Glossary of Terms

# | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | X | Y | Z

A number of the following definitions refer to 'rules' found in the Military Superannuation and Benefits Rules (PDF, 435KB) made under the Military Superannuation and Benefits Act 1991.

1948 Act:

the Defence Forces Retirement Benefits Act 1948.

1973 Act:

the Defence Force Retirement and Death Benefits Act 1973.

1973 Scheme:

the retirement and death benefits scheme provided for in the 1973 Act.

1973 Scheme (deferred benefit) re-entrant:

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

1973 Scheme (invalidity pay) re-entrant:

a 1973 Scheme re-entrant whose invalidity pay under the 1973 Act was, upon his or her becoming a Member, cancelled under section 61D of that Act.

1973 Scheme (refunded contributions) re-entrant:

a 1973 Scheme re-entrant who, in respect of his or her last period of service as an eligible Member of the Defence Force within the meaning of the 1973 Act, received, under section 56 of that Act, a reFund of the amount of the contributions paid by him or her.

1973 Scheme (retirement pay) re-entrant:

a 1973 Scheme re-entrant whose retirement pay under the 1973 Act was, upon his or her becoming a Member, suspended under section 61C of that Act.

1973 Scheme re-entrant:

A Member, other than a transferred Member, who: (a) had not been a Member before he or she began to render the period of continuous full-time service which he or she is rendering, and (b) had been an eligible Member of the Defence Force within the meaning of the 1973 Act before becoming a Member.

1973 Scheme retirement pensioner:

A person to whom retirement pay is payable under the 1973 Act.

1991 Scheme:

the Scheme.

1991 Scheme re-entrant:

A Member who, having been a Member and retired, again became a Member after a break in the continuity of his or her service.

Top Accumulation Fund:

A superannuation Fund where the retirement benefit is an accumulation of contributions and investment earnings (less fees, taxes and any insurance premiums) in respect of individual Members.

Active management:

A style of investment management which seeks to attain returns above a set benchmark by the exercise of manager skills in asset allocation and stock selection and by making active judgments about future market movements. This is the opposite of passive management, where the manager's aim is simply to replicate benchmark returns without making any judgments about future market movements.

Actuary:

A professional person qualified to make calculations and valuations in relation to superannuation Funds, insurance Funds or other forms of investment. A Fellow or an Accredited Member of the Institute of Actuaries of Australia.

AD(JR) Act:

Administrative Decisions (Judicial Review) Act 1977.

ADF:

Australian Defence Force.

Allocated pension:

A type of retirement income arrangement under which an individual invests a lump sum and then draws down an annual pension to a value which takes account of expected cash flow needs and life expectancy. Some of the income may be tax free or eligible for a 15% tax rebate.

Allocation:

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

Allowance:

An allowance determined by the Defence Force Remuneration Tribunal under section 58H of the Defence Act 1903.

Ancillary Benefit:

Has the meaning given by subrule 85 (2).

Ancillary Contributions:

May include: additional personal contributions, Government co-contributions, salary sacrifice contributions, spouse contributions and transfer amounts.

Annuity:

An arrangement under which periodic payments are made to a person in return for the investment of a lump sum, usually for the purposes of providing retirement income.

Appropriate date:

Either the date when the application for superannuation information is received by the trustee, or the date specified in the application for superannuation information (Form 6) (ComSuper refers to this as 'calculation date').

APRA:

Australian Prudential Regulatory Authority.

ASIC:

Australian Securities and Investment Commission.

Asset allocation:

The weighting of assets in an investment portfolio among different asset classes (ie shares, bonds, property, cash etc). The asset allocation employed by your Fund or within the investment option chosen can have a big influence on the returns that you can expect and the amount of 'risk' you face with your investment.

Asset class:

Broad category of a sector of the financial markets (such as Australian shares).

Associate A benefit:

Has the meaning given by subrule 85 (1).

Associate B benefit:

Has the meaning given by subrule 86 (1).

Associate:

Has the meaning given in 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 pension:

A pension that is paid under rule 95.

