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Appendix F: Glossary

Term
Definition
ABS
Australian Bureau of Statistics.
Annuity
Generally, a stream of payments made at regular intervals. In superannuation, a fund member can use all or part of their benefits to purchase an annuity from an insurer in order to receive the value of their benefit as an income stream, either for life or a term of years.
APRA
Australian Prudential Regulation Authority: APRA is the prudential regulator of most superannuation entities other than SMSFs.
ASFA
The Association of Superannuation Funds of Australia Limited.
ASIC
Australian Securities and Investments Commission.
ATO
Australian Taxation Office: the regulator of SMSFs under the SIS Act.
Concessional contributions
Concessional contributions are employer contributions to an employee’s superannuation account made out of their pre-tax salary, including their Superannuation Guarantee and additional employer contributions. Generally, contributions are taxed concessionally at a reduced tax rate (compared to a person’s marginal tax rate) of 15 per cent, referred to as ‘contributions tax’. Contributions for the self-employed or those not working for which a personal tax deduction is claimed may also be concessional contributions. See also personal contributions.
Defined contribution fund
A fund that provides retirement benefits based on accumulated employer contributions and any investment earnings on those contributions. The assets of the fund are invested and any earnings (or losses) are credited (debited) to the member’s account less any charges, such as administration fees and insurance premiums. Members bear the full effect of the fluctuation in investment earnings.
Discussion paper
The paper entitled: Discussion paper: Charter of Superannuation Adequacy and Sustainability and Council of Superannuation Custodians issued on 9 May 2013.
Drawdown phase
Post-retirement decumulation.
Employer contributions
Employer contributions are contributions made by employers and include (but are not limited to) all mandated employer contributions (such as Superannuation Guarantee amounts), salary sacrifice contributions and voluntary employer contributions, less any repatriation to employer sponsors. See also personal contributions.
FSC
Financial Services Council.
Henry review
The 2009 report and recommendation of the Henry review, also known as the Australia’s Future Tax System Review.
IGR
The intergenerational report issued by Treasury under the Charter of Budget Honesty Act 1998.
Lump sum
An amount of a superannuation benefit paid to a fund member as a stand-alone cash amount. Benefits can be paid as one or more lump sums.
Member
A person who holds an interest in a superannuation fund either because they are accruing benefits to provide income in retirement or because they are receiving benefits from the fund.
Post-retirement
The phase of a person’s life during which the person has retired from the workforce and usually ceased to build superannuation benefits and begun to rely on their benefits for income in retirement.
Preservation age
The minimum age, prescribed in the SIS Regulations, at which the superannuation benefits of a fund member become available to be paid from the superannuation fund to the member, for example, on retirement or disability.
Replacement rate
The proportion of a member’s current employment income that the current value of the member’s superannuation benefits would represent if paid to the member as an income stream over the member’s retirement.
Retirement income
The income on which a person relies after they retire from the workforce. This can include superannuation benefits, the Age Pension and private savings.
Retirement phase
The period of a person’s life, and superannuation fund membership, after they have retired from the workforce and qualify for, and may be receiving, superannuation benefits.
SG
The legal requirement under the SG Act for an employer to make contributions at least quarterly equal to a percentage (currently 9.25 per cent per annum) of an employee’s ordinary time earnings into a superannuation fund or RSA on behalf of the employee.
SG Act
The Superannuation Guarantee (Administration) Act 1992.
SIS Act
The Superannuation Industry (Supervision) Act 1993.
SIS Regulations
The Superannuation Industry (Supervision) Regulations 1994.
SMSF
Self-managed superannuation fund.
Terms of reference
The terms of reference for the Charter Group issued on 9 May 2013.