HomeGlossary

Glossary

Words and phrases you may come across while looking at the UniSuper website.

For anything not listed here, the following glossaries might assist:

Accumulation 1

If you are an Accumulation 1 member, your benefits in the Fund are kept in an account in your name. All contributions are paid into this account and invested in your chosen investment option or options. Your super balance accumulates over time with investment returns (which may be positive or negative). Your final benefit is the total of your UniSuper account (minus fees and taxes) and is dependent on investment performance. Employer contributions to your account are generally 9%, and you are not required to make any contributions to your account.

Accumulation 2

If you are an Accumulation 2 member, your benefits in the Fund are kept in an account in your name. All contributions are paid into this account and invested in your chosen investment option or options. Your super balance accumulates over time with investment returns (which may be positive or negative). Your final benefit is the total of your UniSuper account (minus fees and taxes) and is dependent on investment performance. Employer contributions to your account are generally higher than the compulsory 9%, and members are also required to make contributions to their account.

Accumulation Super

An Accumulation Super account provides you with a superannuation/retirement benefit based on your account balance. It includes contributions to your account and any investment earnings based on those contributions, less any fees and tax. It is important to note that members carry investment risk. If investments perform badly, your benefits are directly affected. This is because the earnings rate is applied to your account regardless of whether it is positive or negative.

ACF

See: Average Contribution Factor (ACF)

Adjusted taxable income

The measure of income used by the Australian Taxation Office in determining your liability to surcharge tax.

Administration fee

A fee to cover the cost of running the Fund on a day-to-day basis, including, in UniSuper's case, its dedicated in-house administration and Helpline, Benefit Statements, publications and website, one-to-one consultations and other financial support services. It is deducted from your Accumulation Super account or allowed for in the DBD formula. It is a flat fee for all but Flexi Pension and Term Allocated Pension accounts, and is indexed annually in line with the Consumer Price Index.

All Ordinaries index

An index on the Australian Stock Exchange (ASX) that acts as the market indicator for Australia's equity (i.e. share) market. It comprises the 500 largest companies listed on the ASX.

Anti-detriment payment

An anti-detriment payment represents a reimbursement of the contributions tax paid on a member’s taxable contributions. Payment is made to certain eligible beneficiaries in addition to a lump sum death benefit that would otherwise have been paid. For more information, please speak to a licensed financial adviser or tax adviser.

Asset

A resource of a company, individual, business or other party, which is held to produce a future economic benefit such as income or capital gain. A superannuation fund’s assets include shares, property, cash, bonds and life insurance policies.

Asset Class

The major asset classes are shares, property, fixed interest and cash. All asset classes have different risk and return characteristics.

Australian Prudential Regulation Authority (APRA)

The Federal Government agency responsible for the prudential regulation of banks, life insurance companies, general insurance companies and superannuation funds.

Australian Securities and Investments Commission (ASIC)

The Federal Government agency responsible for the regulation of companies, the securities and futures industries, consumer credit and finance broking. ASIC is also responsible for monitoring and promoting market integrity and consumer protection in relation to the Australian financial system, the provision of financial services and the payments system.

Average Contribution Factor (ACF)

ACF is the time-weighted average of your contribution factors over your periods of Benefit Service with UniSuper participating employers. Your contribution factor is based on the level of standard member contributions you make. For example, if you always make 7% (after tax) standard member contributions, your ACF will be 100%. Reducing the level of your standard member contributions or ceasing to make standard member contributions will decrease your ACF.

Average Service Fraction (ASF)

ASF is calculated by averaging all of your Service Fractions over your periods of Benefit Service with UniSuper participating employers. Your ASF will be 100% if you have always worked on a full time basis at your UniSuper participating employer and have not had any breaks in this employment. Any periods where your Service Fraction was zero including any periods when your defined benefit component was deferred in the DBD and any periods of employer-approved leave without pay, periods of part-time work, half-contributions or breaks between ceasing employment with one UniSuper participating employer and starting with another UniSuper participating employer, will reduce your ASF.