ATO:

Australian Taxation Office.

Australian and International property securities:

are best thought of as investments in companies or property trusts often listed on the Australian or International Stock Exchange. Like listed shares their value fluctuates with supply and demand.

Top Bank:

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

Base amount:

A dollar figure set out in a court order or superannuation agreement that is to be allocated to the non-Member spouse under a Family Law payment split determination.

Board:

The Military Superannuation and Benefits Board of Trustees established by section 13 of the Act.

Bond:

A 'promise' or debt security given to investors by a government, public authority in exchange for cash from lenders or investors. A bond holder is a creditor of the issuer, not a shareholder.

Top Calendar month:

The period commencing at the beginning of a day of one of the 12 months of the year 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.

Cash:

Generally a country's coin and note currency which is in circulation and deposited in cheque accounts and other deposits that are available upon short notice.

CDF:

Chief of the Defence Force.

Certified financial planner:

A qualified person who can provide comprehensive advice and assistance to a client for the purposes of meeting the 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:
1. is an ex-nuptial child of the deceased person, or
2. 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:
1. is a child or ex-nuptial child of a spouse who survives the deceased person, and
2. was wholly or substantially dependent upon the deceased person at the time of the deceased person's death.

Classification:

A classification referred to in rule 22.

Co-contributions:

Additional contributions from the Australian Government available to eligible individuals with an assessable income under $58 000 per annum.

Committee:

Refers to Committees established by the MSB Board, including the Incapacity Classification Committee and the Reconsideration Committee.

Commutation:

The technical term used to describe withdrawing some or all of your money in a retirement income stream in the form of a lump sum. Some retirement income streams do not allow you to withdraw money, which is known as non-commutable.

Complying Fund:

A superannuation Fund which complies with the operating standards specified in the Superannuation Industry (Supervision) Act 1993 (SIS) Legislation and is thereby eligible to receive concessional taxation treatment.

ComSuper:

Commonwealth Superannuation Administration

Consent orders:

Where the parties agree on the terms of the order.

Concessional contributions:

Normally contributions that your employer has made on your behalf (for which they can claim a deduction) and include salary sacrifice contributions. Prior to July 1 2007, concessional contributions were known as deductable contributions

Consumer Price Index (CPI):

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 wage and salary earners. The CPI is the most common method of measuring the rate of price inflation.

Contested orders:

Where the orders are determined by the Court in contested proceedings.

Contribution:

An amount of money placed into the Fund.

Contributions Tax:

Tax applied to certain contributions such as employer and salary sacrifice contributions when they are paid into a superannuation Fund.

Contributory service:

In relation to a transferred person, service by the person after 1 October 1991 in respect of which the person paid contributions under Part 2 or contributions under section 17 of the 1973 Act.

Core Portfolio:

A portfolio of investments comprising, generally a large proportion of a Funds assets which is invested in a highly controlled fashion in an attempt to secure the Fund's liabilities with a reasonable degree of confidence.

Court order:

An order issued by a Court exercising power under the Family Law Act 1975. A court order can be obtained by consent if the parties agree.

Crediting Rate:

The crediting rate is the final interest rate determined by the Board at which interest is allocated to Members' accounts. It is determined at the end of a period and is based on the Fund's performance after other fees and charges are deducted. Crediting rates are determined at the end of each financial year. Since the Fund moved to a unitized structure the MSB no longer uses crediting rates.

Top Debt instruments:

A security representing borrowed Funds that must be repaid by the issuer at an agreed rate of interest.

Deductible amount:

The tax-free component of retirement pay. If you take retirement pay that includes your Member Contributions paid from after-tax dollars (non-concessional contributions), you will receive a tax deductions each year for a portion of this amount over the life of your retirement pay.

Default Investment Division:

Has the meaning given by rule 11D.

Default regulations:

Refers to the Family Law (Superannuation) Regulations 2001. These set out more detail about superannuation information requests and responses and how to value superannuation interests for a family law split.

