 3 years from1 July 2003 as follows:

Year Maximum Rate %

Prior to 2003/2004 15%

2003/2004 14.5%

2004/2005 13.5%

2005/2006 and later 12.5%

The ATO determines the amount of surcharge(if any) which relates to your contributions. Allamounts of surcharge are deducted from youraccount and paid to the ATO on your behalf(except for Retirement or Defined BenefitSchemes).

1 Net of allowable deductions eg. administration and insurance fees.

2 These amounts are indexed annually.

Member protection

If your account balance is less than $1,000,any management fees deducted from youraccount cannot exceed the earnings on youraccount balance in that financial year. Thismeans that your account balance cannotreduce because of management fees(insurance and taxes excluded).

It is important to note that member protectionwill not fully apply in times of poor or negativereturns, as superannuation law provides thatthe Scheme can charge a protected membera nominal management fee of no more thanthe investment return plus $10 in such times.

FEES

There are a number of fees and charges leviedby the Scheme. These include:

1.The Management Fee, which consists of the:

A. Investment Management Fee —which covers the cost of investment.The Investment Management Feerelates to the costs of transactions,advice and other investment chargesincurred by your Scheme in investingyour money. These fees are charged bythe Local Investment Fund to yourScheme and incorporated in the overallmanagement fees.

B. Management Expense Recovery Fee —which is a charge to your account thatrepresents most of the other costsincurred by the Trustee in administeringyour Scheme. These amounts are thetotal variable costs charged to youraccount and are amongst the lowest inthe market.

Note that the Management Fee is not charged directly to

your account. It is debited against investment earnings

before they are credited to members.

2.Administration FeeThe Trustee sets the Administration Fee atthe level needed to recover costs incurred inadministering a member’s individual account.This fee is charged on a monthly basis to amember’s account (except for AllocatedPension and Rollover Plan and Pool B).


TAXES, FEES AND CHARGES

22

TAXES, FEES AND CHARGES (CONTINUED)

Fees charged year ending June 2003

High Growth Diversified Balanced Capital Cash PlusGuarded

Accumulation Scheme (Division A and E1)Management Fee (per annum) 0.74% 0.70% 0.66% 0.62% 0.62%

Allocated Pension and Rollover Plan (Division F) Management Fee (per annum)2 1.58% 1.55% 1.52% 1.48% 1.22%

1 For information on the Executive Scheme BT options contact the Executive Scheme Relationship Manager – Member Services on 1300 369 901.

2 Management Fee for Division F includes investment management, financial planning and account administration fees.


Pool A Division A Division E Division F

Account Establishment Fee No charge No charge No chargeAccess to BT Investment options N/A No charge N/AAdministration Fee – Non 75c per week $3.00 No chargecontributing member per monthAdministration Fee – Standard 75c per week $6.33 No chargecontributing member per monthAny employer contributions No charge No charge N/AAny personal contributions No charge No charge No chargeAutomatic investment switches No charge N/A No chargeBasic Death or Invalidity cover $5.00 per month N/A N/ABenefit Payment Fee $20 $30 No chargeBenefit Split Fee (Family Law) $20 $20 $20Direct access to Executive Relationship Manager N/A No charge N/AEntry Fee No charge No charge No chargeManagement Fee1 0.62% – 0.74% 0.62% – 0.74% 1.22% – 1.58%

Investment in more than 1 strategy N/A N/A No chargeOptional investment switch in any financial year (First) No charge No charge No chargeOptional investment switch $20 $30 No chargein any financial year (Subsequent) per switch per switch

1 The Management Fee percentage will vary according to the investment option you select (see below).


Pool B As a result of the financial strength of your Scheme, the member Administration Fee for Pool B has been paid (for the financial year ending 30 June 2003) by your Scheme rather than debited toyour account.