Average Weekly Ordinary Time Earnings (AWOTE)

A measure of wage and salary levels of employees in Australia as measured by the Australian Bureau of Statistics and published monthly. Economists and others use AWOTE as one indicator of economic activity and wage inflation trends. The Government uses movements in AWOTE as a way of removing the inflationary impact from various superannuation calculations. For example, the concessional contributions cap and the low rate threshold on lump sums are indexed to AWOTE.

Benchmark

A benchmark describes the standard against which the performance of a security, investment fund or portfolio can be measured.

Benefit

The amount of money a member is entitled to receive upon resignation, retirement, death, disablement, or other circumstances as specified in the Trust Deed.
See also: Death Benefit Defined benefit component Defined Benefit Division (DBD) Lump Sum Preserved benefits

Benefit salary

Benefit salary is the average of your annual equivalent full-time indexed salary for the last three years of service as a contributing member. If you have not been a contributing member for more than three years, your benefit salary is averaged over the period you have been a contributing member.
See also: Defined Benefit Division Contributing member

Benefit service

Benefit service is generally your period of service as a contributing member counted in years and days. Periods of employer-approved leave without pay and periods when you are a deferred member of the Defined Benefit Division count toward your benefit service.

Binding death benefit nomination

A binding death benefit nomination is a written direction to the Trustee that sets out the dependants and/or legal personal representative that you want to receive your benefit in the event of your death and the proportions payable to each beneficiary. If your binding death benefit nomination is valid and in effect at the date of your death, the Trustee must pay your benefit in accordance with the nomination. A valid binding death benefit nomination remains in effect for three years from the date it was first signed, last amended or confirmed.

BPAY

A method of making payments by phone directly from a bank, building society, credit union, or credit card account electronically through online or phone banking.

Cash

Investments in short-term money markets such as bank bills and treasury notes.

Choice of Fund

Under the Choice of Fund legislation, certain employees are eligible to choose the super fund into which their SG contributions are paid. Eligibility for Choice of Fund depends on your conditions of employment. Choice of Fund is generally not available to employees whose conditions of employment are governed by an award or industrial agreement which the super fund which employer contributions are to be paid. DBD members are not eligible for Choice of Fund.

Complying superannuation fund

A superannuation fund that meets the requirements of the Superannuation Industry (Supervision) Act 1993 (SIS Act), and qualifyies for concessional tax rates.

Compound interest

Compound interest means interest which is paid on both the principal and the interest previously earned. For example, on an annual 10 per cent interest rate and a $100 principal amount, interest in the first year is $10 (10% x $100). In the second year, interest earned is $11 (10% x $110).

Concessional contributions

Concessional contributions are contributions made from before-tax money. They include employer and any salary sacrifice contributions. Concessional contributions incur the 15% contributions tax. Additional taxes apply if you exceed the concessional contributions cap or if you do not provide your Tax File Number.

Concessional contributions cap

There is a limit on the amount of concessional (before-tax) contributions that can be made into superannuation each financial year. The limit for 2011/2012 is $25 000. Contributions over this cap will taxed at 46.5% (an additional 31.5% on top of the 15% contributions tax). Under transitional arrangements, a higher annual cap of $50 000 applies to persons aged 50 or over until 30 June 2012.

Conditions of release

Under the preservation rules, you must meet a condition of release before your preserved benefits can be accessed. The conditions of release include:

•   Permanent retirement from the workforce on or after reaching your preservation age
•   Termination of employment after reaching age 60
•   Attaining age 65
•   Permanent incapacity
•   Death
•   Terminating employment with an employer who contributed to UniSuper on your behalf and your benefit is less than $200.

Consumer Price Index (CPI)

A measure of the quarterly changes in the prices of selected goods and services which account for a high proportion of representative expenditure of metropolitan wage and salary earners. CPI is calculated and reported by the Australian Bureau of Statistics and is the most common method of measuring the rate of price inflation.

