Welcome to the ninth edition of CEO Online
This edition, I would like to introduce Susan Doyle, the new Chairman of the CSS Board and bring you up to date with:
- your Scheme’s end-of-year results
- the latest findings of our governance research into energy use by Australian companies
- your annual report and member statement and the winner of the CSS Photo of the Year Competition.
New Chairman of the CSS Board
On 28 July 2003, Ms Susan Doyle was appointed Chairman of the CSS Board until 27 July 2006. Susan has many years experience in the area of superannuation and investments. She worked for Commonwealth Funds Management for twenty years and, more recently, was Manager Equities and Fixed Interest Suncorp Insurance and Finance and Chief General Manager NRMA Asset Management Pty Ltd. She is currently a Director of SA Water Corporation and Chairman of its Audit Committee.
I would like to thank departing Chairperson Peter Reynolds for his many years of service to the CSS. Peter has been a member of the Board since 1997, Chair of the Board since 1999 and Chair of the Board’s Investment Committee since 2001. Under Peter’s leadership, the CSS Board introduced many positive changes in the Scheme’s investment strategy, administration, stakeholder communications and governance.
End of year results
The CSS has ended the 2002/03 financial year with an earning rate on investments of 3.3% and a crediting rate of zero. (Please note that the earning rate has now been audited and is 3% for the 2002/03 financial year - September 2003)
I am pleased to report our earnings are back in the positive, compared with this time last year when we saw an earning rate of minus 5.1%. However, the crediting rate will remain at zero until the reserves are restored. As at 30 June 2003, the CSS reserve was around minus $148 million or minus 2.8% of the net assets of the Fund. This is a significant improvement on the reserve of minus 4.5% when I last reported to you. (Please note that the reserve figure has now been audited and is minus $157 million or minus 3.0 % of the net assets of the Fund for the 2002/03 financial year - September 2003).
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.
I encourage members who have questions about their super in a zero crediting rate environment to seek the advice of a licensed financial planner who has experience with the CSS.
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.
FOR MORE INFORMATION ON INVESTMENTS: Investment Performance and Investment Strategy
Putting the spotlight on energy use by Australian companies
In July, the CSS and Catholic Superannuation Fund (CSF) called on companies to improve the governance and reporting of energy use, including greenhouse gas emissions.
Our Governance research shows that a staggering 90% of companies in the S&P/ASX200 Index do not provide information on the management of energy use, including greenhouse gas (GHG) emissions, in corporate disclosures.
The research, performed by BT Financial Group and Monash University, also shows that:
- as few as 14 S&P/ASX200 companies have integrated energy and GHG mitigation into corporate environmental management systems;
- only 18 S&P/ASX 200 companies have publicly disclosed commitments to reduce energy use or GHG emissions; and
- only one in 17 S&P/ASX200 companies disclosed GHG reductions at or below Australia’s Kyoto targets.
This action is the latest in our investment governance program, established in 2001 to safeguard the long-term interests of the Fund by reducing risk in the companies in which we invest on your behalf.
FOR MORE INFORMATION: Energy use media release and the CSS governance program
Keep a watch out for your annual report and member statement
We start mailing annual reports and statements to members from mid-September onwards. If you provided us with your personal postal address by end-July you will receive your Annual Report Pack in the mail. Otherwise it will be sent to your employer’s personnel section.
It seems that photography is quite a popular hobby amongst members. This year, competition for the CSS Photo of the Year was tough and it was not easy selecting a winner. But we did and you can see the winning photo by Dianne Thompson on the back page of your annual report.
I look forward to reporting to you again soon.
