Glossary

Investment manager who is required to beat a benchmark; achieved by buying securities in different proportions from their benchmark weight; actively moves away from benchmark weight in individual investments where the manager has a conviction that those investments will either out- or under-perform the benchmark

Investment approach that aims to achieve returns above a set benchmark, identifying mispriced securities, traded for profit

Non-traditional assets outside those traditional asset classes of shares, property, fixed interest and cash; examples include infrastructure assets, buy-out funds and venture capital

Group of financial assets with similar investment characteristics such as Australian company shares in asset class of equity

Indexes or other market measurements to ‘benchmark’ investment performance and risk against for a comparable investment

Certificate to list any pre-existing medical condition that may affect your ability to work until retirement; generally issued if required following your medical examination upon first joining CSS

Investment option to give you more earnings surety for your taxed accumulation components, rather than higher but more volatile earnings from a balanced option such as your Default Fund

Definition in Family Law Act 1975includes children:

• born to a woman as the result of an artificial conception procedure while that woman was married to, or was the de facto partner of, another person (whether of the same sex or opposite sex); and

• who are children of a person because of an order of a state or territory court made under a state or territory law prescribed for the purposes of 60HB of the Family Law Act 1975, giving effect to a surrogacy agreement

Trustee of CSS (replaced ARIA on 1 July 2011); provides superannuation services and products to Australian Government employees and Military Personnel through nine schemes:

• Commonwealth Superannuation Scheme (CSS)

• Military Superannuation and Benefits Scheme (MilitarySuper)

• Public Sector Superannuation Scheme (PSS)

• Public Sector Superannuation accumulation plan (PSSap)

• 1922 Scheme

• DFRB Scheme

• Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme)

• Papua New Guinea Scheme (PNG Scheme)

• DFSPB

Known in the past as deductible contributions, these contributions are made from before-tax income when you are a CSS contributing member; generally considered ‘employer contributions’ in CSS

CSS members cannot have concurrent memberships; if you join eligible employment as a contributing member without leaving your original employment, you must join PSS for your second employment

You can elect a basic contribution rate of between 2% and 10% of your salary (as a whole percentage), or do not contribute at all. You can also elect to make supplementary contributions to CSS from your after-tax salary. You can change your contribution rate at any time.

Pension indexed half-yearly in line with consumer price index

Investment in government bonds, fixed interest or cash investments; investing in debt generally offers less risk but also lower returns than other asset classes such as equity (shares) or property

Your CSS investment option if you have not elected to change your choice of option in the past; referred to as ‘Default’ Fund since the introduction of Cash Investment Option in December 2004

Individual holding office as a Director of Commonwealth Superannuation Corporation (trustee of CSS); includes Chairperson

In relation to a member who has died, an eligible child is a child of the deceased member or pensioner or of their spouse (including an adopted child, an ex-nuptial child, a foster child, a step-child, a ward, or a child of the member or spouse within the meaning of the Family Law Act 1975) who:

• has not reached age 16

or

• is age 16 or more but less than age 25 and:

• is receiving full-time education at a school, college or university; and

• is not ordinarily employed or self-employed

and

• immediately before the death of the member or pensioner:

• ordinarily lived with the member (except where the child is a child of a spouse of the deceased person but not of the deceased person);

• was, in the opinion of Commonwealth Superannuation Corporation (trustee of CSS), wholly or substantially dependent upon the member or pensioner; or

• where the child is born, after the death of the member or pensioner, and would have, in the opinion of Commonwealth Superannuation Corporation, been living with the deceased member or pensioner or so dependent on them if the person had been born before the death of the deceased

Paid generally as an indexed pension; it is your main benefit available from CSS; depending on your reason for leaving CSS, it is determined by your final super salary, length of CSS contributory membership, prospective (‘potential’) membership and age at exit

Financial planning is the process of meeting your life goals through the proper management of your finances. Your life goals could include buying a home to live in, saving for your children's education, managing debt or planning for retirement

Use of debt to finance assets, usually expressed as the ratio of debt outstanding to gross asset value

Payable if Commonwealth Superannuation Corporation, trustee of CSS, agrees to your retirement because you suffer a permanent medical condition likely to stop you working again; if totally and permanently incapacitated to the extent that you are unlikely to work again in any occupation for which you are reasonably qualified by education, training or experience (or could become so after retraining), you may be retired on invalidity grounds and become entitled to payment of invalidity benefits. A partial invalidity benefit is a form of income maintenance, paid as a pension when your salary is reduced because a permanent medical condition causes you to be downgraded or to work reduced hours; also payable if you retired on medical grounds and then returned to work in a position lower than the one you held when you were first retired on medical grounds

Retrenchment or redundancy, when your employment is compulsorily terminated by your employer, or when you accept an offer of retrenchment or a redundancy package, or when your employment is terminated on inefficiency grounds, due to having lost essential qualifications or, in restricted cases, on termination of contracts

Relationship between a member or pensioner and a person of the opposite or same sex who lived together as husband and wife or partners in a permanent and bona fide domestic relationship for a continuous period of at least three years at the date of the member or pensioner’s death; if this relationship existed for less than three continuous years at the date of death, eligibility can still be determined where Commonwealth Superannuation Corporation, the trustee of CSS, is satisfied that the person ordinarily lived with the member or pensioner as husband and wife or as partners

Your basic and supplementary (if any) contributions to CSS plus scheme earnings which may be positive or negative

To help you keep a record of your contributions and super position in CSS, each year CSS calculates your accrued contributions, scheme earnings and potential benefits as at 30 June; your Member Statement is also available in your secure Member Services Online area