Contributing member

A contributing member is a Defined Benefit Division or Accumulation 2 member who is making standard member contributions, half contributions, has elected to reduce their standard member contributions under the Fund’s contribution flexibility arrangements or is relieved from making standard member contributions.

Contribution splitting

A government measure allowing members to split certain superannuation contributions with their spouse.

Contributions tax

A tax (currently 15%) deducted from employer contributions. For this purpose, any salary sacrifice contributions you make are treated as employer contributions.

Crediting rate

The rate of investment return credited (or debited) to your account, based on the performance of the investment option your accumulation component/account is invested in. The crediting rate is usually expressed as a percentage per annum.

DASP

See: Departing Australia Superannuation Payment (DASP)

Death benefit

The benefit payable to a member’s dependants and/or legal personal representative in the event of their death.

Defined benefit component

The defined benefit component is that part of a Defined Benefit Division member’s benefit that is calculated in accordance with a formula that takes into account their benefit salary, benefit service, Lump Sum Factor, Average Service Fraction and Average Contribution Factor.

Defined benefit Division (DBD)

DBD members have two components to their super, a defined benefit component and an accumulation component. DBD members receive 14% employer contributions into the defined benefit component and 3% additional employer contributions into the accumulation component. The value of a member’s defined benefit component is calculated in accordance with a formula. DBD members are encouraged to make standard member contributions at the rate of 7% from their after-tax salary (or 8.25% from their before-tax salary) into their defined benefit component to maintain full defined benefit entitlements. DBD members are able elect to reduce their level of standard member contributions under the Fund’s contribution flexibility arrangements. The value of a member’s accumulation component is based on the amount of contributions made and the investment earnings received.

Departing Australia Superannuation Payment (DASP)

The lump sum benefit paid to temporary residents whose visa has expired or been cancelled and who have permanently departed Australia.

Dependant

Your dependants include your spouse (including legal or de facto partner of the opposite sex or same sex), your children or the children of your spouse (regardless of age), any person who was in an interdependency relationship with you at the date of your death and any other persons (irrespective of age) who, in the Trustee’s opinion, are, or were in any way financially dependent on you at the date of your death.

Disablement benefit

Defined Benefit Division and Accumulation 2 members may be eligible for a disablement benefit under the Fund’s inbuilt benefit provisions.

Diversification

Spreading investments across a number of different assets, asset classes, countries or investment managers to reduce risk and/or volatility.

Early release of benefits

Under the preservation rules, you may be able to access all or part of your preserved benefits early in certain limited circumstances, provided you satisfy the eligibility criteria. These are:
•    Specified compassionate grounds: You must apply directly to the Department of Human Services.
•    Severe Financial hardship: You must apply to the Trustee for approval. You must be receiving eligible Commonwealth Government income support benefits to qualify.
•    Terminal medical condition.

Eligible rollover fund

An eligible rollover fund (ERF) is a superannuation fund which is eligible to receive benefits automatically rolled over from other super funds. ERFs are required to provide member-benefit protection and generally accept inactive small accounts and lost member account from other superannuation funds.

Employment termination payment (ETP)

A lump sum payment made to an employee on termination of employment. ETPs cannot be rolled over into a superannuation fund.

ERF

See: Eligible rollover fund

ETP

See: Employment termination payment

Fiduciary

A fiduciary is an authorised manager of assets for the benefit of the owner of the assets (or members) rather than its own benefit.

First home saver account

First home saver accounts offer a tax-effective way of saving for your first home through a combination of government contributions and low taxes. UniSuper is not a registered FHSA provider, and cannot accept FHSA contributions or transfers. See the Australia n Tax Office website for more details on FHSAs.

Growth assets

Growth assets include shares and property. They have the potential to achieve higher returns over the longer term compared with defensive assets, but have a higher risk of low or negative returns from time-to-time.

Hedging

Hedging is the practice of investing in something to protect against the risk of loss in another investment. While hedging helps reduce potential losses, it can also tend to reduce potential profits.

