Superannuation Definitions

Asset class / allocation – The type of investment such as shares, bonds or property and how they are they are spread between the different investment options such as balanced or high growth.

Accumulation fund – An accumulation fund is a fund where the benefit a member receives is the total of contributions to the fund plus/minus earnings on those contributions, less any deductions including tax.

Adjusted taxable income – Adjusted taxable income is your taxable income plus your total surchargeable contributions. Surchargeable contributions include salary sacrifice contributions and insurance premiums paid by your employer and may include part of an employer eligible termination payment (ETP) transferred into the fund.

ASFL – Australian Financial Services Licence.

ATO – Australian Taxation Office

AWOTE – Average Weekly Ordinary Time Earnings is a measure of wage or salary levels of employees in Australia as measured by the Australian Bureau of Statistics and published monthly.

Benchmark – Benchmark as used in the investment options is the indicative level of investment in that asset class. The actual amount invested in each asset class is allowed to vary within ranges set by the Trustee.  A benchmark can also be something against which the performance of an Asset class is measured.

Consumer Price Index (CPI) – A measure of inflation that compares the cost of living over time.

Contributions – Contributions are regular (i.e. via payroll) or lump sum payments to a super fund. They can be compulsory contributions made by your employer (as required by law or an industrial award) or additional contributions made by either the employer, or by members for themselves or their spouses.

Crediting rate – the amount applied to your member account with BUSS(Q) as a result of the returns earned on investments, less fees and taxes. Crediting rates can be negative or positive.

Defensive assets – a general term for assets such as fixed interest and cash where the return is comprised entirely or predominantly of interest income or yield, rather than capital growth. These assets are considered to be less risky than ‘growth’ assets as the relatively high level of interest income or yield means that valuations are less volatile.

Employer contributions – Employer contributions include Superannuation Guarantee contributions and any additional employer contributions including salary sacrifice contributions.

FBT – Fringe Benefit Tax

Growth assets – a general term for assets such as shares and property which provide investment returns (comprising both capital growth and income) which outperform inflation.

Inflation rate – This is the rate at which the price of goods and services rise or fall. This is usually shown as a percentage and is measured by the Consumer Price Index (CPI).

Investment management fee – is the fee paid by BUSS(Q) to its investment managers.

Investment objectives – These are the goals that the investment option aims to achieve.

Investment risk – Investment risk is the degree to which returns fluctuate, that is, go up and down in value over time relative to a long-term average.

Investment strategy – This is the way assets in the various options are invested to achieve the investment objectives.

Medicare levy – is the 1.5% of taxable income paid by most Australian individuals, on top of normal income tax, to help pay for the public health system.

Personal Health Statement – a questionnaire you complete that seeks information about your health.

Preservation age – The age at which a member can gain access to preserved benefits that have built up in a super fund, approved deposit fund or retirement savings account.

Preserved benefit – Preserved benefit is that portion of a superannuation benefit that government legislation requires to be maintained, either in a super fund, approved deposit fund or retirement savings account, until certain conditions are met.

Reasonable Benefit Limit (RBL) – An RBL is the maximum amount of concessionally taxed benefits a person can receive during their lifetime.

Salary sacrifice contributions – Salary sacrifice contributions are where you have agreed to forego part of your before-tax remuneration in return for your employer making superannuation contributions of the same value.

Switching – Switching is changing from your current investment option or mix of options to another.

TFN – Tax File Number

Transfers in – Transfers in are superannuation accounts you transferred to BUSS(Q) from other superannuation funds and any amounts received from the Australian Taxation Office on your behalf.

Trustee – a company (or person) that has legal responsibility for the financial aspects (receipts, disbursements and investment) of funds. BUSS(Q)s Trustee is BUSS (Queensland) Pty Ltd.

Trust Deed – A Trust Deed is a document that sets out the rules for the establishment and operation of a superannuation fund.

Volatility – Individual investment values rise and fall in response to rises and falls in the values of the investment markets. Volatility is the extent to which these rises and falls occur. For example, an investment whose value rises and falls quite significantly over a short period is said to be volatile.