Age which applies to an individual in respect to minimum retirement and the terms and conditions of their employment

Previously known as undeducted contributions, these are personal contributions made after June 1983 from your after-tax salary when you were a CSS contributing member

Pension purchased with your member and/or productivity components; it is not indexed to the Consumer Price Index (see CPI-indexed pension) but is paid tax-free from age 60

Investment manager who is required to track the performance of a relevant investment index as closely as possible

Investment approach that aims to equal the overall change in a specific index such as the Dow Jones Index

Pension paid to you under CSS scheme rules

Period from your first to last day of scheme membership

Fortnightly contributions paid by your employer after June 1990; paid from a ‘taxed’ source

Paid due to total and permanent incapacity, in consequence of employment termination

Partial income maintenance from the time any sick leave expires until an assessment is made about retirement on invalidity grounds

Amount of your super for eligible service before 1 July 1983

Productivity contributions paid by your employer for the period before July 1990; it is paid from an ‘untaxed’ source

Age up to which certain components of your superannuation benefit must remain 'preserved' within CSS; you cannot access them until you reach preservation age, except in special circumstances

Employer-contributed amount dependent on your salary, paid fortnightly, to which scheme earnings are applied; it forms part of any benefit paid to you from CSS; it is from a ‘taxed’ source

Investments including office buildings held directly or through a property trust; returns derive from rent, property development and increases in property market values. Over the long term, property investments provide lower risk and return than equity (or shares)

Abolished on 1 July 2007; despite RBLs no longer applying to contributions made after 1 July 2007, CSS is required by law to continue to maintain member RBL information

Individual who is a permanent full-time employee, a permanent part-time employee or a temporary full-time employee for at least three months; also a temporary part-time employee who is employed for at least three months and can access sick and recreation leave

Please see Involuntary Retirement

Transfer of lump sum amounts into a super fund, approved deposit fund or deferred annuity in order to avoid requirement to pay lump sum tax (if amount is not accessed until minimum retirement age)

Commonwealth Superannuation Corporation (trustee of CSS) administers CSS in accordance with provisions in the CSS Act and is responsible for managing and investing CSS funds

Shares (or equity) represent part-ownership of a company; shares deliver profits via share price increases and dividends; shares may provide greater long-term returns than other investments, though fluctuations may also be greater in the short term

Investment position that benefits from a decline in market price

Superannuation Industry (Supervision) (SIS) Regulation; governing federal legislation for superannuation and the super industry; SIS provides legislative basis for Superannuation Guarantee (SG)

The Superannuation Industry (Supervision) (SIS) Regulations introduced a number of changes from 1 July 1999; one is for lump sum amounts accessed before reaching preservation age; your SIS upper limit is the amount you could have taken as a lump sum had you received an involuntarily retirement (retrenchment) on 30 June 1999. Any lump sum benefit paid to you before you reach preservation age cannot exceed your SIS upper limit. If you preserve your CSS benefit and claim your benefit before reaching your preservation age, your lump sum cannot exceed your SIS upper limit. You must pay any balance in excess of your SIS upper limit to an eligible rollover fund

Under the Superannuation Act 1976, a spouse is a person who had a marital or couple relationship with a member or pensioner at the time of their death; where a person previously had a marital or couple relationship but the relationship finished before the date of death, a spouse benefit may still be payable if:

• at the time of the deceased person’s death, the person was legally married to the deceased person, and

• they were wholly or substantially dependent upon the deceased person at the time of the deceased person’s death

Additional super contribution amount paid by the Australian Government into super for low income earners who have made after-tax superannuation contributions in the financial year

SG ensures all employers must contribute a prescribed level of contributions on behalf of their employees to a complying superannuation fund; CSS exceeds the SG prescribed minimum

Tax on certain contributions in specific relation to high income earners; introduced on 20 August 1996 and abolished in July 2005. Surcharge debts for this period are recorded on member accounts and, if not paid during membership, must be paid when their benefit is claimed

Previously known as an Eligible Termination Payment (ETP), this payment consists of two components – tax-free and taxable 

Your basic salary plus any recognised allowances; additional payments such as overtime, accommodation or travel are not counted; your ‘super salary’ is the basis for your basic contribution rate

TBC – Personal contributions in excess of the compulsory 5%

Benefit component including concessional contributions made since 1 July 1983; may contain taxed and untaxed elements

Benefit component consisting of post-June 1990 productivity member contributions, super co-contribution amounts and transfers from other funds; this component was previously known as ‘funded’

Benefit component that may include contributions made before 1 July 1983, non-concessional contributions made since 1 July 1983 and post-June 1994 invalidity amounts

Reduction in tax liability; often a tax offset is described as a percentage, for example, an offset of 10% to a pension; offsets differ from tax deductions, which reduce your taxable income

Australian Taxation Office definition – a payee will be taken to be terminally ill if it is certified by two medical practitioners (at least one being a specialist) that they suffer an illness which in the normal course would result in death within a period of 12 months

Highest income tax rate

If you suffer a physical or mental condition resulting in you being unlikely to work permanently ever again in a job for which you are reasonably qualified by education, training or experience or could be so qualified after retraining

Choose to preserve your benefit in CSS, and, within three months join another eligible superannuation scheme, a transfer value can be paid into that scheme in return for benefits in that scheme

Previously related to notional fund earnings applied to a member’s account from 30 June 2003 to 30 June 2007; from 1 July 2007, Commonwealth Superannuation Corporation (ARIA before 1 July 2011) has allocated fund earnings to reflect actual investment performance; these earnings may be positive or negative

Investment structure whereby multiple investors commit funds to a pooled trust, which purchases and manages direct interests in property