Indirect Cost Ratio (ICR)

The indirect cost ratio (ICR) is the management costs incurred in connection with each investment option (excluding managements costs that are charged directly to member’s accounts) as a percentage of the average net assets of the relevant investment option. The ICR is not deducted directly from a member’s account, it is deducted from the investment earnings and assets of the investment option. The ICR includes all internal and external fees and costs incurred by UniSuper in managing the investment options, the member protection levy, performance-based fees and any expenses, costs or liabilities not covered by the administration fee.

Industry superannuation fund

A multi-employer superannuation fund, usually covering a particular industry or group of industries and accepting contributions from any employers in these industries. Most industry superannuation funds were established in the mid to late 1980's to accept award contributions. UniSuper is an industry super fund for Australia’s higher education and research sector.

Infrastructure

Infrastructure refers to essential facilities and services such as roads, power stations, water supply and other utilities. Investment in infrastructure can take a number of forms, including: a loan to a Government or semi-Government authority; equity in a particular development; a loan to a participant in a development, such as an equity holder or a financier.

Interdependency relationship

An interdependency relationship may exist between two people if they live together in a close personal relationship, and one or each of them provides the other with financial support, domestic support and personal care. If two people have a close personal relationship but do not live together because one or both of them suffer a physical, intellectual or psychiatric illness, they may still be deemed to be in an interdependency relationship.

Investment Choice

Members with accumulation super are eligible to participate in UniSuper’s investment choice program. UniSuper has a range of investment options. You can invest in one of UniSuper’s diversified ‘Pre-Mixed’ options or you can take a ‘Self-select’ approach and invest in more than one Pre-Mixed options and/or one or more of UniSuper’s Single Asset Class options. If you do not select an investment option, your accumulation super will be invested in the Fund’s default investment option, the Balanced option.

Investment Return

The amount of money that an investment earns or loses. Investment returns are usually expressed as an annual percentage.

Investment risk

Investment risk is the likelihood that money will be lost on an investment. Investment risks can come from a range of sources depending on the investments held. For example, changes in market, economic, social and political conditions can all affect different investments in different ways.

Lost members

A member will be become a lost member if:
•   mail is sent to your last known address at least once and is returned unclaimed
or
•   if UniSuper has never had an address for you
or
•   you have been a member for more than two years, and UniSuper has not received any contributions or rollovers within the last five years.

Lump sum benefit

A lump sum benefit is a benefit payable as a cash payment rather than as pension or annuity.

Lump sum benefits tax

A lump sum benefit can include a taxable component, and tax-free component. Tax is payable on the taxable component of the lump sum benefits.

Lump sum factor

Your lump sum factor is determined by your age, as set out in Schedule 2 – Table A of the UniSuper Trust Deed.

Medicare levy

The Medicare levy funds the scheme that gives Australian residents access to health care. The Medicare levy surcharge may apply to high income individuals or families who don't have private patient hospital cover.

Member protection standards

All super funds are required to comply with the member protection standards to ensure that small account balances are not eroded by administration fees. If at the end of each six-month period, your account balance is less than $1,000 and includes or has included mandated employer contributions, the administration fee will not exceed the investment returns received for that period. The member protection standards do not apply to taxes or insurance premiums.

Non-concessional contributions

Non-concessional contributions are contributions made from after-tax money, or contributions for which you don’t claim a tax deduction. They include voluntary member contributions and spouse contributions.

Non-concessional contributions cap

There is a limit on the amount of non-concessional (after-tax) contributions that can be made into superannuation each financial year. The limit for 2011/2012 is $150 000. If you are 64 years old or less on 1 July of the financial year, you are able to bring forward the next two years of non-concessional contributions, but certain conditions apply. This means you can contribute up to $450,000 over a three-year period. If you are 65 years old or over on 1 July of the financial year, you cannot access the bring-forward provisions. Your non-concessional contributions cap is $150,000. Excess non-concessional contributions tax is payable on excess non-concessional contributions at a rate of 46.5%.Your excess concessional contributions also count towards your non-concessional contributions cap.

Notional taxed contribution

Contributions made to finance the defined benefit component for Defined Benefit Division (DBD) members are not linked to the individual member. The Fund’s actuary must determine the notional taxed contributions for each DBD member for each financial year.