Defensive assets:

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

Defined Benefit Fund:

A superannuation Fund which defines a Member's retirement benefit as a multiple of their salary. The multiple is usually based on the Member's period of Fund Membership and is not directly linked to contributions made over the period of Membership. The DFRDB and MilitarySuper are defined benefit Funds.

Department:

The Department of State for Defence.

Derivatives:

Investment products (such as an option on a share) that are derived from other securities or assets. Their value is linked to the value of the 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:

a Member of the 1973 Scheme.

Direct property:

Investments held directly in real estate, as opposed to indirect property investments such as units in a property trust.

Top Earning Rate:

The rate of return on money invested, usually expressed as an annual percentage. It is calculated after taxes and investment fees are deducted from the earnings.

Effective Exposure:

The proportion of MilitarySuper invested in a particular market sector if all assets are included, including real assets such as property, shares, fixed interest etc, and derivatives (investment products, such as an option to purchase shares, that are derived from other securities or assets), which are used to manage the risk profile of the Fund and 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:
1. has attained the age of 16 years but has not attained the age of 25 years, and
2. 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
3. is not ordinarily in employment or engaged in work on his or her own account.

Eligible service:

In relation to a person, service calculated in relation to that person in accordance with Schedule 6.

Emergency Forces:

Has the same meaning as in the Defence Act 1903.

Employer benefit:

In relation to a person, the amount of Employer Benefit calculated in relation to that person in accordance with Schedule 8.

Employer Benefit Multiple:

A figure derived from your length of service. It is multiplied by your final average salary to determine your Employer Benefit. The multiple is 0.18 for each year of service up to 7 years, 0.23 for each year after 7 years up to 20 years, and 0.28 for each year thereafter.

Employer funded account:

For a unitised Member, the account established under paragraph 11M (1) (b).

Top Family law value:

Means the value of a superannuation interest using the Scheme Specific Factors and Methods (SSFM).

Final average salary:

In relation to a person, an amount calculated in relation to that person in accordance with Schedule 7.

Final Average Salary (FAS):

The average of your superannuation salary earned in the 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:

An order/agreement which lifts the previously made payment flag from the Member's superannuation interest.

Flagging agreement/order:

An order/agreement which prevents a trustee from making splittable payments in respect of the Member's interest, and requires the trustee to notify the Court when a splittable payment becomes payable in respect of the Member's superannuation interest.

Flying allowance: T

he 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 6' is the 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:

The 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:
1. 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
2. the interest (if any) in respect of the amount in subparagraph
3. 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.

Top Growth assets:

Assets (such as shares and property) that provide investment returns (comprising both capital growth and income) and which outperform inflation.

Top Hedge Funds:

A type of investment in which the manager is authorized to use a number of higher risk investment techniques, including using derivatives, short selling and borrowing in order to generate higher returns. Managing these investments is highly specialised.

Hedging:

An investment position taken up to counteract the risk of another position.

Higher duties allowance:

The allowance of that name determined under Part IIIA of the Defence Act 1903.

Top ICC:

Incapacity Classification Committee.

Indirect property:

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

Interim benefit:

In relation to a person, the interim benefit that accrued, in respect of the 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 Member of the Defence Force within the meaning of the 1973 Act.

Interim salary fortnight contribution:

In relation to a Member who is a transferred person, a contribution by the Member, the rate of which is governed by the operation of subrule 4 (1A).

International shares:

Money that is invested in international companies and sectors outside Australia. When investing abroad, the value of capital is affected not only by the value of the shares in which the Fund invests 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:

Apayment to a person from a superannuation Fund or employer which is made after 30 June 1994 as a result of that person's disability.

Invalidity pension:

A pension payable under rule 27 or 28.

Invalidity pensioner:

A person who is entitled to invalidity pension or would be so entitled if payment of that pension had not been suspended under subrule 25 (3).

Invalidity retiree:

A person who is about to be, or has been, retired from the Defence Force on the ground of invalidity and includes 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:

The Investment Division established under rule 11A or an Investment Division established as a result of an action by the Board under rule 11C.

Investment income:

Regular payment from an investment, such as the interest you receive on cash and bonds, the rent received from property and the dividends received from shares.

