Account
A record of your investment in the Fund.
Account Balance
The invested total of your superannuation benefit.
Accumulation Plan
A superannuation plan where members receive the total of specifically defined contributions to the Fund, plus earnings on those contributions, minus expenses and tax. Is also called a Defined Contribution plan.
ACSuper
Abbreviation for Australian Christian Superannuation.
Active Management
A style of investment which seeks to obtain returns above a set benchmark by asset allocation and stock selection.
Administrator
The person or company responsible for the day-to-day operation of a superannuation entity. Administration includes keeping records up-to-date, paying benefits, providing annual benefit statements, liaising with members and processing claims.
Annual Report
All superannuation funds (except self-managed super funds) must provide an annual report to members, in which information prescribed by legislation is disclosed.
Asset Allocation
The distribution of investments by an investment manager among various asset classes or sectors (the major asset classes are shares, property, fixed interest and cash).
Asset Class
A category of financial assets. The major asset classes are shares, property, fixed interest and cash, which in turn can be broken down further to include domestic or international shares, domestic or international fixed interest, direct or indirect property investments. All asset classes have different risk and return characteristics.
Asset Switch
Requesting a switch of your investment option(s) in relation to your current account balance (ie. your existing assets).
ATO
Abbreviation for the Australian Taxation Office.
Australian Transaction Reports and Analysis Centre (AUSTRAC)
Agency responsible to administer the Anti Money Laundering / Counter-Terrorism Financing Act
Australian Prudential Regulation Authority (APRA)
Agency responsible for prudential regulation of banks, life insurance companies, general insurance companies and superannuation funds.
Australian Securities and Investments Commission (ASIC)
Agency responsible for consumer protection in financial products covering superannuation, life insurance, general insurance, deposit taking and credit.
Average Weekly Ordinary Times Earnings (AWOTE)
A measure of wage and salary levels of employees in Australia, as measured by the Australian Bureau of Statistics and published monthly.
Beneficiary
A member of a superannuation fund or their dependants.
Benchmark
A measurement of risk, return and performance in each investment portfolio against market performance set to ensure long term objectives of the Plan are achieved.
Benchmark Asset Allocation
The asset allocation applying to the benchmark portfolio. Typically, it is the asset allocation which the Trustee or portfolio manager has decided is most appropriate for the Fund to meet its investment objectives over its suggested investment timeframe.
Benefit
The total amount in the superannuation plan to which the member or beneficiary is entitled.
Buy / Sell Spread
The difference between the buying and selling price of a unitised Investment Option. The buy price is known as a unit allocation price and the sell price is known as a unit exit price. For some Investment Options the unit release price can be the same as the unit allocation price.
For other Investment Options the unit exit price may be lower than the unit allocation price.
Cash
One of the four main asset classes. Cash includes investments in short-term money market securities, such as bank bills and treasury notes. Cash is a low volatility asset class and is an important component of a superannuation investment portfolio to provide liquidity and for capital stability, as well as to generate income returns.
Consumer Price Index (CPI)
The CPI is the most common method of measuring the rate of inflation. It is based on a measure of the quarterly changes in the prices of a ‘basket’ of goods and services which account for a high proportion of representative expenditure of metropolitan households. The CPI is published by the Australian Bureau of Statistics.
Corporate Trustee
Where the trustee of a superannuation entity is a company. A corporate trustee may be one of the professional trustee companies, a separate company established to take on the responsibilities of the fund or the employer company sponsoring the plan. Where a fund has a corporate trustee, the individuals who are appointed, in effect, as trustees are termed trustee directors.
Contributions Tax
The 15% tax levied on certain contributions to superannuation funds (including all employer and salary sacrifice contributions).
Consolidation
Refers to the transfer or rolling over of your previous superannuation fund benefit into another superannuation fund or plan.
Contribution
Refers to money received either from your employer, or yourself.
Crediting Rate
The rate of return that is credited to the member’s account at 30 June. It represents earnings payable since the last credited rate was declared.
Death Benefit
The money payable by a superannuation fund to the beneficiaries (or Legal Personal Representative) of a member, in the event of his or her death.
Defensive Asset
Assets which have the potential to achieve capital growth over the short to medium term; primarily regarded as fixed interest and cash.
Deferred Members
This membership refers to members who are no longer working but have chosen to remain with the Fund.
Dependant
Under Superannuation legislation this includes the member’s spouse, child, person with whom the person has an interdependency relationship.
Diversification
Spreading investments over a number of individual assets, classes of assets, countries or investment managers, in order to reduce total risk.
Diversified Fund
A single Investment Option which incorporates more than one asset class (ie. cash, fixed interest, property, and/or Australian and international shares).
Eligible Rollover Fund (ERF)
A superannuation fund or approved deposit fund that is eligible to receive benefits automatically rolled over from other funds. Amounts may be rolled over to an ERF after 90 days have elapsed since the benefit became payable and remains unpaid. Amounts must be rolled over into an ERF where it appears that, in addition to the requirement above, at least two consecutive reports to the member have not been received by the member.
Eligible Service Period
The period spent in the employment of a certain employer or in the membership of a certain superannuation fund for the purposes of calculating the tax to apply to an Eligible Termination Payment.
Employment Termination Payment (ETP)
An ETP is a lump sum payment made in consequence of termination of employment.
