SuperInformedFEBRUARY 2019

THE SUBTLE ART OF COMPOUND INTEREST P18

SEPARATION AND SUPER P19

AFTERPAY: DREAM OR TRAP? P16

PAGE 14: MEET BEHAVIOURAL SCIENTIST DR MELODY DING FROM THE UNIVERSITY OF SYDNEY

The silver-lined cloud on the horizon

Insurance in your super

Advocating for your interests

PAGE 10: FIVE THINGS YOU SHOULD KNOW

PAGE 12: READ ABOUT OUR LATEST POLICY AND

ADVOCACY ACTIVITIES

PAGE 7: DATA AND CLOUD SERVICES MEET ENVIRONMENTAL,

SOCIAL AND GOVERNANCE

retirementimprove your health?Could

TransurbanHave you ever taken the M1 Eastern Distributor or Lane Cove Tunnel in Sydney? Or used CityLink in Melbourne to get to the airport? They’re just three of 14 toll roads in Transurban’s portfolio—one of UniSuper’s major investments. Toll roads typically operate a business model supported by strong market positioning, resilient demand and inflation-linked price increases. These investments can generate attractive earnings and dividend yields that are sustainable over the long term.*

Upfront

1

THE TOP THREE HAPPIEST

COUNTRIES

RADAR

Got a story? We love hearing about what you’re doing and so do our readers! Drop us a line at superinformed@unisuper.com.au if you’d like to be contacted for a member profile in the future, or to share news of your research.

TH INKERS TO WATCH

ENVIRONMENT

Prof. Juliet Willetts from the University of Technology Sydney has a PhD in environmental engineering and is a water, sanitation and hygiene expert committed to alleviate poverty. She was recognised for influencing policy and practice through her research, evaluation and consultancy.t @UTS_WASH

INDIGENOUS STUDIES

Prof. Megan Davis from the University of New South Wales isa Cobble Cobble Indigenous woman from the Barrungam nation in south-west Queensland. Prof. Davis is the first Aboriginal Australian elected to a United Nations body, as Australia’s representative on the UN Permanent Forum on Indigenous Peoples. t @ILC_NSW

ENGINEERING

Prof. Sandra Kentish from the University of Melbourne was considered one of Australia's most innovative engineers by Engineers Australia in 2017. Prof. Kentish is also an investigator within the Australian Research Council Dairy Innovation Hub, where she's examining a novel approach to addressing wastewater issues.t @engunimelb

Finland takes soak

time seriously. There are an estimated two million saunas in the country with a population of 5.3 million. Finland also had the happiest immigrants, a special focus of this year's report.

Norway is a premier

destination to view the dancing lights of the aurora borealis. In ancient times, people believed the glowing lights were sent from the gods.

Denmark the home of

LEGO, rounds out the top three with their stylish design aesthetic, their focus on family and access to free health care and education.

UPFRONTEver been on a road trip around Australia? Take a tour of some of our assets around the nation.

Karrinyup Shopping CentreOut and about in Perth and need supplies? Pop over to Karrinyup Shopping Centre. About 12km from the CBD, it’s what we refer to as one of our ‘fortress assets’. We’ve had a strong focus on retail property investments for a number of years now, and Karrinyup is a great example of that.

Adelaide AirportHeading to the Barossa Valley? If you arrive through Adelaide Airport, it might interest you to know that we were one of the founding investors when Adelaide Airport Limited (AAL) was privatised in 1998. Airports are attractive assets with built-in consumer demand and limited competition—providing investors with a long-term, stable income.*

Axicom GroupSharing a holiday selfie or staying in touch with the fam while you’re away? You probably need good reception for that. Axicom has about 1,800 wireless communications towers across Australia, providing services and towers to mobile network operators including Telstra, Optus and Vodafone. So if you’re on one of those networks, chances are UniSuper regularly helps you connect with the world.

“If you can manage your spending, buy now, pay later isn't so bad.”

For more information check out the list at worldhappiness.report

Here are a few of our members who made the Australian Financial Review's 100 Women of Influence list. See the full list at afr.com/100women.

Check out the latest episode of our Super Informed Radio podcast as we unpack the new wave of digital pay later services—listen now at unisuper.com.au/podcasts or through any good podcast app.

The minimum before-tax monthly amount you need to earn from your employer before you start receiving super.

* Past performance is not an indicator of future performance. The information provided is not a recommendation or endorsement of any named companies or investments and doesn’t take into account your individual objectives, financial situation or needs.

2 Super Informed February 2019 3

A word from our CEO

THE SILVER-LINED CLOUD ON THE HORIZON Data and cloud services meet environmental, social and governance (ESG) considerations. Page 7.

TH IS ISSUE

WELCOME

A HEALTHY RETIREMENTDr Melody Ding on how leaving work is better for your health. Page 14.

Amongst all the change our industry is experiencing, I’m very confident our future is bright

Whether influenced by the Government, Productivity Commission or

the recent Royal Commission, the landscape in which we operate is evolving and the future is somewhat unknown. I expect to experience significant disruption in the short to medium term and I want our organisation to be ready, regardless of how minor or major it is.

