*rio tinto discovery 2001 - superfacts.com final word this annual report edition of discovery has...

A final wordThis annual report edition of Discovery has been prepared to provide information to help you understand your Fund and your benefits. The information is not intended toconstitute advice, nor is it intended to take the place of a financial adviser. The Trustee of the Rio Tinto Fund recommends that before acting on the information contained withinthis edition of Discovery, or changing your superannuation arrangements, you seek financial advice from a qualified independent financial adviser.

Discovery2001 Annual Report Edition Rio Tinto Staff Superannuation Fund

RIO TINTO STAFF SUPERANNUATION FUND Trustee: Rio Tinto Staff Fund Pty Limited ABN 98 438 661 856 ACN 005 599 422 October 2001

Visit our website! www.riotinto.superfacts.comAnother strong return Can you afford your dream retirement?

Rio Tinto Member Helpline

Superannuation Inquiries Officers Argyle Diamonds, Perth Liana Sly (08) 9482 1136

Australian Mines & Metals,Melbourne Kerrie Shufflebotham (03) 9614 4777

Blair Athol Coal, Clermont Ross Walker (07) 4980 2319

Coal & Allied, Singleton Stacey Rose (02) 6570 0310Susan King (02) 6570 0312

ComalcoBusiness Services Team 1800 731 701Lyndel Eckhold Dean Wise Bromley Rowe Cathy Mackie

Dampier Salt, Perth Vivienne Ingleson (08) 9327 2523

Energy Resources ofAustralia, Ranger & Sydney Kate Power/Kerry Whitten (08) 8938 1326

EWL Sciences, WinnellieHelen McIntosh (08) 8922 5216

Hamersley Iron, Perth 1800 992 112Lynette SkenderFelicity HighamSamantha LetchGemma McGillPauline Palmer

Kestrel Coal, Emerald Kerrie Gilliland (07) 4982 8618

Lihir Management, PNGFelix Tavil +67 5986 5672

North Parkes Mines, ParkesRhonda Cooper (02) 6830 2253

Pacific Coal, Brisbane Brett Mestrez (07) 3361 4287

Peak Gold Mines, Cobar Rhonda Cooper (02) 6830 2253

PT Kaltim Prima Coal, IndonesiaPhillip Joyce +62 549 521436

PT Kelian Equatorial Mining, Indonesia Yasson Tului/David Luxford +62 542 765861

Rio Tinto Exploration, Perth Penny Stewart (08) 9270 9306

Rio Tinto Services, Melbourne Brett Grant/Chas Wood (03) 9283 3333

Rio Tinto Technology GroupRio Tinto Business ProcessImprovementDianne O’Neill (03) 9242 3315Nadine Barnes (03) 9242 3287

Tarong Coal, NanangoAnita Wolski (07) 4160 7224

Information

Inside Australia 1800 687 134Outside Australia +61 3 9245 5723(8.30am to 5.30pm Australian EST)

[email protected]

www.riotinto.superfacts.com

The Fund AdministratorRio Tinto Staff Superannuation FundWilliam M Mercer Pty LimitedGPO Box 1925RMelbourne VIC 8060

News We’re online! 2

Fund update 4

Super update 8

Managing your superCan you afford the retirement you want? 10

Surcharge tax – affecting more of us 12

How much insurance cover do you need? 13

Our performance and our people Investing for the long term 14

Our investments 16

How the options performed 18

New asset allocations for the options 20

Time to check your investment direction? 21

Who is looking after the Fund? 22

Change of Investment Choice Form 23

Summary of accounts 25

Our vital statistics 26

More information 28

Contents

WelcomeDiscovery 2001 Annual Report Edition

Welcome1

Once again, the Fund has had a goodyear. We’re in a very strong financialposition, which ultimately benefits eachand every member. Our size andstrength – and the fact that we’re a not-for-profit fund and generouslysponsored by Rio Tinto – enable us tooffer members a wide range of qualityfeatures and services at a very low cost.I am particularly pleased that we havecontinued to improve investmentreturns for members by negotiatinglower investment management fees.

The Fund continues to look for ways of helping members achieve theirretirement goals, and the recentintroduction of Allocated PensionAccounts and changes to the Deferred Account are examples of this.Another good example is the introductionof Investment Choice in November 2000.This feature has been well received bymembers eager to take a more activerole in the management of their super.

All four investment options havesignificantly out-performed the marketdespite share market returns being lowerin percentage terms than in recent years.

The introduction of our website – atwww.riotinto.superfacts.com – is a newinitiative designed to improve servicelevels to members. It enables you toaccess information about your super 24 hours a day, seven days a week.Turn the page to discover how you canuse it.

During the year we were pleased towelcome 714 North employees to ourFund. We encourage our North Sectionmembers to make the most of thefeatures and services offered by the Fund.

Finally, I wish to acknowledge thecontributions of my fellow Directors and particularly our external Directors,Sam Kavourakis and Sir Gustav Nossal,whose contribution is especially valuedby the Trustee. Also, it is time to farewellthree of our Member Directors: AliceHarris, David Painter and Judy Stead.

David and Judy have been on the Board since 1994 and Alice has been a Member Director since 1999. To hearwhat they have to say about theirexperience, please turn to page 5.All three Directors have shown a strongcommitment to the Fund, both throughtheir representation of members’interests, and also in their roles asSuperannuation Inquiries Officers.On behalf of the Board and members,I’d like to thank them very much for their efforts.

Barry CusackTrustee Chairman

Our size and strength – and the fact that we’re a not-for-profit fund and generouslysponsored by Rio Tinto –enable us to offer members a wide range of qualityfeatures and services at avery low cost.

Accessing Your AccountThis section gives you access to yourpersonal records held by the Fund andenables you to calculate your leavingservice benefit (see Diagram A below).

You will also be able to view:

all contributions made to your account

your current nominated beneficiaries

your benefit history

surcharge tax information

Retirement and Financial PlanningThis section contains interactive tools tohelp you consider:

whether you are maximising your super

how much super you might have forretirement (see Diagram B below)

whether your super will last the distance

Please remember that the tools provideillustrative information only and you shouldseek financial advice before acting on it.

We’re online!

www.riotinto.superfacts.com2 We’re online!3

Discovery 2001 Annual Report Edition


Our website is now up and running, giving you online access to general andpersonalised information about superannuation. The website is an enhancementof our existing services, designed to assist members who prefer accessinginformation through the Internet. Because not everyone uses the Internet,we will be maintaining all our other service options.

Getting started

Logging in

If you’re new to the Internet, you’ll need to follow a few basic steps to get started. Once you’ve opened yourInternet browser, type the Fund’s websiteaddress – www.riotinto.superfacts.com – into the “address” window and hit “Enter.”

First you’ll see the Fund’s “Welcomepage”. Click on the “Please enter”button to proceed to the “Superfactslogin” page. Once you’re there, you need to follow three simple steps toenter the website (as shown below).

You will need your member number andpersonal identification number (PIN) tolog in. Your member number is on yourmost recent Benefit Statement and youwill receive your PIN by mail within thenext two weeks.

The Fund has taken every step possibleto ensure the security of the site and thedata behind it. The Fund’s administrator,William M Mercer, maintains thewebsite. If you would like to change yourPIN, you can do so by clicking on thePIN button at the top of every page.

To log into the website(www.riotinto.superfacts.com) you willneed your member number (as shownon your Benefit Statement) and aPersonal Identification Number (PIN).You will be sent your PIN within the nexttwo weeks.

