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    Aon Master Trust Annual Report 2020

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    Report of the Manager Dear members We are pleased to bring you the annual report for the Aon Master Trust (Scheme) for the year ended 31 March 2020. Investment markets over the financial year The investment markets went through significant change during the year to March 2020, which COVID-19 has proved to be a roller-coaster ride, with strong returns achieved in most asset classes in the first 10 caused volatility months, especially for shares, and an eventful closing six weeks as the COVID-19 pandemic took in investment the world by surprise. markets which Initially the year seemed to have very similar themes to 2018: Political risk such as Brexit, trade has affected Aon tensions especially between the US and China, and uncertainty over how long the bull market Master Trust returns could continue. Central banks started to react to these concerns with the US Federal Reserve in the short term. reducing the Federal Funds rate target twice between 1 July and 30 September 2019 and the While there will European Central Bank slightly reducing its Deposit Facility further into negative territory at be short-term set- -0.5%. backs during your Overall, lower interest rates globally had a positive effect on share markets resulting in higher financial journey, share prices, as future earnings potential was viewed by investors as more attractive compared it is important to to bonds and cash. Share markets received a further boost by apparent developments in trade remain focussed discussions, with the Phase 1 US-China agreement being signed in January 2020. on your long-term And then there was the lockdown investment goals and performance. The NZX50, like many share market indicators worldwide, reached its peak value in late February. This peak was short lived, as governments and investors concluded that COVID-19 was highly infectious and deadly. The resulting lockdown of country borders alongside many governments requiring people to stay at home, seems likely to have had a devastating impact with many businesses unable to open. Extensive government handouts, such as the wage subsidy scheme, seemed necessary to try to protect the economy while it was in hibernation. March 2020 was punctuated with almost daily announcements of enormous stimulus packages, the largest being the US Government’s Care Act, which approved US$2.3 trillion of relief through grants, loans to businesses and payments to lower income households. Alongside the fiscal stimulus and sometimes sharp falls in interest rates, some countries, including New Zealand, took steps to increase liquidity in their fixed interest markets, by purchasing securities, to alleviate stress that had built up because of extreme aversion to risk. The recovery has started but it is fragile These actions have supported a significant recovery in shares that continued after March. This recovery has been focused more on certain sectors and markets; online retailing being an example of a sector that experienced strong growth during the crisis. The full economic impact of lockdowns due to COVID-19 means there is still a potential for more ups and downs over the coming months. We think extreme caution should be applied to any view that the events in the coming weeks and months will be highly predictable and easy to navigate. 2

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    New world It is important to look beyond the headline global share market returns since March as underneath is a wide dispersion of individual company results. So far there have been some big winners post-crisis - certain online retailers and strong growth companies, and losers - energy, banking and tourism to name a few. We think this dispersion provides a fertile playground for active investment managers, such as those Aon Master Trust partners with, to cherry pick investment opportunities and position themselves to outperform their chosen market. We suggest a cautious balanced investment approach is warranted. As much as the pandemic lockdown was unprecedented, the recovery path out is fluid. With interest rates at historic lows it seems difficult to project more than modest returns for income assets for a few years. While growth assets such as shares seem likely to do better over the long-term, returns may be lower than the average experienced over the past 10 years. Risks remain and although we are encouraged by the recent surge in markets, which indicates the extreme fear of mid-March has passed, we anticipate further volatility and perhaps further market corrections. We are committed to the ongoing success of the Aon Master Trust and helping you on your path to financial security in retirement. Helen McKenzie on behalf of the Manager Superannuation Management Nominees Limited Date: 3 July 2020 3

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    Details of Scheme The name of the Scheme is the Aon Master Trust. The The date of the most recent product disclosure Scheme is classified as a restricted workplace savings statement (PDS) is 1 October 2019. The PDS scheme. For the purposes of registration, at 31 March has an “open for applications” status on the 2020 the Scheme also had a legacy scheme section. Disclose Register. For those Plans that are open for membership, a supplement accompanies the PDS The Aon Master Trust is a defined contribution which includes important information about that scheme. Plan. Superannuation Management Nominees Limited The latest fund updates for each fund within the is the manager (Manager) and trustee of the Aon Scheme are dated 31 March 2020. The latest financial Master Trust. statements for the Scheme and auditor’s report To invest in the Scheme, a member’s employer must have been lodged on the Disclose Register and are have established a workplace savings plan (Plan) available at disclose-register.companiesoffice.govt.nz under the Scheme. or at aon.co.nz/aon-master-trust. Information on contributions and scheme participants Membership summary The following table sets out membership information for the year ended 31 March 2020. Members Members at 1 April 2019 2,478 Total new members 220 Transfers from other schemes – Other new members 220 Total exits (289) Retirements (38) Deaths (5) Transfers to other schemes (15) Other withdrawals (231) Members at 31 March 2020 2,409 4

