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

Ability to bathe, dress, eat, go to the toilet and to transfer (move in and out of a chair) without the standby assistance of another person

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

Deduction allowed under the Income Tax Assessment Act 1936

Person authorised under the Corporations Act 2001 by a financial services licensee to provide a financial service or financial services on behalf of the licensee

Salary upon which an individual’s pay is based  when the individual is on sick leave (also known as ‘sick leave salary’)

Generally 15.4% of super salary for an accumulation or contributory member; may include employer contribution shortfall amount

Maximum period your benefits will be paid per claim; it will be for a maximum of two years

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

Trustee of PSSap (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

Early release of benefits to pay for expenses relating to the following:

• medical treatment;

• medical transport;

• home or motor vehicle modifications required because of severe disability;

• palliative care or associated expenses;

• mortgage repayments to prevent the mortgagee from selling the property; or

• expenses consistent with one of the above

Contributions paid from pre-tax income comprising employer contributions and salary sacrifice; taxed on entry to the fund

Conditions specified in Schedule 1 of the Superannuation Industry (Supervision) Regulations 1994

Total value of assets in investment options (less fees not directly deducted from member accounts), divided by the number of units issued per option and calculated on a daily basis

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

Investment option into which member contributions are paid if the member has not elected their own choice of investment option

Super fund where benefits paid to members are defined by a set formula in advance of retirement (such as PSS); benefits are generally expressed as a proportion of a member’s final average salary (FAS). In PSS, benefits are defined in terms of salary, contribution rate and length of membership. In a defined benefit fund, it is generally the employer not member who carries the investment risk.

Most Australian super funds are accumulation or defined contribution style funds (such as PSSap), where set contributions are paid that accumulate investment earnings which may be positive or negative. In this case, the member generally carries the investment risk.

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

• Department – if remuneration of either permanent or temporary employees not on leave of absence without pay is paid wholly or mainly out of the money appropriated by an annual Appropriation Act; or

• Department as determined by the Minister in writing – if remuneration of permanent or temporary employees not on leave of absence without pay is paid wholly or mainly out of money appropriated by an Act other than an annual Appropriation Act; or

• Approved Authority – if remuneration paid to a statutory office holder not on leave of absence without pay is paid by the Authority; or

• Department or person determined by the Minister in writing - if there are alternative arrangements for paying a statutory office holder not on leave of absence without pay; or

• Person determined by the Minister in writing – where the member is on leave of absence without pay; or

  Approved Authority or body that employs a person who is a permanent or temporary employee in all other circumstances

Contributions made by a spouse of a member to PSSap in order to obtain superannuation benefits for that member, or in the event of that member’s death, for the member’s dependants. A spouse includes a person of the opposite or same sex who lives with the member on a bona fide domestic basis as husband and wife or partners

Difference between 9% ordinary time earnings for a PSSap member and the amount contributed by a designated employer in the quarter for the same member who has a super salary based on the member’s fortnightly contribution salary at any time during the quarter

Part of your PSSap benefit determined at exit

Legal personal representative as defined in the SIS Act

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

Fees charged to employers to meet costs of administration of the Superannuation Act 2005 and PSSap Trust Deed

Protects and enhances member shareholder value through identification of environmental, social and corporate governance risks of present and future investments, and through communication of those risks with relevant stakeholders

For full-time and part-time employees who work more than 15 hours per week the definition that applies to invalidity claims is;

• The insured member has suffered the total and irrevocable loss of the:

• sight of both eyes

• use of two limbs

• sight of one eye and use of one limb, or

• The insured member as a result of injury, sickness or disease:

• has not performed any work for an uninterrupted period of at least 6 consecutive months solely due to the same injury, sickness or disease, and

• is attending a Registered Medical Practitioner and has undergone all reasonable and usual treatment, including rehabilitation for the injury, sickness or disease; and

• after consideration of all the medical evidence and such other evidence as AIA Australia may require, has become incapacitated to such an extent as to render him or her unable to ever engage in his or her own occupation and any occupation for which he or she is reasonably suited by education, training or experience

Commonwealth Superannuation Corporation has a responsibility to make a separate decision to the insurer whether to release your accumulated account balance to you in the case of Invalidity. The definition that the Commonwealth Superannuation Corporation must apply to any applications is: Commonwealth Superannuation Corporation “has certified in writing that it is reasonably satisfied the member is unlikely to ever again engage in gainful employment for which the member is reasonably qualified by education, training or experience because of physical or mental ill health"

For casual and part-time employees who work less than 15 hours per week the definition that applies to invalidity claims is;

• The insured member has suffered the total and irrevocable loss of the:

• Sight of both eyes

• Use of two limbs

• Sight of one eye and use of one limb,

or

• having been for a period of 6 consecutive months after the occurrence of the illness, accident or injury, the member is continuously, totally and permanently unable to perform at least 2 of the following activities of daily living as certified by a registered Medical Practitioner:

• Bathing: the ability to wash themselves either in the bath or shower or by sponge bath without the standby assistance of another person;

• Dressing: the ability to put on and take off all garments and necessary medical braces or artificial limbs usually worn, and to fasten and unfasten them without standby assistance of another person;

• Eating: the ability to feed themselves once food has been prepared and made available, without the standby assistance of another person;

• Toileting: the ability to get to and from and on and off the toilet without the standby assistance of another person and the ability to manage bowel and bladder functions through the use of protective undergarments or surgical appliances - if appropriate;

• Transferring: the ability to move in and out of a chair without the standby assistance of another person.