Fees charged year ending June 2003RETIREMENT SCHEME AND DEFINED BENEFIT SCHEME (DIVISIONS B AND D)1

Division B Division D

Administration Fee (per week) Nil Nil

Management Fee (per annum)1 0.32% 0.32%

1 The fees shown only relate to the Contributor Financed Benefit. Fees relating to other benefits payable (including the Basic Benefit - Division C)

are charged to the Scheme as a whole.

24

LOCAL GOVERNMENT SUPERANNUATION SCHEME POOL A

OPERATING STATEMENT FOR THE YEAR ENDED 30 JUNE 2003

30 June ’03 30 June ’02 ($ ’000) ($ ’000)

REVENUE

Net Investment Revenue 20,292 (28,146)

Employer Contributions 117,932 83,399

Member Contributions 8,028 10,972

Transfers In 118,810 96,906

Other Revenue 64 –

TOTAL REVENUE 265,126 163,131

LESS OUTGOINGS

Administration Expenses 7,116 1,722

Insurance Premium 212 162

Income Tax Expense 16,359 8,503

Contributions Surcharge 938 723

TOTAL OUTGOINGS 24,625 11,110

BENEFITS ACCRUED AS A RESULT OF OPERATIONS 240,501 152,021

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2003

30 June ’03 30 June ’02($ ’000) ($ ’000)

INVESTMENTS

Short-term Investments 14,995 36,244

Australian Fixed Interest 1,068 164,826

Australian Equities – 202,294

International Investments 285 192,041

Property Trusts – 41,280

Unit Trusts 832,956 –Pooled Superannuation Trusts 10,644 25,825

TOTAL INVESTMENTS 859,948 662,510

OTHER ASSETS

Cash 9,058 23,655

Receivables 2,623 11,116Deferred Tax Asset 7,397 3,989

TOTAL OTHER ASSETS 19,078 38,760

TOTAL ASSETS 879,026 701,270

LESS LIABILITIES

Payables 953 4,201Provision for Income Tax 5,503 1,370

TOTAL LIABILITIES 6,456 5,571

NET ASSETS AVAILABLE TO PAY BENEFITS 872,570 695,699

The complete Financial Report, including the Auditor’s Report is available on request bycalling Member Services on 1300 369 901, or on our website www.lgsuper.com.au

Large Investments

Other than investments made through LIF, during the year there were no individual investments thatexceeded 5% of Pool A assets or 5% in a single enterprise.


FINANCIAL OVERVIEW


LOCAL GOVERNMENT SUPERANNUATION SCHEME POOL B

STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2003

30 June ’03 30 June ’02($ ’000) ($ ’000)

Net Assets available to pay benefits at the beginning of the year 2,560,617 2,857,998

PLUS REVENUE

Net Investment Revenue (28,635) (197,374)

Employer Contributions 140 160

Member Contributions 40,599 41,691

Transfers In 44,734 2,939

Other Revenue 203 457

TOTAL REVENUE 57,041 (152,127)

LESS OUTGOINGS

Benefits Paid 158,901 158,664

Administration Expenses 10,715 12,033

Income Tax Benefit (6,424) (26,113)

Contributions Surcharge 890 670

TOTAL OUTGOINGS 164,082 145,254

NET ASSETS AVAILABLE TO PAY BENEFITS AT THE END OF THE YEAR 2,453,576 2,560,617

STATEMENT OF NET ASSETS AS AT 30 JUNE 2003

30 June ’03 30 June ’02($ ’000) ($ ’000)

INVESTMENTS

Short-term Investments 6,250 136,199

Australian Fixed Interest – 303,823

Australian Equities 60,511 1,047,975

International Investments 482 741,284

Property 280,353 304,143

Unit Trusts 2,091,266 –

TOTAL INVESTMENTS 2,438,862 2,533,424

OTHER ASSETS

Cash 8,896 14,429

Receivables 9,581 62,412

Deferred Tax Asset 11,708 –

TOTAL OTHER ASSETS 30,185 76,841

TOTAL ASSETS 2,469,047 2,610,265

LESS LIABILITIES

Payables 15,471 48,433

Provision for Deferred Income Tax - 1,215

TOTAL LIABILITIES 15,471 49,648

NET ASSETS AVAILABLE TO PAY BENEFITS 2,453,576 2,560,617

The complete Financial Report, including the Auditor’s Report is available on request bycalling Member Services on 1300 369 901, or on our website www.lgsuper.com.au

Large Investments

Other than investments made through LIF, during the year there were no individual investments thatexceeded 5% of Pool B assets or 5% in a single enterprise.