Investment nomination:

Has the meaning given by rule 11Q.

Investment strategy:

A set of principles or systems used by investors to govern the way they manage portfolios of investments.

Issue price:

Meaning given by rule 11J.

IVR:

Interactive Voice Response telephone system.

Top Lifetime pension or annuity:

A retirement income investment where an individual invests their superannuation or other money and receives an income periodically, usually monthly. The capital is not taxable, and there is little income flexibility. In MilitarySuper the employer sponsored pension is indexed to the CPI and is payable for the life of the Member.

Long term:

In investment terms, this is usually a period in excess of five years.

Lump Sum:

A superannuation benefit taken in cash rather than being rolled over to an income stream such as an allocated pension.

Lump sum maximum benefit limit:

In relation to a person, an amount calculated in relation to that person in accordance with paragraph 1 of Schedule 3.

LWOP:

Leave without pay.

Top Marginal tax rate:

The tax rate payable on the top proportion of a person's income.

Market price:

The last reported price at which a stock sold.

Market timing:

Purchase or sale of stocks on the basis of shorter-term price patterns and temporary market opportunities, as well as judgements of underlying value. Market timing is extremely difficult to get right consistently, particularly for an individual investor.

Master trust:

A Fund that allows a large number of unconnected companies and/or individuals to operate through the same Fund. They are generally operated by banks, life insurance companies, and specialist superannuation administrators.

Maximum Benefit Limit (MBL):

In MilitarySuper the Scheme Rules set an upper limit on the benefits it can pay. Once your total benefit (your Member benefit plus the Employer Benefit) reaches this upper limit, your contributions will stop. This limit is called the pension Maximum Benefit Limit (MBL). This applies mainly to longer serving Members. ComSuper will notify Members nearing their MBL.

Maximum Concessional Contribution:

The maximum amount per annum which can be contributed into a superannuation Fund for a person, and for which a tax deduction is allowed. The limit is dependent on the person's age and the tax deduction is only available to employers and substantially self employed persons.

MBL Member:

A Member who has ceased to pay contributions in accordance with rule 5.

Medium term:

In investment terms, this is usually anywhere between one and five years.

Member:

A person who, in accordance with section 6 of the Act, is a Member of the Scheme.

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:

A legal requirement whereby a Fund cannot charge administration fees in excess of the interest credited unless the Fund's total investment income is less than total expenses for accounts with a balance below $1000. In this way, a small inactive account will not be continually eroded by fees. Note that the protection does not apply with respect to tax on employer contributions or any insurance premiums deducted. In MilitarySuper all administration charges are currently met by the employer.

Member contribution:

A Member Contribution is money contributed by the employee from their after-tax salary and is not taxed when deposited into the superannuation account provided the Member has not claimed a tax deduction for the contribution. Such amounts contributed from 1 July 1999 cannot be taken on exit from the scheme until you have reached your preservation age or retired permanently from the workforce.

Member funded account:

The account established under paragraph 11M (1) (a).

Member spouse:

means the spouse who has the superannuation interest in the Fund and whose superannuation entitlement is being split under a family law splitting order or superannuation agreement under Part VIIIB of the Family Law Act 1975.

Member unfunded account:

The account established under paragraph 11M (2) (a).

Membership:

Membership of the Scheme.

MilitarySuper:

Military Superannuation and Benefits Scheme.

Month:

Calendar month.

MSB:

Military Superannuation and Benefits.

MSBS:

Military Superannuation and Benefits Scheme. Commonly referred to as MilitarySuper

MSCC:

Military Superannuation Communication Committee.

Top Net asset backing:

Total shareholders' Funds in a company (i.e. total assets minus total liabilities) divided by the number of shares on issue.

Net asset value:

Total assets, less total liabilities.

Non-preserved amount:

The part of a Member's benefit that is not subject to preservation, and which can be withdrawn before a Member reaches their preservation age (ie contributions made before 1 July 1999).

Non-Concessional contributions:

After-tax money invested in a superannuation Fund, such as after-tax salary or personal savings.

