ARIA Annual Report 2006-2007

I am pleased to report that this year has been an excellent year for the Funds’ investments and to present the annual report on the performance of the Funds and the management and administration of the CSS, PSS and PSSap.

The continued growth and performance of investment markets during the year resulted in a 16.5% return (after fees and taxes) for the CSS Default Fund and 17.7% (after fees and taxes) for the PSS Default Fund. Also, both the CSS and PSS Cash Investment Options achieved a net return of 5.4%.

In its second year, the PSSap also performed strongly in all investment choice options with the Trustee Choice default fund returning 16.7% (after fees and taxes), well above its long-term target return of 7% per annum.

Late this financial year the Trustee adopted a new Earnings Rate Policy for the CSS and PSS. It replaces the previous methodology for applying interest to members’ accounts. From 1 July 2007, Fund earnings are allocated to members’ accounts on a continuing basis, rather than when the member exits.

The investment and superannuation industries continue to experience change, with the superannuation reforms, announced by the government in the 2006/07 Budget, now in effect. Throughout the year, ARIA has been working with its scheme administrator, to ensure the new systems are in place and members are being informed about the ‘Better Super’ rules.

Further reforms to the public sector schemes were also announced as part of the 2007/08 Budget. Details of the new arrangements are set out in the 29th PSS Amending Deed and the Superannuation Legislation Amendment Bill 2007. These new arrangements will have a material impact on the superannuation arrangements of scheme members. ARIA recognises it will have a central role in the education of its schemes’ members to ensure they are able to take informed decisions in respect to these changes.

I would like to thank the Minister and his department for their continued assistance throughout the year. I would also like to thank our key partners: ComSuper, JPMorgan, JANA Investment Advisors, all of our fund managers and other service providers for their work and commitment throughout the year.

On behalf of the Trustee I would also like to thank the ARIA staff for their continuing dedication and support throughout what was a challenging yet rewarding year.

Finally, I commend and thank my fellow trustees for their assistance, advice and support.

Susan Doyle
Chairman