26

PETER WOODS OAM, BA, M LITT, MACEAppointed by Local GovernmentAssociation of NSW

Chair – LGSS Pty Limited;Immediate Past President – LocalGovernment Association of NewSouth Wales; President –International Union of LocalAuthorities (IULA), Asia PacificRegion; Member – Board of theEnvironment Protection Authority ofNSW; Former President – AustralianLocal Government Association;Former Director – Resource NSWBoard; Member – Sydney HarbourCatchment Management Board.

IAN ROBERTSONAppointed by The EnvironmentalHealth and Building Surveyors’Association of NSW (EHABSA)

Secretary – EHABSA; Secretary –Australian Institute ofSuperannuation Trustees.

JOHN ERNSTAppointed by Federated Municipaland Shire Council EmployeesUnion of Australia (NSW Division)

President – United Service Union,NSW Division (Metropolitan SalariedOfficers Branch); Chair –Superannuation Services Company.

JOHN WEARNE AMAppointed by Shires Associationof NSW

Councillor – Bingara Shire Council;Patron and Former President –Shires Association of NSW; FormerSenior Vice President – AustralianLocal Government Association;Commissioner – National RoadTransport Commission; BoardMember – Country Energy.

LEO KELLY OAMAppointed by Local GovernmentAssociation of NSW

Vice President – Local GovernmentAssociation of NSW; Councillor –Blacktown Council; Member ofNSW Local GovernmentCommittees for Planning,Environment and Industrial WasteManagement; Member – NSWLocal Government BoundariesCommission.

The Trustee is a company called LGSS Pty Limited ABN 68 078 003 497. Its Board consists of equal numbersof directors appointed by employer and employeestakeholders.

The Trustee has in place Trustee indemnity insurance.

Directors appointed by any of the sponsoring organisationscan be replaced at that discretion of that organisation.

BERNADETTE O’CONNORResigned from the boardeffective 1 September, 2003.Beverley Giegerl was appointedto the board following herresignation.


YOUR TRUSTEE

BEVERLEY GIEGERLAppointed 1 September 2003

Councillor – City of Hurstville;Executive Member of the NSWLocal Government Association.

BARRY MASONAppointed by Federated Municipaland Shire Council EmployeesUnion of Australia (NSW Division)

Deputy Chair - LGSS Pty Limited

Expenditure/Risk/Assets Co-ordinator – Kogarah Council;Member of the Local GovernmentManagers Australia.

MARTIN O’CONNELLAppointed by Local GovernmentEngineers’ Association

Director – Local GovernmentEngineers’ Association andAssociation of ProfessionalEngineers, Scientists and Managers,Australia (NSW Branch); ExecutiveMember – Labor Council of NSW.

The trustee of your Scheme is a companycalled Local Government SuperannuationScheme (LGSS Pty Ltd).The Board consists of equal numbers ofdirectors appointed by employer andemployee associations. The Board issupported by the Scheme’s Chief ExecutiveOfficer – Brett Westbrook and Fund Secretary– Peter Lambert.

ROLE OF THE BOARD

The Board is responsible for setting the overallstrategy for the Scheme and ensuring it isoperating in accordance with the trust deedand all applicable laws. The Board meetsmonthly and receives and reviews reports frommost third party service providers such as theScheme’s administrators (Mellon HumanResources and Investor Solutions Pty Limited,and Superannuation Services Company), theCustodian (JP Morgan Chase Bank) and theScheme’s investment managers. Wherenecessary, the Board calls upon specialistadvice from advisers such as solicitors,accountants and the Scheme’s actuary.

