Glossary

Some definitions refer to ‘rules’ set out in this Military Superannuation and Benefits Rules document, made under the Military Superannuation and Benefits Act 1991.

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z

 

A

 

1948 Act

Defence Forces Retirement Benefits Act 1948

1973 Act

Defence Forces Retirement Benefits Act 1973

1973 Scheme

Retirement and death benefits scheme provided for in 1973 Act

1973 Scheme (deterred benefit) re-entrant

1973 Scheme re-entrant to whom, immediately before he or she became a member, deferred benefits applicable under 1973 Act

1973 Scheme (invalidity pay) re-entrant

1973 Scheme re-entrant whose invalidity pay under the 1973 Act was, upon becoming a member, cancelled under section 61D of the Act

1973 Scheme (refunded contributions) re-entrant

1973 Scheme re-entrant who, for their last service period as an eligible defence force member, cancelled under section 61D of the Act

1973 Scheme (retirement pay) re-entrant

1973 Scheme re-entrant who, in respect of their last service period as an eligible defence force member within the meaning of the 1973 Act, received, under section 56 of that Act, a refund of the contribution amount paid to them

1973 Scheme re-entrant

Member, not a transferred member, who: (a) was not a member before they began to render the period of continuous full-time service which they are rendering, and (b) had been an eligible defence force member within the meaning of the 1973 Act before becoming a member

1973 Scheme retirement pensioner

Person to whom retirement pay is payable under the 1973 Act

1991 Scheme

The Scheme

1991 Scheme re-entrant

Member who, having been a member and retired, again became a member after a break in the continuity of their service

Accumulation fund

Fund where retirement benefits are an accumulation of contributions and investing earnings (less fees, taxes and insurance premiums)

Active manager

Investment manager who is required to beat a benchmark; achieved by buying securities in different proportions from their benchmark weight; actively moves away from benchmark weight in individual investments where the manager has a conviction that those investments will either out- or under-perform the benchmark

Active management

Investment approach that aims to achieve returns above a set benchmark, identifying mispriced securities, traded for profit

Activity fees

A fee is an activity fee if:

a. the fee relates to costs incurred by CSC as the trustee of the superannuation entity that are directly related to an activity of the trustee:

i. that is engaged in at the request, or with the consent, of a member; or

ii. that relates to a member and is required by law; and

b. those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee.

Actuary

Individual qualified to make calculations and valuations in respect to superannuation funds, insurance funds or other investment forms; fellow or accredited member of Institute of Actuaries of Australia

AD(JR) Act

Administrative Decisions (Judicial Review) Act 1977

ADF

Australian Defence Force

Administration fees

An administration fee is a fee that relates to the administration or operation of the superannuation entity and includes costs incurred by the trustee of the entity that:

a. relate to the administration or operation of the entity; and

b. are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.

Advice fees

A fee is an advice fee if:

a. the fee relates directly to costs incurred by the trustee of the superannuation entity because of the provision of financial product advice to a member by: i. a trustee of the entity; or

ii. another person acting as an employee of, or under an arrangement with, the trustee of the entity; and

b. those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee.

Allocated Pension

Type of retirement income arrangement under which an individual invests a lump sum and then draws down an annual pension to a value taking account of expected cash flow needs and life expectancy; some income may be eligible for a 15% tax rebate

Allocation

Of a unit in an investment division, meaning given by rule 11O

Allowance

Allowance determined by Defence Force Remuneration Tribunal under section 58H of the Defence Act 1903

Alternative investments

Non-traditional assets outside those traditional asset classes of shares, property, fixed interest and cash; examples include infrastructure assets, buy-out funds and venture capital

Ancillary Benefit

Meaning given by sub rule 85 (2)

Ancillary contributions

May include additional personal contributions, government co-contributions, salary sacrifice, spouse contributions, transfer amounts

Annuity

Arrangement where periodic payments are made to a person in return for investment of a lump sum, usually to provide retirement income

Appropriate date

Date when application for superannuation information is received by trustee, or date specified in application for super information

APRA

Australian Prudential Regulatory Authority

ASIC

Australian Securities and Investment Commission

Asset allocation

Weighting of assets in an investment portfolio among different asset classes (such as shares, bonds, property and