So to prepare for future change and success, we’ll continue to review and improve our capabilities, efficiencies products and services. We’ll continue to manage the fund’s investments and strive to deliver strong long term returns for members. And we’ll also continue to enhance the experience that members and employers have with UniSuper. I’m excited by the enthusiasm and commitment of our staff to make us an even stronger organisation.

At UniSuper, we have the important responsibility of looking after the lifetime savings of thousands of individuals. As a result, we always aim to act in their best interests to provide them with greater retirement outcomes.

BRINGING MORE OF US TO YOUI’m excited at the continuing improvement in the quality and accessibility of our permanent UniSuper Centres and offices, which provide comfortable spaces for you to access our services and meet with a UniSuper Consultant or Adviser.

Since the August Super Informed edition, there are now UniSuper Centres at Curtin University, Edith Cowan University and La Trobe University. We’re excited to be opening a new UniSuper Centre at the Australian National University in Canberra followed by a retail space on the fringe of Adelaide’s CBD opposite the University of Adelaide. This brings us to 10 UniSuper centres nationwide, with more to come.

In addition, we’ve upgraded on-campus member spaces at Victoria University, University of Wollongong, Charles Sturt University in Wagga Wagga and the University of Melbourne.

These are in addition to our existing on-campus spaces at most universities and our centrally located member centres in Perth, Adelaide, Brisbane, Parramatta, Canberra, Melbourne, and Sydney.

I hope you enjoy reading this edition of Super Informed.

While the Royal Commission has exposed some very poor practices, conflicts of interest and legislative breaches within the financial services industry, UniSuper members can take comfort that their super is in good hands.

Please be assured that we will always do the right thing on behalf of our members and they can rightfully place their trust in us.

AWARD WINNING FUNDI’m pleased to highlight that UniSuper’s Balanced option return over the ten years to 30 June 2018 was the highest of all Australian super funds.1 And UniSuper’s fees continue to be amongst the lowest, and in many cases the lowest, of all Australian super funds.

Some of you may have also seen reports where UniSuper was ranked the best super fund in Australia by Stockspot.2 That news featured on a Today show episode on Channel 9. We’re thrilled to receive this unsolicited pat on the back for the work we do in providing our members with greater retirement outcomes.

But, even with all of our accolades and successes over the past 12 months, I can assure you that we’ll aim to lift the bar even higher over the next 12 months.

1 June 2018, SuperRatings Fund Crediting Rate Survey for the SR50 Balanced (60-76) Index. Past performance is not an indicator of future performance.

2 2018, Stockspot, 5th Annual Fat Cat Funds Report, http://bit.ly/2Um6U41

"Our Balanced option return over the ten years to 30 June 2018 was the highest of all Australian super funds.1"

GETTING TO KNOW KEVINWHAT’S THE BEST THING ABOUT YOUR JOB?I love my job. I get to work in a dynamic organisation with an extremely strong focus on doing what’s best for our members. And I get to apply my expertise and experience to lead UniSuper and our great team—what could be better?

DO YOU HAVE A FAVOURITE PLACE IN THE WORLD?There are too many to name but firstly, my wife and I love Tasmania – we take a break there most years. There’s a Provincial Park in Canada called Silent Lake which holds a place in our hearts. And we love our 10 acre property an hour and a half from Melbourne’s CBD. I could go on, but that’s enough for now.

Member profile

5

MEET DR IMOGEN REHMDo you pick at your nails or pull at your hair when you're nervous? It’s more common than you think, but there are things you can do to stave off habits before they become more serious, according to Dr Imogen Rehm from RMIT University.

THE PSYCHOLOGY OF SPENDING VS. SAVINGDo you consider yourself a spender or a saver? Ever felt guilty after walking out of a shop, or is retail therapy even a ‘thing’ for you? Catch up on episode seven of our Super Informed Radio podcast where we speak to Dr Shumi Akhtar from the University of Sydney on why it’s okay to indulge in some spending every now and then. Go to unisuper.com.au/podcasts or subscribe to us through any good podcast app.

In my role as a psychologist, I specialise in treating anxiety and obsessive compulsive related conditions like hair

pulling (trichotillomania) and skin picking disorders. More recently I’ve started lecturing at RMIT.

As a trainee psychologist, I worked with older people as part of an outreach program that Swinburne University’s psychology clinic developed. We would go out to residents of aged care facilities and provide as-needed counselling and support to the residents living there. The focus was on their medical management—making sure they had access to nutrition and doctors, and that they were physically looked after. But there's fewer resources devoted to supporting their psychological well-being. Many older adults living in residential aged care facilities can be living with anxiety and depression, and unfortunately they'll be prescribed medication as a first approach.

I encourage my students to be a lot more open and aware of the issues that are faced by older adults living in residential aged care facilities. It can be quite rewarding and uplifting to see your efforts in providing support, empathy, recognition and connection can be really critical to helping that person feel like they're still contributing, and there's still meaning and purpose to their life.

I got into psychology after volunteering to facilitate an online group chat for people with depression. Later down the track when I started my PhD at Swinburne, we were encouraged to get involved with the Anxiety and Recovery Centre due to the lack of awareness and qualified psychologists in the area.