1. Key in your member number.

2. Enter your four-digit PIN.

3. Click on “Login”.

Need help online?For assistance, click on the “Help”button that appears at the top of everypage, or if you’re still having difficulties,call the Rio Tinto Member Helpline on1800 687 134.

News Go here to read about:

the Fund’s latest news

the Fund’s monthly returns

general superannuation news

About Your FundThis section explains some of the mainfeatures of the Fund, including:

how benefits are calculated

investment choice

insurance

Fund Management and Performance This section covers the management of the Fund and our investments. It hasinformation about:

the Fund’s Trustee

the Fund’s investment approach

Government regulations, fees and taxes

Receiving Your Benefit This section is particularly helpful formembers who want to find out moreabout their final benefits. It explains:

the benefits provided by the Fund

the preservation rules

tax upon leaving, includingreasonable benefit limits

how to claim your benefit and whathappens to unclaimed benefits

Main menu Use the main menu to navigate the site – it has links to every part of the site.This diagram provides an overview of the main sections of the website.

Diagram A: Estimating your Leaving Service Benefit Diagram B: Estimating how much super you will have at a particular age

Fund update5

Fund updateThe Fund’s Trustee is committed to continuous improvement of returns and servicesto members. This section updates you on what has happened during the year.

Election pendingBy now you should have received your ballot paper for the election for new Member Directors. Three of our Member Directors – David Painter, Alice Harris and Judy Stead – will be leaving the Board. Therefore, three new Member Directors will fill their places from1 November 2001. We asked David,Alice and Judy to comment on their time as Directors of the Fund’s Trustee Board.

David Painter

There are a number ofhighlights during thealmost eight years Ihave enjoyed on the

Board, which include:

the excellent working relationship thatall Member Directors had with theCompany Directors

the out-sourcing of administration toWilliam M Mercer and the engagementof Towers Perrin for communicationsand the improvements that haveflowed from this

the introduction of the Fund’s threeCommittees – Claims, Communicationsand Investment – which sped up thedecision-making processes, and

the introduction of Spouse Accounts andthe Allocated Pension option for retirees.

These initiatives have assisted inimproving the returns and communicationswhich members receive. Finally, I’d like tothank all those members who supportedme in my time as a Member Director.

Alice Harris

I have found my timeon the Board avaluable experience.I have expanded my

investment knowledge and enjoyed thechallenges presented on communications.It has made me realise just how complexthe investment field is.

I was pleased to be able to contribute tothe team that has delivered relevant andimportant super information regularly tomembers to enable them to makeinformed decisions. We have also strivedto ensure that the communications arepresented in a language that can be easilyunderstood and yet interesting to read.

This exposure, together with my eight years of experience as an SIO,has enabled me to move into thesuperannuation industry and I am nowpart of the Fund Secretariat that looksafter all members’ interests. Thank youfor supporting me as a Member Director.

Judy Stead

Being a MemberDirector for the pasteight years has beenan extremely

rewarding experience.

I have had the opportunity to be involvedwith many of the changes that nowmake the Fund the success it is today.I believe it is a fund that is capable ofholding the key to every member’sfinancial future.

I would like to thank the other Directorsand the Rio Tinto Services superannuationteam for all their support during myterm, and would also like to give my bestwishes to the incoming Member Directors.

Good returns across the board

Simplify your super and save

Despite a difficult year in the markets,all four investment options managed toout-perform their benchmarks bybetween 1.5% and 2.4%. The returnswere also above the 6.0% inflation rateas measured by the Consumer PriceIndex. For more information, please seepages 14–19.

In order to maximise future returns whiletaking account of risk, the Trustee hasagreed to make minor modifications tothe asset allocations of the fourinvestment options. For informationabout these new asset allocations, andabout switching options, please turn topages 20–21.

If you’ve got super in other funds, youcould save time and money by rolling it into the Rio Tinto Fund. Unlike manyother funds, the Rio Tinto Fund doesn’tcharge entry, exit or ongoing managementfees, so it’s a cost-effective fund for your super.

Please note, however, that if you transfernon-preserved super into the Rio TintoFund, you won’t be able to access ituntil you leave the Company. For moreinformation, please contact the Rio TintoMember Helpline.

Increased flexibilityDuring the year, the Fund’s Trusteeagreed to amendments to the Trust Deed and Rules to effect thefollowing changes.

Deferred Accounts Spouse and Superannuation Guaranteemembers are no longer required to have $25,000 in order to open Deferred Accounts.

Also, Deferred Account members cannow make withdrawals from theiraccounts as often as they wish, providedtheir account balances remain above$25,000. If their account balanceswould fall below this amount as a resultof any withdrawal, the whole accountbalance would have to be withdrawn.

An administration fee is charged foreach withdrawal from a DeferredAccount, except for the final withdrawal.

Benefits in excess of the standard RBLsMembers whose vested benefits exceed the standard Reasonable BenefitLimits will be able to elect to receivesalary instead of future superannuationcontributions/benefit accruals.Separate advice on this issue will beprovided to affected members by theCompany in the near future.

Pensions for beneficiariesThe Fund can now pay pensions tobeneficiaries who request this type ofpayment instead of a lump-sum benefit,eg. for a death benefit.

Time to rethinkyour level ofinsurance cover?If you are a defined contribution member,which includes members of the NorthSection, you can choose from differentlevels of insurance cover for death anddisablement (as discussed on page 13).Your current level of cover is shown onyour 2001 Benefit Statement. Pleasenote that if you increase your level ofinsurance cover, your premium willincrease and you might be required to provide health evidence.

To change your level of cover from 1 November 2001, please submit anInsurance Cover Variation Form to yourlocal SIO before Tuesday, 30 October 2001.

www.riotinto.superfacts.com4

Don’t lose your super when you leave If you retire or leave Rio Tinto withoutopening a Deferred Account or AllocatedPension Account, you should leaveinstructions about where your benefit isto be paid. If you don’t, after 90 daysyour super will be rolled over into theFund’s Eligible Rollover Fund (ERF),which is Colonial’s SuperTrace.ERFs are designed to protect your superby investing in low-risk, low-returninvestments, so they are not suitablelong-term investments.

You can call Colonial’s SuperTrace on1300 788 750 or write to Locked Bag5429, Parramatta NSW 2124.

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Member’s BookletNorth Section

Welcome to ourNorth SectionmembersOn 1 May 2001, 714 members of the NorthSuperannuation Fund became members ofthe North Section of the Rio Tinto Fund.The Fund extends a warm welcome toour North Section members. We hopethat you will take an active interest in theFund and make the most of the featuresand services it offers.

Option and benchmark returns for year to 30 June 2001


Claims Committee

Sir Gustav Nossal

What has been your focus for thepast year?

In looking back over the year, I canreport that the Committee met regularlyand held seven meetings during the yearto ensure that all claims were consideredwith all due thoughtfulness, care andempathy. The result of this has beenthe approval of six death and 30disablement benefit claims.

I noted from this year’s Fund accountsthat only 7% of the benefit amounts paidhave occurred for reasons of disablementor death. Therefore, 93% of all thepayments have been due to membersleaving the Fund at or before retirement.

And next year?

Having noted that 93% of payments areto “healthy” members, I wouldnevertheless like to see all membersleaving the Fund in a “healthy” condition.