Refers to various risks incurred when making investments; examples include financial risk (risk that a company will run into financial difficulties and not be able to meet its obligations to investors) and market risk (risk that the value of an investment will be affected by general movements in the market or industry to which the investment belongs, rather than by factors specific to the investment itself)

Person who is an accountant, solicitor, financial planner, tax agent, or any other person or organisation which is licenced to provide you with relevant financial, tax or legal information

Additional levy applied to your standard insurance premium due to insurer taking greater risk in providing requested insurance cover

Benefit taken as single amount not a pension or annuity

Contributions made by your employer on your behalf under Superannuation Guarantee and/or any other industrial award or Certified Agreement

Investment grouping expected to behave differently to equities and bonds, thereby assisting investors to ride out any short-term volatility in more traditional asset classes

Statement provided to you each to help you make sense of your PSSap account, covering your accrued contributions, interest and potential benefits; correct as at 30 June for that year

Age 55, or the particular age if a minimum retirement age is set out in your employment terms and conditions

Insured portion of your salary paid to you if you make a valid claim; you can insure up to 75% of your income

Loss on capital invested

Scheme earnings adjusted for taxes, fees and the reserve

Dependant (s) and/or legal personal; representative of the member named by the member to receive their death benefit

Post tax super contributions; not taxed on entry to scheme; these contributions are capped at $150,000 per annum or $450,000 over a three year period

If an insured member is partially disabled beyond the end of the waiting period and the insured member had been totally disabled for at least 10 out of 14 consecutive days, a Partial Disablement benefit will be payable. This benefit will be a proportion of the full monthly benefit.Partially disabled means that, due to injury or sickness, the insured member:

• is unable to perform one or more important duties of his or her own occupation

• is incapable of working (whether or not for reward)

• is earning a monthly income which is less than his or her pre-disability income

• remains under the regular care, attendance, and following the advice of a registered Medical Practitioner in relation to that Injury or Sickness.

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

Person whose terms of engagement are effectively ‘open ended’ – there is no set end date or event in their terms

Questionnaire you may be required to use to disclose your health, personal circumstances and activities; the Insurer uses this information for its risk assessment

Benefits contained in personal superannuation account of a PSSap member who is no longer employer by a designated employer; benefits include amounts subsequently credited or debited to their account

Information or opinions that can identity a living person

Authorisation by a shareholder (in this case, Commonwealth Superannuation Corporation, trustee of PSSap) for a vote to be exercised in its name

Good judgment; discretion

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)

Payment of money on frequently and known basis

Amount of initial interests of an associate member created by applying a superannuation splitting order

PSSap is the scheme; it receives and invests your contributions

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

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.  Any PSSap lump sum amount that exceeds your SIS upper limit must be rolled into an eligible superannuation rollover fund

Occurrence or happening in scheme which has potential to adversely affect a member’s superannuation benefit

Statutory office holders are people appointed to occupy particular positions established by legislation. Examples of statutory office holders are the Ombudsman, the Race Discrimination Commissioner and members of the Australian Broadcasting Authority

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; PSSap 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

Salary used as a basis for calculating employer contributions; it is not necessarily the same as your gross or net salary and can vary depending on if you are on a Fortnightly Contributions Salary (FCS) or Average Weekly Ordinary Time Earnings (AWOTE) salary

Benefit component comprising post July 1983 amount which existed prior to 1 July 2007

Benefit component comprising following amounts that existed prior to 1 July 2007 – Post June 1994 Invalidity, Capital Gains Tax Exempt, Undeducted Contributions, Concessional, and Pre-July 1983

A person whose terms of engagement specify an end date or end event , that is, the employee has been hired:

• for a fixed period; or

• for the duration of a specified task; or

• to perform duties that are irregular or intermittent (temporary employees engaged on this particular basis are more commonly referred to as casual employees)

A member will be taken to be terminally ill if it is certified by two medical practitioners (at least one of these a specialist) that they are suffering from an illness which in the normal course would result in death within a period of 12 months; effective on 12 September 2007

The total disability benefit is payable if you are unable to work and you are totally disabled for longer than the waiting period. Total Disability means that due to injury or sickness the insured member:

• is unable to perform one or more important duty* of his or her own occupation

• remains under the regular care, attendance and following the advice of a registered Medical Practitioner in relation that sickness or injury

• is not engaged in any occupation (whether or not for reward).

* An important duty is one that involves 20% or more of the insured member's overall tasks.

Various costs involved in implementing investment strategy; include cost of brokerage, custody, investment advice, investment management, compliance monitoring, legal advice and tax advice

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

One of the following payments made to the PSSap:

•  a roll-over superannuation benefit;

• a directed termination payment;

• a super guarantee amount from a previous employment payable under the Superannuation Guarantee (Administration) Act 1992; and

• a Government co-contribution entitlement payable under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003.

Benefits that can be cashed out (withdrawn) at any time

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

Period of time you have to be disabled before you can qualify for any disability benefits; you select the waiting period based on how long you can wait until disability benefits would be payable