I’ve also always been interested in how people can feel compelled to compulsively pull out their hair or pick their skin to the point of hair loss and wounds. These people desperately want to stop but can’t, no matter what they try, so it’s a real battle. Some people speak of it as an addiction or they believe it’s an emotional coping mechanism.

The other interesting slant to these behaviours is that they often don't cause pain. Some people can feel pleasure from the act of focusing on the behaviour, like they’re in a trance.

Lots of people bite their nails and it’s pretty harmless. There’s a smaller group of the population, however, that engage in nail biting and skin picking where it’s not a harmless habit—we’re still not sure how these conditions start out and progress to such a severe and uncontrollable disorder. Often these conditions begin during early adolescence.

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THE SILVER-LINED

CLOUD ON THE HORIZON

FEATURE

"An Australian report has stated that 23% of people in their studies said they've engaged in problematic hair pulling, skin picking, lip biting, cheek chewing, and nail biting.1"

6 Super Informed February 2019

With the use of data and cloud services on the rise, what impact can we have on the environmental, social and governance (ESG)

considerations of the companies we invest in who operate in this space?

Teenagers then might become wary about people looking at them, or they might start avoiding activities. As this antisocial cycle continues, you start to see the development of the anxiety and depression. This then becomes the trigger for people seeking help.

An Australian report has stated that 23% of people in their studies said they've engaged in problematic hair pulling, skin picking, lip biting, cheek chewing, and nail biting.1 Despite these stats, these conditions receive little funding for research and there's a general lack of awareness even among professionals.

Hair pulling and skin picking behaviours do run in families. So if you've got it, chances are someone in your immediate family has it or has experienced it in the past. Another factor that contributes to developing the disorder occurs when people struggle to regulate their emotions. People with these conditions find it overwhelming to experience negative emotions like sadness, frustration, anxiety, anger, and even boredom.

A common style of treatment for this disorder is habit reversal therapy. It's a very practical skill-based therapy where you support people to become aware of the hair pulling and the skin picking when it happens; often these behaviours can occur without the person's awareness. If you or someone you know is suffering from this condition, it’s a good idea to see a GP. There, they can make a referral to a psychologist who can work with the person on an ongoing basis.

Overall, these conditions can have a broad impact across all areas of a person’s life. It's not uncommon for people with hair pulling and skin picking problems to find themselves avoiding going to work or calling in sick frequently.

1 https://bit.ly/2FhxNC3

98 Super Informed February 2019

Feature story

"NEXTDC’s customers—who control the electricity they use in the racks or data vaults they lease—will also soon be able to opt in to a similar program to offset their emissions."

1 Past performance is not an indicator of future performance.2 Source: The Guardian, https://bit.ly/2Ab2H8W.3 The information provided is not a recommendation or endorsement of individual companies

and doesn’t take into account your individual objectives, financial situation or needs.Source: Data Never Sleeps 6.0, Domo, https://bit.ly/2l4kxo2

HOW MUCH DATA IS GENERATED EVERY MINUTE?

49,380 Photos are posted by Instagram users

2,083,333Snaps are shared by Snapchat users

120 New professionals join LinkedIn

4,333,560 Videos are watched by YouTube users

473,400 Tweets are tweeted by Twitter users

97,222 Hours of video are streamed by Netflix users

It’s no secret that we invest your hard-earned retirement savings in assets with potential for growth. Airports, shopping

centres, toll roads, desalination plants—they’re just a few examples of assets which are chosen to produce stable, long-term returns to help fund your retirement dreams.1

Lately, our investments team has been turning its attention to monetising ‘data and the cloud’—a key ‘thematic’, as it’s known in the investments world, for investors right now and a service for which demand is only increasing.

“Whether it’s on your computer, your mobile phone, on your laptop—wherever it is—the demand for data and cloud services that society is using is growing,” says Jarrod McDonald, Manager of Equities in UniSuper’s investment team.

ESG CONSIDERATIONS?Known for being a power hungry sector—the information and communications technology (ICT) industry could use 20% of all electricity and emit up to 5.5% of the world’s carbon emissions by 20252—how does this marry up with UniSuper’s approach to ESG?

WE’RE ONTO ITTalieh Williams, Manager of Governance and Sustainable Investment at UniSuper, heads up the team that puts an ESG lens over all of our investments.

“We work across all of the asset classes and all of the investments that UniSuper has,” Talieh says. “On any day of the week, you'd probably find the Chairs and CEOs of some of Australia's largest companies coming in to meet with us to discuss a broad range of issues including ESG.”

“Talieh and our Senior Investment Analyst Sybil Dixon have the expertise in that space—they were able to connect NEXTDC with Qantas, a company we also invest in and which has a carbon offsetting program called Qantas Future Planet.”

NEXTDC’s corporate operations have now been certified as carbon neutral against the Australian Government’s National Carbon Offset Standard and it has formed a strategic partnership with Qantas Future Planet.

“So really, they had the sustainability and carbon neutral goals to begin with,” Jarrod says. “UniSuper’s whole-of-fund approach to ESG across all our investments just helped them get there.”

NEXT LEVELFor his part, NEXTDC’s Alex Teo reflects warmly on this process.

“UniSuper does a lot of homework before investing in companies—not just from a financial perspective, but also from an ESG and responsible and ethical investing perspective.”