Asset classes

Group of financial assets with similar investment characteristics such as Australian company shares in asset class of equity

Associate

Meaning given by subsection 46 (1A) of the Act; note under subsection 46 (1A) of the Act an associate is a person to whom an associate benefit is payable Associate benefit includes an associate A benefit, an associate B benefit and an associate pension

Associate A benefit

Meaning given by sub rule 85 (1)

Associate B benefit

Meaning given by sub rule 86 (1)

Associate pension

Pension paid under rule 95

ATO

Australian Taxation Office

Australian and international property securities

Best thought of an investments in companies or property trusts often listed on the Australian or international stock exchanges; similarly to listed shares, their value fluctuates with supply and demand

B

 

Bank

Includes but not limited to a body corporate that is an ADI (authorised deposit taking institution) for the purpose of the Banking Act 1959

Base amount

Dollar figure set out in a court order or superannuation agreement to be allocated to the non-member spouse under family law split

Benchmark

Indexes or other market measurements to ‘benchmark’ investment performance and risk against for a comparable investment

Bond

‘Promise’ or debt security given to investors by government or public authority in exchange for cash from lenders to investors; a bond holder is a credit issuer, not a shareholder

Buy-sell spreads

A buy-sell spread is a fee to recover transaction costs incurred by the trustee of the superannuation entity in relation to the sale and purchase of assets of the entity.

C

 

Calendar month

Period commencing at the beginning of a day of one of a particular month and ending immediately before the beginning of the corresponding day of the next month or, if there is no such corresponding day, ending at the expiration of the next month

Carry over value

In relation to a 1973 Scheme (deferred benefit) re-entrant, an amount calculated in relation to that person in accordance with Schedule 10A

CDF

Chief of Defence Force

Certified financial planner

Qualified person who provides comprehensive advice and assistance for purpose of meeting clients’ financial needs and life goals; investment advice can only be provided by a person or corporation licensed by the Australian Securities and Investments Commission

Child

In relation to a person who has died, includes:

  • a person who:

    • is an ex-nuptial child of the deceased person, or

    • is, immediately before the death of the deceased person, a stepchild, an adopted child, a foster child or a ward, of the deceased person, and

  • a person who:

    • is a child or ex-nuptial child of a spouse who survives the deceased person, and

    • was wholly or substantially dependent upon the deceased person at the time of the deceased person's death.

Classification

Classification referred to in rule 22

Co-contribution

Additional contributions from the Australian Government for low income earners; specific eligibility criteria applies

Committee

Established by MSB Board (trustee of MilitarySuper to 30 June 2011; now Commonwealth Superannuation Corporation) including Incapacity Classification Committee and Reconsideration Committee

Commonwealth Superannuation Corporation

Trustee of CSS (replaced ARIA on 1 July 2011); provides superannuation services and products to Australian Government employees and Military Personnel through nine schemes:

  • Commonwealth Superannuation Scheme (CSS)

  • Military Superannuation and Benefits Scheme (MilitarySuper)

  • Public Sector Superannuation Scheme (PSS)

  • Public Sector Superannuation accumulation plan (PSSap)

  • 1922 Scheme

  • DFRB Scheme

  • Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme)

  • Papua New Guinea Scheme (PNG Scheme)

  • DFSPB

Commutation

Technical term describing withdrawing some or all of your money from a retirement income stream as a lump sum amount; some retirement income streams do not allow you to withdraw money (these are called ‘non-commutable)

Complying fund

Fund that complies with operating standards specified in the Superannuation Industry (Supervision) Act 1993 (SIS) legislation; is thereby eligible to receive concessional taxation treatment

ComSuper

Commonwealth Superannuation Administration

Consent orders

Parties agree on terms of an order

Concessional contributions

Normally contributions your employer has made on your behalf (for which your employer can claim a deduction) and salary sacrifice contributions; prior to 1 July 2007 concessional contributions were known as deductable contributions

Consumer Price Index (CPI)

Most common method of measuring the rate of price inflation; it measures quarterly changes in price of a 'basket' of goods and services which account for a high proportion of representative expenditure of metropolitan wage and salary earners

