GLOSSARY |
A
Accumulation plan means that your account balance equals any contributions to the fund plus investment earnings, less taxes and fees. Super Saver is an accumulation plan.
After-tax contributions (or non-concessional contributions) Super contributions for which an individual or employer hasn’t claimed a tax deduction.
Age Pension Taxpayer-funded basic retirement income stream for people who cannot fully support themselves. Age Pension
Allocated Pension A flexible income stream that gives a member access to their capital through a series of payments during retirement but no guarantees on how long the income lasts. Vision Allocated Pension
Alternative investments Alternative assets are investments that lie outside the traditional share, property, and fixed interest investment markets. Alternative investments fact sheet
Assessable income Ordinarily, gross income before any deductions are allowed.
Asset Any item of economic value, such as property, shares, paintings, furniture, cars or cash. In relation to investing, assets are generally known as financial assets.
Asset allocation The mix of different assets that make up investment options (e.g. shares, property, cash and fixed interest are parts of the Balanced Growth Investment option). Asset allocation fact sheet
Asset classes The broad categories of particular types of assets, usually categories of financial assets. The main asset classes are cash, fixed interest investments, shares and property.
ATO Australian Taxation Office. The ATO monitors Superannuation Guarantee, regulates self-managed superannuation funds, and collects taxes. ATO
Australian Financial Services Licence (AFSL) The licence required to provide financial advice legally. Any organisation (or person), including super funds, can't provide financial advice unless it holds an AFSL.
Australian Prudential Regulation Authority (APRA) The regulator of financial organisations and super funds, which oversees the safeguards put in place to protect the assets of super funds. APRA
Australian Securities and Investments Commission (ASIC) The company and financial services regulator and consumer protection regulator. ASIC
B
Before-tax contribution (concessional contributions) Also known as concessional contributions. Can include employer contributions, contributions made under a salary sacrifice arrangement and tax-deductible contributions by an individual. Beneficiary A beneficiary is the person / people you wish your death benefit to be paid to. Beneficiary Fact Sheet
Benefit The amount you are entitled to when you leave the fund, through either retirement, retrenchment, resignation or death and disability. The payment you receive is called an Eligible Termination Payment (ETP).
Bring forward rules: Rules that allow you to bring forward up to two years of non-concessional contributions. bring forward rules
C
Capital Money, or assets, or amount available to invest.
Choice of fund Legislation that allows many working Australians to choose where their Superannuation Guarantee contributions are paid. To find out if you are entitled to Choice, talk to your payroll officer. It's easy to stay with Vision Super after you change jobs: simply download a Choice of Fund form and Certificate of Compliance and give these to your new employer.
Contribution The money you and your employer put into your super. For Super Saver members, your employer is legally required to contribute 9% of your salary. You can also make additional voluntary contributions.
Contribution caps The maximum amounts that you can contribute each year and get tax relief. The limits include contributions your employer makes and any salary sacrifice contributions you make. Contribution caps
Contributions tax Super contributions are normally taxed at 15%. This tax only applies to employer and salary sacrifice contributions. Any contributions made from your post-tax salary are not taxed.
Co-contribution Scheme Co-contributions are special payments made by the government (up to $1,500 per year) to superannuation accounts of members whose assessable income is less than $58,000 and who make personal superannuation contributions from their after tax salary. Government Co-contribution
Compound returns (or compound earnings) Interest earned on interest or, in the case of a super fund, investment returns on returns. Compound Returns Fact Sheet
Compulsory superannuation contributions Employer contributions made under the Superannuation Guarantee Scheme.
Concessional contributions Before-tax contributions that can include employer contributions, contributions made under a salary sacrifice arrangement and tax-deductible contributions by an individual.
Concessional contributions cap Before-tax contributions receive concessional tax treatment up to this cap. Contribution caps
Concessional tax rate A rate of tax that’s less than what a person ordinarily pays on income received during the year.
Condition of release A term that means a member can take his super out of the super system after satisfying a condition, such as retiring, or becoming permanently disabled.
Consumer Price Index (CPI) A measure that tracks quarterly changes in the price of goods and services. CPI increases are also known as inflation.
Contributions tax A tax of 15 per cent on before-tax contributions.
Crediting rate The investment return deposited into a member’s account.
D
Defined benefit fund A super account where the benefits that a member will receive are defined in advance using a set formula.
Dependant For the purposes of superannuation, your dependants include:
Diversification In order to reduce the risk of loss, investments are spread over many different assets, asset classes, investment managers or countries. If one asset is performing poorly, another may perform well and make up for the loss.
Diversified Bonds Investments Defensive investments, normally bonds or debt securities. When governments or companies want to raise money, they may borrow money from investors. Investors lend money for a specified period of time, receiving interest in return. How we manage Diversified Bonds Fact Sheet
Death and disability insurance An insurance policy that provides death cover and disability insurance. Death and disability cover
Death benefit On the death of a member, a payment from a super fund in the form of a lump sum payment (a superannuation lump sum death benefit) or income stream (a superannuation income stream death benefit).
