Account based pension
An account based pension is superannuation monies rolled over to pay a regular income stream in retirement. A minimum amount is required to be drawn each year, but there is no maximum amount and you are able to make lump sum withdrawals.
Alternative debt includes bond and loan investments, both in Australia and overseas. It can produce high returns with a moderate to high level of risk. Currency movements may also impact returns.
APRA (Australian Prudential Regulation Authority)
A Government organisation that regulates super funds and other bodies in the financial sector, and ensures that they operate in line with relevant legislation.
ASIC (Australian Securities and Investment Commission)
The Government organisation which collects information on public and private companies and other corporate bodies registered under Corporate Law.
Australian equities (shares) include returns from dividends and capital gains/losses. Investing in Australian shares means buying ownership in companies and sharing in profits and growth. Shares can produce high returns but the risk level is also high and shares are designed for investment over the long-term.
An investment portfolio with its funds invested over a range of both low and high growth asset classes. Normally a balanced fund has between 20-30% defensive assets and 70-80% growth assets.
Beneficiary – binding and non-binding
A beneficiary is the person or persons nominated to receive a member’s super benefit should they die. Nominations may be binding or non-binding. Superannuation funds are bound to adhere to binding nominations (subject to certain conditions) while non-binding nominations offer a ‘preference’ rather than legally binding instructions.
The amount of a member’s entitlement in the fund to which the estate and/or dependants are entitled.
Cash includes cash deposits, term deposits and bank bills. Cash offers the lowest risk of any asset class with steady returns generally in line with the official cash rate set by the Reserve Bank of Australia. Cash is designed for investment over the short term with a low level of potential return.
All copied pages of ORIGINAL proof of identification documents (including any linking documents) need to be certified as true copies by the individual approved to do so (see below.)
The person who is authorised to certify documents must sight the original and the copy to make sure both documents are identical, then ensure all pages have been certified as true copies by writing or stamping ‘certified true copy’ followed by their signature, printed name, qualification (eg Justice of the Peace, Australia Post employee, etc), years of service (if applicable) and date. The following individuals can certify copies of the originals as true and correct copies:
- a Justice of the Peace
- a permanent employee of Australia Post with five or more years of continuous service
- a finance company officer with five or more years of continuous service (with one or more finance companies)
- an officer with, or authorised representative of, a holder of an Australian Financial Services Licence (AFSL), having five or more years of continuous service with one or more licensees
- a notary public officer
- a police officer
- a registrar or deputy registrar of a court
- a person enrolled on the roll of a State or Territory Supreme Court or the High Court of Australia, as a legal practitioner
- an Australian consular officer or an Australian diplomatic officer
- a judge of a court
- a magistrate, or
- a Chief Executive Officer of a Commonwealth court.
Choice of fund
Choice of fund legislation enables employees, in certain circumstances, to select the super fund to which their employer (SG) contributions are to be paid. Most people can choose which super fund they’d like their super contributions paid into but if you don’t have a choice or don’t tell your employer where to pay your super, your employer will use a super fund that they’ve chosen.
A clearing house assists employers making super payments to multiple super funds at the same time. Generally, the information and covering funds are forwarded to the clearing house, which will then disperse the payments according to the employer’s instructions. With StatewideSuper, this service is free – call 1300 65 18 65 and speak to one of our friendly Client Service Officers to find out more.
As an incentive to save in super, the Government contributes .50c for every after-tax contribution made to super up to a stated maximum, subject to certain eligibility requirements.
The co-contribution scheme was introduced by the Federal Government in the mid-2000s as an incentive to encourage people earning less than $61,920 pa to make personal after-tax contributions to their super. If you are eligible (see criteria below), and your income is less than or equal to $31,920 pa then you will receive from the Government .50c for every after-tax dollar you contribute to super – up to $500 pa. The Government Super Co-contribution amount decreases by 3.333 cents for every dollar earned over $31,920, until it reaches zero at $46,920 pa.
You will be eligible for the co-contribution for a financial year if:
- you make eligible personal super contributions during the financial year, and
- your total income is less than $46,920 (the higher income threshold) and
- 10% or more of your total income is earned from carrying on a business, eligible employment or both, and
- you are less than 71 years old at the end of the financial year, and
- you are not a temporary resident, and
- you lodge an income tax return for the relevant financial year.
