Glossary

The 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.

Allowable deduction

A deduction allowable under the Income Tax Assessment Act 1936

Authorised representatives

A person authorised in the Corporations Act 2001 by a financial services licensee to provide a financial service or financial services on behalf of the licensee

ARIA

We provide superannuation services and products to Australian Government employees and employers through three Schemes – the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) and the PSS Accumulation Plan (PSSap).

Base salary

The salary upon which an employee's pay is based when the employee is on sick leave (also referred to as 'sick leave salary')

Basic employer contributions

Generally 15.4% of superannuation salary of an accumulation member but may also include an employer contribution shortfall amount.

Benefit period

The maximum amount of time we will pay you benefits for each claim. This will be a maximum of 2 years.

Compassionate grounds

Relates to the early release of benefits to pay for expenses related 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.

Concessional Contributions

Are pre-tax income contributions and are comprised of employer contributions and salary sacrifice contributions. They are taxed on entry by the fund. For more information see the Contributions to the PSSap fact sheet.

Conditions of release

Those conditions specified in Schedule 1 to the Superannuation Industry (Supervision) Regulations 1994

Daily unit price

The total value of assets in an investment option (less fees, other than fees deducted directly from the member's account, expenses and taxes), divided by the number of units issued in the investment option, calculated on a daily basis

Default option

An investment option into which a members contributions may be invested in the absence of a positive choice being exercised by the member.

Designated employer

A Department - if the 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
A Department as determined by the Minister in writing - if the 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
An approved Authority - if the remuneration paid to a statutory office holder not on leave of absence without pay is paid by the Authority; or
A 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
A person determined by the Minister in writing - where the member is on leave of absence without pay; or
An approved Authority or body that employs a person who is a permanent or temporary employee in all other circumstances

Eligible spouse contributions

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

Employer contribution shortfall

The difference between the amount a designated employer contributed in the quarter for a PSSap member whose superannuation salary was based on the member's fortnightly contribution salary at any time during the quarter and 9% of the ordinary time earnings of that same member.

Employer-financed component

A part of your PSSap benefit which is determined at exit.

Estate

Legal personal representative as defined in the SIS Act.

Financial planning

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, saving for your children's education, managing debt or planning for retirement.
Financial planners use a six-step process that helps you take a 'big picture' look at where you are and where you want to be financially. Using this process they help you work out what you need to do now and in the future to reach your goals.
The six steps of the financial planning process are:

1. Gathering your financial data - such as details on your income, debt level, commitments, etc.
2. Identifying your goals.
3. Identifying any financial issues - or deficiencies between where you are now financially and where you want to be.
4. Preparing your financial plan - which will identify recommended investments and will address your attitude to risk.
5. Implementing your financial plan.
6. Reviewing and revising your plan - to ensure it stays up-to-date and relevant to the economic climate and your changing lifestyle.

Copyright: FPA 2002

Fund

The PSSap Fund. The Fund receives and invests your contributions on your behalf.

Gearing

The use of debt to finance assets, usually expressed as the ratio of debt outstanding to gross asset value. For example, the 13% gearing of ARIA's core unlisted property portfolio implies that $130 of debt is held against every $1,000 of property value.

General administration fees

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

Governance advisory service

The Governance Advisory Service protects and enhances shareholder value for members through identification of environmental, social and corporate governance risks of present and future investments; and active communication of those risks with relevant stakeholders.

Interdependency relationship

Two persons have an interdependency relationship if:

• they have a close personal relationship (that is, a relationship that involves a demonstrated and ongoing commitment to the emotional support and well-being of the two parties - people who share accommodation for convenience, such as flatmates, or people who provide care as part of an employment relationship or on behalf of a charity are not considered to have a close personal relationship); and
• they live together; and
• one or each of them provides the other with financial support; and
• one or each of them provides the other with domestic support and personal care.

An independency relationship also exists if there is a close personal relationship between the two persons, but the other requirements for interdependency are not satisfied because of a physical, intellectual or psychiatric disability.

Invalidity Definition (Insurer's definition)
 

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

Invalidity Definition for all members
(ARIA)
 

ARIA 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 Board must apply to any applications is:
"The Board 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"

Invalidity Definition for casuals and some part-timers
(Insurer's definition)

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.