Non-Member spouse:

Means the spouse who is not the Member spouse who has the interest in the superannuation Fund which is to be subject to a family law splitting order or superannuation agreement.

Top Operative time:

The date of effect of the split - this is the date specified in a court order, or four business days after a superannuation agreement is served on a Trustee. From this date, the non-Member spouse is an associate Member of the relevant scheme.

Top Parliamentary Candidates Act:

The Defence (Parliamentary Candidates) Act 1969.

Participating employer:

An employer who makes superannuation contributions to a superannuation Fund on behalf of their employees. In the case of MilitarySuper this is the Department of Defence.

Passive:

An investment approach in which the objective is to achieve market or index returns, with no judgments being made bout future market movements.

PAYG:

'Pay as you go', a taxation procedure for wage and salary earners under which income tax is deducted in instalments from periodic payments.

Payment phase:

Simply defined as an interest that is not in the growth phase at the time of the split. For example, where the Member spouse is in receipt of a pension.

Payment split:

Another term for a splitting order/agreement.

PDS:

Product Disclosure Statement

Pension:

A regular periodic payment, either by the Government (social security) or as a superannuation benefit.

Pension maximum benefit limit

: In relation to a person, an amount calculated in relation to that person in accordance with paragraph 3 of Schedule 3.

Percentage-only interest:

A superannuation interest where the Member's interest is determined by reference to a percentage. The Family Law (Superannuation) Regulations 2001 prescribes certain superannuation interests to be percentage-only interests. MilitarySuper does not have percentage-only interests.

Permanent Forces:

Has the same meaning as in the Defence Act 1903.

Physical Exposure:

The actual amount of cash invested in physical assets in a particular market sector or at the total portfolio level. This does not include amounts committed for future drawdown and investment (ie in the case of Private Equity, Infrastructure and opportunistic property), currency hedging positions or derivatives (investment products, such as an option to purchase shares, that are derived from other securities or assets),which are used to manage the risk profile of the Fund and to implement investment positions.

Personal superannuation:

An arrangement between an individual and a life office or bank where the benefit is Funded entirely from the Member's own contributions, and not by their employer. Members should seek professional investment advice before entering into such an arrangement and pay close attention to the level of fees and commissions charged, especially the penalties that may apply in the event of early termination of these arrangements.

Portability:

The ability to take your superannuation with you when you change jobs.

Portfolio:

An investor's range of investment holdings, usually with reference to its composition; that is, the mix of different asset classes or if in a single asset class, the mix of different sectors and stocks.

Post-30 June 1983 component:

The portion of your benefit that relates to service after 30 June 1983. The benefits are concessionally taxed and depend on your age and the amount involved.

Pre-1 July 1983 component:

The portion of your benefit that relates to service before July 1983. Only 5% of this amount 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, and which usually receive a fixed rate of return on the unfranked investment.

Prescribed fee:

A fee prescribed in regulations made in pursuance of section 52 of the Act.

Prescribed half-year:

The half-year commencing on 1 January 2002 or a subsequent half-year.

Prescribed year:

The year commencing on 1 July 1991 or a subsequent year.

Preservation:

The legal requirement that certain superannuation benefits must be retained in a superannuation or rollover Fund until the Member retires after reaching their preservation age. Only in very limited circumstances, including total and permanent disablement and extreme financial hardship, can preserved amounts be released before the Member reaches this age.

Preservation age:

The age at which a Member of a superannuation or rollover Fund can have access to their preserved benefits, provided the Member has permanently retired from the workforce.

Preserved amount:

Part of a Member's benefit that is subject to preservation.

Preserved Funds:

Funds maintained in a superannuation savings structure until retirement on reaching preservation age or other genuine retirement from the workforce. These Funds are 'preserved' and cannot generally be withdrawn until retirement.

Profit:

The amount earned upon selling an asset that has increased in value beyond the original purchase price.