Complying super fund
A complying super fund is a super fund that has elected to be regulated under the Superannuation Industry (Supervision) Act 1993.
Concessional contributions are before-tax contributions that include:
- Employer (SG) contributions
- Salary sacrifice contributions
- Tax-deductible contributions made by an individual (eg self employed).
They are subject to a special tax treatment in the super fund as long as they fall under the concessional contributions cap of $25,000. This cap applies to all ages. If you exceed the cap you may pay 31.5% tax on the excess amount.
For more information visit the ATO website at http://www.ato.gov.au/content/00106372.htm
Contribution splitting allows members to split certain super contributions made during a financial year into an eligible partner’s super account.
A Government tax imposed on employer and before-tax (salary sacrifice) contributions. The tax is currently 15%.
As part of the 2012 Budget, the Federal Government introduced an increased tax rate of 30% on concessional contributions for high-income earners (those earning in excess of $300,000).
Death Only Insurance
Death Only Insurance provides a lump sum benefit, which is paid to your Estate and / or dependants (Eg spouse) in the event of your death, once we are notified.
Death and Total and Permanent Disablement (TPD) Insurance
Death and TPD Insurance provides a lump sum benefit:
- if an illness or injury prevents you from ever working again, or
- to your Estate and / or dependants (eg spouse) in the event of your death
A default fund is the super fund nominated by an employer to receive their employees' Superannuation Guarantee contributions if the employee does not make a choice. A default superannuation fund must be a complying fund and also offer a minimum level of life insurance as set out in the choice regulations.
A dependant is a person who is financially dependant on the member or has an interdependency relationship with the member. This can include a spouse (including same-sex or defacto), child, relative or any other person.
An investment strategy which looks to minimise risk by spreading investment funds across a range of asset classes.
Eligible rollover fund (ERF)
An ERF is an approved fund that maintains small or inactive accounts at a low cost, while it continues to accumulate interest (if applicable). You may be able to access your account if is transferred to an ERF, subject to preservation rules. Your personal information will also be provided to the ERF to establish and administer your account. The ERF StatewideSuper uses is AUSfund. For details visit www.unclaimedsuper.com.au or call 1300 361 798.
Employer Sponsored member
An Employer Sponsored member receives Superannuation Guarantee (SG) contributions from a participating employer.
Employer termination payment (ETP)
An employee payment made upon retirement, resignation, retrenchment or disablement. In certain circumstances, this amount can be rolled over into a complying super fund.
Fixed interest includes government, corporate and other bonds. Fixed interest can often provide positive returns in years when returns on shares are negative. It is designed for investment over the medium term with the potential for moderate returns.
An investment portfolio with its funds invested primarily in growth assets. Normally a growth fund has between 0-20% defensive assets and 80-100% growth assets.
Income Protection Insurance provides for a regular income to be paid in the event of a member being unable to work on a temporary basis due to illness or accident.
An Industry Fund is a super fund that is a complying fund with 20 or more participating employers.
It has equal numbers of employer and member representatives on its Board of Directors and is ‘run only to profit members’ (ie all profits remain in Industry Funds and are applied for the benefit of members).
Infrastructure includes toll roads, airports, ports, power stations and other community projects and assets, both in Australia and overseas. It can produce high returns with a moderate to high level of risk. Currency movements may also impact returns.
International equities (shares) include returns from dividends, capital gains/losses and currency movements. Investing in international shares involves buying ownership in predominantly overseas companies and sharing in profits and growth. Shares can produce high returns but the risks are also high, so this asset class is designed for investing over the long term. Currency movements may also impact returns.
Investment time horizon
The length of time an investor is able to invest.
In January 2010, the Federal Government introduced a range of Award Agreements based on industry and occupation to consolidate and replace existing Agreements. For further information refer to the Fair Work Australia website – www.fwa.gov.au
Non-concessional contributions are contributions that are not tax deductible. They include:
- personal contributions that are not claimed as a tax deduction
- contributions made for a member by their spouse
- certain amounts transferred from an overseas pension scheme which are not taxed in the Fund.