Contested orders

Orders determined by Court in contested proceedings

Contribution

An amount of money placed into scheme or fund

Contributions tax

Tax applied to certain contributions such as employer and salary sacrifice contributions when paid to a superannuation fund

Contributory service

In relation to a transferred person, service by person after 1 October 1991 for which they paid contributions under Part 2 or contributions under section 17 of1973 Act

Core portfolio

Investment portfolio comprising in general a large proportion of fund assets invested in a highly controlled fashion in order to secure fund liabilities with a reasonable degree of confidence

Court order

Order issued by Court exercising power under the Family Law Act 1975; can be obtained by consent if parties agree

Crediting rate

Final interest rate determined by trustee at which interest is allocated to member accounts; determined at the end of a specified period and based on fund performance after fees and charges are deducted. No longer used by MilitarySuper; unitisation replaced crediting rates

D

 

Debt instruments

Security representing borrowed funds to be repaid by issuer at an agreed interest rate

Deductible amount

Tax-free component of retirement pay; ff you take retirement pay including your member contributions paid from after-tax dollars (non-concessional contributions), you will receive tax deductions each year for a portion of this amount over the life of your retirement pay

Default Investment Division

Meaning given by rule 11D

Default regulations

Family Law (Superannuation) Regulations 2001; sets out more detail about superannuation information requests and responses and how to value superannuation interests for family law splits

Defensive assets

Assets (such as cash and bonds) not very susceptible to market fluctuations

Defined benefit fund

Fund which defines retirement benefit as a multiple of member’s salary; usually based on member's period of fund Membership and not directly linked to contributions made over membership; MilitarySuper and DFRDB are defined benefit funds

Department

Department of State for Defence

Derivatives

Investment products (such as a share option) derived from other securities or assets; value is linked to value of underlying security

Determination No. 6 of 1992

Determination No. 6 of 1992, Salaries, made under section 58H of the Defence Act 1903, as in force from time to time

DFRDB

Defence Force Retirement and Death Benefits

DFRDB member

Member of 1973 Scheme

Direct property

Investments held directly in real estate; not indirect property investments such as units in a property trust

E

 

Earning rate

Rate of return on money invested, usually expressed as an annual percentage; calculated after taxes and fees are deducted

Effective exposure

Proportion of MilitarySuper invested in a particular market sector if all assets are included; used to manage fund risk profile in order to implement investment positions

Eligible child

In relation to a person who has died and was at the time of his or her death, an ancillary, an associate, a Member or a former Member, a person who is the child of the deceased person and:

  • is a person who has not attained the age of 16 years, or

  • is a person who:

    • has attained the age of 16 years but has not attained the age of 25 years, and

    • is receiving full-time education at a school, college or university or other full-time education approved by the Board for the purposes of this subparagraph, and

    • is not ordinarily in employment or engaged in work on his or her own account.

Eligible service

Service calculated in relation to person in accordance with Schedule 6

Emergency forces

Meaning given under Defence Act 1903

Employer benefit

Amount of employer benefit calculated for a person in accordance with Schedule 8

Employer benefit multiple

Figure derived from your length of service; multiplied by your final average salary to determine your employer benefit; multiple is 0.18 for each year of service up to seven years, 0.23 for each year after seven years up to 20 years, and 0.28 for each year thereafter

Employer funded account

For unitised member, account under paragraph 11M (1) (b)

Exit fees

An exit fee is a fee to recover the costs of disposing of all or part of members’ interests in the superannuation entity.

F

 

Family law value

Value of superannuation interest using Scheme Specific Factors and Methods (SSFM)

Final average salary

Amount calculated for a person in accordance with Schedule 7

Final Average Salary (FAS)

Average of your superannuation salary earned in last three years before retirement or other departure from MilitarySuper (or your period of membership if less than three years). Your employer benefit is determined by multiplying your employer benefit multiple by your Final Average Salary (FAS)

Financial year

A period of 12 months commencing on 1 July

Flag lifting agreement/order

Lifts previously made payment flag from a member super interest

Flagging agreement/order

Prevents a trustee from making splittable payments in respect of a member's interest, and requires trustee to notify the Court when a splittable payment becomes payable for that super interest