Preserved Benefit:

The Government requires that certain superannuation benefits be maintained either in a complying superannuation or rollover Fund until permanent retirement from the work force after you reach your preservation age. Increasing proportions of superannuation benefits will be preserved in future years. If amounts are preserved, the only reason you can be paid out is if you meet financial hardship tests, die, become disabled, or gain the approval of the Australian Prudential Regulatory Authority (APRA). Early payout is also permissible if the payment is less than a prescribed minimum.

Previous contributions:

In relation to a person, contributions made by him or her under the 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:

The 1948 Act and the 1973 Act.

Private equity:

An equity interest in companies that are not listed on a recognised stock exchange. May be unlisted public companies or privately owned businesses operating under a proprietary limited arrangement.

Productivity Component:

An amount, equal to 3% of your salary paid into MilitarySuper on your behalf by the Department of Defence. It was introduced in 1988 as a result of a national wage case decision to grant Australian workers a 3% pay rise in the form of a contribution to their superannuation Fund by their employer. In MilitarySuper it forms part of the total Employer Benefit which is calculated by multiplying your Employer Benefit multiple by your Final Average Salary (FAS).

Top Q & S Component:

Of an allowance, the qualifications and skill component of the allowance.

Top RC:

Reconsideration Committee.

Real interest rate:

A nominal (unadjusted) interest rate less the current inflation rate.

Real rate of return:

The amount the rate of return exceeded the rate of inflation over a period. For example, some Funds have an investment goal that their rate of return to Members should, over any three-year period, exceed the rate of inflation by an average of at least 3% per annum.

Reasonable Benefit Limit (RBL):

The maximum level of superannuation benefit an individual can receive over a lifetime on a concessionally taxed basis. The RBL is much more generous if the benefit is taken as a pension than as a lump sum.

Regulated superannuation Fund:

A superannuation Fund falling under the regulation of the SIS legislation. A Fund becomes a regulated superannuation Fund when it elects to adopt a corporate trustee structure, or when its principal activity is the provision of age pensions to its Members.

Reporting compliance:

Refers to the large body of information that superannuation Fund trustees are required to provide to Members, to their parties and to regulatory authorities such as the Australian Taxation Office and the Insurance and Superannuation Commission, so that they comply with (meet) the requirements set down by law.

Reserves:

Part of a Fund's assets that is not allocated to Members' accounts when interest is credited. Reserves are used to 'smooth' the fluctuations of returns from year to year. For example, in a year of good returns, a Fund might put some of the earnings into reserve, and declare a lower crediting rate than the Fund earned; in a year of poor returns, the reserves might be used to increase the crediting rate to Members. MilitarySuper does not maintain a reserve but rather distributes all earnings, both positive and negative, to the Member.

Return:

The amount of money received from an investment, usually expressed as a percentage.

Regulation 72 notices:

This is a notice to the Trustees from the associate Member setting out the relevant personal information that is required under regulation 72 of the Family Law (Superannuation) Regulations 2001.

Regulated superannuation Fund:

Has the same meaning as in section 19 of the Superannuation Industry (Supervision) Act 1993.

Relevant date:

In relation to a payment split under a superannuation agreement:

Relevant percentage:

In relation to a spouse or eligible child of a deceased person, the percentage applicable to that spouse or child in accordance with Schedule 4.

Relevant period:

In relation to a person to whom Part 7 of these Rules applies, the period referred to in a relevant provision in the application of that provision to that person.

Relevant provision:

In relation to the Parliamentary Candidates Act 1969, subsection 10 (2), 11 (2) or 12 (2), as the case requires.

Reserve Forces:

Has the same meaning as in the Defence Act 1903.

Retirement pensioner:

A former Member to whom a pension is payable but does not include a person to whom a pension is payable only because he or she is the spouse or the child of a deceased Member.

Reversionary interest:

Where the person's entitlement to benefits in respect of the interest is conditional on the death of another person who is still living. A superannuation interest which may be subject to a family law split does not include a reversionary interest.

Risk budget:

An expression of the level of risk that the Fund is prepared to accept to achieve the target return for each investment option.

