TelstraSuper

We created a unique offering for TelstraSuper retirees, providing enhanced investment options that address the specific needs of members who are drawing down on their super. In summary, the changes are:

• Enhancements to four investment options for retirees, which are now branded as the Lifestyle investment options
• Introduction of a new Cash Allocation feature
• For Diversified Income Investment options in both accumulation and RetireAccess products, the minimum investment will be removed. Diversified Income in RetireAccess will be renamed to Lifestyle Moderate.

Our retiree members require a regular drawdown to fund their retirement income. They are also focused on protecting their investment and are seeking protection against a market downturn.

We have made these changes because we understand that members who are drawing an income in retirement have different investment needs to members who are building their savings while they still work. Managing risk and maximising income are the key priorities for members who are retired. The changes we made seek to address both these needs for retired members drawing an income.

The enhanced investment strategy specifically addresses retirees’ needs, delivering flexible access to cash and slightly less volatility whilst remaining within the existing investment objectives.

They have an asset allocation which is more suited to members in retirement who are drawing an income. The changes are expected to provide less volatility in returns. The Lifestyle investment options also have a Cash Allocation feature which allows you to invest in cash on a regular basis.

The enhancements to the investment options came into effect on 8 November 2021. If you are retired and invested in the Conservative, Balanced, Diversified Income or Growth investment options, you were automatically allocated into the corresponding enhanced and re-branded investment options as follows:

Current	New
Conservative	Lifestyle  Conservative
Balanced	Lifestyle Balanced
Diversified Income	Lifestyle Moderate
Growth	Lifestyle Growth

For example, suppose you were previously invested in the Growth and Balanced investment options: in that case, you're invested in the Lifestyle Growth and Lifestyle Balanced options from 8 November 2021, in the same proportions as you were invested before that date.

No immediate changes to your current mix of investment options were made, except that those options will be the corresponding Lifestyle investment options in their existing proportions.

The remaining six RetireAccess investment options are unchanged. The investment options for RetireAccess members who are in Transition to Retirement (TTR) did not change.

You have a few choices for what you can do:

1. Do nothing

If you were invested in the investment options that changed, you are now invested in their corresponding Lifestyle options . If you’d like to review and switch any of your chosen investment options anytime in the future, you can.

2. Turn on the automatic Cash Allocation feature

If you are already invested in the investment options that changed, you can choose to utilise the new Cash Allocation feature. This can be turned on by logging into your SuperOnline account.

3. Make an investment switch into the Lifestyle investment options

If you are not currently invested in any of the options, but want to review and change your investment options, you can make changes by logging into your SuperOnline account.

Remember, before making any investment changes, you should always read the current Product Disclosure Statement or consider obtaining personal advice from a licensed financial adviser.

The existing investment objectives have not changed. The expected overall performance will be broadly the same, however we expect slightly less volatility.

The overall result is anticipated to deliver an improvement in risk-adjusted returns, and, particularly, members are expected to be better off during times of crisis where we expect losses to be slightly moderated relative to the equivalent accumulation products.

The Lifestyle Conservative, Balanced and Growth products changed the underlying mix of assets where money is invested, with slightly less growth assets and more defensive assets. In addition, over time, the Fund will alter the mix of underlying assets within the listed equity asset classes, towards slightly more defensive securities.

This depends on the timing of the switch, the option(s) you switch between and the manner in which investment markets respond to the crisis.

For a switch to add value, two decisions need to be made - firstly, the decision to exit a particular option, and secondly, to decide when and if to return to the original investment strategy.

Timing investment switches is exceptionally difficult, even for professional investment managers. Our strong preference is for members to understand your risk tolerance and to invest accordingly, perhaps with the support of a licensed financial adviser. TelstraSuper Financial Planning can speak to you about your investments if you are thinking of making any changes.

Each month the Fund will declare a distribution rate of return that will be allocated to the Cash investment option. The distribution rate is determined by the Trustee who considers the expected yield on the underlying assets. This rate can change at the discretion of the Trustee.

If you turn on the Cash Allocation you will automatically be set up with a Cash investment option for the allocation to be sent on a monthly basis.

You will need to turn on the Cash Allocation by the last calendar day of the month for the payment to be made within the first seven days of the next month.

By having the Cash Allocation feature turned on, the Cash investment option will be topped up on a regular basis to draw income from, regardless of how the markets are performing.

Your investment earnings will be directed into your Lifestyle investment option.  On a monthly basis the declared investment return will be used to convert a proportion of your Lifestyle investment option and allocate it to your Cash Investment option.

Yes, the Cash Allocation feature can be turned on and off at any time. If you log into your SuperOnline account, you will be able to see if you currently have the option turned on or off. You can then easily change the status at any time.

Diversified Income members do not have the option of turning off the Cash Allocation feature and this will not change.

Yes, you can invest in any of the other options. You can speak with an Adviser from TelstraSuper Financial Planning about how to structure your investments to maximise your outcomes.

You can choose which options from which you draw your income. If you are invested in multiple options you can choose to draw down proportionately from all of them or choose any one or more of them.

One strategy that is used to help manage volatility is to draw down income from a Cash option. The benefits of drawing down from cash is that cash can typically be less risky and the rate of return more stable. This can mean there is less need to drawdown on your growth assets during a market downturn to meet your income needs.

If you want to draw your income from the Cash option, you need to ensure there is enough invested in the option to draw the income from. If you choose to drawdown from the Cash option and there isn’t enough in the Cash option to cover your regular income payment, the payment will be taken proportionately from all the options that you are invested in. By having the Cash Allocation feature turned on you will be regularly adding to the Cash option.

You can specify the investment options from which your income is drawn down from.

You have the choice of specifying a percentage amount or proportionally across your investments. In the event there are insufficient funds in a specified investment option, your income payment will be made by proportionately selling down units across all your investments to meet the amount to be paid.

You can select which investment options you wish to draw your income payments from in your SuperOnline account.

If you prefer, you can continue to work with the paper-based process – just download a PDF form from telstrasuper.com.au/forms and submit via post or email.

It’s important to note that if you don’t have enough money to pay your income from your chosen drawdown option(s), your income will be taken proportionally from all the options you are invested in. Refer to the Product Disclosure Statement for more information.

An Adviser from TelstraSuper Financial Planning can help you with your investments and drawing an income in retirement. The Adviser can work with you to develop a plan to maximise your outcomes.

You can find out more about the advice you can receive by visiting telstrasuper.com.au/advice.

The re-branded investment options and Cash Allocation are reflected in your 31 December 2021 statement.

TelstraSuper Financial Planning offers a range of advice options. Some types of advice are included as part of TelstraSuper membership so there is no additional cost. More comprehensive personal advice does have a cost. You can speak with an Adviser to find out what kind of advice suits your needs. There is no cost to speak with an Adviser and they will let you know if there are any costs involved before you proceed.