The Fixed Term Investment option invests 100% in defensive assets and is similar to the Cash and Cash Enhanced investment options which are lower risk and may provide lower average long-term returns as they invest fully in defensive assets.
However, there are some important differences as set out below:
- 12 month term
- Investment dates: 1 March, 1 June, 1 September, 1 December
- Fixed interest rate (net of fees and any tax) if the investment is held until the end of the term
- Interest rate set two to three weeks before the investment date
- Available for account balances, not for regular contributions
- Minimum investment $20,000
- Maximum investment 80% of your account balances
- No switches to other investment options during the term
- Trustee approval generally required for withdrawals during the term
No automatic reinvestment at the end of the term.
|DECEMBER FIXED TERM INVESTMENT|
|1.97%||All other accounts|
|Apply by 23 November 2017|
To provide a pre-determined rate of return on investments held for a 12-month term.
Using a panel of Cash Enhanced investment managers to structure an investment option which provides a pre-determined rate of return on investments held for a fixed term.
This option may be most suitable for members:
- who want the certainty and security of a pre-determined investment return over a short term but who are not using it as a long term strategy to build retirement savings; and
- who do not wish to withdraw the amount invested as a cash lump sum or switch to another investment option(s) prior to the maturity date.
Risk versus return
The Fixed Term Investment option provides the short-term security of a pre-determined interest rate but no capital growth. As the interest rate is fixed for the term of the investment, investors will not be able to take advantage of any interest rate increases should they rise during the term of the investment.
There is little risk of a negative annual return or capital losses. This could only occur in the extremely unlikely event that the underlying investment manager (either an Authorised Deposit Taking Institution (e.g. bank or credit union) or life insurance company) failed to provide the interest rate or failed to return all of the amount invested.
There will be no access by members to their investment during the 12 month term, other than in exceptional circumstances (see 'Early access prior to the end of the term’ below).
It may not suit the member’s particular objectives, financial situation or needs. The Fixed Term Investment option has a short-term focus and, on its own, is generally not suitable as a long-term strategy for building retirement savings. It should be used on advice from a financial planner as part of an overall investment plan tailored to the member's circumstances.
Early access prior to the end of the term
The pre-determined interest rate will only apply if the investment is held to the end of the 12 month term. Early access before the end of the 12 month term is generally limited to situations required by superannuation law or in exceptional circumstances such as death, total and permanent disablement, terminal illness and to satisfy a Family Law payment split. In other circumstances you will need to apply to the Trustee, and early access to the investment may not be available. If the Trustee approves early access to your Fixed Term Investment, your Fixed Term Investment will be redeemed in full and you are not entitled to any interest on your investment for any of the term. However, the Trustee may pay some interest, based on the circumstances at the time.
The Trustee may also redeem the whole Fixed Term Investment prior to the end of the term, where your only remaining benefit is invested in this option and we need to pay premiums, the administration fee or tax from your account.
If you have multiple Fixed Term Investments and your investment is redeemed before the end of its term, the Trustee will redeem your investments on a ‘last in first out’ basis. However, the Trustee will not allow the purchase of a Maritime Super pension (other than following the death of the member) with the proceeds of a Fixed Term Investment during its term.