September 2010 Investment Update

The Investment Update is to be read in conjunction with your Annual Statement.

Details of the investment information such as strategy, objective, asset allocations can be found in the documents on the right side of the webpage. Please select the document relevant to your product.

Issuer, Administrator, Insurer & Investment Manager

TOWER Australia Limited
ABN 70 050 109 450
AFSL No. 237848

Customer Service

1300 209 088
Monday to Friday
8:30am - 6:00pm (AEST/AEDT)

customerservice@toweraustralia.com.au

TOWER Australia Limited
PO Box 142
Milsons Point NSW 1565

Terms used in this Investment Update

Disclaimer

TOWER Australia Limited (nor any of its related bodies corporate and their respective directors and associates) does not guarantee any particular rate of return, or the repayment of capital or income, or the performance of any of the products or funds referred to in this report unless otherwise stated. The information contained in this Investment Update is general information only. It does not take into account your individual investment objectives, financial situation or particular needs. You should obtain your own advice from a financial adviser with respect to your individual investment objectives, financial situation and particular needs.

TOWER's investment objective and strategy

TOWER’s investment objective and strategy is detailed in the document titled "Investment information" which can be located at the end of this webpage. Please select the document relevant to your product.

Performance returns

Investment performance information is detailed in the document titled "Investment information" which can be located at the end of this webpage, and the figures are rounded to one decimal place. Please select the document relevant to your product. The calculation of performance returns is based on the movement of unit prices for the unit linked investment options over the period reported. The performance returns shown are calculated after the deduction of any tax, asset management charge and investment costs attributable to the investment option and before the deduction of any other fees and rebates that may be applicable to your policy. Performance returns are the annual returns for the investment option as a whole. For current investment performance information, click here and then select your product.

Asset allocations and benchmarks

Asset allocations for 30 September 2010 and 2009 for each of the investment options are shown in the document titled "Investment information" which can be located at the end of this webpage, and have been rounded to one decimal place. The actual allocations may vary from time to time due to market fluctuations and investment decisions. A limited portion of the investment portfolios may be held as cash for liquidity or other investment purposes from time to time. This cash holding is included in the asset class specified in the manager’s mandate. For example, a specialist shares manager may hold some cash (within specified limits) and this would be classified as shares. For current or further information about asset allocation benchmarks and minimum and maximum ranges, please contact your financial adviser, call us on 1300 209 088 or click here and then select your product and the appropriate investment option.

Changes to the strategic asset allocation

The strategic asset allocation (SAA) is the asset allocation that TOWER has decided is most appropriate to meet each investment option's investment objective. As part of the ongoing monitoring and commitment to continually improve investment offerings, the asset allocation of each investment option has been reviewed. Any changes to the SAA will be detailed in the document titled "Investment information" which can be located at the end of this webpage. Please select the document relevant to your product.

Risk and return profile

Volatility can be simply defined as fluctuations in the returns of an investment and is the most common way to measure the risk associated with certain asset classes. An investment which is more volatile than another is said to be riskier. This is because the greater the volatility of an investment, the greater the chance that its return could be less than expected. It is widely accepted that over long periods of time, a relationship exists between the risk and return of each investment option. Generally, the investment options with the potential for earning higher returns carry a higher risk (i.e. have higher volatility of returns). If you would like details for each of the investment options available to you as a policyholder (including asset allocation benchmarks and ranges) call us on 1300 209 088 or click here and then select your product and the appropriate investment option.

Multi-manager investment style

TOWER’s multi-manager investment options are managed by Russell Investment Management Ltd (Russell Investments), ABN 53 068 338 974. Russell’s investment strategy begins by researching some of the world's best investment managers. Managers are then selected for inclusion in the portfolios – each chosen for what Russell believes are their outstanding capabilities. These managers, with different approaches and styles to investing, are then combined together to manage portfolios of securities. It’s a multi-dimensional process that provides a simple yet sophisticated investment for investors.

For nearly 40 years, Russell’s extensive understanding of markets, managers and investors has enabled them to design funds that seek to deliver consistent long-term results. Through the TOWER investment options, you gain exposure to a highly awarded investment company.

Labour standards and environmental, social and ethical considerations

Other than for the Ethical Growth investment option, labour standards, environmental, social, or ethical considerations are not taken into account for the purpose of selecting, retaining, or realising an investment. Underlying investment managers may or may not take these considerations into account.

Investment in derivatives

Derivatives such as futures, forwards, options and swaps (as applicable) may be used, within agreed limits, by the underlying investment managers in managing the various asset classes. TOWER’s Risk Statement (DRS) contains information about our approach to the use of derivatives. If you would like a copy of this, please contact us or click here to access a copy of the DRS.