Investment risks

Investment risk refers to various risks incurred when making investments. Examples include financial risk (the risk that a company will run into financial difficulties and not be able to meet its obligations to investors) and market risk (the 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).

Licenced professional

This may be an accountant, a solicitor, a financial planner, a tax agent or any other person or organisation licenced to provide you with relevant financial, tax or legal information.

Loadings

This is an additional levy which is applied to your standard insurance premium as a result of the insurer taking a greater risk in providing the insurance cover requested.

Long/Short shares

Represents investment managers that buy shares they believe will go up in value and sell shares they believe will go down. The long/short funds that the PSS invest in are expected to underperform the sharemarket when it rises, and to outperform the market when it falls. They help to ride out any short term volatility in the sharemarket

Lump sum

The benefit taken as a single payment, rather than taken as a pension or annuity

Mandated Employer Contributions

These are contributions made on your behalf by your employer under the Superannuation Guarantee and/or under any applicable industrial award or Certified Agreement.

Market Neutral Funds

A grouping of investments which are expected to behave differently to equities and bonds, and thereby assist us to ride out any short-term volatility in the more traditional asset classes.

Member statement

A statement which includes your accrued contributions, interest and potential benefits as at 30 June each year

Minimum retirement age

Age 55, or if a minimum retirement age is specified as applicable to you in terms of your employment, that age.

Monthly benefit

This is the insured proportion of your salary that we will pay you if you make a valid claim. You can insure up to 75% of your income.

Negative returns

A loss on capital invested

Net investment earnings

Fund earnings after adjustments for taxes, fees and the reserve.

Non-Concessional Contributions

Are after tax income contributions, such as member contributions and are not taxed on entry to the fund.  These type of contributions are capped at $150,000 per annum or $450,000 over three years.

Partial Disability (Income Protection)
 

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.

Permanent

A person whose terms of engagement are effectively 'open ended' (that is, there is no set end date or end event to the terms of engagement)

Personal Statement

This is a questionnaire you may need to use to disclose your health, personal circumstances and activities. The insurer uses this information for risk assessment.

Preserved benefits

The benefits retained in the personal accumulation account of a PSSap member who is no longer employed by a designated employer , together with any amounts subsequently credited or debited to the account.

Private information

Information or opinions that can identify a living person

Proxy votes

An authorisation by a shareholder (in this case ARIA) for a vote to be exercised in its name.

Prudence

Good judgment; discretion

Regular income

A payment of money on a frequent and known basis (for example, a pension paid weekly)

Separation Amount

The amount of the initial interests of an associate member created on applying a splitting order.

Short position

An investment position that benefits from a decline in market price.

Significant event

An occurrence or happening in the fund that has the potential to adversely affect a member's benefits

Statutory office

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.

Super Co-Contributions

Additional contributions paid by the Australian Government to low income earners who make after tax contributions.  For more information please read the super co-contributions fact sheet.

 Superannuation contributions surcharge threshold

A level applied to your adjusted taxable income which, if exceeded, means extra tax is payable in relation to your super.

Superannuation Industry (Supervision) Upper Limit

The Superannuation Industry (Supervision) Regulations (SIS) placed certain restrictions on the amount of cash lump sum that can be paid to members who are not permanently leaving the workforce, or have not reached their preservation age.

If you are not permanently retiring from the workforce or have not reached your preservation age, any cash lump sum paid to you cannot exceed your SIS Upper Limit. This is the cash amount you would have received if you had been involuntarily retired (retrenched) on 1 July 1999.

Any PSSap lump sum amount that exceeds the SIS Upper Limit must be rolled over into a rollover fund.

Tax-free Component

This is comprised of the following components that existed prior to 1 July 2007 - Post-June 1994 Invalidity, Capital Gains Tax Exempt, Undeducted Contributions, Concessional, and Pre-July 1983

Temporary employee

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)

Terminal Illness

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. The new rules became effective on 12 September 2007.

Total Disability
(Income Protection)
 

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.

Transaction costs

The various costs involved in implementing the investment strategy. They include the costs of brokerage, custody, investment advice, investment management, compliance monitoring, legal advice and tax advice.

Transfer

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

Transfer value

A transfer value is 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.

Unrestricted non-preserved benefits

Benefits that can be cashed out at any time

Unlisted pooled property trust

An investment structure whereby a number of investors commit funds to a pooled trust, which purchases and manages direct interests in property assets.

Waiting period

This is the 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.