Fixed Interest Security
One of the four major asset classes, fixed interest securities include bonds, debentures and mortgage-backed securities. For investment managers, fixed interest securities offer two attractions: relatively stable income flow and capital value and, for some investments, the opportunity for capital gains if interest rates fall.
Fund Administration
Involves establishing and maintaining databases of members’ superannuation records, and generally co-ordinating and managing all the administrative tasks including: calculating benefits and tax, issuing member statements and maintaining insurances.
Future Contributions
All contributions that will be paid into the superannuation fund in the future.
GICS
Global Industry Classification Standard (GICS) is a global classification system that classifies companies into sectors.
Growth Assets
Assets which have the potential to achieve capital growth over the medium to long-term, such as shares and property.
GST
A tax on the supply of goods and services.
Inflation
The increase in the general price level of goods and services in the economy, usually measured in terms of movements in the Consumer Price Index (CPI).
Investment Objectives
The investment results the Trustee aims to achieve over a nominated timeframe.
Investment Fluctuation Reserve
Reserves built up within the Fund for smoothing year to year returns credited to member accounts. They are established by not distributing some investment income when fund earnings are high, and are then used to top up crediting rates when earnings are low.
Investment Manager
The company that invests and manages the assets of the Fund.
Investment Return
The dividends, interest payments or other income, plus the capital gains or losses, generated on an investment.
Investment Strategy
The investment strategy that is put in place to meet investment objectives.
Investment Switch
Requesting a switch of your investment option(s) in relation to your future contributions.
Leaving Service Benefit
A benefit paid to a member on departure from the employer-sponsor of the Plan, other than on retirement, death or disablement.
Long Term
In investment terms, long term generally means an investment horizon of five years or more.
Medium Term
In investment terms, medium term generally means an investment horizon of three to five years.
Member Investment Choice
Means that you can choose from a range of investment portfolios (or decide on a combination of those), giving you control over how your benefits are invested.
Net Earning Rate of the Investment Portfolio
The earning rate of an investment portfolio, less all relevant deductions, over a set period.
Neutral Investment Style
An approach that does not deliberately target either value or growth stocks, and specifically seeks to minimise any overall style bias of the portfolio. Neutral style managers will rotate their style depending on market cycle and perceived market inefficiencies.
Nomination of Beneficiary
A member may nominate another person or persons to receive death benefits, although the Trustee will have the discretion as to who will ultimately receive the benefit.
Non-Preserved Benefit
That part of a benefit in a superannuation fund which can be received in cash, before the member reaches preservation age.
Preserved Benefit
The amount of money that must remain in a superannuation fund generally until retirement.
Property
One of the major asset classes, which includes commercial, retail, industrial and residential real estate. Property is generally considered more volatile than cash and fixed interest but less volatile than shares.
Risk-Return Trade-Off
The relationship between the risk (volatility) and return of an asset. In general, assets which provide higher returns also tend to be more volatile and assets providing lower returns tend to be more stable.
Rollover
Transfer of an eligible termination payment from one superannuation fund to another superannuation fund, deferred annuity or approved deposit fund.
Salary Sacrifice
An arrangement between an employer and an employee which involves the employee giving up a negotiated amount of their pre-tax salary in exchange for the employer providing an alternative benefit, such as superannuation contributions.
Shares
A security which represents an interest in a company. Also called ‘Equities’.
Short-Term
In general investment terms, it means up to three years.
Spouse
A Spouse is defined to include de-facto relationships (ie. a person not legally married, but who lives with the person on a genuine domestic basis as a husband or wife). If you are legally married, but your spouse lives permanently apart from you then you are not eligible. Same sex partners do not qualify as spouses.
Spouse Members
This membership refers to spouses of existing members who have joined the Fund in order to have contributions made on their behalf. Spouse members do not have to be employed to have contributions made on their behalf.
Statutory Funds
Funds which are legislated by the Life Insurance Act 1995. These can only be operated by a life insurer.
Superannuation Industry (Supervision) Act 1994 (SIS)
Legislation enacted in 1993, and commencing on 1 July 1994, for the regulation, responsibilities and activities of superannuation funds.
Superannuation Complaints Tribunal (SCT)
A tribunal established under the SIS legislation to conciliate and, if necessary, to arbitrate, on complaints brought before it by individuals affected by decisions of trustees of superannuation funds or approval deposit funds.
Superannuation Guarantee Legislation
Legislation that requires employers to provide a minimum level of superannuation contributions for most employees (currently 9%).
Superannuation Lump Sum Payment
This is a lump sum payment made by a superannuation fund to a member of a superannuation fund, or their beneficiary after their death.
Trust Deed
The document which sets out the rules for the establishment and operation of the Fund.
Unit-Linked Investment
A pooled investment where investors purchase units, with each unit representing a share of the underlying assets.
Unrestricted Non-Preserved Benefits
That part of a benefit in a superannuation fund which can be received in cash at any time.
Unit Price
Fund net asset value (NAV) divided by total units on issue adjusted for transactions costs.
Volatility
The extent to which asset values, interest rates and investment returns move up and down in value. Volatility is commonly used to assess the risk of changes to the capital value of an asset. That is, the more volatile an investment, the greater the chance that the actual return will be different to the expected return and therefore the higher risk.
Withdrawal Fee
A charge which may be applied when benefits are withdrawn/ transferred from a superannuation fund.