Risk:

The variability of returns from an investment, ie the risk that the return achieved will be lower or higher than that anticipated. Investments with greater inherent risk must promise higher expected returns if investors are to be attracted to them.

Roll Over:

To transfer a Superannuation Rollover Benefits Payment to a rollover Fund or to another superannuation Fund.

Rollover:

The transfer of a superannuation benefit or other Superannuation Rollover Benefits payment within the superannuation environment between superannuation Funds, or from a superannuation Fund to an income stream such as an allocated pension.

Top Salary:

Has the meaning given by Part 10 of the Rules Schedule. Salary or wages are generally any periodical payment made to a person in return for work or services.

Salary sacrifice:

An agreed arrangement between an employer and an employee whereby the employee agrees to sacrifice a part of their gross salary in exchange for a benefit, such as extra employer contributions to superannuation. Salary sacrifice contributions to superannuation are preserved.

Scheme specific factors and methods (SSFM):

Refers to methods and factors which have been prescribed for the civilian and military schemes to enable a superannuation interest to be valued for family law splitting purposes. Although these methods and factors became operative on 18 May 2004, they apply to all family law superannuation splits.

Scheme:

The Military Superannuation and Benefits Scheme established by the Trust Deed.

Scheme value:

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

SCT:

Superannuation Complaints Tribunal.

Self-managed superannuation Fund:

A superannuation Fund where all administration and investment management is performed by the trustee rather than by external service providers.

Separation declaration:

A written declaration, signed by at least one of the spouses, that must be served on the trustee within 28 days of being signed by the spouse(s). It is only relevant to superannuation agreements where the parties are separated but are not yet divorced.

Service:

Service as a Member of the ADF.

Service allowance:

The allowance of that name established under Determination No. 11 of 1994, Service Allowance, made under section 58H of the Defence Act 1903, as in force from time to time.

Service offence:

Has the same meaning as in the Defence Force Discipline Act 1982.

Shares:

The ownership of part of a company which gives investors (known as shareholders) certain rights such as the right to participate in profits through dividends, voting rights, and in the event the company is dissolved the right to a claim against asset remaining after all debts have been paid.

Short term:

In investment terms, this is usually less than one year.

SIS:

Superannuation Industry (Supervision) Act 1993.

SIS preservation threshold amount:

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

SIS Regulations:

The Superannuation Industry (Supervision) Regulations 1994.

Special action forces allowance:

The allowance of that name established by Determination No. 11 of 2002, Special Action Forces Allowance, made under section 58H of the Defence Act 1903, as in force from time to time.

Specialist operations allowance:

The allowance of that name established by Determination No. 19 of 2002, Specialist Operations Allowance, made under section 58H of the Defence Act 1903, as in force from time to time.

Spouse contribution:

A contribution made by a person to their spouse's superannuation Fund. Attractive taxation benefits are available in some circumstances.

Spouse's pension:

Pension payable to a spouse under Part 4 of these rules.

SRC Act:

Superannuation (Resolution of Complaints) Act 1993.

Statistician:

The Australian Government Statistician.

Statutory Retiring Age (SRA):

The age determined by the Department of Defence at which you must retire from the ADF.

Submarine service allowance:

The allowance of that name established by Determination No. 9 of 1995, Submarine Service Allowance, made under section 58H of the Defence Act 1903, as in force from time to time.

Superannuation:

Money saved during a person's working life to use in retirement.

Superannuation Complaints Tribunal (SCT):

A tribunal established by the Federal Government to deal with complaints about decisions of superannuation Fund trustees. The SCT requires complaints to be fully addressed through a Fund's internal dispute resolution procedure before considering a complaint.

Superannuation Guarantee (SG):

The minimum amount an employer is required to 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:

The legislation that governs the operation of all complying superannuation Funds.

Superannuation Lump Sum Payment:

A payment from a superannuation Fund, or employer, to a person upon resignation, retrenchment, disablement, death or retirement. Such payments can be rolled over to another super Fund, or can be taken in cash in some circumstances.