Flying allowance

Allowance of that name established by Determination No. 7 of 1997, Flying Allowance, made under section 58H of the Defence Act 1903, as in force from time to time

Foreign service member

A person (not being a person who has been an eligible Member of the ADF within the meaning of the 1973 Act):

  • who, before he or she became a Member, had been a Member of the armed forces of a country other than Australia, and

  • who rendered with those forces a period of service

Form 6

Declaration to accompany application to trustee for information about a superannuation interest; form number of this declaration in the Family Law (Superannuation) Regulations 2001

FSG

Financial Services Guide

FSR

Financial Services Reform

Full-time service

Of a kind similar to continuous full-time service in the ADF for a period of or exceeding 12 months, and (c) with regard to whom the Board, after consultation with the appropriate authority of the Defence Force, directs that the full-time service or a part of that service of that person with those forces is to be included in aggregated service for the purposes of Schedule 8

Fund

Fund established, and vested in the Board, by the Trust Deed

Funded Employer Benefit

 

 

 

 



In relation to a person, means:

  • before 1 July 2002 - the sum of:

    • the amount of employer contributions paid by the Department, in relation to the person, under rule 10 less the amount of income tax paid or payable by the Fund in respect of those contributions, and

    • the interest (if any) in respect of the amount in subparagraph

    • in accordance with a determination or determinations by the Board as to rates of interest and the method of allocation of interest to such amounts, and

  • on or after 1 July 2002 - the sum of the values of units in the person's employer funded account

G

 

Growth assets

Assets such as company shares that provide investment returns (comprising capital and income) that outperform inflation

H

 

Hedge fund

Investment type where manager uses higher risk techniques to generate higher returns including derivatives, short selling and borrowing in order; hedge fund management is highly specialised

Hedging

Investment position taken to counteract risk of another position

Higher duties allowance

Allowance determined under Part IIIA of the Defence Act 1903

I

 

ICC

Incapacity Classification Committee

Indirect cost ratio

The indirect cost ratio (ICR) for an investment option offered by a superannuation entity is the ratio of the total of the indirect costs for the investment option to the total average net assets of the superannuation entity attributed to the investment option.

Note: A dollar-based fee deducted directly from a member’s account is not included in the indirect cost ratio.

Indirect property

Property investment made by purchasing units in a property trust, or shares in a property company

Interim benefit

Interim benefit accrued for person in accordance with clause 7 of the Defence Force (Superannuation) (Productivity Benefit) Determination (made under section 52 of the Defence Act 1903) while the person was an eligible defence force member within the meaning of 1973 Act

Interim salary fortnight contribution

A contribution by member who is a transferred person; rate is governed by operation of sub rule 4 (1A)

International shares

Money invested in international companies and sectors outside Australia; value of capital is affected not only by value of shares but also by currency exchange rates

Invalidity

In relation to a person, includes physical or mental incapacity of the person to perform his or her duties

Invalidity component

Payment to a person from super fund or employer made after 30 June 1994 due to person's disability

Invalidity pension

Pension payable under rule 27 or 28

Invalidity pensioner

Person entitled to invalidity pension or would be entitled if pension payment had not been suspended under sub rule 25 (3)

Invalidity retiree

Person who is about to be, or has been, retired from defence force on the ground of invalidity  including a person who, in accordance with rule 30, is to be treated as if he or she had been retired on that ground

Investment Division

Established under rule 11A or by trustee action under rule 11C

Investment fees

An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes:

a. fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and

b. costs incurred by the trustee that: i. relate to the investment of assets of the entity; and

ii. are not otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.

Investment income

Regular payment from an investment, such as interest from cash and bonds, or rent from property and dividends received from shares

Investment nomination

Meaning given by rule 11Q

Investment strategy

Set of principles used to govern how investment portfolios are managed

Issue price

Meaning given by rule 11J

IVR

Interactive Voice Response telephone system

L

 

Lifetime pension or annuity

Retirement income invested in super (or other money invested) with income paid periodically such as monthly; capital not taxed but minimal income flexibility available; in MilitarySuper, the employer sponsored pension is indexed to CPI and paid for the life of a member