Death cover An insurance product that pays a benefit when the person named in the insurance policy dies.
Default fund The super fund where an employer’s super contributions must go, if an employee doesn’t choose a fund.
Default investment option The option a fund chooses for those members who fail to choose an investment option. The default option for Vision Super Saver members is Balanced Growth
Defined benefit fund A super fund that pays a final super benefit based on a formula that takes into account your final salary and the number of years that you work for your company or government department.
Defined benefit pension A term-certain (such as life expectancy) pension or lifetime pension that’s payable from a super fund. Defined Benefit Plan
Diversification Spreading risk by investing across a broad range of assets.
DIY super fund (or self-managed superannuation fund or small APRA fund) A super fund with four or fewer members.
E
Eligible Service Period (ESP) The years of service with an employer and/or as a member of a super fund. For employees, the ESP starts on the date they joined an employer. For self-employed people, the ESP starts on the date they join the super fund as a member.
Eligible Termination Payment (ETP) A lump sum payment you receive from your superannuation fund or a lump sum payment from an employer when an employee ceases employment.
Equities Another word for shares. Shares represent ownership in a company.
Estate A term that means any assets that a person owns.
F
Financial hardship Your super is normally preserved until you retire permanently on or after age 55. In some cases the trustee may allow an early release of preserved benefits under certain circumstances such as severe financial hardship. To apply you will need the Financial hardship form (Form 60)
Financial services guide (FSG) A document that can assist you in deciding whether to use the services of an adviser. The document explains the adviser's services, remuneration, terms of operation and any interests, associations or relationships that might influence the advice the adviser gives. Vision Super FSG
G
Government Co-contributions Co-contributions are special payments made by the government (up to $1,500 per year) to superannuation accounts of members whose assessable income is less than $58,000 and who make personal superannuation contributions from their after tax salary. Government Co-contribution
Gross income Income before any tax is deducted.
Growth assets A type of asset, such as shares or property that usually delivers higher returns over the longer term than income assets, such as cash or fixed interest investments.
Growth investments Investments that usually produce higher returns but usually experience higher volatility. They include shares and property.
IIncome stream A series of regular payments over a period of time, just like being paid wages or a salary. Most people have a choice of taking their super as an income stream or as a lump sum.
Indexed Any income levels or rates or amounts that are adjusted annually in line with increases in average weekly earnings or inflation or another measure.
Inflation The rise in price of goods and services. The is measured by the Consumer Price Index (CPI).
Interdependency relationship A close personal relationship between two people who live together, where one or both provides for the financial and domestic support, and care of the other. This definition can include parent-child relationships that don’t fall within the definition of death benefits dependant, and sibling relationships.
Investment choice A feature of a fund through which a member has a say over where his super fund invests his super money. Investment choice
Investment income tax Tax payable by a super fund on assessable income, including a fund’s investment income.
Investment manager An investment specialist hired by a trustee to invest super money on the trustee’s behalf.
L
Lifetime pension A guaranteed income stream for a person’s lifetime and maybe the spouse’s lifetime too.
Lump-sum tax The tax you pay when you take your benefit payment as a cash ETP. All benefit payment taxes on lump sum payments paid to members from age 60 have been removed from 1 July 2007.
M
Marginal tax rate The highest rate of income tax that a person pays on income. The more a person earns, the higher the marginal tax rate.
Medicare levy A tax that the Federal Government imposes on Australian taxpayers to help fund the country’s public health system.
Member protection A rule that protects small superannuation account balances from administrative fees and charges (accounts under $1,000). Generally, fees and charges on small super accounts must not be greater than investment earnings.
Member report A document that gives super fund members a snapshot of the benefits a member receives, details of the performance of different investment portfolios and other important fund information. Member reports
Member statement An annual summary of a member’s benefits in the super fund, including how much money is in the member’s super account and contributions made during the year.
N
Nominated beneficiary (or nominated beneficiaries) A person (or persons) whom a fund member nominates to receive the super if the member dies. Anyone nominated must be a dependant or a person’s legal representative. Beneficiary Fact Sheet
Non-binding nomination A type of nomination that helps the trustee to decide who is eligible for a death benefit, especially when a lot of people may claim to be financially dependent.
Non-commutable income stream An income stream that can’t be converted into a lump sum payment. Vision Non-commutable Allocated Pension
Non-concessional contributions After-tax contributions including spouse contributions and contributions made under the Super Co-contribution Scheme.
Normal retirement age (NRA) The age, as designated by the Trust Deed, at which a retirement benefit is payable. The most common NRA is 65.
O
Ordinary time earnings (OTE) OTE is the earnings base (salary) that is used in the calculation of Superannuation Guarantee (SG) contributions.