At the time his team first engaged with UniSuper on ESG, Alex says NEXTDC was pursuing a number of sustainability goals, including increasing the use of renewable sources to power its data centres, and hadn’t initially considered implementing a carbon offsetting program.

“Talieh’s team, Sybil Dixon in particular, suggested that we should have a close look at the Qantas program. We took that on board and spoke with Qantas about what we could do.”

NEXTDC was already reporting its carbon inventory to the National Greenhouse and Energy Reporting Scheme (NGERS), Alex says. “But to obtain carbon neutral certification in Australia required NEXTDC to comply with the National Carbon Offset Standard (NCOS) and undergo a carbon audit. We’re now NCOS-accredited for our corporate operations and have formed a partnership with Qantas as the strategic supplier of our carbon credits. There are number of projects we’ll be co-sponsoring with Qantas which we are very excited about,” he says.

A BRIGHT FUTURE100% of the carbon emissions associated with NEXTDC’s corporate operations are now offset through the Qantas arrangement.

NEXTDC’s customers—who control the electricity they use in the racks or data vaults they lease—will also soon be able to opt in to a similar program to offset their emissions.

“Our engagement with UniSuper on ESG has been very positive. It was UniSuper’s initial guidance that led us down this path and we maintain our longer term business goal of being 100% renewable," Alex says.

“As it’s turned out, being carbon neutral is a lot easier than we would have believed, so we are committed to helping our customers get there also.”

Critically important, Talieh says, is using UniSuper’s influence as an investor to help and guide companies to ensure they have appropriate practices in place.

“It's really important to us from an investment and risk management perspective and we also know it's important to our members that we're investing in responsible companies.”

PAYING DIVIDENDS“An ICT company with recent experience of our whole-of-fund approach to ESG is NEXTDC,” says Jarrod, referring to Australia’s leading independent, ASX200-listed data centre operator.3

With a network of data centres in Sydney, Melbourne, Brisbane, Canberra and Perth, NEXTDC offers enterprise-class colocation services to local and international organisations.

“We did a lot of work getting ourselves comfortable with the business. Once we’d done that, we spoke with the company about being a capital partner and a major shareholder. All up the process probably took at least 18 months.” The groundwork culminated in UniSuper investing $150M in an initial stake in the company in April 2018, representing about 8.6% of its total value.

“From there, I spoke with NEXTDC’s ESG representative, Manager of Investor Relations and Corporate Development Alex Teo, and the NEXTDC team.

“We knew they had a number of sustainability and carbon neutrality goals, and we had a very positive, productive discussion about how they were going to work to achieve them.

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Five things

INSURANCE

5 OUTSOURCE SOME OF THE

GROUNDWORKIf you’re not comfortable choosing the type or level of cover appropriate for you, you can speak to one of our financial advisers who can consider your entire financial situation. Fees for this kind of limited advice can be taken out of your super account, meaning it won’t hurt your bank balance. Visit unisuper.com.au/advice for more information.

1 YOUR TYPE OF COVER

Insurance in super covers three areas:

A Death cover generally pays a lump sum to your beneficiaries if you pass away—or to you, if you become terminally ill

A Total and Permanent Disablement cover (or Disablement benefits if you’re in the Defined Benefit Division [DBD]) pays a lump sum (or regular income for DBD members) to you if you’re permanently unable to work, and

A Income Protection (or Temporary Incapacity if you’re a DBD member) pays a regular income if you’re injured or ill and temporarily unable to work.

When you join UniSuper, you generally get a default level of cover.

But how much you’ll need depends on your circumstances. For example, are you single or married? Do you have children, a mortgage or other debts? If the worst happened, how would you or your family maintain your current lifestyle?

2 YOU CAN TAKE YOUR INSURANCE

WITH YOUIf you have multiple super accounts, you may be able to transfer any insurance cover you have in your other super fund to us.* The benefit of transferring your insurance cover, compared to standard applications for cover, is that you generally won’t have to provide medical evidence to the insurer and be approved (‘underwriting’).

If you have more than one super account and you’d like to transfer your insurance, you can do so. Once you’ve transferred your insurance, you can combine your super online by logging in to your account.

4 WHO GETS YOUR MONEY AFTER

YOU’RE GONE? Super doesn’t form part of your estate, which is why it’s important to nominate a beneficiary. There are two types of nominations you can make—binding or non-binding—with some restrictions on who you can nominate to receive your super.

Log in to your account to check if you have any existing nominations. To make sense of the kinds of nominations you can make, go to unisuper.com.au/beneficiaries.

* Other conditions apply. Read the Transfer of insurance cover application form for more information.

ARE YOU IN THE DEFINED BENEFIT DIVISION?Insurance works differently for you.

In this article, where we've referred to insurance, we’re talking about externally insured benefits, and not the inbuilt benefits you receive as a DBD member.

If you're eligible for inbuilt benefits, then you may generally also access external insurance cover. Inbuilt benefits are based on specific formulas and can't be changed.

Explore this in more detail by logging in to your account at unisuper.com.au.