The Company is very committed tohaving healthy employees, asdemonstrated by its highly successfuloccupational health and safety initiatives,but I’d like to take this opportunity toencourage members to do whatever theythemselves can do to ensure a long andhealthy retirement.

In addition to putting “safety first”, thismight mean making changes to lifestylefor some members. If you think youcould be taking better care of yourself,consider making an appointment to talkabout it with your doctor.


TrusteeCommitteereportWe asked the Chairs of the Trustee Board’sthree Committees to tell us what theirCommittees are doingfor members…

Communications Committee

David Painter


During the year the CommunicationsCommittee has completed three significantcommunications projects, namely:

communicating the introduction ofInvestment Choice to members

providing communication material tothe North Fund members on allaspects of the transfer into the RioTinto Fund, and

informing members about currentFund issues and especially theperformance of the Fund’s investmentoptions and the markets to the end ofthe 2000 calendar year.

All three projects were very important,and the Committee spent considerabletime ensuring members were giveninformation that was current, accurateand substantial so that, where decisionswere necessary, members were able tomake them on an informed basis.

And next year?

Currently the Committee is workingtowards completing the introduction ofthe Fund’s website, which will go live inOctober 2001. To gain access to theweb-site (www.riotinto.superfacts.com),you need to have both your membernumber (as shown on your BenefitStatement) and a personal identificationnumber (PIN). For security reasons theseitems cannot be sent to you together.Shortly, you will receive your PIN in the mail.

For the remainder of the year theCommittee will be concentrating onenhancing the website and also updatingsome of the Fund's other publications.We will also need to consider the impactof legislative reforms such as theFinancial Services Reform Bill and PrivacyAct on the Fund’s communications.

Investment Committee

Sam Kavourakis


During the past year, the InvestmentCommittee has been focussing on thefollowing major items:

managing and reviewing the Fund’scurrent investment structure

monitoring the individual investmentmanagers within this structure

introducing Investment Choice formembers, and

managing the asset transfers duringthe year which included transfer ofthe North Fund.

Naturally, the Committee is very pleasedthat the returns achieved for each of theinvestment options have been well abovetheir respective benchmarks for the year.It is worth noting that this result hasbeen achieved even though monthlyreturns have been volatile. This volatilityis largely attributable to a significantdownward correction in the value of thetechnology sector around the world and resultant nervousness in themarkets thereafter.

And next year?

As members will note from page 14, theTrustee, after careful consideration ofadvice from the Committee and theFund’s asset consultant, has agreed tochange the Fund’s investment structurefrom the current 50% balanced, 50%sector-specialist style to a 100% sector-specialist style.

As part of the review of the Fund’sinvestment structure, the Fund’s assetconsultant has also recommended thatsome amendments should be made toeach of the Investment Choice options inorder to achieve the best risk and returnoutcomes. These asset allocationchanges, which come into effect on 1 November 2001, are detailed on page 20.


Fund update • Trustee Committee report7

ReasonableBenefit Limits for2001/2002The Reasonable Benefit Limits (RBLs) for the 2001/2002 financial year are$529,373 for benefits taken as lumpsums, and $1,058,742 for benefitswhere at least half is taken as acomplying pension.

An RBL is the maximum amount of yoursuper benefit that you can receive at the concessional tax rate of 15 per cent.Anything above your RBL is taxed at the top marginal rate. The RBLs differdepending on whether you receive your super as a lump sum or complying pension.

Transitional RBLsDuring the year, the Australian TaxationOffice was forced to reverse its decisionto prevent people continuing to apply forTransitional RBLs.

Transitional RBLs were introduced in July1994 to smooth the transition from theprevious RBL system to the current one.Prior to 1 July 1994, the RBL systemwas based on a formula which includeda person's highest average salary.Since 1 July 1994, RBLs have been setto fixed-dollar values, indexed annually.

The Transitional RBL rules generallyprovide the greatest benefit to peoplewho were aged 50 or over at 1 July1994 and could establish a higherformula-based RBL under the old rulesthan the new fixed-dollar thresholds.Subject to certain conditions, thoseunder 50 with large vested benefitscould also qualify for Transitional RBLsabove the fixed limits.

Your financial adviser will be able to help you to determine your eligibility fora Transitional RBL and, if you might beeligible, assist you to apply for one.

Super updateIt’s been a busy year in superannuation. The May 2001 Federal Budgetintroduced some change, and a number of recently passed laws will affect the superannuation industry and the Fund.

What’s new in theworld of super?

Choice of fund has again beendefeated in the Senate because theDemocrats wanted the Government to recognise the rights of same-sexcouples.

Superannuation will soon be able tobe split between divorcing couples.

Privacy laws have been extendedfrom the public to the private sector,including superannuation funds.

Some of the surcharge tax anomaliesin respect of eligible terminationpayments have been addressed (see pages 12–13 for information).

From March 2002, superannuationfunds will be governed by tighterdisclosure requirements.

Choice of fundstill stalledWhile the Government remains publiclycommitted to the introduction ofemployee choice of fund for employerSuperannuation Guarantee contributions,it appears no closer to securing thenecessary support from Parliament.The Democrats have joined with Labor to defeat the legislation in the Senatebecause the Government has not agreed torecognise same-sex couples for thepurposes of superannuation. As such, itseems most unlikely that the legislationwill be passed before the next Federalelection.

Privacy lawsFrom 21 December 2001, the amendedPrivacy Act 1988 will apply to all private-sector organisations including the Fund.This Act, which previously covered federalpublic-sector agencies and private-sectorcredit providers, regulates the wayorganisations collect, use, store, accessand share personal information.

The Fund and William M Mercer, the Fund’sadministrator, are already committed torespecting members’ privacy andsecurity, but will nevertheless be auditingall processes and documentation toensure compliance with the Privacy Act.

Splitting superon divorceLegislation is pending that will permitsuperannuation benefits to be split byagreement between the parties, or bythe court, upon divorce. The legislation is expected to come into effect towardsthe end of 2002. When the regulationsare available we will provide you withmore information.

New disclosurerequirementsUnder the new Financial Services ReformBill (FSRB), which is scheduled to comeinto effect on 11 March 2002,superannuation funds will be governed bytighter disclosure requirements. At thisstage we await more detailed informationabout the extent to which the disclosurerequirements will apply to corporatefunds such as ours.

www.riotinto.superfacts.com8 Super update9


As the “Baby Boomer” generation beginsto turn 55, the very notion of whatretirement means – and when it starts –is changing. As people retire younger(the average retirement age is now 58)and in better health, they are expectingto enjoy increasingly active, andpotentially more expensive, retirements.

Clearly, many people are going to haveto adjust their expectations or increasetheir retirement incomes in order to havethe retirement lifestyles they want.Many financial advisers say that you’llneed a net retirement income that isaround 60% of your net working incometo maintain your lifestyle in retirement.

This is generally considered realisticgiven that your expenses decrease inretirement because you are likely to:

have ceased making mortgagerepayments

have ceased saving for retirement

have no financial dependants otherthan a spouse

have realised property investments,perhaps by moving to a smallerhouse, and

pay less tax.

That said, there are many factors thatcan make your retirement lifestyle moreexpensive than expected, including:

retiring early

enjoying longer life expectancy

additional health care costs

travel expenses, and

the need to replace large consumergoods such as a car.

Strategies forboosting yoursuper nowWhilst your retirement-planning strategyis something that you should work outwith a qualified independent financialadviser, the Fund offers a number ofways to boost your superannuation benefit.

