Super terms explained

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Account balance: The amount of money credited to a member in the Fund and generally includes employer contributions, personal contributions, any other super money rolled into First State Super, any Federal Government co-contributions less tax, insurance premiums, administration fees, investment switching fees, withdrawal fees and benefits paid.

Accumulation fund: A superannuation fund where the benefit paid is the total of your employer’s contributions and any other contributions that have been paid into your account and their investments earnings (which may be positive or negative) less fees, taxes and insurance premiums.

Actively at Work: A person who is employed and, in the Insurer’s opinion, capable of performing their normal duties without restriction by any illness or injury for at least 30 hours per week (whether or not they are actually working those hours).

Asset class: A category of investments of a similar type.

Benefit: Your entitlement in First State Super including, in the event of death or disablement, any insured amount or entitlement payable (if your claim is accepted by the insurer). A benefit can generally only be paid when you satisfy a condition of release. See Cashing super and payments for more information. 

Choice of fund: Many employees can choose which complying superannuation fund they want to invest their future superannuation guarantee contributions.

Co-contribution: Is a Federal Government initiative to help eligible individuals save for retirement. Subject to qualifying rules, the Government makes contributions of up to $1.50 for every $1 of non-concessional contributions paid to a superannuation fund by eligible persons. Note that if we do not hold your tax file number, we will not be able to accept your non-concessional contributions and you will therefore not be eligible to receive any co-contribution. For more information, see Government co-contributions.

Concessional contributions: See Make contributions

Condition of release: You can access the preserved component of your superannuation, if you satisfy a condition of release, which is the earliest of the following events:

• you reach 65 years of age, whether you are still working or not,
• you permanently retire on or after your preservation age,
• you reach your preservation age and wish to draw a transition to retirement pension from your super fund,
• you cease employment with an employer on or after reaching age 60 (although you may continue to work in another employment arrangement),
• you ceased employment with an employer before age 60, but you have since reached age 60 and the Trustee is reasonably satisfied that you will not return to work,
• you suffer permanent incapacity,
• you are temporarily incapacitated and have Income Protection insurance through the Fund,
• you meet the criteria for early release on specified compassionate grounds, subject to the Australian Prudential Regulation Authority’s (APRA) approval and conditions, and the approval of the Trustee,
• you meet the eligibility requirements for severe financial hardship (subject to Trustee approval and conditions),
• you are an eligible temporary resident and have permanently left Australia (limited to certain visa categories and not available to New Zealand citizens),
• you (or the ATO) provide a valid release authority to the Trustee for payment of tax on excess concessional or non-concessional contributions,
• you terminate employment with an employer-sponsor of the Fund, and your preserved benefit at that time is less than $200,
• you were previously classified as a lost member who is found, and the value of your benefit in the Fund, when released, is less than $200.

Contribution: A contribution is money paid into your superannuation fund account.

Contributions surcharge tax: An additional tax for higher income earners on all employer contributions and before-tax (salary sacrifice) contributions. Not applicable to contributions made after 30 June 2005.

Contributions tax: A Federal Government tax imposed on employer and before-tax (salary sacrifice) contributions. Currently up to 15% of those contributions.

Consumer Price Index (CPI): CPI is one way the rising (or lowering) costs of everyday living are measured. This change in the cost of living is also referred to as inflation. To calculate CPI, the Australian Bureau of Statistics collects between 85,000 and 90,000 prices of a fixed list of goods and services, four times a year. The fixed list or ‘basket’ is made up of the most common goods and services purchased by metropolitan wage and salary earners.

Custodian: A custodian is appointed to ensure that the assets of the Fund are independently and securely held.

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Death benefit: See Death and disablement.

Death benefit insurance: See Importance of insurance.

Deductible amount: For pensions which commenced prior to 1 July 2007, this is the amount of your payment you will receive tax free each year until certain events occur. From 1 July 2007, the tax free component of any income stream payments will be calculated by reference to the deductible amount until certain events occur.