These contributions are subject to an annual contributions cap. However contributions that are excluded from this limit include Government co-contributions, certain Capital Gains Tax exempt small business sale proceeds and personal injury proceeds where certain conditions are met.
Ordinary time earnings (OTE)
OTE are what your employees are paid for their usual hours of work and include:
- over award payments
- allowances (except some expense allowances or reimbursements)
- shift loading and casual loading
- paid leave.
Overtime is not included in OTE. For more information contact the ATO on 13 10 20 or visit their website at www.ato.gov.au.
The following certified documents may be used:
One of the following documents only:
- current driver’s licence issued under State or Territory law
One of the following documents:
- birth certificate or birth extract
- citizenship certificate issued by the Commonwealth
- pension card issued by Centrelink that entitles the person to financial benefits
One of the following documents:
- letter from Centrelink regarding Government assistance payment
- notice issued by Commonwealth, State or Territory Government or local council within the past 12 month that contains your name and residential address.
- ATO Notice of Assessment
- Rates notice from local council.
Personal contributions – also referred to as ‘voluntary contributions’
A personal contribution can also be referred to as a ‘voluntary contribution’ or an ‘after tax contribution’. These are contributions you make from your take home pay, after you have paid tax. You can contribute regularly or make one off contributions.
You can make personal contributions if you’re:
- Under age 65
- Between age 65-75 and have been gainfully employed for at least 40 hours in 30 consecutive days during the financial year in which you want to make the contribution.
The age at which a member can gain access to preserved benefits which have built up in a super fund, provided the member has permanently retired from the workforce.
|Persons born||Preservation age|
|After June 1964||60|
|1 July 1963 – 30 June 1964||59|
|1 July 1962 – 30 June 1963||58|
|1 July 1961 – 30 June 1962||57|
|1 July 1960 – 30 June 1961||56|
|Before 1 July 1960||55|
Preserved benefits must remain in the super environment until the member has reached preservation age, or met another condition of release under the Superannuation Industry (Supervision) Act 1993. These conditions include:
- your retirement
- your resignation
- your death
- your total and permanent disablement, or
- rolling over your super to another complying super fund.
Private equity mainly involves investment in private or unlisted companies both in Australia and overseas. It can provide high levels of return but also comes with a high risk level. Currency movements may also impact returns.
Product Disclosure Statement
A document provided to you when a financial service provider offers or recommends a financial product. It includes information about the product’s key features, fees, commissions, benefits, risks, and the complaints handling procedure.
Property includes industrial and commercial property, both in Australia and overseas. It normally produces better returns than cash or fixed interest, but it can be a more volatile investment and is considered a moderate to high risk investment. Currency movements may also impact returns.
Return is the amount of money received from an investment or changes in the market value of that investment. It is usually expressed as a percentage of the amount invested.
Risk can mean a number of things, but ultimately is the likelihood of not receiving back the amount you invested. It is often expressed as the variability of returns. Investments such as cash have a low risk because the return will vary within a small range, while investments such as shares have a greater risk due to the large degree of variability in returns, including large negative returns.
A rollover is a transfer of all or part of a super account from one fund to another, or from a super fund to a complying retirement product.
Salary sacrifice super payments are made from before-tax income as a result of an arrangement between an employee and his employer. Salary sacrificing offers a number of benefits, particularly for those on a higher income, as it reduces the employee’s gross income, while the contributions themselves are taxed at a concessional rate within super.
Self managed superannuation funds (SMSFs)
A self managed super fund (SMSF) is a complying super fund under the Superannuation Industry (Supervision) Act 1993 which has:
- fewer than five members
- each individual trustee of the fund is a fund member
- each member of the fund is a trustee
- no member of the fund is an employee of another member of the fund, unless those members are related.
Socially responsible investments
An investment style that manages environmental, social and governance (ESG) risks associated with investments.
You can make contributions to StatewideSuper on your spouse’s behalf, providing your spouse is:
- under age 65
- between age 65 and 70 and has been gainfully employed for at least 40 hours in 30 consecutive days during the current financial year.
