Where we are now and what’s ahead

In terms of earnings, the latest results from January 2003 show the CSS returned –0.7 % compared to our overall benchmark of –1.6%. This brings the year-to-date return to –2.2%, compared to our benchmark of –3.6%. Overall this means CSS investments are performing better than expected but, because of continued market volatility, not consistently enough to put us firmly back in the positive.

Whilst overall earnings and reserves are both negative, the CSS continues to maintain a zero crediting rate.

About the reserve

The CSS is precluded by interpretation of its legislation from declaring a negative crediting rate, even when the investment return is below zero. As a result, the CSS operates a reserving mechanism that assists in smoothing out fluctuations in annual crediting rates. As at 31 January 2003, the CSS reserve was around -$429,000,000 or –8.5% of the net assets of the fund.

A number of members have asked how the CSS compares with other Funds

Based on our earning rate over the financial year to date, independent industry monitor Intech currently ranks the CSS 5th out of the 17 large superannuation funds it monitors.

The big question: when will investment markets improve?

Unfortunately, it is not possible to predict investment markets accurately because it is not possible to predict events, such as terrorism and war, which have a significant impact on global investment markets. For example, a 2001 survey* of leading investment managers asked them to predict the performance of Australian equities for the 2001/2002 financial year. Their predictions ranged from 5.5% as the lowest to 10.6% as the highest. At the end of the 2001/2002 year, the actual market return came in at -4.7%.

As previously reported, the CSS Boards’ triennial investment strategy review (conducted in 2002) shows that investment returns overall are likely to be lower going forward and financial market volatility will continue in the short-term.

More information about investment performance and our investment strategy is available on this website.

*conducted by Towers Perrin

How does a zero crediting rate affect you?

If you are a contributing member, any member and/ or productivity components of your benefit will not earn any interest for the last financial year. However, if you leave as an age retiree, your pension, the most significant part of your benefit, is not affected by investment performance because it is determined by your final salary, length of membership and age at exit.

If you are a deferred benefit member, any member and/ or productivity components of your benefit will not earn any interest for the last financial year. The value of your employer financed pension, calculated and payable when you claim your entitlement is also influenced by interest accruals on your member component.

We encourage members who have questions about their super in a zero crediting rate environment to seek the advice of a responsible financial planner who has experience with their scheme.

Also, if you are planning to retire or claim your deferred benefit in the next 12 months, please call a CSS Information Officer on 1300 000 277 for a detailed estimate of your benefit.

Family Law changes

From 28 December 2002, new Family Law legislation came into effect. The new legislation allows for superannuation to be split on marriage breakdown either by an Agreement between the parties or by a Family Court Order.

If you are a CSS member,either a contributor, pensioner or deferred benefit member, in the process of divorcing or separating then please go to the Family Law and Your Super fact sheet for more information.

Are you planning your retirement?

As you may be aware, in December 2002 we announced our investment in State Super Financial Services, one of Australia’s leading financial planning organisations.

This investment provides you and your family with the opportunity to access professional financial planning and investment management services, particularly useful if you are considering changing jobs or planning your retirement.

If you would like to know more go to the State Super Financial Services page.

Do you use the Internet frequently?

If you are one of the many members who use our website frequently, we would greatly value your feedback on our online information service.

Our annual research, last conducted in November 2002, shows over 80% of members prefer to use the CSS website to access information about their super.

To ensure our websites continue to meet your information needs, we have worked with our administrator ComSuper and Orima Research to develop an online survey tool for members who prefer to use electronic rather than paper communications.

If you would like to let us know what you think go to the Five Minute Survey

Your answers will help us further improve our online information services for all members and we thank you for your participation.

Do you know about the CSS email service for members?

Recent research we conducted shows that over 70% of members prefer to receive information by email, yet many are not aware that we have been offering an email service for some time.

If you would like to receive important updates on your super by email, simply call a CSS Information Officer on 1300 000 277 and provide your email address.

I look forward to reporting to you again soon.