Glossary

Active member

A fund member who is currently receiving contributions to his/her account.

Adjusted Taxable Income

Adjusted Taxable Income is generally the member's taxable income for the year, plus the value of any reportable fringe benefits, tax deductible contributions received and a portion of any employer termination payments received.

Administration fee

The fee charged by a fund against a member's account to cover administration costs. Prime Super charges a low flat fee, expressed as an amount per week, which can reduce when the member is no longer receiving employer contributions.

Assets

The superannuation money invested by Prime Super on behalf of its members. Among other things, these may include shares, property, cash or bonds.

Australian Prudential Regulatory Authority (APRA)

The Federal Government body responsible for regulation and monitoring of the insurance and superannuation industries.

Award superannuation

Superannuation entitlements which are determined by a Federal or State industrial award. Occasionally these entitlements may provide entitlements to employees which are additional to the minimum requirement of the Superannuation Guarantee.

Complying fund

A superannuation fund that is regulated under the Superannuation Industry Supervision (SIS) Act and complies with the operational standards specified in the Regulations.

Contribution fee

A fee charged by some funds as a percentage of all contributions received. Prime Super doesn't charge any contribution fees at all.

Death benefit

The amount payable to a member's beneficiaries and/or dependants in the event of the member's death.

Death insurance (Death cover)

Insurance arrangement whereby the member's beneficiaries and/or dependants receive an insured amount in the event of the member's death. Prime Super offers a choice as to the level of cover, expressed as the amount of cover per unit of insurance. Insurance premiums are deducted from contributions as they are received by Prime Super. It is most important that you read the detail of your fund's insurance arrangements, and decide what options, if any, you wish to exercise.

Disability

The current policy defines Disability to mean "the member being unable by reason solely of illness or injury to attend to his or her occupation and provided the member is not otherwise gainfully employed or gainfully engaged in gainful business activity".

Inactive member

A fund member who is not currently receiving any contributions to his/her account.

Insurance premiums

The sum of money paid to purchase insurance against death and permanent disability. The premium is deducted from contributions as they are received by Prime Super and is detailed on Member Statements.

Investment Management Fee

The fees charged by an investment manager for their services. The fee is normally charged as a percentage of the funds invested, and may be performance-based. The fees are normally deducted from the fund's earnings before determination of the fund's earning rate. Because of our size and efficiency, Prime Super is able to get comparatively low investment management fees.

Investment manager

An organisation appointed by a fund to manage the investment of part of the fund's assets. Prime Super appoints a range of investment managers, who may have specialist expertise in particular areas of investment.

Lump sum

A benefit payable in a single cash payment rather than as pension or annuity.

Non-preserved benefit

The part of a member's benefit which is not subject to preservation.

Ordinary Time Earnings (OTE)

The earnings (before tax) on an employee's ordinary hours of work, generally excluding overtime, but including commission payments, shift loadings, casual loadings and some other payments. This is used as the basis for calculating employer contributions for Superannuation Guarantee.

Participating employer

A partcipating employer is an employer who has already registered with the Fund.

Portability

The ability to take your superannuation with you when you change your job. Prime Super is particularly well placed in this regard, as members can often stay with us despite changing employers.

Preservation age

The age at which you can have access to your preserved benefits, provided you have permanently retired from the workforce. The preservation age gradually increases from 55 years depending on your date of birth as shown below:

Preserved benefit

That part of a member's benefit which is subject to preservation.

Product Disclosure Statement (PDS)

Product Disclosure Statements for Prime Super provide important information about the main features, costs, benefits and risks of investing your super. To view a PDS, go to the Forms & Publications page.

Rollover

The transfer of a benefit or Eligible Termination Payment (ETP) into a superannuation fund, ADF or deferred annuity.

Salary Sacrifice

An agreed arrangement between an employer and employee whereby the employee's gross salary is reduced by a certain amount, and the employer's contributions to the superannuation is increased by the same amount. Note that the amount of the salary sacrifice must be in addition to the normal contributions required to be made by the employer. This can be a very tax-effective way of saving for the employee, although it should be noted that the additional amount contributed to the superannuation fund will be subject to preservation.

Spouse

The member's spouse, including a person who, although not legally married to the member, lives with the member on a genuine domestice basis as the husband or wife of the member. Spouse does not include a person of the same sex as the member.

Superannuation

A means of setting aside funds during working life for use in retirement.

Superannuation Guarantee (SG)

The minimum amount that an employer is required to contribute to a complying superannuation fund on behalf of each qualifying employee (currently 9% as at July 1, 2002).

Employers who fail to meet their SG obligations are liable to substantial financial penalty, called the Superannuation Guarantee Charge (SGC).

Superannuation Industry (Supervision) Act (SIS Act)

The legislation which governs the operation of all complying superannuation funds.

Total & Permanent Disablement

Total and Permanent Disablement is defined in the insurance policy held by the Trustee to mean:

1. the member suffering the loss of use of two limbs or the sight in both eyes or the loss of the use of one limb and the sight in one eye (where limb is defined as the whole hand or the whole foot); OR
2. the member having been absent from their occupation with the employer through injury or illness for six consecutive months and having provided proof to the satisfaction of the Fund insurer that the member has become incapacitated to the extent as to render the member unlikely to ever again engage in any gainful profession, trade or occupation for which the member is reasonably qualified by reason of education, training or experience.

Trustee(s)

The persons or corporate body that has a legal responsibility for the running of the fund in accordance with the requirement of the trust deed. The Trustee of Prime Super is a company with equal numbers of directors representing employees and employers. Irrespective of who appointed them, the Trustees/Directors owe a fiduciary duty to the beneficiaries.