3 YOU CAN APPLY TO CHANGE YOUR

COVER AS YOUR SITUATION CHANGESIt’s important to review your insurance to ensure it meets your needs. Another good time to review your insurance is when important life events happen, such as marriage, divorce, taking out a mortgage, having a child, or getting a salary increase.

FIVE THINGS YOU SHOULD KNOW

ABOUT INSURANCE IN YOUR SUPER

While it may not be a topic likely to win over dinner party guests, getting it right could

mean winning at one of the most important financial decisions of your life.

INSURANCE

10 Super Informed February 2019

ADVOCATING FOR YOUR BEST INTERESTSYou may not know, but we use our size and scale to influence the government, community and opinion leaders on important matters related to super.

FEATURE

WHAT GOES INTO OUR POLICY AND ADVOCACY PROCESS?We actively monitor proposed legislative change, industry developments and emerging public policy issues e.g. government announcements, regulator discussion papers, Treasury consultations, draft legislation and industry white papers.

We then review how these changes could affect UniSuper, our members, products, employers and administrative systems.

We prepare policy positions and statements to build an advocacy for the fund, particularly through direct participation with industry associations.

Feature story

Super’s gone through a fair amount of change over the past few years. From contribution rules to data

reporting requirements, using super to buy a first home and means testing of retirement income streams—super is constantly evolving and this can have wide-ranging impacts.

It’s partly why many large super funds, like UniSuper, are playing a more active role in policy debates. Rather than reacting to legislative change, we’re participating directly with policy makers during the policy formation process.

We’ve had a strong advocacy voice for a while now—working closely with super industry bodies to develop industry policy. When we combine forces like this, our viewpoints are more likely to be heard by policy makers than if we were to go it alone.

However, there are times when we need to speak firmly with our own voice, particularly on issues around employment in the higher education and research sectors, defined benefit schemes and other bespoke issues.

Recently, we’ve been building strong relationships with government officials, including Treasury, the ATO and the Department of Social Services.

Owing to our scale, technical expertise and depth of experience, we’re a key player in policy debates, routinely consulted by policy makers in the policy development stage—something we’re very proud of.

ADVOCACY IN FOCUS—RETIREMENT INCOME FRAMEWORKOne key area we’ve significantly contributed to over the last few years has been in the debate around new retirement income streams. In case you missed it, the Government released a discussion paper on developing more efficient retirement income products.1 It aims to:

A increase peoples’ standard of living in retirement

A increase the range of retirement income products available, and

A empower trustees to provide members with an easier transition into retirement.

We’ve long been arguing for more flexibility for trustees to create new income streams that meet their members’ unique needs.

While it’s early days, we think the idea of a framework is preferred rather than having prescriptive rules imposed on us.

YOUR VOICE COUNTS TOOWe think it’s important to proactively manage the risks and opportunities associated with policy and legislative changes and to consider member feedback as a valuable resource.

So from time-to-time, we use member feedback on policy matters in our on-going discussions with policy makers; ultimately, having genuine feedback on the effects of government policy can be extremely powerful.

Read our latest submissions at unisuper.com.au/policy-and-advocacy.

1 Australian Treasury, Retirement Income Framework, http://bit.ly/2PgoN0v

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Member profile

Working as an epidemiologist and population behavioural

scientist isn’t a typical career—what does this involve and how did you find yourself working in this area?

My work involves identifying population trends for chronic disease and understanding the intricate relationships between risk factors and health as well as exploring the behavioural and social mechanisms for unhealthy lifestyles and developing strategies for improving public health and wellbeing. Our work is particularly relevant in forming public policies. I see what we do as complementary to doctors. The difference being, we focus more on prevention and less on treatment; and we work with whole populations rather than the individual.

I fell into this field by chance after reading the description for the Master of Public Health degree in the United States. And I fell in love with this discipline during my first lecture and I haven’t looked back! I love the big picture and informative nature of the field, but what drives me most is knowing that what I do can make a difference in the health and wellbeing of many people around the world.

MEET DR MELODY DINGEver thought retiring would be better for your health? Work by UniSuper member and epidemiologist and population behavioural scientist from the University of Sydney Dr Melody Ding suggests it would be.

Your mother’s experience in her lead up to retirement gave you some personal insight into the field. What was your biggest learning from this and the research?

I learned from researching the retirement transition at the population level that people’s lifestyles became healthier after retirement. They became more physically active, sat less, slept more and some quit smoking. This was certainly encouraging and this research made news headlines around the world. The message I like to communicate from this research, is that retirement can be a great thing, a window of opportunity for a healthy change, and an enjoyable new chapter in life.

My research on retirement and lifestyle was inspired by my personal experience. Watching my mother manage her anxiety in the year leading up to her retirement made me understand how many people might feel when faced with this important and inevitable change in life.

MY IDEAL RETIREMENT Although my retirement is a long time off, I often daydream about what it’ll be like. I think I’ll be very happy to have more free time to fit in hobbies. I’ll continue to enjoy yoga, dance, swimming and cycling, while making the time for new adventures, such as learning a foreign language and taking music and art lessons. I’ll devote time to travelling, writing and teaching yoga (I’m a certified yoga instructor, but have little time to teach). Finally, I want to continue to be active in communities through scientific communication, public speaking, and volunteering to promote public health and to empower girls and women to pursue a successful scientific career.

