Super Talk
BHP Steel Super November 2002
In this issue
1 Election to the BHP Steel
Super Policy Committee
Election to the BHP Steel Super
Policy Committee
2 Daily switching
now operating
Elections for member representatives on the BHP Steel Super Policy Committee
were held in October. Congratulations to Peter Downie, Angel Medina and
Haydn Smith who have been elected to the committee.
3 It’s your money –
make the most of it
The policy committee is the link between the Trustee, the members of the Fund
and BHP Steel.
4 Investment report
It provides input to the Trustee on BHP Steel superannuation matters, monitors
service providers, represents members’ interests and provides feedback to
the Trustee.
Welcome
to the first
edition
The first meeting of the policy committee will take place on 5 December
in Melbourne.
Super Talk is a quarterly
newsletter produced on behalf
of the Trustee and designed
to provide you with useful
information about your
superannuation fund.
Topics that will be covered
include updates on the benefits
your superannuation can deliver,
along with information about
the administration and
regulation of your fund.
There is also an investment
report on the back page so you
can track how the Fund has
performed over the last quarter.
For more information about
BHP Steel Super’s products and
services, log onto the website
at www.bhpsteelsuper.com.au.
Issues that can be addressed by the policy committee include your Fund’s
investment performance, operation and the provision of information to members.
The policy committee can also assist the Trustee to address complaints or
inquiries about the operation of the Fund.
If you have any questions or concerns on these aspects of BHP Steel Super,
you can bring these to the attention of your policy committee representatives.
However, for information about your personal situation, you will need to
contact SuperConnect on 1300 130 434.
The member representatives hold office for three years and the policy committee
must meet at least four times in any calendar year.
There are six people on the BHP Steel Super Policy Committee,
three elected by the members and three appointed by BHP Steel.
Company appointed representatives: Member elected representatives:
Allen Innes – Manager
Remuneration & Performance, Melbourne
alllen.innes@bhpsteel.com
03 9666 4093
Gerard Hammond – Treasurer
BHP Steel, Melbourne
gerard.hammond@bhpsteel.com
03 9666 4052
Peter Downie
Acacia Ridge, Queensland
peter.downie@bhpsteel.com
07 3845 9370
Angel Medina
Port Kembla, New South Wales
angel.medina@bhpsteel.com
02 4275 3399
Greg Waters – President
Western Port, Victoria
greg.waters@bhpsteel.com
03 5979 6200
Haydn Smith
Western Port, Victoria
haydn.smith@bhpsteel.com
03 5979 6120
Super Talk November 2002
1
Daily switching
now operating
Members of the Defined Contribution Division, Retained
Benefits Division or Allocated Pension Division have
unitised accounts and are now able to switch investment
options on a daily basis. Defined Benefit members who
make additional contributions to their accounts will also
be able to switch daily.
Even though you can now switch your options daily, you
should remember that frequent switching may work
against you. It is better to make any decision based on
your investment requirements over the long term and
consider switching only if your circumstances change.
When to switch
The Trustee is not in the business of advising you when
you should or should not switch between options.
However, you may find the following information helpful
when considering your position.
Many superannuation funds posted poor results for the
last financial year, but in relative terms, your Fund
performed quite well.
The investment strategy of BHP Steel Super is designed
to produce results over the long term.
The major negative influences on returns over the last
financial year have been the equity markets, and
international shares in particular. Whilst no one wants low
or negative returns, the returns from growth assets such as
equities do fluctuate over time. It is important to keep in
mind that superannuation is a long-term investment.
The decision to change options is, of course, your own.
However, trying to anticipate markets and frequently
switching between options can have an adverse effect
on returns. The negative effect of some stocks may be
outweighed over the long term by the positive effect of the
wide diversity of stocks in which BHP Steel Super invests.
How to switch
If you would like to switch options, you can either log
onto the website or call SuperConnect on 1300 130 434.
If you call SuperConnect you may use the voice prompt
to switch options, or elect to speak to a Benefit
Service Representative.
The Member Investment Choice brochure available on the
website provides information about investment choices.
2
Super Talk November 2002
Your investment options
OPTION A
Investment mix
100%
Income
Assets
Characteristics
Cash, including short-term money market investments.
Protects the value of your super in the short term.
Low risk, but returns are likely to be low.
Investment growth may not keep up with inflation
over the long term.
OPTION B
Investment mix
60%
Income
Assets
40%
Growth
Assets
Characteristics
Cash, including short-term money market and fixed
interest investments, plus some shares and property.
Investors accept some short-term risk for potentially
higher returns in the long term.
OPTION C
Investment mix
30%
Income
Assets
70%
Growth
Assets
Characteristics
More investment in shares and property.
Higher long-term returns possible.
Some risk of short-term negative returns.
OPTION D
Investment mix
10%
Income
Assets
90%
Growth
Assets
Characteristics
A much greater investment in shares and property.
Highest long-term returns likely.
Greatest risk of short-term negative returns.
It’s your money – make the most of it
Workshops designed to help you plan your financial future,
get a better understanding of your superannuation and
access personal financial advice will take place over the
next few months.
There will be two types of workshops, a general one for all
members and another focussed on the needs of members
over 50 and nearing retirement. They will be held in all
major sites around Australia.
Dates and venues are being confirmed, but you
will receive plenty of notice so that you can mark the
appropriate times in your diary.