Long term

Investment reference to period more than five years

Lump sum

Superannuation benefit taken in cash rather than rolled into an income stream such as a lifetime pension or allocated pension

Lump sum maximum benefit limit

Amount calculated for person in accordance with paragraph 1 of Schedule 3

LWOP

Leave without pay

M

 

Marginal tax rate

Tax rate payable on top proportion of an individual’s income

Market price

Last reported price of a stock sold

Market timing

Purchase or sale of stocks on basis of shorter-term price patterns and temporary market opportunities plus view of underlying value; extremely difficult to get right consistently

Master trust

Fund allowing many unconnected companies and/or individuals to operate through same fund; generally operated by banks, life insurance companies and specialist superannuation administrators

Maximum Benefit Limit (MBL)

Set in MilitarySuper rules as upper limit on benefits which can be paid; contributions stop once total MilitarySuper benefit ( member benefit and employer benefit) reaches this limit; MBLs apply mainly to longer serving members; MilitarySuper will notify you if close to your MBL

Maximum Concessional Contribution

Maximum amount per annum contributed into super for which a tax deduction is allowed; dependent on person's age and tax deduction is available to employers and the substantially self-employed only

MBL member

Member who ceased to pay contributions in accordance with rule 5

Medium term

Investment reference to period of one to five years

Member

Member of scheme in accordance with section 6 of the Act

Member benefit

For a person, means: (a) before 1 July 2002 – an amount calculated in accordance with Schedule 9;and (b) on or after 1 July 2002 – the sum of the value of units in the person's Member funded account and Member unfunded account

Member benefit protection

Legal requirement where a fund cannot charge administration fees in excess of interest credited unless fund's total investment income is less than total expenses for accounts with a balance below $1000; means small inactive accounts are not eroded by fees; does not apply to tax on employer contributions or any insurance premiums; all administration charges in MilitarySuper met by the employer

Member contribution

Money contributed by employee from after-tax salary; not taxed when deposited into fund provided the member has not claimed a tax deduction for the contribution; amounts contributed from 1 July 1999 cannot be taken on exit until you reach your preservation age or retire permanently from the workforce

Member funded account

Account established under paragraph 11M (1) (a)

Member spouse

Spouse with superannuation interest in fund with superannuation entitlement from split under family law splitting order or superannuation agreement under Part VIIIB of the Family Law Act 1975

Member unfunded account

Account established under paragraph 11M (2) (a)

Membership

Membership of MilitarySuper

MilitarySuper

Military Superannuation and Benefits Scheme

Month

Calendar month

MSB

Military Superannuation and Benefits

MSBS

Military Superannuation and Benefits Scheme (MilitarySuper)

MSCC

Military Superannuation Communication Committee

N

 

Net asset backing

Total shareholder funds in a company divided by issued shares

Net asset value

Total assets less total liabilities

Non-preserved amount

Part of member benefit not subject to preservation; can be withdrawn before member reaches their preservation age; are all contributions in MilitarySuper made before 1 July 1999

Non-concessional contributions

After-tax money invested in a super fund such as additional personal contributions

Non-member spouse

Spouse, not member spouse, with interest in super entitlement subject to a family law splitting order or superannuation agreement

O

 

Operative time

Date split takes effect, specified in a court order; or four business days after a superannuation agreement is served on the trustee; non-member spouse becomes an associate scheme member

P

 

Parliamentary Candidates Act

Defence (Parliamentary Candidates) Act 1969

Participating employer

Employer who makes superannuation contributions to fund on behalf of their employees; Department of Defence for MilitarySuper

Passive

Investment approach with objective to achieve market or index returns; no judgments made on future market movements

PAYG

'Pay as you go'; taxation procedure for wage and salary earners under which income tax is deducted in installments from periodic payments

Payment phase

Interest not in growth phase at time of split; for example, member spouse in receipt of pension

Payment split

Splitting order/agreement

PDS

Product Disclosure Statement

Pension

Regular periodic payment, either by government or as super benefit

Pension maximum benefit limit

Amount calculated in relation to a person in accordance with paragraph 3 of Schedule 3

Percentage-only interest

Superannuation interest where member interest is determined by reference to a percentage; Family Law (Superannuation) Regulations 2001 prescribe certain superannuation interests to be percentage-only interests; MilitarySuper does not have percentage-only interests