COMMITTEES

The Board has appointed two BoardCommittees to allow it to review theoperations of the Scheme in greater detail.The Investment Committee (made up of JohnWearne – Chair, Barry Mason, Ian Robertsonand Peter Woods) meets monthly. The mainfunction of the Committee is to monitor theperformance of the Scheme’s investmentmanagers and oversee the work of theScheme’s Investment Advisor, RussellInvestment Group.

The role of the Audit and ComplianceCommittee (made up of Martin O'Connell –Chair, John Ernst, Beverley Giegerl and LeoKelly) is to review the internal controls and riskmanagement of the Scheme and its serviceproviders. Meetings of the Committee are alsoattended by representative of the Scheme’sInternal Auditor, Leonard Yong. The Audit andCompliance Committee meets at least sixtimes per year.

INDUSTRY REGULATOR

The operations of the Scheme are supervisedby the Australian Prudential RegulationAuthority (APRA). Representatives of the Boardmeet APRA regularly, so as keep the regulatorinformed about the activities of the Scheme.These meetings also provide an opportunity forthe Board to hear APRA’s views about thesuperannuation industry generally.


SCHEME GOVERNANCE


CHANGES DURING THE YEAR FOR POOL A

The following changes were made to the TrustDeed at year ending 30 June 2003 for Pool A.

1. From 1 July 2002, the Basic Death orInvalidity Insurance benefits in the Division AAccumulation Scheme were increased to theamounts contained in the following table:

Age attained Amount of Basic Benefit

Up to 35 $68,00036 $63,80037 $63,80038 $63,80039 $59,50040 $54,40041 $45,90042 $38,30043 $31,50044 $25,50045 $22,10046 $18,70047 $15,30048 $12,80049 $11,90050 $11,70051 $11,10052 $10,20053 $9,30054 $8,30055 $7,40056 $6,50057 $5,60058 $4,60059 $3,70060 $3,20061 $2,80062 $2,30063 $2,30064 $1,90065 and over nil

Other important developments include:

1. From 28 December 2002, changes to thelaw allow superannuation to be included inproperty settlements when legally marriedcouples separate or divorce.

2. The law now requires that employers mustpay Superannuation Guaranteecontributions at least quarterly andemployers must provide employees with thedetails of such contributions within 30 daysof payment. However, the LocalGovernment Superannuation Scheme rulesalready required that all employercontributions be received by the Scheme bythe 28th day of the month following that towhich the contribution applies. Latecontributions can be subject to penaltyinterest payable by the employer.

CHANGES DURING THE YEAR FOR POOL B

The following changes were made to the TrustDeed during the year ended 30 June 2003(affecting only the Retirement Scheme).

1. Provisions have been inserted in the TrustDeed to permit members of the PoliceSuperannuation Scheme who commenceLocal Government employment, to transferto the Retirement Scheme of the fund. Thisextends the superannuation mobilityprovisions between the closed StateSuperannuation Schemes and LocalGovernment employment.

2. An amendment approved on 30 September2003, provides that the minimum totalbenefit that a member will receive on leavingthe Scheme will be the amount of their cashresignation benefit. This applies to Schememembers who terminate employment after1 July 2003. For a small number ofmembers, the resignation benefit is greaterthan the retirement benefit due to highinvestment returns over a number of years.The amendment ensures that members willalways get the higher benefit.

Other important developments include:

1. From 28 December 2002, changes to thelaw allow superannuation to be included inproperty settlements when legally marriedcouples separate or divorce.

CHANGES TO YOUR SUPERANNUATION SCHEME


ENQUIRIES AND COMPLAINTS

ENQUIRIES

We have listed some of the most frequentlyasked questions at the end of this report.

Our website is also packed with informationabout many of the questions that you mayhave: www.lgsuper.com.au or contactMember Services on 1300 369 901(8.30am - 5.00pm Monday - Friday)

PERSONAL INTERVIEWS

Interviews can be arranged between 9.00amand 4.30pm Monday to Friday, see below forlocations.