Superannuation Surcharge:

A Federal Government tax on superannuation contributions made by employers (including salary sacrifice contributions) for high-income earners. It may also apply to Members who have not provided the Fund with their Tax File Number (TFN).

Sustainability:

The sustainability of a company is its ability to maintain long-term growth without causing environmental or social damage. A company's economic, social and environmental performance is evaluated as part of its overall sustainability rating. This is also known as the 'triple bottom line'.

Superannuation Surcharge:

A tax imposed by the Government on workers whose total taxable income exceeds a prescribed amount.

Surcharge:

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

Surcharge debt account:

For a Member of the Scheme, the surcharge debt account kept for the Member by the Board under section 16 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997.

Surcharge deduction amount:

In relation to a Member of the Scheme to or in respect of whom benefits become payable under the rules, the surcharge deduction amount that is specified in the determination made by the Board, under Schedule 12, in relation to the Member.

Top Tax File Number (TFN):

A unique number issued to individuals and organisations by the Australian Taxation Office to increase the efficiency in administering tax and other Commonwealth Government systems such as income support payments.

Taxable (Untaxed) source:

You may have to pay tax on the taxable part when you claim your benefit. The taxable part of your benefit from an untaxed source is also made up of different components. The most common of these components is the post-June 1983 taxed element.

Taxed sources:

A source where tax has previously been paid, including: additional personal contributions, Government co-contributions, salary sacrifice contributions, transfer amounts and any earnings on these contributions. Your benefit from a taxed source is further divided into two parts: tax-free and taxable.

Today's dollars:

The projected amount discounted to take out the effect of inflation i.e. the amount reflects the current buying power of your final superannuation account balance. For example $100 in 20 years' time may be worth only $60 today.

Total and permanent disablement (TPD):

The definition of TPD may vary slightly, but generally it requires that, for payment of an insurance benefit, the trustee of a Fund 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. It is a frequent misunderstanding of Members 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 far more strict than this. Some Funds provide different forms of disablement insurance cover, such as temporary disablement cover.

Total benefit:

In relation to a person, the sum of the person's Member benefit and Employer Benefit.

Transfer:

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

Transfer amount/separation amount:

The starting amount of the associate's interest in the relevant scheme.

Transfer application:

Has the meaning given by rule 11U.

Transfer value:

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

Transferred (former recipient) person:

A transferred person who, immediately before he or she transferred from the 1973 Scheme, was rendering continuous full-time service and who, immediately before he or she began to render that service, was a 1973 Scheme retirement pensioner.

Transferred (refunded contributions) person:

A transferred person who, immediately before he or she transferred from the 1973 Scheme, was rendering continuous full-time service and who, before he or she began to render that service, had been an eligible Member of the Defence Force within the meaning of the 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:

A person who became a Member in consequence of his or her having made an election to do so under section 132 of the 1973 Act.

Trust deed:

A legal document that sets out the rules governing the operation of a superannuation 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/s:

The persons or corporate body with legal responsibility for the running of a Fund in accordance with the requirements laid out in the trust deed. The trustee has a fiduciary duty to act in good faith and in the best interests of Members, and is governed by ASIC and APRA.

Top Unit value:

Has the meaning given by rule 11I.

Unitisation:

The conversion of Member interest-bearing accounts to unit-based accounts within the MilitarySuper Fund.

Unitised Member:

(a) a Member of the Fund, and (b) a person who has a preserved benefit (other than a person in respect of whom a death benefit is payable).

Unsplittable interest:

A superannuation interest of the Member spouse with a withdrawal benefit of less than $5000.

Untaxed preserved benefit:

In relation to a person, so much of the Employer Benefit included in the Preserved Benefit applicable to the person as is not funded.

Top Value/valuation:

For family law purposes, this is the higher of the scheme value and the family law value at the operative time.

Volatility:

The degree of fluctuations in an investment, for example share prices, exchange rates or interest rates. Volatility is one measure of risk.

Voluntary contributions:

Personal contributions made by a Member to his or her account. These are additional to any employer contributions.

Top Withdrawal price:

Has the meaning given by rule 11K.

Glossary of Terms

More Information

Links