A tax rebate is available for people who make super contributions on behalf of a low income or non working spouse. The maximum rebate is $540, providing your spouse earns less than $10,800 a year and you’ve contributed at least $3,000. The money is put into an account in your spouse’s name. If they’re not already a StatewideSuper member all your spouse has to do is read the PDS and complete an application form and we’ll open an account in their name. Call us on 1300 65 18 65 to get yours. A partial rebate may be paid if your spouse earns between $10,800 and $13,800 or you contributed less than $3,000.
Statement of Advice (SOA)
A Statement of Advice is a document prepared by a Financial Planner based on the individual needs and objectives of a client. An SOA is sometimes referred to as a Financial Plan. This document is broken up into several sections and covers where the client is now in relation to their financial and personal situation and what their goals and objectives are. The SOA is a document the Financial Planners issue to the client which covers recommendations and steps required to achieve the client’s goals and objectives.
Statement of Compliance
A Statement of Compliance is a document issued by a super fund which confirms that they meet certain legal requirements as specified in Australian law.
Superannuation Complaints Tribunal
A tribunal established by the Federal Government to deal with complaints about decisions of super fund trustees.
Superannuation Guarantee (SG)
The Superannuation Guarantee (Administration) Act 1992 was introduced on 1 July 1992 outlining the responsibilities of employers in regards to providing the necessary superannuation support for their employees.
The SG effectively states that employers must make a contribution of 9% of their employees’ earnings base to a super fund which complies with Government standards.
In 2012, the federal Government announced that the SG rate will gradually be lifted to 12% by 2019-20. The first increase of 0.25% will happen on 1 July 2013.
Superannuation Guarantee Charge (SGC)
A charge imposed under the Superannuation Guarantee Charge Act 1992 on employers who do not meet the minimum superannuation guarantee requirements on behalf of employees.
Superannuation Industry (Supervision) Act 1993 (SIS Act)
Legislation that governs the operation of complying super funds in Australia.
Sustainability isn’t just about considering the impacts of decisions we make today, its’ about your future financial security.
For StatewideSuper, sustainability is about recognising that the actions we take and the way we invest will have an ongoing impact on the environment, society and the economy. Because it affects everything we do, we’ve made sustainability a guiding principle across our business – our investments, our organisation and our place in the community.
A member can choose to change the investment option for their account balance and/or future transactions at any time. This is called an investment switch. The first switch in any financial year is free. Any further switches in the same financial year will attract a fee (StatewideSuper’s fee is $20 for each switch.) This fee will be deducted from the member’s account at the time of the switch.
The crediting rate to be applied to a switch between investment options will be the next determined crediting rate after the date the written election is received by StatewideSuper. Switching elections will be processed once per month on the 20th of the month. A signed and dated Investment Choice form requesting a switch needs to be received by Statewide prior to 5pm on the 19th of the month (or next working day in the event of a public holiday or a weekend) to be processed using the next determined crediting rates, effective 20th of the month.
An election to switch received after this date will not be processed until approximately the 20th of the next month.
(The effective date for July investment switches may differ as this is dependent on completion of the annual review)
Tax File Number (TFN)
A unique number issued by the Australian Tax Office (ATO) to individuals and organisations to increase the efficiency in administering tax and other Commonwealth Government systems.
Total and Permanent Disablement (TPD)
A condition for which most super funds provide insurance cover. The definition of TPD may vary slightly from fund to fund, but generally requires that, for payment of the benefit, the trustee must be satisfied that ‘the member will never again be able to work in any occupation to which they may be suited by reason of their training, education or experience’.
Transition to Retirement Pension
A Transition to Retirement Pension enables members who have achieved their preservation age to access their superannuation benefits in the form of a pension (income stream) without retiring or satisfying another condition of release. You need to draw a minimum pension each year based on your account balance, with the maximum pension being 10% of your account balance. You cannot make lump sum withdrawals.
A trustee is responsible for looking after a super fund for the benefit of the members. The trustee is legally responsible for managing the fund in accordance with the Trust Deed and relevant legislation.
Undeducted contributions are contributions paid to a super fund where a tax deduction has not been claimed. Undeducted contributions are not subject to tax upon entry to a fund, for example member after-tax contributions. Undeducted contributions are also known as non-concessional contributions.
Please see Personal contributions.