Offices: Please call Member Services on1300 369 901 to arrange an interview.

Sydney, 28 Margaret Street Orange, 187 Summer StreetWagga Wagga, 2/209 Baylis StreetWollongong, Shop 2, 60 Burelli StreetLismore, 81-83 Molesworth StreetAlbury*, 429 Swift StreetGoulburn*, 148 Auburn Street

*By appointment only.

COMPLAINTS

With our focus on quality service andtransparency, the Trustee of your Schemewishes to ensure that any enquiries orcomplaints are handled courteously andpromptly. We hope that you will always receivesatisfactory service from your Scheme andthat all your enquiries are promptly attendedto. However, if you are dissatisfied with theservice you are receiving, you may lodge aformal complaint.

This should be made in writing to:Complaints Resolution OfficerSuperannuation Services Company Pty LtdPO Box N835 Grosvenor Place NSW 1220

The Complaints Resolution Officer willconsider your complaint on behalf of theTrustee and provide you with a response assoon as possible.

If you are not satisfied with the response, oryour complaint has not been resolved within90 days, you have the option of referring yourcomplaint to the Superannuation ComplaintsTribunal. The Federal Government establishedthe Tribunal for the purpose of resolvingdisputes, which may arise, betweensuperannuation funds and their members,former members or beneficiaries. The Tribunalcan only consider matters that impact onmembers personally and not in respect of theoverall conduct of the Scheme.

You may only approach the Tribunal if you havefirst been through the Scheme’s internalcomplaints procedure (as outlined earlier). Inexercising its power, the Tribunal cannot actcontrary to the provisions of the Trust Deed. Allcomplaints to the Tribunal must be made inwriting and at your own expense. The staff atthe Tribunal will attempt to resolve the matterby conciliation, which involves assisting youand the Scheme to come to a mutualagreement. If no agreement is reached byconciliation, the Tribunal will determine thematter.

The contact details are: Superannuation Complaints Tribunal Locked Bag 3060 GPO Melbourne VIC 3001 Ph: 1300 884 114

If you are a former member of one of the StateSuperannuation Schemes who was transferredto the Local Government SuperannuationScheme, you may have the option of lodgingan appeal with the NSW Industrial RelationsCommission (in Court Session) within sixmonths of being notified of the determinationof your complaint by the Trustee, or within thetime allowed by the Commission.

Any written enquiries should be directed to: Member ServicesLocal Government Superannuation Scheme PO Box N835 Grosvenor Place NSW 1220 Fax: (02) 9279 4131e-mail: [email protected]


FURTHER INFORMATION

The following service providers assist theTrustee in effectively managing the Schemes1:

ACTUARYMercer Human Resource Consulting Pty Limited

ADMINISTRATIONMellon Human Resources and InvestorSolutions Pty LimitedSuperannuation Services Company Pty LimitedFuturePlus Financial Services Pty Limited

AUDITORDeliotte Touche Tohmatsu

ASSET CONSULTANTMercer to 30 September 2003SSGA to 30 September 2003Russell Investment Group from 15 October

2003

CUSTODIANCommonwealth Custodial Services Ltd(to 22 May 2003)JP Morgan Chase Bank (from 23 May 2003)

INVESTMENT MANAGERSDeutsche Asset Management (Australia) LimitedAberdeen Asset Management (Australia) LimitedState Street Global AdvisorsLocal Government Superannuation Scheme(through its agent Superannuation ServicesCompany Pty Limited)PutnamConcordUBSBoston Company Asset ManagementPimcostreetTRACKS ETFStandish MellonLoomis Sayles

SOLICITORSPhillips FoxAllens Arthur Robinson

SECRETARIAT TO TRUSTEESuperannuation Services Company Pty Limited

Tax File Number collection

The Trustee is now required to ask you toprovide your Tax File Number (TFN). This is alegal requirement authorised by tax laws, theSuperannuation Industry (Supervision) Act1993 and the Privacy Act 1988.

