Glossary

Account Balance

This is the sum of the balances in your Award, Bonus and Voluntary Accounts. For details about all these accounts and how they work please see the definitions below.

Accrued Multiple

Your Accrued Multiple is your Benefit Multiple adjusted proportionally for the period of standard contributory membership (calculated as the number of years and complete months of service as a member) that you have completed your actual retirement date, compared to the membership you would have completed at age 60.

Adjustment Factor

This is a multiple applied to your service period for the purpose of determining your defined benefits. It is the weighted average of the number of months in the service period (multiplied, where applicable in the case of a part-time employee, by the percentage of full-time hours worked during such a month) during which you were classified by your employer as a standard contributory member and as a standard employee, an elective services employee or an emergency services employee. See also Salary Adjustment Factor information.

Age pension

A fortnightly income paid by Centrelink to retired people who are over age 65 (for men). Depending on their date of birth, women qualify for the Age Pension at different ages. More details can be obtained on the Centrelink website.

Asset

Something you own like a house, shares or cash.

The weighting of assets in an investment portfolio among different asset classes (shares, bonds, property, cash and overseas investments). Also known as Investment Mix.

Assets with similar risk and return characteristics are sorted into an asset class. The main asset classes are: cash, bonds, property and equities.

Assets test

Means testing applied by Centrelink to assess whether an applicant can receive social security entitlements based on their assets.

Award Account

This contains the 3% award contributions paid to the Scheme by your employer less contributions tax, plus investment earnings. If you have taken out voluntary insurance cover the cost is deducted from this account.

Balance sheet

A statement at a point in time of all the assets and liabilities of a company or an individual (like you).

An index which is used as a yard stick to assess the performance and risk of a portfolio. For example the ASX 300 index is a commonly used benchmark for Australian share portfolios.

Beneficiary

A person who will benefit from a deceased person's Estate or from a death entitlement paid by a super scheme.

Benefit multiple

This is calculated at the rate of 15.5% for each year of service as a standard contributory member at age 60 plus a further 2% for each year of service as a standard contributory member from you 55th birthday to age 60. For members who joined the Scheme before 1 January 1982 different rules apply.

A debt security issued by such entities as corporations and governments. A bond holder is a creditor of the issuer, not a shareholder.

Bonus Account

If applicable to you (as shown on your Annual Member Statement), this account is credited a share of the Scheme’s reserves as determined by your employer, the Trustee and the Scheme’s actuary, plus investment earnings.

Budget

A plan setting out how much money you are earning versus how much money you need for living expenses.

Capital gain

The profit made by buying an asset and then selling it for a higher price after taking out costs.

Centrelink

A Commonwealth Government agency that is responsible for assessing and paying social security entitlements.

Co-contribution

Contributions made into super by the Commonwealth Government as an incentive for members to make personal after-tax contributions.

Compassionate grounds

Special circumstances where super can be released before retirement. Each case will be individually assessed but permission may be granted where you have pressing personal or family medical expenses or are at risk of having your home repossessed.

Complying pension

A type of private pension that will provide you with social security and tax benefits by meeting minimum government standards.

Compounding

Reinvesting the returns from your investments so your assets grow faster. Sometimes called earning "interest on your interest".

Contributions

Payments made into super by an employer, by you, by your spouse or by the Commonwealth Government.

Credit

The willingness of a lender to advance money as a loan.

Deductible contribution

A contribution into super for which the person making the contribution has claimed a tax deduction.

A superannuation scheme in which the benefits to be paid to the member are defined in advance of the member’s retirement. The benefit is usually expressed as a proportion of the member’s salary on retirement. In these schemes it is generally the company or sponsor of the fund which carries the investment risk. Opposite of Defined Contribution Scheme or Accumulation Scheme.

Dependant

A person who relies on you for financial support. In terms of super, your spouse and non-adult children are counted as dependants.

A financial contract or synthetic instrument that derives its value from an underlying physical security or index. Derivatives come in many varieties including futures, futures and options.

Diversification

Spreading your investments amongst different assets to minimise the impact of poor performance by one asset. Not "putting all your eggs in one basket".

Dividend

A share of the profits of a company paid out to their shareholders.

Financial markets in countries with developing economies, where industrialisation has commenced and the economy has linkages with the global economy. The financial markets in these countries are immature compared to those of the world’s major financial centres, but are becoming increasingly sophisticated and integrated into the international markets. These markets provide potentially high returns but are subject to high risk and volatility. Current examples include Brazil and Thailand.

Estate

The assets and liabilities that belonged to a person when they died.

Equity

Ownership of an asset. Commonly used to describe the money you would have if you sold a property and paid off an associated loan.

Executor

A person, persons or organisation you appoint to administer your Estate according to your Will.

Final Average Salary

This is the average of your salaries at each review date (ie 1 July) for the three-year period immediately prior to ceasing employment.

Financial hardship

Special circumstances where super can be released before retirement. It requires the person to have been receiving social security benefits for an extended period and be unable to meet pressing living expenses.

An investment management technique aimed at protecting an investor’s overseas investments by eliminating the effect of movements in overseas currencies against the Australian dollar.

HELP

Higher Education Loan Program. A loan advanced to students in tertiary study to pay for course fees.

Income test

Means test applied by Centrelink to assess whether an applicant can receive social security entitlements based on their income.

