Terms and conditions

This Calculator has been prepared by Centuria Life Limited (ABN 79 087 649 054). Any advice contained in this Calculator is of a general nature only and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this Calculator, you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering, and seek professional advice from a licensed, or appropriately authorised, financial adviser if you are unsure of what action to take.

This Calculator is not intended as an advertisement for any product issued by Centuria Life Limited or any of its related entities. It has been designed for Australian conditions only.

Today’s dollars/future dollars

If the user has not selected to show the results in today’s dollars or have selected an Inflation Rate (CPI) of 0%, the Calculator shows results in future dollars with no adjustment for inflation. It is important to note that the purchasing power of future dollars erodes with time due to the impact of inflation increasing the prices of goods and services in the future.

If the user has selected to use Inflation Rate (CPI) greater than 0%, this Calculator will give you an estimate of the future value of your investments in today’s dollar values. Showing results in today’s dollars allows you to consider the future value of your investments in the context of today’s goods and services. The today’s dollar amounts have been calculated by deflating future dollar amounts using an Inflation Rate (CPI) as shown on the summary page. If the summary page shows an Inflation Rate (CPI) of 2.5% per annum, this is the default rate set by ASIC based on the midpoint of the Reserve Bank of Australia’s target range for inflation. The actual rate of inflation may differ significantly from this assumption and, if inflation is more or less than the assumed rate of inflation, the outcome at the end of the selected period could be affected.

Assumptions

There are a number of factors that will affect the future value of your investment and its value in today’s dollars. Some of the major factors, like investment returns and inflation, will fluctuate over time, but are assumed to lie within certain ranges over the long term.

For simplicity, the values for investment return and inflation remain the same for each year of the projection. The default values for these items can be changed. However, you should note that these default values are considered to be reasonable for the current conditions and are consistent with each other. If you change the default values, it is possible that unrealistic scenarios will be projected. The default investment return assumption depends on the investment option you select. Note that the Calculator imposes some limits on the fixed assumptions, but the actual experience could be outside these ranges (e.g.  investment returns may be negative in some years).

The results given depend on the assumptions input. If these assumptions are not borne out in practice the actual future value of your investment may be different from that projected. It is recommended that you run a number of projections by varying the editable assumptions to illustrate the impact of changes in these assumptions on the projections, for example, the effect of different investment returns.

There are other assumptions used in the calculations which are set by legislation and cannot be changed (e.g. tax rates and the way taxation is applied to the different components of investment income).

Investment options

The Calculator lets you model the outcome of seven different investment options (each with an assumed investment return), or you can select a combination of the different investment options.

For each investment option which has a capital gain component (i.e. investment options which are not 100% defensive), it is assumed that 15% of capital gains are realised each year.

Additionally, the ‘Balanced’, ‘Growth’ and ‘Australian Shares’ investment options are assumed to have franking credits attached to the income return. The default assumption is that 14%, 22% and 75% of income returns of the respective ‘Balanced’, ‘Growth’ and ‘Australian Shares’ investment options would be subject to franking credits.

For a chosen portfolio which contains multiple investment options, it is assumed that the portfolio would be rebalanced every year such that the proportions between each investment option remain constant throughout the life of the investment.

The default assumed investment returns have been set based on simulations (1) from Mercer’s Capital Market Simulator and as a result are considered reasonable long-term estimates at the current date. The default returns listed above are illustrative only and should not be taken to provide an estimate of the amount of investment earnings you will receive.

The rate of investment return is assumed to remain constant over the projection period.

If you have a short investment time horizon (for example less than 10 years) the assumed rates may not be appropriate.

Tax

Unless otherwise stated the calculations are based on the Australian taxation legislation and rules at 1 July 2019. In particular, the Calculator allows for:

• All investment earnings in the investment bond (including realised capital gains) are taxed at 30%.
• Investment income is taxed at the time it is earned, and capital gains are taxed at the time the gains are realised. The default assumption is that 15% of capital gains are realised each year.
• The Calculator allows for the impact of imputation credits.

Fees

The Calculator allows for total fees (including investment and administration fees) according to the default assumptions below. The Calculator deducts these amounts from the investment return shown prior to calculating earnings and tax for each year. The fees shown below are the gross fees, before allowance for any tax benefit.

The default fees have been determined by reference to the fees charged for “passive” investment options for each type of product, which is consistent with the approach used to determine the default returns. They have been reviewed by Centuria’s actuary and are considered reasonable for use in the Calculator.

Important information

No representation or warranty (whether express or implied) is made by the Centuria or any of its officers, advisers, agents or employees as to the accuracy, completeness or reasonableness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this Calculator or provided in connection with it, or any omission from this Calculator, nor as to the attainability of any estimates, forecasts or projections set out in this Calculator. Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities or other financial products. It does not include all available information and should not be used in isolation as a basis to invest in any product which may be offered by Centuria.

This Calculator is not a prospectus, disclosure document, product disclosure statement or other offering document under Australian law or under any other law. This Calculator is provided expressly on the basis that you will carry out your own independent inquiries into the matters contained in the Calculator.

The information in this Calculator is of a general nature and in summary form only. It does not purport to contain all information that a prospective investor may require in deciding whether or not to invest in securities or other financial products, nor does it contain all information which would otherwise be required by Australian law or any other law to be disclosed before
acquiring a financial product.

This Calculator contains certain forward looking statements and comments about future events. Forward-looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies, and other factors, many of which are outside the control of Centuria, are subject to change without notice, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct, and which may cause the actual results or performance of the securities or other financial products to be materially different from any results or performance expressed or implied by such forward-looking statements. Forward looking statements should not be relied on as an indication or guarantee of future performance. No representation, warranty or undertaking is made that any projection, forecast, assumption or estimate contained in this Calculator should or will be achieved. Recipients must conduct their own independent investigation, evaluation and analysis of the matters and data set out in this Calculator and rely entirely on such investigation and analysis.

1. Mercer Australia has consented to the use of the Capital Market Simulator in this Calculator.