Permanent Forces

Same meaning as in Defence Act 1903

Physical exposure

Actual cash amount invested in physical assets such as market sector or at total portfolio level; does not include amounts for future drawdown and investment (ie for private equity, infrastructure and opportunistic property), currency hedging positions or derivatives (investment products such as option to purchase shares derived from other securities or assets) to manage risk profile of fund and to implement investment positions

Personal superannuation

Arrangement between individual and a life office or bank where benefit is funded entirely from individual's own contributions, not their employer; members should seek professional investment advice before entering into such arrangements and should pay close attention to level of fees and commissions charged, especially penalties applied in the event of early termination of these arrangements

Portability

Ability to take your superannuation with you when you change jobs

Portfolio

Investor's range of investment holdings which generally references its composition (ie mix of different asset classes or mix of different sectors and stocks for single asset class)

Post-30 June 1983 component

Portion of your benefit relating to service after 30 June 1983; benefits concessionally taxed and depend on your age and amount involved

Pre-1 July 1983 component

Portion of your benefit relating to service before July 1983; only 5% is included as taxable income in the year you receive the benefit

Preference shares

Shares ranking before ordinary shares in the event of liquidation of the issuing company; usually receive a fixed rate of return on unfranked investment

Prescribed fee

Fee in regulations made in pursuance of section 52 of the Act

Prescribed half-year

Half-year commencing on 1 January 2002 or a subsequent half-year

Prescribed year

Year commencing on 1 July 1991 or a subsequent year

Preservation

Legal requirement for certain superannuation benefits to stay in super or a rollover fund until member retires after they reach their preservation age; released before preservation age only in very limited circumstances, including total and permanent disablement and extreme financial hardship

Preservation age

Age at which super fund member can access their preserved benefits, provided they permanently retire from the workforce

Preserved amount

Part of member's benefit subject to preservation

Preserved funds

Funds in superannuation structure until retirement on reaching preservation age or other genuine retirement from the workforce; funds are 'preserved' and cannot generally be withdrawn until retirement

Profit

Amount earned upon selling an asset that increased in value beyond original purchase price

Previous contributions

Contributions made by person under previous legislation, other than: (a) any such contributions refunded to him or her under that legislation, and (b) in the case of a person who, immediately before he or she transferred from the 1973 Scheme, was rendering continuous full-time service (in this paragraph called the relevant service) and who, before he or she began to render the relevant service, was a 1973 Scheme retirement pensioner - any such contributions made in respect of service rendered by the Member before the Member began to render the relevant service, and (c) any such contributions in respect of which a transfer value was paid under section 82ZA of the 1948 Act or section 77 of the 1973 Act

Previous legislation

1948 Act and 1973 Act

Private equity

Equity interest in companies not listed on a recognised stock exchange; can include unlisted public companies or privately owned businesses operating under a proprietary limited arrangement

Productivity component



Amount, equal to 3% of salary paid into MilitarySuper by Department of Defence; introduced in 1988 after national wage case decision to grant Australian workers a 3% pay rise as contribution to superannuation by their employer; in MilitarySuper, it forms part of your total employer benefit which is calculated by multiplying your employer benefit multiple by your Final Average Salary (FAS)

Q

 

Q & S Component

Qualifications and skill component of an allowance

R

 

RC

Reconsideration Committee

Real interest rate

Nominal (unadjusted) interest rate less current inflation rate

Real rate of return

Amount a rate of return exceeds inflation rate over a period; for example, fund aims to achieve a rate of return for members of 3% per annum above the inflation rate over any three-year period

Reasonable Benefit Limit (RBL)

Maximum super benefit an individual can receive over a lifetime on concessionally taxed basis; more generous if benefit is taken as a pension than as a lump sum

Regulated superannuation fund

Fund falls under regulation of SIS legislation; becomes ‘regulated’ when it elects to adopt a corporate trustee structure, or when its principal activity is provision of age pensions to members

Reporting compliance

Information super fund trustees must provide to their members, parties and to regulatory authorities such as the Australian Taxation Office and Insurance and Superannuation Commission, in order to comply (meet) with legislative requirements

