The Super Fund Co. Blog

Account Based Pension

Also known as an 'Allocated Pension'. An investment account established with a lump sum from a super fund from which a regular or irregular income is drawn.

Annuity

An investment bought (usually at retirement with superannuation money) to provide regular income.

Asset

An investment product; it can be cash, shares, fixed interest or property.

Benefit

The amount of money saved in a retirement account which is accessible after meeting certain government-imposed conditions such as retirement.

Choice of super

Your right to choose the superannuation fund you wish to put money in to.

Contribution

The money put into a superannuation fund by you or your employer.

Co-contribution

The money the government puts into your superannuation fund if and when certain conditions are met.

Concessional contributions

Money you put into a superannuation fund yourself (see personal contribution) for which you are eligible to claim a tax deduction. Concessional amounts are taxed at 15% (see Contributions tax).

Contributions cap

Government imposed limits on the amount of money that can be put into a superannuation fund each financial year. The limit can change from year to year.

Contributions tax

A once-off 15 % tax levied on all employer and personal concessional contributions at the time the money enters the super account.

Defined benefit

A superannuation account where the amount at retirement is calculated using a formula based on your final salary and years of employment.

Non-concessional contributions

Money you put into your superannuation account yourself that you have already paid tax on, such as your after-tax salary.

Pension

An investment purchased with superannuation money that provides regular income in retirement.

Personal contribution

Any money you put into your superannuation account yourself. These are usually Concessional contributions or Non-concessional contributions.

Preservation age

The government prescribed age at which you are able to access your superannuation money provided you meet certain other criteria.

Return

The amount of money your superannuation account earns while invested.

Risk

The chance that your investment may fall in value.

RSA

Retirement Savings Account. An alternative superannuation product usually offered by institutions like banks or building societies.

Salary sacrifice

An arrangement where you put a certain amount of your pre-tax (gross) salary into superannuation. This reduces your take-home pay but may have tax advantages. Contributions tax of 15% will still apply.

SG (Superannuation Guarantee)

The amount of money employers must contribute to employees’ super funds. The rate is currently 9.5%pa. These contributions are classed as Concessional.

Spouse contributions

Amounts of money you contribute to your spouse’s superannuation account. These contributions are classed as Non-concessional, they do not attract contributions tax, and you cannot claim a tax deduction for them.