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    Contribution information The following table sets out the contribution arrangements for the year ended 31 March 2020. Membership Number of members at Number of members at 1 April 2019 31 March 2020 Contributing members 2,145 1,987 Non-contributing members 333 422 The total amount of contributions received during the year ended 31 March 2020 was $18.033 million in respect of 2,297 members. The following table provides further information on the types of contributions to which the total amount relates. Contributions Amount Number of members $000 Member contributions $9,194 2,088 Employer contributions $7,861 2,202 Member voluntary additional contributions $978 301 Amount of accumulations The following table sets out the total amount of accumulations and membership it relates to for the year ended 31 March 2020. Date Amount Number of members $000 1 April 2019 196,179 2,478 31 March 2020 182,904 2,409 5

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    Changes relating to the Scheme During the year ending 31 March 2020 there were Effective 1 October 2019, both the PDS and SIPO no amendments made to the Scheme’s trust deed. were updated. The main changes were: However, there were updates to the Scheme’s PDS and the statement of investment policy and • Contribution fees and withdrawal fees no longer objectives (SIPO). apply to investments from 1 October 2019 in the Nikko funds and the Russell funds. Effective 23 April 2019, the SIPO was updated mainly to flag a change to the target mix and • Some changes to the estimated annual fund permitted ranges of the Nikko Balanced Fund and charges. to flag changes to the investment strategies of the • To change the investment strategy of the Nikko ANZ Conservative, Balanced and Growth Funds. Growth Fund. Effective 1 August 2019, the SIPO was updated to • To include cash and cash equivalents in the reflect changes in the target mix and permitted investment strategy of the Nikko Balanced Fund. ranges of the ANZ Conservative, Balanced and Growth Funds and Milford Active Growth There were no related party transactions entered Wholesale Fund. into during the year ended 31 March 2020 that were not on arm’s length terms. Other information for particular types of managed funds Withdrawal information The following table sets out the permitted withdrawals made during the year ended 31 March 2020. Type of withdrawal Amount Number of $000 members Death benefit 407 5 Total and permanent disablement or serious illness 192 4 Partial withdrawal 4,526 186 Leaving service benefit 8,544 184 Retirement benefit 7,897 38 Retrenchment benefit 4,317 43 Transfers to other workplace savings schemes 1,511 15 6

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    Investment returns The performance of our underlying investment managers gets regularly reviewed by the Manager with the assistance of our investment consultant. The purpose of these reviews is to monitor the performance of our underlying investment managers taking into consideration the amount of risk the underlying investment manager is taking for the return it delivers. Asset mixes for the ANZ diversified funds, Nikko Balanced and Growth Funds, and the Milford and Russell funds are determined by the respective underlying investment managers, but are reviewed by the Manager to ensure they continue to be appropriate for the Scheme. The investment returns for each of the Scheme’s funds for the year to 31 March 2020, and the unit prices at the start and end of the year, are set out below: Fund Investment Unit price at Unit price at return start of year end of year (net of fund (1 April 2019) (31 March 2020) charges but $ $ before tax) ANZ Cash 1.64% 15.5294 15.7839 ANZ Conservative 3.16% 22.1387 22.8393 ANZ Balanced -2.63% 26.5205 25.8220 ANZ Growth -5.80% 28.1268 26.4960 Milford Active Growth Wholesale -2.64% 3.5627 3.4687 Nikko Cash 1.54% 14.5844 14.8089 Nikko Conservative -2.32% 16.8282 16.4371 Nikko Balanced -4.80% 19.7117 18.7648 Nikko Growth -6.07% 24.7651 23.2626 Russell LifePoints® Conservative 1.80% 9.9397 10.1190 Russell LifePoints® Moderate -0.09% 10.0807 10.0719 Russell LifePoints® Balanced -1.58% 9.8215 9.6665 Russell LifePoints® Growth -3.18% 9.8986 9.5836 Russell LifePoints® Target Date 2025 0.79% 9.4206 9.4946 Russell LifePoints® Target Date 2035 -0.87% 9.5256 9.4427 Russell LifePoints® Target Date 2045 -2.53% 9.4123 9.1738 7

