understanding super

glossary of terms

A-C D-F G-I J-L M-O P-R S-U W-Z

A-C

Administration Reserve Account

The Administration Reserve Account is used as a cost recovery measure where the Account Keeping Fees are insufficient in any one year to administer the Fund and is also used to fund extraordinary expenses.

Additional Cover

The Death and/or Total and Permanent Disability (TPD) and Income Protection insurance that is provided to a member by the insurer that is in addition to any automatic cover they have been provided upon joining the Health Super Fund.

Account Based Pension

A pension arrangement where a person has his/her own account and regularly (e.g. monthly) draws down an amount from the account, within certain legislated limits. The pension/annuity continues until death or until the account is exhausted.

Association of Superannuation Funds of Australia (ASFA)

Consisting of over 375 constituent superannuation funds, ASFA is a non-profit, non-party political national organisation established to protect, promote and advance the interests of Australia’s superannuation funds, their trustees and their members.

Australian Prudential Regulatory Authority (APRA)

The Commonwealth agency which is responsible for prudential regulation of banks, life insurance companies, general insurance companies and superannuation funds.

Automatic Acceptance Limit (AAL)

The death and/or disability insurance cover which insurance companies provide for an individual without detailed medical evidence, if the person is insured under a group life insurance policy.

Beneficiary

A person for whose benefit assets are being held. Beneficiaries of a superannuation fund are usually the members and their dependants.

Concessional Contributions

Concessional contributions include employer contributions (including contributions made under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction by a self-employed person.

D-F

Deductible Contributions

Money paid into a superannuation fund, either by an employer or a member (e.g. a self-employed person), on which a taxation deduction is available. Limits apply to the amount of deductible contributions available in a year.

Dependent

A spouse, child or any other person who is wholly or partly dependent on the member or who had a legal right to look to the member for financial support. Superannuation legislation defines dependant as the spouse any child of the member or person that has an interdependency relationship with the member. For superannuation benefits tax purposes, a child dependant must be under 18 years of age or financially dependent. A child includes a stepchild, an adopted child or one born within or outside marriage. Spouse includes legally married, de facto spouse or former spouse.

Eligible Termination Payment (ETP)

Generally composed of a lump sum payment from a superannuation fund/RSA or an employer to an employee when he/she ceases employment.

Financial Services Guide (FSG)

A document required under Federal legislation that is given to a retail client when they are provided financial services by a holder of an Australian Financial Services Licence. This document describes the service being provided and who is providing it.

G-I

Government Co-Contribution

An Australian Government initiative to assist eligible individuals to save for their retirement. If you are eligible and make personal superannuation contributions, the Government will match your contribution with a co-contribution up to certain limits.

Group Life insurance

Death and/or TPD and Income Protection insurance provided by insurers to large groups of people who are associated in some way (such as the members of superannuation funds), for whom certain assumptions about an average state of health can be made.

International Labour Organisation (ILO)

A United Nations specialised agency that establishes and monitors compliance with international standards for human and labour rights.

Investment Managers’ Fees

The charge levied by investment managers to invest the assets of a superannuation fund. These are included in 'Other Management Costs' (see below).

J-L

M-O

Management Costs

At Health Super, the management costs are the annual account-keeping fee that is applied directly to your super account for the day-to-day administration of your account plus an Investment Managers' Fee for each particular investment option. It may also include an Asset Fee. The Asset Fee of up to 0.10% p.a may be charged and allocated to the Administration Reserve Account.

Member Investment Choice

A facility made available to the members of a superannuation fund allowing them to decide the proportion of funds to be allocated between different investment strategies, sectors or managers.

Non-Commutable Account Based Pension

A Non-Commutable Account Based Pension allows you to access your preserved super money as a tax-effective income stream without the need to retire first.

In relation to an annuity or pension, this means it cannot be converted into a lump sum payment (unless specific conditions are met) but must be taken as a series of periodic payments.

Non-Concessional Contributions

Non-concessional contributions include personal contributions for which you do not claim an income tax deduction.

Other Management Costs

“Other management costs” are shown on your member statement. It is an approximate amount and includes management costs that are not deducted directly from your account. “Other management costs” are a subset of and not additional to “Management Costs” shown in the Product Disclosure Statement. They only apply to accounts that attract investment earnings. Refer to your member statement for information about how they apply to your account.

P-R

Registered Health Super Employer

An employer who agrees to participate in the Health Super Fund by agreeing to pay employer contributions in accordance with an agreement with Health Super and the Health Super Fund’s Trust Deed.

Rollover

Transfer of an eligible termination payment to another superannuation fund or RSA (Retirement Savings Account).

S-U

Salary Sacrifice

An arrangement between an employer and an employee which involves the employee giving up a part of his/her pre-tax salary in exchange for having the employer provide an alternative benefit, such as superannuation contributions.

Socially Responsible Investments (SRI)

An investment option that invests in companies based on labour standards and/or environmental, social, and/or ethical considerations.

Spouse

A person’s legally married husband or wife, or a de facto husband or wife of the opposite sex (where one person lives with another on a genuine domestic basis).

Superannuation Industry (Supervision) (SIS) Act 1993

The Act that prescribes prudential standards for superannuation entities, commencing on 1 July 1994.

Superannuation Industry (Supervision) Regulations

The SIS regulations contain the majority of the detailed requirements which funds must meet in order to comply with the SIS Act.

Undeducted Contributions

A component of an Eligible Termination Payment (ETP) made up of contributions made to a fund or RSA after 30 June 1983, for which no tax deductions were allowable. The undeducted contributions component of an ETP is not taxable, and does not count towards a person’s reasonable benefit limit.