P
Pension An income stream payable from a superannuation fund.
Personal contributions (voluntary contributions) A contribution that an individual under the age of 75 contributes to a complying superannuation fund.
Preserved A term that means a person’s retirement benefit is locked away until retirement, or until a condition of release is satisfied. Preservation age Legislation requires benefits to be retained within a complying superannuation or rollover fund until the member reaches preservation age and has retired permanently from the workforce. A person's preservation age depends on their date of birth, as set out below:
Preserved benefit This type of benefit must remain in a super fund until the member reaches preservation age and, in most instances, retires from the workforce.
Product Disclosure Statement (PDS): A document that explains the features of a super fund, including an explanation of the investment options available (if any), who makes these investments on behalf of the fund, the risks associated with investing in each option, the importance of getting advice and the fund’s past investment performance. A person must receive a fund’s PDS before he joins the super fund, and anyone can ask for a fund’s PDS by contacting the super fund. PDS
Property: A broad asset class encompassing office buildings, factories, shopping centres and other developments. Super funds can either invest in these investments directly or indirectly, via listed property trusts. How we manage Property Fact Sheet
R
Restricted benefit A person’s benefit may include this type of benefit if they were a super fund member before 1 July 1999. A person can cash this benefit when they resign from an employer who is contributing to her super fund.
Restricted non-preserved benefit This benefit is restricted until a person leaves his job. A person’s super may include this type of benefit if he was a super fund member before 1 July 1999.
Retirement income stream An income stream that produces regular income payments during a person’s retirement.
Risk The likelihood that your investment will earn less than expected or even drop in value. Investment Risk vs Return Fact Sheet
Risk profile The level of risk a person is willing to tolerate.
Rollover Transfering money from one superannuation fund to another. Rollover and save
S
Salary sacrifice Salary Sacrifice is an arrangement between an employee and an employer. An employee transfers part of their before tax salary into super to gain tax benefits. Salary Sacrifice
Secure site A Web site that a person can only access with a password.
Self-managed superannuation fund (or DIY super fund) A small super fund that’s regulated by the Australian Taxation Office.
Shares Also called equities, shares represent part ownership in a company, usually listed on the stock exchange. Investment returns come from increases (or decreases) in share value over time and / or dividends. Dividends are company profits distributed to shareholders. More about Shares
Spouse A spouse can be a married or de facto partner of the opposite sex, or former spouse. A spouse can also be a partner of the same sex.
Statement of Advice (SOA) The written advice your licensed adviser gives you, the reasons for providing you with advice and how much your adviser gets paid, including any adviser commissions.
Sustainable investment Investments made in companies that consider wider issues such as labour standards or environmental, social or ethical considerations. Vision offers members a choice of sustainable investment options.
Superannuation Complaints Tribunal (SCT) A body established by the Federal Government to deal with complaints by super fund members and beneficiaries about their fund. There are rules for what complaints the SCT can deal with. SCT
Superannuation contributions splitting Members who have made "Splittable contributions" to a super fund can elect to transfer all or part of those contributions made each year into their spouse's account. The spouse may have an account in the members super fund or a different fund.
Superannuation Guarantee (SG) The amount your employer is required to contribute on your behalf to your super for any month in which your total salary and wages exceeds $450. SG is currently 9% of your salary.
Super Saver Vision Super's main accumulation-type plan. To become a member of Vision Super Saver you must be employed by a participating employer. Super Saver
SuperSeeker The online search facility of the Australian Taxation Office that allows members to locate their lost super. SuperSeeker
T
Taxed benefit The benefit is paid from a source where tax has been paid on the concessional contributions and earnings of the fund.
Tax-effective A term that means a person is able to take advantage of much lower rates of tax than he ordinarily pays on income.
Tax file number A unique number issued by the Australian Taxation Office to identify individuals and organisations for tracking the payment of tax and to improve the efficiency of data collection.
Tax offset An offset that reduces the tax payable on taxable income.
Transition-to-retirement income stream (TTR) A non-commutable income stream that’s available before retirement. This is also called a Non-commutable Allocated Pension.
Trustee The Trustee is responsible for all aspects of the management of the Fund, including governance, investment management, compliance with superannuation and other relevant law, financial management, member records administration, member communication, and advisory services. The Trustee of the Fund is Vision Super Pty Ltd (ABN 50 082 924 561). Vision Super Trustee directors
Trust deed A legal document which sets out the rules for the operation of a super fund. Vision Super trust deeds
U
Undeducted contributions Personal contributions made from after-tax salary and for which no deduction has been allowed. Salary sacrifice and superannuation guarantee contributions are not included. Undeducted Contributions are a tax-free Eligible Termination Payment component.
Unrestricted benefit: This type of benefit isn’t subject to preservation and can be accessed at any time, subject to the rules of the super fund. |