IS RETIREMENT BETTER FOR YOUR HEALTH?Find out more about Melody’s work into retirement offering more chances to develop healthier lifestyles at http://bit.ly/2EyOj07.

Feeling like you’re part of a community can be important for one’s mental health. Britain has a Minister for Loneliness to tackle the isolation felt by more than one in ten people in the UK. How do you think we can promote community in our society?

Humans are social creatures. Feeling connection and trust with one another is critical to our wellbeing. In the last few decades, many societies have seen a decline in human interactions. We move from the city to live in bigger houses, drive around in car-dependent cities, and glue our eyes to our phone instead of looking each other in the eyes. Promoting a sense of community should start with rethinking the way we live, travel and communicate at different levels. At the societal level, we need to build walkable and liveable neighbourhoods which facilitate a healthy, active and socially connected lifestyle. At the community level, we should think about the simple contribution we can make, such as volunteering and organising or attending a community event. At the individual level, we should be mindful about our addictions to cars, TV, and smartphones and think about how we can bring human interaction back into our life.

It’s important to have a social role after retirement. Whether it’s being a grandparent, neighbour, student, volunteer or community organiser, having a role to fulfil provides us with a sense of purpose, identity and opportunities to socialise with people around us, all of which are important for our physical, mental and emotional wellbeing.

14 Super Informed February 2019

16 Super Informed February 2019 17

Columns

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COULD YOUR DIGITAL SELF 'LIVE' ON WHEN YOU DIE?

One of the kindest gifts you can leave a loved one when you die is your memories—the photos, music and books that are

the images, stories and soundtracks of a life well lived.

L IFE

Written by Lisa WinboltDigital Content and Experience Consultant

We now keep many of our memories online–our photo albums are in Google Drive and Dropbox, our music collection is a series of Spotify playlists arranged according to mood and many of our day-to-day interactions are on email, Facebook and Instagram.

So how do you pass the digital versions of these prized possessions onto others? And can you choose what happens to your digital accounts when you die? A digital will can help.

A digital will tells your family how to access and manage your online accounts and what you want to be done with your digital assets after you’re gone.

You can start by making a list of all your accounts and what you use them for. Knowing what you have makes it easier for your executor to access your files, pass the management of them onto your family or close them down. Email is often the most useful to access as it’s likely linked to your other accounts. You should also include any:

A file managers (DropBox, Google Drive, iCloud)

A social media (WhatsApp, Facebook, Twitter, Instagram,

LinkedIn, YouTube) A streaming and subscription

services (Netflix, Spotify, Apple Music, Audible)

A utilities A banking and insurance A shopping (eBay, Amazon) A websites or blogs you own and

manageYou should include how to access your computer, phone and other hardware that may hold your digital valuables. You can keep all of your account details in a secure password management service. Keep the access details for this in a safe place and include instructions on where to find these in your will.

When deciding what to do with your assets, you should check what you own and what you have a licence for—many music and publication services like iTunes only sell you a licence that can’t be transferred to someone else. The terms and conditions for each service will outline ownership and what can be transferred.

Your digital legacy can last forever, so as well as giving your digital collections to loved ones, a digital will can also protect your privacy, as well as that of

your family and friends. If you’re not around to manage your accounts, hackers could use your information for fraudulent activity without detection.

To combat this problem, some services let you choose someone to have limited access to your account.

Google’s inactive account manager lets you choose someone to have limited access to your account and data if you haven’t logged in for a set amount of time.

Facebook’s legacy contact lets you ask another person to memorialise or delete your account once they’re told of your death. They can use your memorialised account to notify friends of a memorial service or to close your account.

While it may not be the same as going through photos, accessing your online memories can be just as powerful for your family and friends as any material object.

BUY NOW + PAY LATER= A MATCH MADE IN HEAVEN?Buy now, pay later—sounds like a dream come true, right?

We unpack the ins and outs of this new wave of digital payment methods.

F INANCE

Written by Charles AzzopardiPrivate Client Adviser

Digital pay later services like AfterPay, OpenPay and ZipPay have emerged as a game changer for shoppers looking for an innovative approach to payment solutions—but how do they work and are there any risks?

For starters, they let you buy what you want and instead of paying the full amount at the time of purchase, you make regular interest-free payments to a third party payment gateway in instalments.

Once you’ve registered with your pay later provider, you do your shopping, and when it comes to payment, you select the ‘pay later’ option. Unlike a traditional ‘lay-by’ concept, you actually get your item upfront.

Rather than charging interest to consumers, the pay later providers charge retailers a small fee on each transaction. Retailers enjoy the service because it makes it easier for shoppers to buy their products. What they spend in fees, they hope to make up in increased sales.

The obvious benefit for consumers is immediate gratification, but are there any hidden risks?

Consumers may incur a small plan management or account fee to use the service and fees will vary depending on your provider. Missing an instalment can also result in a fee, and if you fail to make repayments within a specific timeframe, more fees may be charged. If you miss all your repayments, you could end up paying significantly more than the original price of the item/s. The terms and conditions vary between operators, so other fees may apply.

Because consumers enter into an arrangement with a third party and not the retailer, things can get murky when returning items, or if a complaint or dispute occurs.