Consultants engaged by Towers Perrin will conduct the
workshops. Topics that will be covered include:
superannuation returns for 2002
retirement planning
personal savings plans, and
balancing immediate financial needs with saving
for the future.
Please check the website for updates on workshops
or contact SuperConnect on 1300 130 434 or email
info@bhpsteelsuper.com.au
Financial education workshops in November
Port Kembla
Venue: Visitors Centre, BHP Steel North Gate, Springhill Road, Coniston
Date
Wednesday 13 November
Thursday 14 November
Tuesday 19 November
Tuesday 26 November
Wednesday 27 November
Thursday 5 December
12:45pm – 2:00pm
3:00pm – 4:45pm
5:45pm – 7:00pm
General
Pre-retirement
–
General
Pre-retirement
–
General
Pre-retirement
Pre-retirement
General
Pre-retirement
Pre-retirement
–
Pre-retirement
Pre-retirement
–
Pre-retirement
Pre-retirement
Western Port
Venue: Works Training Area, Administration Building, Bayview Road, Hastings
Date
12:45pm – 2:00pm
3:00pm – 4:45pm
5:45pm – 7:00pm
Wednesday 13 November
General
Pre-retirement
Pre-retirement
Tuesday 26 November
General
Pre-retirement
–
There is no need to register for a workshop, simply attend on the day that suits you. For the latest information visit
the website or contact SuperConnect.
Information update
Updated product brochures for the following
are now available on the internet
Defined Benefit Division
Defined Contribution Division
Member Investment Choice
Retained Benefits Division
Spouse Account
Allocated Pension Account
Tubemakers Division
r
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BHP SCote
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July 200
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Super
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If you would like a hard copy of these brochures, please call SuperConnect on
1300 130 434 or you can download a copy from the website.
Super Talk November 2002
3
Investment Report
Quarter ended 30 September 2002
Share market returns during the September quarter were
the worst since the 1987 crash and most Australian
superannuation investors experienced negative
investment returns.
In this environment, it’s tempting to opt out of the
sharemarket. However, discipline and long-term thinking
remains important.
Market round-up
International equities were the poorest performing asset
class in the September quarter. The MSCI World Index
fell 15.7%.
Despite the Nikkei’s drop to a 19-year low, Japan was the
best major market, while the rest of the Pacific held up
relatively well. Europe was hardest hit, with Germany
down 36.6%.
The Australian sharemarket fell 6.5%. Best performers
were defensive sectors such as utilities – worst
performers were media, healthcare and insurance.
Investors flocked to less risky cash and bonds and the
Australian fixed interest benchmark return increased 3.8%.
Sentiment vs fundamentals
Overall, the sharemarket falls may well reflect changing
sentiment rather than seriously deteriorating fundamentals.
Investor confidence has been impacted by recent negative
events including the fall in the technology sector, the
terrorist attack in New York, the potential war in Iraq and
high profile accounting scandals such as Worldcom and
Enron in the US.
Whilst these events have created disillusionment and fear,
the underlying economic reality may not be as bleak as it
would otherwise seem.
Also valuation levels of equities appear more attractive,
re-inforced by the current level of low interest rates
around the world.
What should members do?
This is a time for investors to review their investments
and long-term goals to ensure they align. Most importantly,
act rationally and resist fear and panic when making
financial decisions.
Performance of your Fund’s
investment options
Fund quarterly % returns at 30 September 2002
net of investment management fees & tax
Ist Qtr
%
Year to date
%
Option A
Accumulation Accounts
0.91
0.91
Option B
Accumulation Accounts
-2.45
-2.45
Option C
Accumulation Accounts
-4.5
-4.5
Option D
Accumulation Accounts
-7.58
-7.58
Option A – 100% Income Assets (cash and short-term money
market investments)
Option A delivered a return of 0.91% after tax over the quarter. The performance
of this Option reflects the return available on cash-based investments.
Option B – 60% Income Assets (fixed interest, index linked bonds and cash)
and 40% Growth Assets (Australian shares, international shares and property)
Option B had a return of -2.45% after tax this quarter. Due to the large sharemarket
drop, this Option’s 40% exposure to growth assets resulted in the negative return
for the quarter.
Option C – 70% Growth Assets (Australian shares, international shares and
property), 30% Income Assets (fixed interest, index linked bonds and cash)
Option C had a return of -4.5% after tax this quarter. Option C was negatively
impacted by the sharemarket performance during quarter. At the same time, it
performed significantly better than the majority of balanced funds in Australia. As a
comparison, the average return for the InTech survey was -5.56%.
Option D – 90% Growth assets (Australian shares, international shares and
property), 10% Income Assets (fixed interest, index linked bonds and cash)
Option D had a return of -7.58% after tax this quarter. Having the highest exposure
to growth assets, this option was the most adversely affected by the poor
sharemarket results during the quarter. In particular, Option D’s investments in
international shares severely impacted its performance.
Disclaimer
This flyer has been prepared to help you understand your Fund’s returns for the year to 30 September 2002. It is not intended
to constitute financial product advice, nor is it intended to take the place of a financial advisor briefed on your individual
financial circumstances. The Trustee of the BHP Steer Superannuation Fund recommends that before acting on any
information contained within this flyer, you seek financial advice from a qualified independent financial advisor.
4
Super Talk November 2002
Issued by the Trustee, Total Risk Management (ABN 62 008 644 353)