Reserves

Fund assets not allocated to member accounts when interest is credited; used to 'smooth' fluctuations in returns from year to year

Return

Money received from investment, usually expressed as a percentage

Regulation 72 notices

Notice to trustee from associate member to set out relevant personal information required under regulation 72 of the Family Law (Superannuation) Regulations 2001

Regulated superannuation Fund

Same meaning as in section 19 of Superannuation Industry (Supervision) Act 1993

Relevant date

Relates to payment split under a superannuation agreement

Relevant percentage

Percentage applicable to spouse or child of deceased member in accordance with Schedule 4

Relevant provision

Relates to Parliamentary Candidates Act 1969, subsection 10 (2), 11 (2) or 12 (2), as case requires

Reserve Forces

Same meaning as in Defence Act 1903

Retirement pensioner

Former member paid a pension not including person paid a pension  because they are spouse or child of a deceased member

Risk budget

Expression of level of risk a fund is prepared to accept to achieve target return for each investment option

Risk

Variability of returns from an investment; risk that returns achieved will be lower or higher than anticipated; more risk must equal higher expected returns if investors are to be attracted

Rollover

Transfer of a superannuation benefit or other superannuation rollover benefits payment within superannuation environment between funds, or from a fund to an income stream such as an allocated pension

S

 

Salary

Meaning given by Part 10 of Rules Schedule; generally any periodical payment made to a person in return for work or services

Salary sacrifice

Agreed arrangement between an employer and an employee whereby the employee agrees to sacrifice part of their gross salary in exchange for a benefit, such extra employer contributions to super; these superannuation contributions are preserved

Scheme specific factors and methods (SSFM)

Refers to methods and factors prescribed for civilian and military schemes to enable a superannuation interest to be valued for family law splitting purposes; methods and factors took effect on 18 May 2004 but apply to all family law superannuation splits

Scheme

Military Superannuation and Benefits Scheme set by Trust Deed

Scheme value

Value of superannuation interest in Scheme for family law purposes using method set out in SSFM and factors set out in Ministerial orders (CSS), Trust Deed (PSS), or in attachment to actuary's document (DFRDB and MilitarySuper)

SCT

Superannuation Complaints Tribunal

Self-managed superannuation fund

Fund where all administration and investment management is performed by trustee not external service providers

Separation declaration

Written declaration, signed by at least one spouse that must be served on trustee within 28 days of spouse(s) signature; only relevant to super agreements where parties are separated but are not yet divorced

Service

Service as member of the Australian Defence Force

Service allowance

Allowance established under Determination No. 11 of 1994 made under section 58H of the Defence Act 1903

Service offence

Same meaning as in Defence Force Discipline Act 1982

Shares

Part ownership of a company given to investor (shareholder); provides certain rights such as right to participate in profits through dividends, voting rights, and in the event company is dissolved, right to a claim against asset remaining after all debts are paid

Short term

Investment reference to period usually less than one year

SIS

Superannuation Industry (Supervision) Act 1993

SIS preservation threshold amount

Amount specified, in column 2, in item 104 of Schedule 1 to the Superannuation Industry (Supervision) Regulations

SIS Regulations

Superannuation Industry (Supervision) Regulations 1994

Special action forces allowance

Allowance under Determination No. 11 of 2002, Special Action Forces Allowance, made under section 58H of the Defence Act 1903

Specialist operations allowance

Allowance under Determination No. 19 of 2002, Specialist Operations Allowance, made under section 58H of the Defence Act 1903

Spouse contribution

Contribution made by a person to their spouse's super fund; attractive taxation benefits may be available

Spouse's pension

Pension paid to spouse under Part 4 of these Rules

SRC Act

Superannuation (Resolution of Complaints) Act 1993

Statistician

Australian Government Statistician

Statutory Retiring Age (SRA)

Age determined by Department of Defence at which you must retire from the Australian Defence Force

Submarine service allowance

Allowance established by Determination No. 9 of 1995, Submarine Service Allowance, made under section 58H of the Defence Act 1903

Superannuation

Money saved during working life for retirement

Superannuation Complaints Tribunal 

Tribunal established by Australian Government to deal with complaints about super fund trustee decisions; requires complaints to be fully addressed through fund's internal dispute resolution procedure first