Although not a traditional form of credit, using pay later can still affect your credit rating. This is one of the more significant risks of these services. Some operators say they reserve the right to conduct a credit history

check, so if you fail to make repayments, you may be reported to a credit reporting agency.

The consumer protections under the National Consumer Credit Protection Act 2009 typically don’t apply to pay later arrangements. The concern for consumer groups is that these operators aren't obliged to check if you can actually afford to make repayments. As a result, the Government and consumer groups have been agitating for reforms for all unlicensed financial service providers, and to look into more responsible lending practices.

Ultimately, these services can help people prudently manage their shopping—you've just got to keep yourself in check and not go overboard.

“The concern for consumer groups is that these operators aren't obliged to check if you can actually afford to make repayments.”

Columns

18 Super Informed February 2019 19

THE SUBTLE ART OF COMPOUND INTEREST

Earning interest on top of interest you've already earned.

WEALTH

Business magnate Warren Buffett claims the single most powerful factor behind his investment success is compound interest. Albert Einstein once called it the ‘eighth wonder of the world’. So what is it and why is it a thing?

Compound interest is all about earning interest on your interest. As you invest your money, you’ll earn money on your investment through interest. If you continue to invest that money, the interest will compound—essentially, it’s money on top of money you’ve already earned.

Consider an investment of $100 that earns a fixed return of 10% each year. In the first year you will earn $10. You can choose to spend that earned interest or reinvest it along with the initial $100 in the second year. If you choose to reinvest, the interest earned in the second year will be $11. The additional interest of $1 represents the benefit of compounding. If this process is repeated many times, you will eventually earn more interest from compounding than you will on your initial $100 investment!

Similar to the concept of compound interest, not being able to access your super until retirement means that the magic of compounding is left to do its thing. Of course investment returns aren’t always positive, and negative returns may impact your account balance. But, as your super is invested for the long term, the earnings that are applied to your super account are re-invested to deliver more super earnings—earnings on earnings.

How does it happen? Obviously time is a big factor to realise the benefits of compounding. An extra percentage point a year may not seem much when viewed

in isolation, but the cumulative impact of a minor change can be significant, and this is where a long-term investment like super can be beneficial.

It’s also one of the reasons for making additional contributions to your super. There’s the potential for investment growth, combined with the power of compounding earnings. Putting away small, regular amounts will stack up over time.

If you'd like to know more, read up on investments basics by going to unisuper.com.au/investments.

Written by Brooke LoganAdvice Technical Consultant

SEPARATION AND SUPERSeparating from a long-term partner is enormously challenging and when it comes to finances may require a lot of short and long

term planning during a time when emotions are also fraught.

FAMILY

Written by Dale BarrattSenior Private Client Adviser

Most people automatically acknowledge the first steps in separating finances and usually take care to promptly close off joint accounts, cancel redraws and access to shared credit cards and establish new bank accounts.

While the impacts to your day-to-day finances and the arrangements for your children (if any) are essential and should be considered with priority, it’s important to also consider your long-term investments such as super.

Super is an asset like any other. A separation or divorce from your partner likely involves dividing assets and debts—super is no exception.

When you separate, it makes sense to gather all relevant financial information and collect important documents including super statements (both yours and your partner’s).

And remember, you don’t have to be married to have claims to super—you can be in a de facto relationship—the laws will differ depending on your state or territory.

When dividing super, usually there are three options when it comes to managing super during a separation.

1. Split the super by agreement, or by court order. If couples are unable to agree, the court can make an order as part of a property settlement. A valid agreement or court order is binding on the trustee of a fund.

2. Defer your decision about how to split the super assets until another time, such as retirement.

3. Consider super assets as part of the financial settlement, but choose to leave them alone i.e. each party retains their own entitlements.

Other things to consider—your super statement has information about who should receive your super if you die—your beneficiaries. It’s important to carefully reconsider this information in light of your new circumstances. You can also log in to your account to check this at unisuper.com.au.

It’s also worth noting that super of little value i.e. less than $5,000 or amounts deemed not cost effective will not be split by agreement or court order.

When approx. one in three Australian marriages end in divorce, you can be sure there’s plenty of qualified people who have experience in helping people manage these situations and are willing to help you do your best to protect your financial future.

Interested in finding out more about how to protect your interests through estate planning? Have you separated from your partner and need help with your super and broader finances?

UniSuper Advice can provide you with more information. Call us on 1800 823 842.

Finally, if you're in the midst of separating or dividing your finances due to a relationship breakdown, professional legal advice should also be considered as part of this broader process.

“A separation likely involves dividing assets—super is no exception.”

YEARS 2 4 6 8 10 12 14 16 18 20 22 24 2826 30

$1,500

$2,000

Principal Interest on principal

$1,000

$500

Interest on interest

Diagram is for illustrative purposes only and does not relate to any UniSuper investment option.

Important updates

20 Super Informed February 2019 21

UNISSIBUILD 0219

AWARD-WINNING FUND With a string of awards and high ratings from Australia’s top ratings and research agencies, SuperRatings and Chant West, we’re one of Australia’s most award-winning super funds.