Consider makingAdditional VoluntaryContributions nowIt’s never too late to start makingAdditional Voluntary Contributions(AVCs). Because of the effects ofcompound interest, a small monthlysacrifice could make a big difference toyour final benefit.

The table below illustrates how muchextra super you could save over 20 yearsby making AVCs.

Consider your Investment Choice optionsInvestment Choice enables you to choosethe most appropriate investment strategyfor someone in your situation.This means that you can tailor yourinvestment strategy in line with yourpersonal investment timeframe and risk tolerance.

Even though the overseas share marketshave been down this year, you shouldn’tnecessarily abandon a high-growthstrategy provided you are comfortablewith volatile returns and have a longtime until you’ll need your super.

Something to keep in mind when you’reconsidering your investment timeframe isthat it doesn’t necessarily end at yourretirement date. If you continue to investyour super for growth after you retire –for example, if you invest in the Fund’sDeferred Account or Allocated Pension –your investment timeframe continuesinto retirement.



the retirement you want?Can you affordHow do you picture your retirement? If you’re anything like the majority of Australians, your dream retirement is likely to be long and active – and therefore expensive. As a Rio Tinto employee you’re likely to be accruing generous superannuation for retirement, but will it be enough?

Table courtesy of KPMG Financial Services Pty Ltd

Annual withdrawal (years)Capital atretirement

How much could you save in 20 years?

Please note:Taxes, fees and inflation have not been included. The returns shown are gross returns.These returns are provided as examples only. They do not guarantee future investment returns.

Annual investment return

Additional benefit after 20 years

AVCs per month

4% 6% 8%

A good way to estimate how much youwill need for retirement – and to putplans in place to save this amount – is toseek the assistance of a financial adviser.A financial adviser can take into accountall your personal circumstances whenexamining the issues raised in this article.

The table below shows how long variouslump sums would last given differentlevels of annual spending.

The table assumes an investment returnof 5% per annum above inflation. Theannual withdrawals shown in the tableare gross amounts and are not indexed.Depending on your circumstances, andthe amounts withdrawn, your withdrawalsmight be subject to tax.

How much do you need to retire on?Consider opening aSpouse AccountA Rio Tinto Fund Spouse Account mayenable you and your spouse to manageyour super more tax-effectively.By spreading super across two superaccounts – yours and your spouse’s –you increase the amount of super that can be received as a couple atconcessional tax rates. This isparticularly attractive if your own superis approaching, or exceeds, yourReasonable Benefit Limits.

There is also a tax rebate of up to $540in any one year from the AustralianTaxation Office. To get the full rebate youmust contribute $3,000 to your spouse’saccount and your spouse must earn nomore than $10,800 in that year.

Look for low-cost,tax-effective investments for retirement There are a lot of retirement investmentvehicles on the market, and many ofthem are quite expensive. By all meanstalk to your financial adviser aboutpossible investments, but don’t forget toconsider the retirement investmentsoffered by the Rio Tinto Fund.

The Fund’s Deferred Account andAllocated Pension Account, for example,are offered as a service to members and not to make a profit, so they areextremely competitive.

Can you afford the retirement you want?11

How long will your super last ?

$30,000 $40,000 $50,000 $60,000 $70,000$300,000 14.2 9.6 7.3 5.9 4.9$350,000 17.9 11.8 8.8 7.1 5.9$400,000 22.5 14.2 10.5 8.3 6.9$450,000 28.4 16.9 12.3 9.6 7.9$500,000 36.7 20.1 14.2 11.0 9.1$550,000 50.9 23.8 16.4 12.6 10.2$600,000 forever 28.4 18.8 14.2 11.5$650,000 forever 34.3 21.5 16.0 12.8$700,000 forever 42.6 24.7 17.9 14.2$750,000 forever 56.8 28.4 20.1 15.7$800,000 forever forever 33.0 22.5 17.4

$50 $18,339 $23,102 $29,451

$100 $36,677 $46,204 $58,902

$250 $91,694 $115,510 $147,255

$500 $183,387 $231,020 $294,510

Surcharge tax

Who’s liable?The tax applies to those considered bythe Government to be “high-incomeearners”. To determine whether you fallinto this category, the Australian TaxationOffice (ATO) looks at your “adjustedtaxable income”, which is made up of:

your taxable income as shown onyour tax assessment notice

your employer superannuationcontributions, which include employeecontributions made via salarysacrifice, and

the “grossed-up” value of most fringebenefits you receive from your employer.

Fringe benefitsYour employer will be able to tell youexactly which of the fringe benefits you receive are included in your PAYG payment summary (previouslyknown as your “group certificate”) andtherefore form part of your adjustedtaxable income.

Surcharge tax ratesOnce your adjusted taxable income reaches the lower surcharge threshold as shown in the table below,you become liable to pay the surchargetax on your employer superannuationcontributions. These include employeecontributions made via salary sacrifice.

The surcharge tax rate ranges from 0 to 15%, depending on the degree towhich your adjusted taxable incomeexceeds the lower surcharge threshold.The surcharge tax rate increases byapproximately 1% for every “surchargeincrement” by which your adjustedtaxable income exceeds the lowerthreshold. If your adjusted taxable incomereaches or exceeds the upper surchargethreshold, you will be assessed at the fullrate of 15% on all your employersuperannuation contributions.

Please note that if you have not suppliedyour Tax File Number to the Fund, youmay be assessed for surcharge taxregardless of your income level.

Who actually pays it?The Fund receives members’ surchargetax assessments and pays any tax owingstraight to the ATO. Once the Fund haspaid your surcharge assessment tax,the amount paid is recorded in your“Surcharge Account”.

If you receive a notice of surcharge taxliability, you are not required, nor able,to pay the tax yourself while you are amember of the Fund.

Your Surcharge AccountIf you have a Surcharge Account, itsbalance (including interest) is shown onyour 2001 Benefit Statement. When youreceive your final benefit from the Fund,the balance of your Surcharge Account(including interest) is deducted from it.


affecting more of us

Since the Federal Government introduced the superannuation surcharge tax in1996, the number of Fund members liable for this tax has increased by almostfive times. In this article we take a look at how this confusing tax works.

Surcharge tax and eligibletermination payments Currently, some lower-income earnersare forced over the surcharge thresholdwhen they receive eligible terminationpayments (ETPs) such as redundancypay-outs from their employers. In orderto mitigate this, the Government hasamended the surcharge tax legislation.

Now, when a taxpayer receives anemployer ETP of less than the upper

surcharge threshold ($98,955 for2000/2001), only a fraction of the ETP (based on years of service) will beincluded when comparing their incomewith the surcharge thresholds.This change has been backdated to 20 August 1996, when the surchargetax was introduced.

A second amendment makes permanentthe transitional arrangement wherebyonly the post-20 August 1996components of ETPs were subject to

surcharge tax. This change has alsobeen backdated so that it applies toETPs rolled into superannuation fundsbetween 20 August 1996 and 1 July 1997.

The third change removes from 22 May 2001 the surcharge tax on thecomponent of employer ETPs in excess ofreasonable benefit limits, removing thepossibility of paying an additional 15%tax above the 47% tax and MedicareLevy already charged on those payments.

Year Lower surchargeinvestment

Upper surchargethreshold

Surchargeincrements

David has just received his firstsurcharge assessment. He is somewhatsurprised by this as his salary is$68,000, which is well below the2000/2001 lower threshold of $81,493.