Optional insurance cover

UniSuper provides death and disablement cover (including cover for terminal illness) and income protection cover to members who meet the eligibility criteria. The Trustee has taken out group life policies to provide the optional insurance cover.

Outperformance

This is when an investment achieves a higher investment return than the benchmark or other measure it is compared with.
See also: Benchmark Investment Return

Pension

A pension from a superannuation fund provides a regular income stream.

Permanent incapacity

A member may access their preserved and restricted non-preserved benefits on the grounds of permanent incapacity if the member have ceased gainful employment and the Trustee is reasonably satisfied the member is unlikely because of their physical or mental ill-health, to ever again engage in gainful employment for which the member is reasonably qualified by education, training or experience.

Portability

You can transfer all or part of your accumulation component/account to another complying superannuation fund once every 12 months under the portability transfer rules. Your employer will continue to make contributions into UniSuper on your behalf. You can request a portability transfer once every 12 month period. If you are not transferring all of your benefit you must leave a minimum of $5,000 in your accumulation component/account. The portability transfer rules do not apply to the defined benefit component of a Defined Benefit Division member’s account.

Preservation

Superannuation is a long term investment. The Government has placed restrictions on when you can access your super. Generally, you super must be preserved in the superannuation system until you permanently retire from the workforce on or after reaching your preservation age.

Preservation age

The age at which you can access preserved benefits. Your preservation age varies depending on your date of birth.

Date of Birth	Preservation age
Before 1 July 1960	55
1 July 1960 - 30 June 1961	56
1 July 1961 - 30 June 1962	57
1 July 1962 - 30 June 1963	58
1 July 1963 - 30 June 1964	59
From 1 July 1964	60

Preserved benefits

All employer and member contributions and all investment earnings must be kept in the superannuation system unless you permanently retire from the workforce on or after reaching your preservation age. Under the preservation rules, members are able to access part or all of their preserved benefits early in certain limited circumstances. Defined Benefit Division members generally cannot access their defined benefit component unless it consists entirely of unrestricted non-preserved benefits.

Property

Investments in property include investing in industrial, retail or commercial real estate.

Rebalancing

If you choose a self-select investment menu by investing in more than one UniSuper investment option, your portfolio’s overall mix of assets may change over time if left unchecked. This is because each investment option will perform differently over time, some options may achieve high returns, while others may achieve low or even negative returns. As a result, the overall percentage of your super invested in each option may be quite different over time from the breakdown you originally intended. By regularly checking your portfolio for such changes, and rebalancing your portfolio (e.g. through investment switching), you can ensure your super remains invested according to your personal financial objectives.

Restricted non-preserved benefits

Restricted non-preserved benefits can be accessed when you terminate employment with an employer who had contributed to UniSuper on your behalf. Restricted non-preserved benefits can also be accessed if you meet a condition of release for preserved benefits. Defined Benefit Division members generally cannot access their defined benefit component unless it consists entirely of unrestricted non-preserved benefits.

Reversionary beneficiary nomination

A reversionary beneficiary nomination allows for the balance of a member’s pension to continue to be paid to an eligible dependant as a pension rather than a lump sum, in the event of the member’s death. This option may provide greater certainty for members wanting to ensure an eligible dependant receives an ongoing income stream. A nominated reversionary beneficiary must be an eligible dependant of the member at the date of their death. Other restrictions apply, including where a child is nominated as a reversionary beneficiary.

For more information about eligibility of dependants and the reversionary beneficiary option, refer to the Your guide to pensions booklet.

Reversionary pension

A reversionary pension is a pension that continues to be paid after the death of the original pension member.

Rollover

A rollover is when a superannuation benefit is transferred from one superannuation fund into another superannuation fund.

Salary sacrifice contributions

Salary sacrifice contributions are contributions made into superannuation from your before-tax salary under an arrangement you have with your employer.