SuperRatings, a superannuation research company, has awarded UniSuper a Platinum Choice rating for its accumulation products, something only the ‘best value for money’ funds receive. Our accumulation products have also achieved a 10-year Platinum Performance rating. Go to www.superratings.com.au for details of its rating criteria. SuperRatings does not issue, sell, guarantee or underwrite this product.

We’re committed to highlighting the insightful work and research our members undertake in the course of their occupations. Our member articles are for informative purposes only. UniSuper doesn’t recommend or endorse the comments, views, products or services featured within them. UniSuper Management Pty Ltd is the Administrator of the Fund and is licensed to provide financial advice, which is provided under the name of UniSuper Advice—a service dedicated to UniSuper members, former members and their families. This information has been prepared to provide members with general information only and includes general advice. Any advice in this newsletter has been prepared without taking into account your individual objectives, financial situation or needs. Before making any decision in relation to your UniSuper membership, you should consider your personal circumstances, the relevant product disclosure statement for your membership category, and whether to consult a qualified financial adviser. For a copy of the PDS relevant to your membership category, visit unisuper.com.au/pds or contact us on 1800 331 685. For more information about UniSuper Advice, visit unisuper.com.au, access the Financial Services Guide and, for any further enquiries, contact us on 1800 823 842. Any views expressed by third parties are those of the third party and not UniSuper. UniSuper is referred to as UniSuper or the Fund. UniSuper Ltd is referred to as UniSuper or the Trustee.

Issued by: UniSuper Management Pty Ltd (ABN 91 006 961 799), AFSL No. 235907 on behalf of UniSuper Limited, ABN 54 006 027 121, AFSL No. 492806, the Trustee of UniSuper (ABN 91 385 943 850) the Fund. MySuper Authorisation No. 91385943850448.

Level 1, 385 Bourke St, Melbourne Vic 3000.

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CHANGES TO SUPERUniSuper update

ANNUAL INVESTMENT FEES AND COSTS REVIEWWe annually review our investment fees and costs. The investment fees and costs for the financial year ending 30 June 2018 are available at unisuper.com.au/investment-costs.

Important updates

CHANGES TO UNISUPER’S TRUST DEEDThe following changes were made to our Trust Deed—one of the documents which governs how our fund operates—effective 1 January 2019:

A clarify how benefits are calculated when a Division B disablement pension ceases to be paid in the Defined Benefit Division (DBD). The amendment confirms that, for the period that the member receives the disablement pension, their Service Fraction is deemed to be equal to their Average Service Fraction at the date of calculation of the disablement pension. This ensures that the Average Service Fraction is essentially frozen while the member receives the disablement pension.

A include references to the Australian Financial Complaints Authority (AFCA).

A confirm the power to roll over death benefits to another superannuation fund

A empower the Trustee to determine to pay DBD pensions at intervals other than monthly, and

A remove an impediment to the payment of pensions which required the attainment of super preservation age. The amendment was made because some death benefit recipients may be eligible to receive a pension before attaining superannuation preservation age.

Further analysis of the last two amendments is required before any change to current processes could be contemplated.

Effective 1 July 2019: A Simplify the waiting period that must be served

to qualify for a DBD disablement pension or Temporary Incapacity benefit. Currently a member must, among other criteria, be absent through injury or illness for three months in a consecutive 12-month period to qualify. Under the new provisions, the waiting period would generally be 60 working days in a consecutive 12-month period for full-time employees or a pro-rated number of days for members who work part-time. This is considered a clearer and simpler concept and is expected to be favourable for part-time employees, and also for full-time employees who experience intermittent absences from work due to illness or injury, by having a clear focus on a specific number of working days for which a member needs to be absent. A new provision has also been included to ensure that any members who have already commenced absence due to illness or injury will continue to have the benefit of the former waiting period in the unlikely event that the new waiting period were to be longer in their particular circumstances.

CHANGES TO UNISUPER’S REGULATIONSThe following changes to UniSuper’s Regulations took effect on 1 January 2019 to:

A provide greater clarity regarding the calculation of benefits when a Division B disablement pension ceases to be paid in the DBD (this mirrors the aforementioned amendment to the Trust Deed)

A provide greater flexibility for the Trustee to extend the time for DBD members to elect what to do with their defined benefit component after ceasing to be a contributing member

A confirm that those acting under powers of attorney cannot make binding death benefit nominations, and

A provide discretion for the Trustee to allow signature of non-lapsing binding nominations before a single witness in certain circumstances.

Further analysis will be required regarding the last amendment before any change to the current process could be contemplated.

10MYSUPEROF THE YEAR2019

2019

FUNDOF THE YEAR2019

Chant West awarded UniSuper ‘Pension Fund of the Year’ in 2017 and 2018. We've also been rated 5 Apples by Chant West for being the Highest Quality Fund based on our investments, fees, insurance, administration and member services. Compare us to more than 200 other super funds using the Chant West AppleCheck tool at www.unisuper.com.au/compare.

We’re proud to have been named 2019 Fund of the Year—as the fund with the best value end-to-end product offering—by research house, SuperRatings. For more, check out our website at unisuper.com.au/trophy-cabinet.

SUPERRATINGS NAMES UNISUPER FUND OF THE YEAR