When David looks at all the elements ofhis remuneration package, and considershis fringe benefits, he realises that his“adjusted taxable income” isconsiderably higher than his salary.

David’s adjusted taxable income

Salary (excluding salary-sacrificed contributions) $65,000

Salary-sacrificed employeesuperannuation contributions $3,000

Employer superannuationcontributions $9,000

Fringe benefits $8,500

Total $85,500

David’s surcharge tax assessment for2000/2001 is $412.74. This is becausehis adjusted taxable income is $4,007above the lower threshold of $81,493.If you divide $4,007 by the relevantsurcharge increment of $1,165, you get3.44%. This surcharge tax rate isapplied to his employer superannuationcontributions and his salary-sacrificedemployee contributions totalling $12,000to get a tax assessment of $412.74.

As an income earner, your continuinggood health is probably your mostvaluable asset. For members employedby the Company, the Fund’s death anddisability insurance enables you to insurethat asset for your protection and that ofyour dependants.

While you are a Company employee,your death and disablement protects you24 hours a day, 7 days a week. Itprovides generous benefits for you and

your dependants should somethinghappen to prevent you from working.

For members with accumulation-styleaccounts, the Fund offers several levelsof death and disablement insurancecover. Your 2001 Benefit Statementshows your current level of cover. Youcan change your level of cover effectivefrom 1 November each year. If youincrease your level of cover, you mightbe required to provide health evidence.

The level of cover you need will dependon a range of factors including your age,whether you have dependants and theamount of super you already have saved.

The case studies below show how threehypothetical members made theirdecisions. They are illustrative only andwe recommend you seek financial advicewhen making your decision.

David’s first assessment

Surcharge tax affecting more of us • How much insurance cover do you need?13

How much insurance cover do you need?

Fund members assessed for surcharge tax Indexed surcharge tax thresholds and increments


1996/1997 $70,000 $85,000 $1,0001997/1998 $73,220 $88,910 $1,0461998/1999 $75,856 $92,111 $1,0841999/2000 $78,208 $94,966 $1,1182000/2001 $81,493 $98,955 $1,1652001/2002 $85,242 $103,507 $1,219

1997 1998 1999 2000

593

1,599

2,290

2,765Con

Con is 49 years old.He is a divorced fatherof two adult children.Con has opted for

Basic cover because he has no financialdependants and has accrued a largesuperannuation entitlement. Con believesthat if he becomes totally and permanentlydisabled, the combination of his Basiccover and accrued superannuation will besufficient to support him.

Sharon

Sharon is 25 years old,single and has nofinancial dependants.She has decided to go

for Medium cover because she has verylittle super and is concerned that if shebecomes totally and permanently disabledshe will need to be adequately covered.

Jason

Jason is a married 32year-old father of twoprimary-school agechildren. He has

accrued a moderate amount ofsuperannuation but wants to ensure hisyoung family is well provided for shouldanything happen to him. Accordingly,Jason has opted for High cover.

Case studies

This graph shows the investment return on the Fund’s assets since 1995. For 2001,the rate shown was not the rate actually credited to members’ accumulation-styleaccounts because members now receive the Annual Declared Earning Rates for theirchosen investment options (see page 19). The 2001 return shown here represents thereturn on the whole of the Fund’s assets.

Our investmentobjectivesOur overriding investment objective is to ensure that the Fund’s returns enablemembers’ benefits to grow in real termsover the long term. The Trustee doeshowever acknowledge that there is at all times a possibility that any of theFund’s investment options couldgenerate a negative return.

The Trustee has set five-year objectivesfor each of the investment options.These objectives specify the extent towhich each option’s rolling five-yearreturn (after fees and taxes) shouldexceed inflation, as measured by theConsumer Price Index (CPI).

In addition to these objectives for rollingfive-year returns, the Trustee has setobjectives for each option’s return overthree-year periods. These three-yearobjectives specify the degree to which theoptions should out-perform a selection ofother funds in the market. The Trusteealso expects the options’ returns to behigher than the returns that would havebeen achieved had the Fund investedpassively through indexed portfolios.

Our investmentstrategy In order to meet the Fund’s objectives,the Trustee implements an investmentstrategy. With the introduction ofInvestment Choice on 1 November 2000,the Trustee established an investmentstrategy for each investment option. Eachoption’s strategy is expressed in the formof a benchmark portfolio with clearlydefined allocations to each asset class.

Although the introduction of InvestmentChoice established four distinct options,the Trustee has decided to continue toinvest the Fund’s assets in one combinedpool. This decision recognises both thesubstantial economies of scale that canbe achieved with a single pool of assetsand the advantages of maintaining asimple investment structure.

Changes to our strategyfrom November 2001As part of a review of investments,the Trustee has recently decided tomodify the Fund’s strategic approach to investments with effect from 1 November 2001. Firstly, all of theFund’s assets will be invested in sector-specialist portfolios rather than a mix ofsector-specialist and balanced portfolios(see page 16).

Secondly, there will be some minorchanges to the asset allocations for each of the investment options in orderto maximise returns while minimising the risk of volatility. More information about these changes can be found onpage 20.

Keeping costs down The Fund keeps track of its cost-effectiveness by measuring its“management expense ratio” (MER). Forthe year to 30 June 2001, our MER wasapproximately 0.7% of the Fund’s assets,including additional fees payable tomanagers that out-performed. Thismeans that the Fund spent 0.7% of itsassets on costs related to the running ofthe Fund.

In general, the lower a fund’s MER, thehigher the proportion of returns that arecredited to members’ accounts. OurMER is much lower than the MERs ofmost commercial superannuation funds,which benefits members. The changes tothe investment structure from 1 November 2001 are likely to result inan even lower MER as the Trustee hasrenegotiated its investment arrangementswith some of its investment managers.


for the long term

The Trustee is pleased the Fund has out-performed its benchmarks for the year,but remains focused on its performance over the longer term. This is because,for most members, superannuation is an investment that spans their workinglives and can continue well into retirement.


Annual Declared Earning Rates

Out-pacing inflation

*Please note that the CPI for 2001 was impacted by the introduction of the Federal Government’s Goods and Services Tax (GST).

As you can see, the Fund’s investment returns have been significantly higher than theinflation rate over the medium to long term.

Declared Earning Rates for the past seven years (to 30 June)

Fund Returns and Consumer Price Index (to 30 June)

Investing

Investing for the long term15

How the marketsperformedOver the past year, investment marketshave been characterised by volatility as aresult of shifting investor sentiment, aslowing global economy and a significantcorrection in the value of technology stocks.

International equities fell 6% over theyear, which was a major turn aroundfrom the 23.8% increase in theprevious year. However, Australianinvestors were protected from largerfalls due to the 15% depreciation ofthe Australian dollar against the US dollar.

Australian equities rose 9.1% due tothe relatively low exposure to “new”technology stocks and the strength inthe resource sector. In stark contrastto the fall in the value of internationalequity markets, Australian equitieswere the best-performing majorequity market.

The Australian property sectorperformed strongly as investorssought the sector’s relative stability,returning 13.6% for the year.

In terms of fixed interest investments,both domestic and international bondmarkets gained momentum andperformed strongly followingsignificant cuts in official interestrates. The US Federal Reserve cut itsofficial rates six times, to 3.75%,while the Australian Reserve Bank cutits official rate three times, to 5.00%.The Australian and international fixedinterest markets returned 7.4% and9.0%, respectively.