Default fund: A default fund (also known as employer fund) is the superannuation fund nominated by an employer to receive their employees' superannuation guarantee contributions if the employee does not make a choice. A default superannuation fund must be a complying fund and also offer a minimum level of life insurance as set out in the choice regulations (with some exceptions).

Dependant: See Death and disablement.

Disablement insurance: See Importance of insurance.

Derivative instruments: A financial security or contract whose value is derived from an underlying security, such as a share or a bond eg. options and futures.

Eligible rollover fund: The Trustee may automatically transfer your benefit to an eligible rollover fund (ERF) if:

• the balance of your account is less than $1,000 and either:
  • your employer has advised First State Super that your employment has been terminated; or
  • no contributions to your account have been received by First State Super for 6 months, or
• the Trustee receives a tax offset for you as a result of receiving your TFN after you have left the Fund.

The eligible rollover fund used by First State Super is AUSfund.

Employer category: For insurance purposes First State Super’s participating employers have been categorised into broad occupational groups. These groupings affect the level of cover for Basic cover and in some circumstances Income Protection. For examples, click here

Employer Sponsored Division: If you are a member of this Division it means that your employer is a First State Super participating employer.

Employer Sponsored member: For insurance purposes, you are considered to be an employer sponsored member if we have received a superannuation guarantee (SG)contribution from a participating employer on your behalf and we have not been advised of your termination of employment with this employer.

Employment termination payment (ETP): Broadly, a lump sum payment from an employer to an employee when they cease employment – exceptions apply (eg. accrued annual leave or long service leave).

FSS Trustee Corporation: FSS Trustee Corporation ACN 118 202 672, AFSL 293340, RSE L0002127 the trustee of the First State Superannuation Scheme. 

First State Super participating employer: If an employer is a NSW public sector employer or signs an agreement to be a ‘participating’ First State Super employer, then employees of that employer are automatically accepted as members of the Fund once we receive the first contribution from the employer on the member’s behalf.

Fund: First State Superannuation Scheme ABN 53 226 460 365, RSE R1005134.

Futures: An agreement to buy or sell a set amount of a commodity or security in a designated future month at a price agreed upon today by the buyer and seller. A futures contract differs from an option because an option is the right to buy or sell, whereas a futures contract is the promise to actually make a transaction.

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Growth assets: Are those which have the potential to achieve capital growth over the medium to long term. Typically, they are investments in property and Australian and international shares. Historically, it has been found that while in the long term these types of asset classes have the potential to produce greater benefits, they can be more volatile (or risky) in the short term when compared with income assets, and have a greater potential to produce negative returns in the short to medium term.

Hedge: An investment strategy to offset losses or potential losses. A perfect hedge eliminates the possibility of future gain or loss.

Incident Date: In respect of TPD cover, the later of the date of the injury or illness which caused TPD or the person ceased employment due to injury or illness that caused TPD. In respect of death cover, the date of death or the date the Insurer agrees you have a terminal illness.

Income assets: Generally provide a fixed income, and include bonds, bank bills, debentures and cash. These investments are generally considered to be less risky than growth assets, but at times, can produce a negative return.

Income stream account (previous called pension account): An account with First State Super from which income stream payments are made. After the initial investment to set up the income stream account is made, no further contributions or investments to the income stream account are permitted.

Interdependent relationship: See Death and disablement 

Investment choice: Download and read the fact sheet (PDF 252kb).

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Lost super: See Find your lost super.

Lump sum: A single payment. See the When can I receive my super benefit fact sheet (PDF 280kb).

Member: A member of First State Super.

Member protection: Federal Government legislation limits the amount of fees and charges that can be applied to certain small superannuation account balances. If your account balance is less than $1,000 at the end of a member reporting period and your account includes any employer superannuation guarantee or award contributions, the Trustee currently applies member protection to limit the total fees (excluding investment management fees, insurance premiums and taxes) charged to your account during the period. Member protection may result in an administration fee or withdrawal fee being partly or fully rebated.