 

• IU_Deferred Annuity_Investment info as at 30 Sep 10_Final
• IU_FULS LifeForce Pooled_Investment info as at 30 Sep10_Final
• IU_Savings_Investment info as at 30 Sep 10_Final

Processing of contributions and withdrawals

The following section provides information about the circumstances in which we may suspend the processing of contributions and withdrawals. Our current process may differ to the description in your original product terms.

We reserve the right to suspend the processing of all contributions or withdrawals under certain market conditions or extraordinary circumstances, if in our opinion, to continue processing would not be in the best interest of policyholders. Please note that before you rollover, transfer or withdraw a benefit you can ask us for any assistance or information on anything you are unsure of, including benefits, fees and charges, or the possible effects of rolling over/transferring your benefit.

Identification requirements

TOWER has processes in place to help to prevent unauthorised people from gaining access to your investments. However, there are some steps that individuals can take to help protect their personal information from unauthorised access or use. To view information about steps you can take to help protect your personal information click here.

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act) requires us to identify you and verify your identity when you withdraw benefits from your policy. Generally, you will need to provide certain documents (such as your passport or current driver’s licence) for sighting and verification of your identity. If you do not provide identifying documents we will not be able to pay your benefit. The AML/CTF Act also imposes reporting obligations on us if we form suspicions about the identity of someone we are transacting with or about the transaction itself. In these circumstances we may decide to delay or decline to process that transaction and report it to the regulator if we are concerned that the request or transaction may be in breach of the provisions of the AML/CTF Act or cause us to commit an offence under that Act. If we take this step we will not incur any liability to you.

Unit pricing

The following section provides information about unit pricing. Our current process may differ to the description in your original product terms. We reserve the right to alter our process at any time without notice.

How unit pricing works

When you invest money in a TOWER product, your money is pooled together with that of other policyholders. TOWER then uses this pool of funds to buy assets which are managed on behalf of all policyholders. All units within each unit linked investment option have an equal value. Unit prices for these investment options are determined daily (for each business day) by dividing the total net asset value of the investment option by the number of units on issue within that investment option.

The net asset value of the investment option includes the market value of the assets (including some tax benefits that may arise in the future) and provisions for fees, transaction costs and any other expenses of the investment option. We use the most recent best estimate of these provisions in each day’s net asset value. These estimates are updated regularly.

The only options that are not unitised are the TOWER Capital Assured, TOWER Capital Guaranteed and Investment Series C investment options, which credit income via an interest rate.

Benefit payments

TOWER’s current procedure is to calculate the withdrawal value using the latest available unit price at the time of calculating the payment. Our current process has been updated and may differ from the benefit calculation procedure in your original product terms.

Adjustments

Unfortunately, from time to time administration or unit pricing errors occur that may affect the value of accrued benefits of the policy. When a material error has been identified, TOWER will adjust policyholders’ accounts as follows:

• for policyholders who are still current, we will adjust your investment to ensure it is in the position it should have been had the error not occurred; and
• for policyholders who have exited, compensation will be paid where the adjustment is $20 or more.

Where an exited policyholder has been overpaid, TOWER may seek to recover the overpayment from the policyholder.

Fees

We will provide you with at least 30 days notice before introducing any additional fee(s) or before any increases (other than Consumer Price Index increases) to existing fees.

Enquiries

If you have a general enquiry or require further information on your policy, call us on 1300 209 088, Monday to Friday between 8:30am-6:00pm (AEST/AEDT). Alternatively, click here to email us (quoting your policy number or write to us at the following address:

TOWER Australia Limited
PO Box 142
Milsons Point NSW 1565

Complaints

If you have a complaint regarding your TOWER product, please lodge your complaint in writing to the Complaints Resolution Manager at the address shown above.

For all Savings (Non-superannuation) policyholders
If your complaint has not been resolved to your satisfaction within 45 days of lodgement, you may refer your complaint to the Financial Ombudsman Service (FOS), contact details are shown below:

Financial Ombudsman Service
GPO Box 3
Melbourne VIC 3001

Call 1300 780 808
Website: www.fos.org.au

FOS is an independent body designed to help you resolve complaints relating to financial products as well as complaints relating to financial advice and sales of financial and investment products. Complaints with FOS may be resolved by a conciliation process or arbitration. This complaints procedure is free of charge.

For Deferred Annuity policyholders

If your complaint has not been resolved to your satisfaction within 90 days of lodgement, you may refer your complaint to the Superannuation Complaints Tribunal (SCT), contact details are shown below:

Superannuation Complaints Tribunal
Locked Bag 3060
Melbourne VIC 3001

Call 1300 884 114
Email: info@sct.gov.au
Website: www.sct.gov.au

The SCT is an independent body established by the Commonwealth Government to deal with complaints about superannuation, annuity policies and retirement savings accounts. The objective of the SCT is to provide a fair, timely and economical means of resolution of complaints as an alternative to the court system. The SCT cannot consider complaints that have not been first referred through the complaints resolution process of the provider of the product.