How the FundperformedThe Fund earned a return of 6.9% on itstotal assets, after taxes and investmentmanagement expenses. This comparesvery favourably to the majority ofsuperannuation funds in the marketplace. Our 2001 return would haveplaced us in the top 15% ofsuperannuation funds as reported in theMercer Pooled Fund Survey.

Over a five-year period, the Fund hasreturned 10.9% per annum after tax andinvestment management expenses,compared to an annual inflation rate, asmeasured by the Consumer Price Index(CPI), of 2.2%. The real return of 8.7%per annum is well above the Fund’sinvestment objective of a real return of4.5% above CPI.

The returns for each of the fourinvestment options are shown on page 19.

Changes to theinvestmentstructureAs you may recall, the Fund’s currentinvestment structure, which was put inplace on 1 July 1999, provided for halfof the Fund’s assets to be managed bybalanced managers and half to bemanaged by sector-specialist managers.Balanced managers invest across allasset classes, while specialist managersinvest in only one asset class, such asAustralian equities, in which they areconsidered experts.

Over the course of the year, the Trusteeand its investment advisers continuedtheir extensive review of the Fund’sinvestment arrangements and theperformance of the Fund’s balanced andspecialist managers. This reviewrevealed that as aggregate groups, theFund’s sector-specialist managers haveout-performed the Fund’s balancedmanagers by approximately 0.5% perannum over the past two years.

As a result, the Trustee has decided toimplement a fully sector-specialistinvestment structure in the second halfof 2001. This will mean that the Fundwill no longer use balanced managers,and will now be able to select the bestmanagers in each asset class to managethe Fund’s assets.

For information about how the newinvestment structure will impact on thestrategic asset allocations for each of theFund’s investment options, please turn topage 20.

During the year, the InvestmentCommittee decided to replace MercantileMutual as an Australian equitiesmanager and appoint UBS AssetManagement in its place. In May 2001,the Investment Committee, with theassistance of a transition manager andits investment advisers, managed thetransfer of the assets of the NorthSuperannuation Fund ($52 million) intothe Fund.

www.riotinto.superfacts.com16 Our investments17


Our investments Who is managingour assets?Balanced managersBarclays Global Investors Australia $191m

Credit Suisse Asset Management (Australia) $189m

Rothschild Australia Asset Management $194m

Specialist managers

Australian equities

Merrill Lynch Investment Managers $117m

UBS Asset Management(Australia) $113m

International equities

Zurich Scudder Investments $73m

State Street Global Advisors, Australia $67m

Property

HSBC Asset Management (Australia) $56m

Fixed interest

County Investment Management $55m

PIMCO Australia $53m

Tactical asset allocation

State Street Global Advisors, Australia $6m

Tactical Global Management $10m

Total at 30 June 2001 $1,124m

What the Fund invested in

4240

38

2623 23

107 7 7

47

5

13

18

11 10 9

Rio Tinto Fund asset allocation 2001

Rio Tinto Fund asset allocation 2000

Average asset allocation(Mercer Pooled Fund Survey, 2001)

Internationalfixed

interest

Australian equities

Internationalequities

Property Australianfixed

interest

Cash

0%

10%

20%

30%

40%

01 00 01 01 00 01 01 00 01 01 00 01 01 00 01 01 00 01

How our investments performed

Fund asset allocation and average asset allocation (to 30 June)

Returns by asset class (to 30 June)

18

Calculating theEarning Rates Your investment option’s AnnualDeclared Earning Rate is the ratecredited to your account at the end ofeach financial year. Since July 1995, theTrustee’s policy has been to creditaccumulation-style accounts with theactual net monthly earning ratesachieved by the Fund on its investments.The Annual Declared Earning Rate iscalculated by compounding these twelvemonthly rates.

This approach has been maintained withthe introduction of Investment Choice.Each investment option’s monthlyDeclared Earning Rate represents theactual return for that option’s assetprofile, net of investment expenses andtax on investment earnings.

If you leave the Fund during the courseof the financial year, before the AnnualDeclared Rates are determined, youraccount will be credited with the monthlyDeclared Earning Rates known at thedate you leave the Fund, and the Fund’snet bank account rate thereafter.

As shown in the graphs opposite, eachof the investment options exceeded itsparticular benchmark for the year. Thiswas despite all four investment optionsearning negative returns in some months.

The Fund uses benchmarks to assess itsperformance, and that of its investmentmanagers. We use benchmarks becausethey give us something to measure ourperformance against – they enable us tocheck how we’re tracking compared tothe market.

The benchmarks are the returnsachieved by the relevant market indicesweighted so that they reflect eachinvestment option’s asset profile. Theseindices are as follows.

Australian equities

Standard and Poors/Australian StockExchange 300 Accumulation Index

International equities

Morgan Stanley Capital InternationalWorld Index (excluding Australia)

Property

Standard and Poors/Australian Stock Exchange 300 PropertyAccumulation Index (listed property)

William M Mercer Australian UnlistedProperty Index (direct property)

Australian fixed interest

UBS Warburg Composite Bond All Maturities Index

International fixed interest

Salomon Bros World Government BondIndex (hedged and excluding Australia)

Cash

UBS Warburg Bank Bill Index

www.riotinto.superfacts.com How the options performed19


options performedHow the

As you can see from the graphs opposite, this year’s markets have beenunsettled – and the returns reflect this. It is extremely pleasing, however, thatall the Fund’s investment options have substantially exceeded their individualbenchmarks. This can be attributed to the Trustee’s considered investmentstrategy and the careful selection and monitoring of investment managers.

2.0%

-2.0%

0%

4.0%

8.0%

-4.0%

6.0%

Jul 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Mar 01 Apr 01 May 01 Jun 01

1.3 0.7 0.7 0.5 0.5 1.5 -0.1 -0.7 1.4 0.6 0.6-0.1 7.0 5.3

AnnualDeclaredEarning

Rate BenchmarkAnnualReturn

Monthly Declared Earning Rates

2.0%

-2.0%

0%

4.0%

8.0%

-4.0%

6.0%

Jul 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Apr 01 May 01 Jun 01Mar 01

1.3 0.7 0.7 -0.7 -1.52.9

-0.9 -2.3 4.2 1.2 1.3 6.8 4.4-0.1


RateBenchmark

AnnualReturn


2.0%

-2.0%

0%

4.0%

8.0%

-4.0%

6.0%

Jul 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Mar 01 Apr 01 May 01 Jun 01

1.3 0.7 0.7 1.1 1.0 1.5 0.4 -0.1 0.3 0.3 0.5-0.1 7.8 6.3

Annual DeclaredEarning



Growth option: 7.1%

Balanced option: 7.0%

Equity option: 6.8%

Capital Stable option: 7.8%

What are the benchmarks?2.0%

-2.0%

0%

4.0%

8.0%

-4.0%

6.0%

Jul 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Apr 01 May 01 Jun 01

1.3 0.7 0.7 0.0 -0.2 1.9 -0.5 -1.5 2.7 0.9 1.0-0.1

Mar 01

7.1 5.1




Monthly Declared Earning Rates, Annual Declared Earning Rate and benchmark annual return




Please note that the returns shown for July to October for all four investment options are the same as the returns for the Growth option.This is because the investment options did not come into existence until Investment Choice became effective on 1 November 2000.Prior to that, the Fund’s total assets were invested in accordance with a strategy that was adopted for the Growth option.

asset allocations


for the options

New

investmentTime to check your

In order to maximise returns while minimising the risk of volatility, the strategicasset allocations of the Fund’s four investment options will change from 1 November 2001.