SCT

See: Superannuation Complaints Tribunal (SCT)

Service fraction

If you are a Contributing Member who works on a full-time basis, your Service Fraction is generally 100%. If you work on a part-time basis, your Service Fraction will be less than 100% to reflect your employment conditions. If you cease to be a Contributing Member, your Service Fraction will be zero. For example, you defer your defined benefit component in the Defined Benefit Division, take a period of employer-approved leave without pay or a break between ceasing employment with one UniSuper participating employer and starting with another UniSuper participating employer.

SG

When you buy shares in a company, you are buying a part of that company. This means you share in the company's performance in the form of profits which can be given to you as dividends and/or capital growth through the value of your shares increasing. Companies generally list on the stock exchange to raise capital for their company and to create a market in their shares.

SIS Act

Socially Responsible investing

Socially responsible investment involves investing in companies with a more socially responsible and sustainable investment practices as compared to their peers. Investments are selected having regard to labour standards, environmental, social and ethical considerations.

SPIN

See: Superannuation Product Identification Number

Spouse contributions

Spouse contributions are non-concessional (after tax) contributions are made by a person on behalf of their eligible spouse.

Super co-contribution

The super co-contribution is a government initiative to help low or middle income earners to boost their super savings. If your total income is $31,920 p.a. or less, the Government will match each $1 of after-tax contributions you make into super up to a maximum of $1,000. If you are eligible, all you need to do is make an after-tax contribution and lodge an income tax return.

Superannuation Complaints Tribunal (SCT)

An independent body set up by the Federal Government that deals with superannuation-related complaints.

Superannuation Guarantee (SG) legislation

The legislation governing the superannuation guarantee obligations of employers and which sets out the minimum level of contributions an emploer must make for its employees.

Superannuation Industry (Supervision) Act 1993 (SIS Act

The legislation governing the prudential mamagement of complying superannuation funds

Superannuation Product Identification Number

The Superannuation Product Identification Number (SPIN) is the standard method of identification for superannuation products within the financial services industry. UniSuper's SPIN is UNI0001AU.

Tax file number (TFN)

The Australian Taxation Office issues a unique nine digit number to individuals to help it administer tax and other Government systems. If you do not provide your TFN to UniSuper, it is not permitted to accept any non-concessional (after-tax) contributions from you and any concessional (before-tax) contributions such as employer and salary sacrifice contributions will be taxed at 46.5%.

Temporary Incapacity benefit

Defined Benefit Division and Accumulation 2 members who are in active employment may be eligible for a temporary incapacity benefit under the Fund’s inbuilt benefit provisions.

Terminal medical condition

A member can access their super benefit if they have a terminal medical condition. A terminal medical condition exists if:
•   two registered medical practitioners have certified jointly or separately that the member suffers from an illness, or has incurred an injury, that is likely to result in the member's death within 12 months of the date of certification
•   at least one of the registered medical practitioners is a specialist practicing in an area related to the illness or injury, and
•   the certification period has not ended for each of the certificates.

Terminal medical condition benefit

Defined Benefit Division and Accumulation 2 members may be eligible for a terminal medical condition benefit under the Fund’s inbuilt benefit provisions.

TFN

See: Tax File Number (TFN)

Transition to retirement

Under the transition to retirement rules, eligible members who have reached their preservation age but who are under age 65 can take all or part of their superannuation benefit in the form of a non-commutable account based pension while continuing to work. UniSuper member can transition to retirement using a Flexi Pension.

Transitional concessional contributions cap

An increased concessional contributions cap of $50,000 applies until 30 June 2012 for persons age 50 years old or over. The government has announced changes that, if made into law, will permanently increase the concessional contributions cap to $50,000 for persons who have total super balances below $500,000 and are 50 years old or over.

Trust Deed

The legal document that contains the governing rules for a superannuation fund.

Trustee

The trustee of a superannuation fund is solely responsible for the management of the fund and must manage the fund in accordance with superannuation law and the fund’s governing rules. The trustee of UniSuper is UniSuper Limited.

TTR

See: Transition to retirement

UniSuper Helpline 1800 331 685