VicSuper Pensions
Net earning rates
This section provides an explanation of how VicSuper calculates the net earning rates and the way in which these are applied to your VicSuper Pension. Net earnings represent the dollar value of your net investment return.
After the end of each month, a net earning rate is determined for each of VicSuper's seven investment options. These can be positive or negative depending on the investment performance of your chosen option or options over the period.
Rates are calculated using the gross investment return plus adjustment for imputation credits (if applicable) for the month for each option. This calculation is explained in the following examples:
| Growth option | % | |
|---|---|---|
| Gross investment return | 1.59 | |
| Plus | Adjustment for imputation credit | 0.04 |
| Equals | Net earning rate | 1.63 |
This is the actual return for the Growth option in May 2009 for VicSuper Pensions.
| Growth option | % | |
|---|---|---|
| Gross investment return | -1.72 | |
| Plus | Adjustment for imputation credit | 0.04 |
| Equals | Net earning rate | -1.68 |
This is the actual return for the Growth option in July 2008 for VicSuper Pensions.
Each month's net earning rate during the financial year is compounded to determine the net earning rate for the period 1 July to 30 June. This report shows the rates for 2008/09 and for the previous four financial years, for each VicSuper option.
Gross investment returns
The gross investment return refers to the investment income earned by VicSuper for the investment option after external investment managers of managed investment trusts have deducted their management costs. For more on externally managed investment costs, see the 'About your Annual Benefit Statement' explanatory notes.
Imputation credits
Imputation credits relate to investments in Australian equities, and are a positive adjustment made to the gross investment return where applicable.
Net earnings
Net earnings are calculated by applying the relevant net earning rates to your average account balance over the period. When calculating the net earnings for each month, we take into account your opening balance at the beginning of the month, along with your pension payments and any partial withdrawals (including partial rollovers) that were deducted from your account during the month.
Net earnings can be a positive or negative amount depending on the investment performance of your chosen investment option or options over the period.
| Net earnings were applied: | Net earnings were applied to: | Net earnings were calculated using: |
|---|---|---|
| If you changed your investment options | Your entire account balance |
The finalised compounded net earning rates for each of the months that your savings were invested from the later of:
up to the day before your change of investment options took effect. |
| At 30 June 2009 | Your entire account balance |
The finalised compounded net earning rates for each of the months that your savings were invested from the later of:
up to 30 June 2009 |
* If you joined a VicSuper Pension part way through the month, the net earnings were pro-rated to take into account the number of days from when your pension account commenced, to the end of the month.