If you want to reconsider your investment choice,now is the time to do so. To change your investmentoption from 1 November 2001, complete the formon page 23 and submit it by 30 October 2001.

direction?

Growth Assets 25%Australian Equities 14%

International Equities 8%

Property 3%

Australian Fixed Interest 7%

Defensive Assets 75%

Cash 54%

International Fixed Interest 14%

3%

7%

8%

14%

54%

14%



Property 8%


Cash 10%



23%

19%

8%25%

15%

10%



Property 3%




25%

22%

3%17%

33%




Property 10%


Cash 5%


8%5%

40%

25%

10%

12%



Property 7%




17%

35%

33%

7%

8%



Property 1%



Cash 39%


1%

11%

10%

14%

39%

25%

Capital Stable option

Members with accumulation-styleaccounts have the opportunity to switchinvestment options annually at no cost.Changing option can be a good idea ifthere has been a significant change toyour individual circumstances.However, generally it’s better to carefullyselect the option that’s right for you andstick with it. Research shows thatmaintaining a carefully chosen strategyover the long term is more effective thantrying to predict the market and makingshort-term adjustments.

You might recall from your InvestmentChoice Guide that there are a number offactors that you should consider whenchoosing an investment option.

The assetsThe investment options comprisedifferent proportions of growth and defensive assets. The asset allocations for the investment options are shown opposite.

Risk and returnRisk and return go hand in hand.Growth and defensive assets havedifferent risk/return profiles. Over the long term, the returns from growth assets are expected to be higher thanthose from defensive assets, despitebeing more volatile.

Your risk toleranceYour personal tolerance of investmentrisk should impact on your investmentchoice. The more tolerant you are of

volatile returns, the more comfortableyou will be with an investment optionwith a higher percentage of growth assets.

Your investment timeframeWhen choosing an investment option youneed to consider whether your super is ashort, medium or long-term investment.The longer your investment period,the more time you have to ride out the volatility associated with highrisk/return investments.

When assessing your investmenttimeframe, keep in mind that it couldextend beyond your retirement date ifyou continue to invest your super afteryou have retired.

Your Change of InvestmentChoice Form is on page 23.Tear it out and fold it into areply-paid envelope.

New asset allocations for the options • Time to check your investment direction?21

During the year the Investment Committeecommissioned its investment advisers toreview the strategic asset allocations ofeach of the Fund’s investment options.

When conducting this review theyconsidered issues such as:

the fact that overseas investmentprovides access to a much broaderrange of sectors and companies than isavailable in the domestic market

additional investment overseas increasesthe exposure to currency risk which canbe managed through hedging

the Australian share market’s heavyconcentration around a few largestocks, and

the illiquid nature of direct propertyinvestments.

As a result of the review, the Trustee hasdecided to change the strategic assetallocations of all four investment options.

Equity option

Balancedoption



63% 37%



50% 50%

Growthoption



is looking after the Fund?Who

Professional advisers

Rio Tinto Services Limited Advisory, administrationand investment services

William M Mercer Pty Ltd Administration, accounting,actuarial, superannuation and investment consulting

Towers Perrin Communication consulting

PriceWaterhouseCoopers Taxation and audit services

Allens Arthur Robinson Legal advice

Investment Committeeas at 30 June 2001Sam Kavourakis (Chairman)Barry CusackBrian HorwoodDavid Painter

Claims Committeeas at 30 June 2001Sir Gustav Nossal (Chairman)Adrian GarnerPaddy LynchGraham Tucker

Communications Committee as at 30 June 2001David Painter (Chairman)Alice Harris Jeff Kortum (GM, Human Resources)Paddy Lynch Judy Stead Graham Tucker

The Fund has a Trustee Company (Rio Tinto Staff Fund Pty Limited) which manages the Fund according to the Trust Deed, theFund Rules and relevant superannuation legislation. The Fund has trustee indemnity insurance to protect the Trustee, itsDirectors and the Fund against the financial effects of any honest mistake that might occur in running the Fund.

At any one time the Board has 10 directors: five elected by members and five appointed by the Company.

Member-elected Directors as at 30 June 2001

Alice Harris, Rio Tinto Services, Melbourne

Paddy Lynch, Hamersley Iron, Tom Price

David Painter, Comalco, Bell Bay

Judy Stead, Comalco, Brisbane

Graham Tucker, Boyne Smelters, Gladstone

Company-appointed Directors as at 30 June 2001

Barry Cusack, Rio Tinto, Melbourne (Chairman)

Adrian Garner, Rio Tinto, London

Brian Horwood, Pacific Coal, Brisbane

Sam Kavourakis, External Director, Melbourne

Sir Gustav Nossal, External Director, Melbourne

The Trustee Board

The directors engaged the following professional advisers during the year:


FOLD

Rio Tinto Staff Superannuation Fund

Change of Investment Choice Form

Personal Details

Surname: ...................................................... Given names: ....................................................................

Postal address: ................................................................................................................................................

...................................................................................................................... Postcode: ........................

Contact telephone number: (work) ............................................... (home) ...............................................

Business unit: ......................................................... Location: ................................................................

Date of birth: ........../........../.......... Member number: ....................................................

Selected Investment Option

From 1 November 2001, I would like to invest the total balance of my accumulation-style account, includingfuture contributions and earnings, in the one option marked below:

❍ Equity option (100% growth assets)

❍ Growth option (75% growth assets, 25% defensive assets)

❍ Balanced option (50% growth assets, 50% defensive assets)

❍ Capital Stable option (25% growth assets, 75% defensive assets)

Declaration

I declare that I have read and understood the Fund’s Investment Choice Guide and the information about therevised asset allocations on pages 20–21 of this edition of Discovery.

I understand that I should consult a qualified independent financial adviser if I require assistance choosing an option.

I also understand that if I am a defined benefit member with an accumulation-style account or an ex-definedbenefit member with a Deferred Account, and I am currently entitled to receive a guaranteed minimum annualreturn of 4%, this guaranteed return will be forfeited forever if I choose an option other than the Growth option.

Signature: .................................................................... Date: ........../........../.........

Please note that this form must be received by the Fund’s administrator by 30 October 2001 for your newchoice to be effective. You do not have to submit this form if you do not wish to change your option.

To submit this form, please tear off this page and fold the form into an envelope. You do not need to affixa stamp.

FOLD

FOLD

FOLD

Please note: The Fund’s full auditedaccounts are available from your localSuperannuation Inquiries Officer.