Member reporting period: A member reporting period begins on 1 July each year and ends at 30 June the following year or your date of exit from the Fund, whichever occurs first.

Minimum Hours: In relation to death or TPD cover, means for a member who continuously held insured cover in First State Super from 1 July 2004, an average of 10 hours per week of work, otherwise, an average of 15 hours per week of work over the three months preceding the Incident Date. In relation to Income Protection cover, means 15 hours per week.

Non-concessional contributions: See Make contributions 

Non-pension superannuation account: An account with First State Super which is not an income stream account. Unlike an income stream account, ongoing contributions can be made to a non-pension superannuation account (restrictions apply if you are over the age of 65).

NSW public sector employer: A NSW public sector employer that is required to contribute to the Fund under the First State Superannuation Act 1992.

Occupation category: For insurance purposes a wide range of job types have been categorised into broad groups based on the risks and hazards of those types of jobs. These groupings affect the level of cover for Additional cover and in some circumstances Income Protection. In determining occupation categories, the Insurer relies on information provided by you. If that information is inaccurate, the Insurer may be entitled to re-assess the category that applies. For examples, click here

Options: The purchaser of an option has the right (but not the obligation) to buy (or sell) a security at a predetermined price within a set time period.

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Participating employer: See First State Super participating employer

Permanent incapacity: In relation to a member means ill health (whether physical or mental), where the Trustee is reasonably satisfied that the member is unlikely, because of the ill health, to engage in gainful employment for which the member is reasonably qualified by education, training or experience.

Personal contributions: Any extra after tax contributions that you make voluntarily to your superannuation account, either as a regular deduction from your pay or as a lump sum payment. 

Personal Division: The division of First State Super open to any individual who is eligible to join a superannuation fund.

Personal member: For insurance purposes, you are considered to be a personal member if we have not received an SG contribution on your behalf or if we have received an SG contribution on your behalf from an employer that
is not a participating employer, or if you are not an employer-sponsored
member.

Pooled fund: Pooled fund means the assets of the State Authorities Superannuation Scheme (SASS), the State Superannuation Scheme (SSS), the Police Superannuation Scheme (PSS), and the State Authorities Non-contributory Superannuation Scheme (SANCS).  

Preservation: Is a Federal Government requirement that certain member benefits be maintained within the superannuation environment until a condition of release is satisfied. See Cashing super and payments.

Preservation age: See retirement for more information.

Reasonable Benefit Limit: The maximum amount of superannuation benefits that can be taken in a person’s lifetime which may be taxed at the concessional rates applicable to superannuation benefits and employer Eligible Termination Payments. Not applicable after 30 June 2007.

Retirement income stream: A flexible investment that provides regular income and certain tax advantages during retirement. You must have satisfied a condition of release with no cashing restrictions before you can invest in a retirement income stream.

Reversionary beneficiary: A person who is nominated as the spouse to receive an income stream on the death of a superannuation income stream division member. A reversionary beneficiary must be nominated at the time a member joins either the First State Super Retirement Income Stream or the Transition to Retirement Income Stream. The reversionary spouse will continue to receive the income stream (or have the option of cashing out the income stream account as a lump sum), only if he or she is the spouse at the time of death.

Rollover or transfers: The transfer of money to a superannuation fund, approved deposit fund, deferred annuity or retirement savings account.

Sector: Refers to groups of investments with similar characteristics within an asset class, eg. a group of bonds with similar characteristics such as rating, maturity or industry may be a sector within a single class of assets.

Spouse: For superannuation purposes your spouse is a person who is legally married to you, or a person who, although not legally married to you, lives with you on a genuine domestic basis as husband or wife, but does not include a person who lives separately and apart from you on a permanent basis. It does not include a same-sex partner, although a same-sex partner may qualify as a dependant under the ‘interdependency relationship’ provisions.