Superannuation Guarantee (SG)

Minimum amount an employer must contribute to a complying superannuation fund on behalf of each qualifying employee; employers who fail to meet their SG obligations are liable to a substantial financial penalty, called the Superannuation Guarantee Charge (SGC)

Superannuation Industry (Supervision) Act (SIS) 1993

Legislation governing operation of all complying superannuation funds

Superannuation lump sum payment

Payment from super fund, or employer, to a person upon resignation, retrenchment, disablement, death or retirement; payment can be rolled over to another fund or taken in cash in some instances

Superannuation Surcharge

Tax on super contributions made by employers (including salary sacrifice contributions) for high-income earners; may apply to members who have not provided their tax file number

Surcharge

Superannuation Contributions Tax (Assessment and Collection) Act 1997 is a tax on employer-financed superannuation contributions

Surcharge debt account

Maintained under section 16 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997

Surcharge deduction amount

In relation to scheme member or to whom benefits become payable under the Rules; specified in determination made by trustee, under Schedule 12, in relation to the member

Switching fees

A switching fee is a fee to recover the costs of switching all or part of a member’s interest in the superannuation entity from one class of beneficial interest in the entity to another.

T

 

Tax file number

Unique number issued to individuals and organisations by Australian Taxation Office to increase efficiency in administering tax and other government systems such as income support payments

Taxable (untaxed) source

Tax paid on taxable part when claiming your benefit; part of your benefit from an untaxed source is also made up of different components, most common of which is post-June 1983 taxed element

Taxed sources

Source where tax was previously paid including additional personal contributions, salary sacrifice contributions, transfer amounts and any earnings on these contributions; your benefit from a taxed source is divided into two parts – tax-free and taxable

Today's dollars

Projected amount discounted to take out effect of inflation

Total and permanent disablement 

Definition may vary slightly, but generally requires that, for payment of an insurance benefit, the fund trustee must be satisfied that the member is unlikely to be able to work in any occupation they may be suited by reason of their training, education or experience; members may misunderstand that they would be covered if they are unable to return to the position they held before they became disabled, but the test is normally more strict; some funds provide different forms of disablement insurance cover, such as temporary disablement cover

Total benefit

Sum of a member benefit and employer benefit

Transfer

Of a unit in an Investment Division, has the meaning given by rule 11S

Transfer amount/separation amount

Starting amount of associate's interest in relevant scheme

Transfer application

Meaning given by rule 11U

Transfer value

In relation to a transferred person, amount calculated in accordance with Schedule 10

Transferred (former recipient) person

Transferred person who, immediately before transferring from 1973 Scheme, was rendering continuous full-time service and who, immediately before beginning to render that service, was a 1973 Scheme retirement pensioner

Transferred (refunded contributions) person

Transferred person who, immediately before transferring from 1973 Scheme, was rendering continuous full-time service and who, before he or she began to render that service, had been an eligible defence force member within meaning of 1973 Act during an earlier period of such service rendered by him or her, in respect of which he or she: received, under section 56 of that Act, a refund of the amount of the contributions paid by him or her, and did not subsequently make an election under paragraph 63 (1) (d) or subsection 64 (1) of that Act

Transferred person

Person who became a member in consequence of having made an election to do so under section 132 of the 1973 Act

Trust deed

Legal document to set out rules governing operation of a super fund; members are entitled to view a copy of their fund's trust deed, although they may be charged a fee to be sent a copy

Trustee

Corporate body with legal responsibility for running of a fund in accordance with requirements laid out in trust deed; has fiduciary duty to act in good faith and best interests of members

U

 

Unit value

Meaning given by rule 11I

Unitisation

Conversion of member interest-bearing accounts to unit-based accounts within MilitarySuper

Unsplittable interest

Super interest of member spouse with withdrawal benefit under $5000

V

 

Value/valuation

In relation to family law; higher of scheme value and family law value at operative time

Volatility

Degree of fluctuations in an investment such as share prices or exchange rates; one measure of risk

Voluntary contributions

Personal contributions made by members; additional to employer contributions

W

 

Withdrawal price

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Meaning given by rule 11K