Summaryof accounts

Summary of accounts25

Delivery Address:GPO Box 1925MELBOURNE VIC 8060

The Fund AdministratorRio Tinto Staff Superannuation FundWilliam M Mercer Pty LimitedReply Paid 1925MELBOURNE VIC 8060

No stamp requiredif posted in Australia

Statement of Net Assets 2001 $ 2000 $ InvestmentsAustralian Equities 453,662,632 414,765,955International Equities 282,992,733 241,787,717Property Trusts 130,028,974 103,406,885Australian Fixed Interest Securities 128,657,357 121,892,590International Fixed Interest Securities 72,227,559 68,505,705Cash and Short Term Deposits 56,928,538 100,363,468

Other AssetsCash at Bank 369,577 5,389,579Contributions Receivable 448,843 27,649Sundry Debtors 61,339 35,379Total Assets 1,125,377,552 1,056,174,927

LiabilitiesIncome Tax Payable 3,551,235 2,605,898Provision for Deferred Income Tax 7,480,832 9,431,259Benefits Payable 11,259,195 7,254,180Sundry Creditors 2,792,120 2,276,488Total Liabilities 25,083,382 21,567,825Net Assets Available to Pay Benefits 1,100,294,170 1,034,607,102

Statement of Changes in Net Assets 2001 $ 2000 $ Investment RevenueInterest & Dividends 32,837,847 73,936,442Changes in Net Market Values 40,061,011 67,545,654Direct Investment Expenses (4,720,031) (4,957,404)

Contribution RevenueEmployer Contributions 8,145,292 8,362,932Members’ Contributions 4,638,334 3,388,579Transfers from Other Funds 68,034,621 17,391,638Other Revenue 17,388 –Total Revenue 149,014,462 165,667,841General Administration Expenses (1,659,690) (1,434,926)Superannuation Contributions Surcharge Tax (3,720,951) (2,984,946)Benefits Paid (74,098,651) (66,452,415)Income Tax Expense (3,848,102) (11,727,563)Net Change for the Year After Income Tax 65,687,068 83,067,991Net Assets Available to Pay Benefits at the Beginning of the Year 1,034,607,102 951,539,111Net Assets Available to Pay Benefits at the End of the Year 1,100,294,170 1,034,607,102


FOLD

FOLD

FOLD

FOLD

Our membership profile is constantly changing. In this section we take a lookat who we were on 30 June 2001.

Our vital statistics

www.riotinto.superfacts.com26 Our vital statistics27

The changingface of the FundOver the past year we have seen anumber of changes to the membership ofthe Fund. Firstly, member numbers haveincreased significantly, from 7,771members at 1 July 2000 to 8,815

members at 1 July 2001, mainly due tothe transfer of the North Fund members.

Secondly, the demographic profile ofmembers has changed in that themembership is slowly becomingyounger. Thirdly, there has been anincrease in non-employed members asmore people choose to open DeferredAccounts, Allocated Pension Accountsand Spouse Accounts.

Allocated pensionersIn 2000 we were very pleased tointroduce the Rio Tinto Allocated PensionAccount. This facility enables retiredmembers to invest their super with theFund and draw a flexible pension.To date, 19 members have takenadvantage of this tax-effective and verycompetitive retirement investment.

Our Allocated Pension enables you to:

receive a regular monthly income

withdraw your investment at any time

adjust the size of your monthlypension (within legal limits)

make lump-sum withdrawals tosupplement your pension

leave your remaining money to yourdependants when you die, and

choose from one of four investmentoptions.

For more information about thesetypes of membership, pleasecontact the Rio Tinto MemberHelpline or your local SIO.

Deferred membersAs our 1081 deferred members know,you don’t have to leave the Fund justbecause you leave Rio Tinto. By openinga Rio Tinto Deferred Account, you can:

keep your super invested with theFund you know

defer paying withdrawal tax on yoursuper

save on the entry, exit and ongoingmanagement fees that other fundscharge

make unlimited withdrawals, and

choose from one of four investmentoptions.

Spouse membersSince we introduced the Rio TintoSpouse Account in 1999, 224 spousesof members have taken the opportunityto join our Fund. The Spouse Accountoffers:

a simple, low-cost savings plan foryour spouse

a tax-effective way of saving

a potential tax rebate for you of up to$540, and

the opportunity for your spouse tochoose from one of four investmentoptions.

Accumulation 77.3%

Defined Benefit 7.7%

Spouse 2.6%

Deferred 12.4%

77.3%

2.6%12.4%

7.7%

Membership types

Female 17.7%Male 82.3%

Gender

82.3%

17.7%

Under 25 11.4%

26-35 33.9%

36-45 33.3%

46-55 18.1%

Over 55 3.3%

Age

33.3%

18.1%

3.3%11.4%

33.9%

Our demographic profileSince last year, the Fund has a greater proportion of accumulation members, women,and members in the 26–35 years age group.

Where are our members?

Total members at 1 July 2000 7,771

New members since 1 July 2000 2,315

Members who left 1,271

8,815

Leaving Service $42,833,627

Retirement $24,718,919

Death & Disablement $5,802,204

Pensions $743,901

$74,098,651

Where the money wentThe table below shows how much theFund paid out in benefits during the year.

Who came and went during the year?The table below shows that the Fund’smembership increased by over 1,000members during the year.Total benefit payments for year (to 30 June)

Total members at 1 July 2001

Argyle Diamond Mines 630

Australian Mines and Metals 27

Blair Athol Coal 98

Boyne Smelters 1,264

Coal and Allied 228

Comalco 240

Comalco Aluminium 608

Comalco Mining and Refining 491

Dampier Salt 293

ERA Ranger 214

EWL Sciences 18

Hamersley Iron 2,085

Kaltim Prima Coal 8

Kelian Equatorial Mining 24

Kestrel Coal 185

Lihir Gold 50

North 14

North Parkes 174

Pacific Coal 70

Peak Gold Mines 145

Rio Tinto Exploration 116

Rio Tinto Services 139

Tarong Coal 81

Technological Resources 213

Allocated pensioners 19

Deferred members 1,081

Pensioners 76

Spouse members 224

Total 8,815

Employed members per business


More informationInformationabout the FundIf you would like more information aboutany aspect of the Fund, including:

the Trust Deed

the latest audited Fund accounts andaudit report

the Investment Policy Statement

the Fund’s latest actuarial review

the Rules governing the appointmentand removal of the Fund’s Directors

the Fund’s inquiries and complaintsprocedure

please contact the Fund’s administrator,William M Mercer, or your localSuperannuation Inquiries Officer (SIO).

Inquiries aboutyour benefitsYour first point of contact should be theRio Tinto Member Helpline or your localSIO (as listed on the back cover).

Rio Tinto Member Helpline

Inside Australia

1800 687 134

Outside Australia

+61 3 9245 5723(8.30am to 5.30pm EST)

+61 3 9654 5535

[email protected]


The Fund AdministratorRio Tinto Staff Superannuation Fund William M Mercer Pty LimitedGPO Box 1925Melbourne VIC 8060

ComplaintsIf you have a complaint about the waythe Fund administers your benefits, youcan complete a Complaint Form (availablefrom your local SIO) and send it, with anysupporting documentation, to the Fund’sComplaints Administrator (contact detailsbelow). The Complaints Administrator or,where necessary, the Trustee, willinvestigate your complaint and adviseyou of the decision within 90 days.

Complaints Administrator(03) 9283 3071

(03) 9283 3990

Complaints Administrator Rio Tinto Staff Superannuation FundC/- Rio Tinto Services LimitedGPO Box 384DMelbourne VIC 3001

If you’re not satisfied with the responsefrom the Complaints Administrator orTrustee, you can contact theSuperannuation Complaints Tribunal(SCT) (contact details below) to find outwhether they can assist you to resolveyour complaint. Please note, however,that certain complaints must be lodgedwith the SCT within a time limit.

The SCT is an independent tribunalestablished by the Federal Governmentto resolve complaints. It can becontacted at:

13 14 34

[email protected]

Superannuation Complaints TribunalLocked Bag 3060GPO Melbourne VIC 3001

www.sct.gov.au




*rio tinto discovery 2001 - superfacts.com final word this annual report edition of discovery has...

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