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    The following funds are still provided but are no longer available for new members to select. Fund Investment Unit price at Unit price at return start of year end of year (net of fund (1 April 2019) (31 March 2020) charges but $ $ before tax) ANZ Capital Stable 3.27% 19.9598 20.6131 AMT NZ Bond* 4.74% 17.7655 18.6080 AMT International Bond* 3.76% 23.9541 24.8540 AMT Australasian Shares* 0.64% 31.2560 31.4554 AMT International Shares* -7.38% 34.0136 31.5030 AMT Australasian Property* -7.12% 32.9559 30.6094 AMT International Property* -20.36% 14.9188 11.8812 Russell LifePoints® Target Date 2015 1.91% 9.5078 9.6894 * The underlying investment manager of these funds is ANZ New Zealand Investments Limited. The formula used to calculate the investment performance is: Unit price at end of year -1 Unit price at start of year Unit prices are net of those fund charges reflected in the unit price, but before tax and any fund charges met by withdrawing some of your units on a monthly basis. The unit price at the start of the year is the closing price for 31 March 2019. The returns shown above may differ slightly from the equivalent returns shown in the 31 March 2020 fund updates due to the fund updates making allowance for any applicable tax credits within each fund. Manager’s statement The Manager states that: • All the contributions required to be made to the Scheme in accordance with the terms of the governing document of the Scheme have been made; • All the benefits required to be paid from the Scheme in accordance with the terms of the governing document of the Scheme have been paid; and • The market value of the Scheme property at 31 March 2020 equalled or exceeded the total value of benefits that would have been payable had all members of the Scheme ceased to be members at that date and had provision been made for the continued payment of all benefits being paid to members and other beneficiaries as at 31 March 2020. 8

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    Changes to persons involved in the Scheme Changes to the directors of the Manager during the year ended 31 March 2020 were: • Dennis Church was appointed to replace Janet Brownlie (previously known as Janet Hayden) with effect from 12 April 2019. How to find further information Further information relating to the Scheme (including financial statements, the trust deed, the SIPO, fund updates, annual reports, the PDS, and other material information) is available on the offer register and the scheme register. These registers can be found at disclose-register.companiesoffice.govt.nz. A copy of information on the offer register or scheme register is available on request to the Registrar of Financial Service Providers. The following information may also be requested from us free of charge, by contacting us in writing: • Copies of the PDS. • Copies of the PDS Supplements specific to your Plan. • Copies of all written investor communications sent to you (including annual reports, financial statements, PIE statements and confirmation information). • Copies of the trust deed, SIPO and fund updates. • A written statement of your unit holding as detailed in the Scheme’s register of investors. • Minutes of all investor meetings. • Resolutions passed by investors. 9

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    Contact details and complaints Contact details Questions or complaints The Manager can be contacted via the administrator Should you have any questions or complaints please at: direct them to us via the administrator at: Aon Master Trust Aon Master Trust Level 11, Deloitte Centre, 80 Queen Street Level 11, Deloitte Centre, 80 Queen Street PO Box 332, Shortland St, Auckland 1140 PO Box 332, Shortland Street, Auckland 1140 Telephone: 0800 266 268 Telephone: 0800 266 268 Email: amt@linkmarketservices.com Email: amt@linkmarketservices.com Link Market Services Limited is the administrator If you have made a complaint to us and it has not and maintains the register of the Scheme and can be been resolved you may direct your complaint to our contacted at: independent dispute resolution scheme: Link Market Services Limited Financial Services Complaints Limited Level 11, Deloitte Centre, 80 Queen Street 4th Floor, 101 Lambton Quay PO Box 91976, Shortland Street, Auckland 1140 PO Box 5967, Wellington 6140 Telephone: 0800 266 268 Telephone: 0800 347 257 Email: complaints@fscl.org.nz Fax: 04 472 3728 Financial Services Complaints Limited will not charge a fee to any complainant to investigate or resolve a complaint. 10

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    Contact us Our helpdesk staff are available to assist you with any queries. Please note that our contact centre staff are not able to provide you with financial advice. t: 0800 266 268 e: amt@linkmarketservices.com w: aon.co.nz/aon-master-trust About Aon Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. © 2020 Aon New Zealand

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