Inflation

A measure of the average increase in prices over time.

Interest

The income paid by cash and fixed interest investments like bank accounts, term deposits and Government bonds.

Liability

Something you owe like a debt or a loan.

Life expectancy tables

Tables showing the average number of years that a group of people of the same age can be expected to live in the future.

Lost super

When a super fund loses contact with one of its members it must report the details to the Australian Taxation Office as "lost". The Tax Office has a lost members information service called "Superseeker" to help you recover your lost super.

Managed Funds

An investment like a super fund, without some of the tax advantages or restrictions that super has. A number of small investors pool their money and have it invested by a specialist manager.

Means testing

Examining the financial resources of a person to see if they qualify for social security entitlements. Social security is support for people with lower levels of assets and income.

Member

A person who has money held for them in a super scheme.

Member Account

Your Member Account contains the compulsory contributions which you make to the Scheme, plus investment earnings. If you make contributions on a before-tax basis, contributions tax is payable and is deducted from your Member Account. The Member Account is not included in Account Balances referred to above.

Mortgage

A legal document giving a lender the right to repossess your assets (usually a property) if you fail to pay loan repayments as agreed.

Net wealth

The difference between what you own (your assets) and what you owe (your liabilities).

Ordinary time earnings

Your normal pay less overtime and some other allowances.

PAYG tax

The "pay as you go" income tax system where deductions are made from your income throughout the year as tax instalments.

Pension

A series of regular payments over a term or until the pensioner dies or they run out of money. Also called an income stream or an annuity.

Preservation

The rules that restrict access to super until retirement or some other defined (usually aged based) event occurs.

Private equity investing can be defined most broadly as investing in companies that are not listed on a stock market. A private equity fund is a professionally managed investment fund that invests in the securities of several private companies.

Rent

Periodic payment for the use of a property.

Return

The profit you make from an investment including income and capital gains.

Risk

The uncertainty of investment outcomes. Technically, the term risk is used to define uncertainty about the average outcome, including both upside and downside possibilities. Risk or volatility of returns is measured using the statistical model, standard deviation.
Small Companies Generally, small companies that are listed outside the top 100 companies on the Australian Stock Exchange.

Salary

For super purposes your salary means basic salary (calculated as an annual rate of base salary). It does not generally include bonuses, commission, overtime and expense allowances or other similar payments.

Salary Adjustment Factor

If you work in elective or emergency services, your Salary Adjustment Factor is 110% or 130% respectively, of your Salary. If either of the above do not apply to you, your Salary Adjustment Factor is 100%. If you are working part-time your Salary Adjustment Factor is multiplied by the percentage of full-time hours worked.

Salary sacrifice

Arranging with your employer to reduce your taxable salary and pay the amount directly into super instead. It can be a tax effective way to make super contributions.

Generally, small companies that are listed outside the top 100 companies on the Australian Stock Exchange.

Spouse/putative spouse (defined under Commonwealth legislation)

The Superannuation Industry (Supervision) (SIS) Regulations 1994 stipulate that a spouse includes another person who, although not legally married to the person, lives with the person on a genuine domestic basis as the husband or wife of the person. This does not provide for a same sex partner to be deemed a spouse.

The selection of an individual security within an asset class for inclusion into the portfolio of securities. For example, stock selection in relation to equity investments is made after analysing the financial standing, future earnings prospects and valuation of the shares concerned. Stock selection is a key way in which investment managers add value.

Superannuation

Called super on this website. Super is a tax effective way to accumulate money for retirement and to provide a lump sum to purchase an income in retirement.

Superannuation Guarantee

Employers must pay 9% of your ordinary time earnings into super each quarter.

Superannuation surcharge

The tax imposed by the Commonwealth Government on your surchargeable contributions (employer contributions) once your income reached certain levels. The surcharge rate was reduced to zero on 1 July 2005. Any surcharge liability accrued prior to 1 July 2005 is still payable.

Tax deduction

An expense you incurred in earning income. It can be deducted from the taxpayer's income to reduce the total income that is taxed.

Tax offset

A reduction in the amount of tax paid. Also known as a tax rebate.

Temporary disablement

Usually when a person has used up their sick leave and is unable to do their own job due to illness or injury but is expected to eventually resume work.

Total Account Balances

The sum of your Account Balances and your Member Account.

Total and permanent disablement

This entitlement is payable when the Super SA Board is satisfied that the member's incapacity for all kinds of work due to illness or injury is 60% or more of total incapacity and is likely to be permanent.

Trauma insurance

Insurance that may be paid if you are diagnosed with a specific illness. The Scheme does not offer trauma insurance.

Trust Fund

Money held and invested for the benefit of others. A super fund and a managed fund are usually set up as a trust. You can set up a trust fund in your Will for your children.

Trustees

The group of people or the directors of a company responsible for running a super Scheme.

Units

Super contributions are used to purchase units. The balance of your accounts is valued using a unit price. Your individual account balance is calculated by multiplying the number of units you have in your account by the prevailing unit price. A change in the unit price reflects changes in the value of the underlying investments.

Voluntary Account

This contains any additional voluntary contributions that you make plus any entitlements you roll over from another super fund, plus investment earnings.

Will

A legal document setting out how a person wants their assets distributed upon their death.