Your TFN may be used by the Trustee for thefollowing authorised purposes:■ Taxing Eligible Termination Payments at

concessional rates.■ Finding and amalgamating your

Superannuation benefits where insufficientinformation is available.

■ Passing your TFN to the Australian TaxationOffice where you receive a benefit, or haveunclaimed superannuation money afterreaching the aged pension age.

■ Allowing the Trustee to provide your TFN toanother superannuation provider receivingany benefits you may transfer. The Trusteewill not pass on your TFN to anothersuperannuation provider if you tell theTrustee in writing not to do so.

■ Allowing the Trustee to provide your TFN tothe Australian Taxation Office whenreporting details of contributions for thepurposes of the SuperannuationContributions Tax (Surcharge).

You are not required to provide your TFN.Declining to provide your TFN is not anoffense. To provide your TFN to the Scheme,please complete the form below and return itto the address shown.2

1 The list of service providers reflects the organisations contracted at

for the period covered in the 2002-2003 Annual Report. The

Trustee reviews the performance of its service providers regularly

and where appropriate may resolve to replace some, or all of them.

2 If you have previously provided your Tax File Number to the

Scheme, you will not need to provide it again.

The Local Government Superannuation SchemeSend to: PO Box N835, Grosvenor Place, NSW 1220

Surname: _______________________________________________ Date of Birth: ______________

First name: ______________________________________________ Sex: Male Female

Member no. _________________________________________________________________________

Signature: _______________________________________________ Date: _____________________

I agree to provide my Tax File Number: No Yes my TFN1 is: _________________________1 If you have previously provided your Tax File Number to the Scheme, you will not need to provide it again.

As a member of the Retirement Scheme Iam able to contribute between 1% and9%. What rate should I pay?

Your final benefit will contain your personalisedaccount balance as well as an employerfunded component. To maximise the employerfunded component, you need to achieve anaverage contribution rate of 6%.

Can I roll money into, or top up myRetirement/Defined Benefit Schemeaccount?

In accordance with the Trust Deed and Rulesthe Retirement Scheme and Defined BenefitSchemes are not able to accept lump sumroll-ins. In certain circumstances you mayhowever open an Accumulation Schemeaccount into which you can make lump sumpayments or top-up contributions (while stillemployed).

Can I transfer other superannuationaccounts into my account?

Yes, you can transfer any othersuperannuation funds into your account (PoolA only). You could even transfer funds fromyour bank or credit union into superannuation.

Combining all your superannuation accountssaves you paying multiple sets ofmanagement fees and helps you keep track ofyour super.

Your Scheme charges no entry fees. However,you should be aware that your other fund maycharge an exit fee.

If you would like to transfer an amount fromanother superannuation fund into youraccount in Pool A you should complete theTransfer-In Authority included with this AnnualReport and send it to the address shown onthe back of the form.

I am a member of the AccumulationScheme and would like to know howmuch superannuation my employer isrequired to pay on my behalf?

As a member of the Accumulation Scheme,your employer is required to pay an amount(over and above your salary) equal to aminimum of 9% of your normal salary (referredto in legislation as “ordinary time earnings”). Ifyou wish to know the balance of your accountat any time simply call Member Services.

How do I make contributions on behalf ofmy spouse? When would this money beavailable?

If you are an “active” member of your Schemethen you are eligible to make after-taxcontributions on behalf of your spouse, to theAccumulation Scheme. You may be eligible fora tax rebate if your spouse’s annual income iscurrently below $13,800. The first paymentmust be a minimum of $100. After that, thecontribution minimum is $50. There is nomaximum limit. Payments of spousecontributions are subject to compulsorypreservation requirements.

If you require more details on any of thequestions above, call Member Serviceson 1300 369 901.


FREQUENTLY ASKED QUESTIONS

28 Margaret Street Sydney NSW 2000Phone 1300 369 901www.lgsuper.com.au

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