Spouse member: You may become a spouse member if your spouse is a member of First State Super, SASS, SSS or PSS, or is a NSW Parliamentarian and has made spouse contributions to First State Super for you. See Pooled fund

Superannuation benefit: Amounts paid from the Fund if you meet a condition of release.

Superannuation Guarantee: Employers in Australia are required by the Superannuation Guarantee (SG) legislation to make contributions to a complying superannuation fund for most employees in order to avoid being liable for additional tax. The rate is currently 9%.

Superannuation Income Stream Division (formerly known as the Pension Division): The division of First State Super open to eligible persons who wish to set up an income stream account. There are two superannuation income streams available from First State Super, a Retirement Income Stream and a Transition to Retirement Income Stream.

Tax offset at 15%: The Australian Taxation Office (ATO) permits a tax offset (rebate) for superannuation income streams paid to individuals between preservation age and age 60 from complying taxed superannuation funds. The offset is applied through an individual’s income tax return.

Temporary incapacity: In relation to a member who has ceased to be gainfully employed (including a member who has ceased temporarily to receive any gain or reward under continuing arrangement for the member to be gainfully employed), temporary incapacity means ill health (whether physical or mental) that caused the member to cease to be gainfully employed, but does not constitute permanent incapacity.

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TPD: Total and Permanent Disablement is defined as:

When an insured member is employed or self-employed for at least the Minimum Hours, if one of the following (i) to (iv) applies:

(i) the insured member suffering the permanent loss of use of 2 limbs or the sight of both eyes or the loss of use of one limb and the sight of one eye (where limb is defined as the whole hand or the whole foot).

(ii) the insured member having been absent from their Occupation through injury or illness for 6 consecutive months and having provided proof to the satisfaction of us that the insured member has become incapacitated to such an extent as to render the insured member unlikely ever to engage in or work for reward in any occupation or work for which he or she is reasonably qualified by reason of education, training or experience.

(iii) the insured member through illness or injury and having provided proof to the satisfaction of us is permanently unable to perform 2 of the following 6 basic activities of everyday living.

• Bathing – to shower or bathe;
• Dressing – to dress or undress;
• Toileting – to use the toilet including getting on and off;
• Feeding – to eat and drink;
• Mobility – to get out of bed or chair or wheelchair; or
• Continence – to control bladder and bowel function.

If the insured member can perform the activity by using special equipment, they will be considered able to undertake that activity.

(iv) the insured member through illness or injury is suffering from the permanent deterioration or loss of intellectual capacity and has provided proof to our satisfaction that the insured member is required to be under continuous care and supervision by another adult person for 6 consecutive months and this care is likely to be on a permanent daily basis and ongoing.

When an insured member is unemployed, or employed for less than the Minimum Hours or self-employed for less than the Minimum Hours, or is aged 65 and over, they are not eligible to be assessed under point (ii) above, but they can still be assessed under points (i), (iii) and (iv) above.

If a claim relates to an incident date prior to 1 December 2007, then different definition will apply. 

Transition to retirement income stream: A flexible investment that provides regular income and certain tax advantages before retirement. You must have reached your preservation age before you can invest in a transition to retirement income stream.

Transition Date: 1 May 2006, the date First State Superannuation Scheme ABN 53 226 460 365 became a superannuation fund regulated by the Commonwealth.

Trustee: The FSS Trustee Corporation.

Unit price: Download the fact sheet How your First State Super account works (PDF 284kb).

Unrestricted non-preserved benefit: Preserved and restricted non-preserved components of your superannuation benefits become unrestricted non-preserved components when you satisfy one of the conditions of release.  See When can I access my super benefits? (PDF 374kb)

Volatility: Changes in the price of a security, the variability (fluctuation) of returns, both positive and negative, usually expressed in percentage per annum terms.

Year-To-Date (YTD): The period starting 1 July of the current year and ending today. Used mostly to describe investments returns (+/-) between today's date and the beginning financial year (ie 1 July).