BlueScope Steel Super Home Site Map Contact    



Helping you understand superannuation and investment terms or jargon you may not be familiar with.

Please select the term you would like explained:

Active Management
Active management is the process where an investment manager seeks to gain additional returns relative to a market index or attain above-average risk-adjusted performance.
This is a person with qualifications in analysing financial transactions and assessing risks. Actuaries report to superannuation fund trustees on the financial position of funds.
Additional Voluntary Contributions (AVCs)
Additional Voluntary Contributions (AVCs) are additional amounts you may wish to contribute to your superannuation. There are two types of AVCs – AVCs made directly from your regular pay and lump sum AVCs made in the form of occasional lump sum payments.
Account Based Pension
An account based pension is a tax effective facility that allows you to convert your lump sum superannuation benefit into a flexible source of income in retirement. Your lump sum benefit and any investment returns fund your regular pension payments. You can choose the amount of pension payments each year, provided that you withdraw the minimum amount set by legislation. You can also elect to withdraw additional lump sum amounts at any time. Payments continue until you decide to withdraw your entire account balance as a lump sum, or your account balance is nil.
Account Based Pre-Retirement Pension
An Account Based Pre-Retirement Pension (Account-based PReP) allows you to access your super prior to retirement. This pension can provide you with a regular income stream from your super while you are still working, provided you have reached your preservation age (currently age 55), then allows you to easily transition your super into another retirement product when you retire. The (Account Based PReP) offers almost all of the same features as an Account Based Pension. You can choose the amount of pension payments each year, provided that you withdraw the minimum amount set by legislation. However you cannot withdraw more than 10% of your pension account balance (at 1 July) in any financial year. Pension payments will be paid from your Account Based PReP account for as long as there are sufficient funds in your account to fund them.
Annualized Rate of Return
The rate of return over a given period expressed on an annual basis or as a return per year.
Asset class
A group of financial assets of the same type. The major asset classes are shares, property, fixed interest and cash.
Asset allocation
Asset allocation refers to the way in which assets are invested among various types of investments or asset classes. For example if you have $10,000 to invest and you allocate $5,000 to buy stocks in a company (shares) and $5,000 to place in the bank (cash) your asset allocation is 50% shares and 50% cash.
APRA (Australian Prudential Regulation Authority)
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the Australian financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry.
ASIC (Australian Securities & Investments Commission)
The Australian Securities & Investments Commission (ASIC) enforces and regulates company and financial services laws to protect consumers, investors and creditors. ASIC is an independent Australian government body that reports to the Commonwealth Parliament, the Treasurer and the Parliamentary Secretary to the Treasurer.
ATO (Australian Taxation Office)
The Australian Taxation Office (ATO) is the Government’s principal revenue collection agency, and is part of the Treasurer’s portfolio. The ATO’s role is to manage and shape tax, excise and superannuation systems that fund services for Australians.
AFSL (Australian Financial Service Licence)
This licence authorises the Trustee to provide certain financial products and services.
Balanced Manager
An investment manager whose expertise includes the supervision of portfolios containing a variety of asset classes, such as shares, bonds, property and cash reserves.
The person(s) eligible to receive your superannuation benefit in the event of your death. The person(s) must be a dependant (eg spouse, child under 16) or financially dependent on you.
Bear Market
A market in which prices are declining sharply in a situation of widespread pessimism, growing unemployment, or business recession. A bear market is a prolonged period of falling share prices, usually marked by a decline of 20% or more.
A benchmark is a market index which is used by an investment manager to assess the performance of an investment portfolio.
Binding nomination

A valid binding nomination is where the Trustee is required by law to pay your death benefit to the person(s) nominated by you.

For your binding nomination to be valid and legally binding each of the following conditions must be satisfied, at the date of your death:

  • the people mentioned in the nomination must be your dependants or Legal Personal Representative,
  • the total proportions nominated to dependants must equal 100%,
  • the nomination form must be signed and dated by you in the presence of two witnesses, each of whom is 18 or over and not mentioned in your nomination as a dependant or Legal Personal Representative,
  • each of the witnesses must complete and sign the form,
  • the nomination form must be received by the Trustee (a notice will be sent to you confirming receipt of your binding nomination),
  • the nomination form must not have expired (i.e. it is effective for 3 years from the date it was signed by you), and
  • the nomination form has not since been revoked or amended by a more recent binding nomination form.

A certificate of debt (promissory note) issued for a period of more than one year by entities such as corporations, municipalities, federal, state, and local government agencies. A bond is a loan to the issuer, bearing a stated interest rate, and maturing on a stated future date.

Bonds are debt-based investment instruments. When an investor buys a bond, the investor is lending money to the seller. The seller of the bond agrees to repay the principal amount of the loan at a specified time. A bondholder is, thus, a creditor of the issuer and not a partial owner, as is a stockholder.

Bull Market
A market in which prices are advancing in an upward trend.
Capital growth
Capital growth refers to the increase in value of an asset. For example if you buy shares for $2,000 then sell them for $2,500 some time later your capital growth on this investment is $500.
Capital markets
The markets for medium to long term securities (i.e. shares, bonds) investments.
Cash rate
Cash rate refers to the interest rate set by the Reserve Bank of Australia for the short-term money market.
Choice of Fund
Choice of Fund is the Government’s legislation that allows most Australian employees to choose to which super fund they would like to direct their employer contributions.
Company Contributions
All employers in Australia must contribute to a superannuation fund on behalf of their employees. Superannuation Guarantee (SG) legislation requires employers to contribute no less than 9.5% per year of each employee’s earnings up to a maximum level specified in the legislation.
Concessional contributions
Concessional contributions are Company contributions plus contributions made from your before-tax salary, including salary sacrifice contributions.
Contributions Tax
Contributions tax of 15% is deducted from all concessional contributions. Contributions in excess of the concessional and non-concessional contribution limits set by superannuation law will incur excess contributions tax (refer to Excess Contributions Tax for more information).
Contributions splitting

Superannuation legislation allows certain contributions paid to your superannuation account to be split with your spouse.

There are two main types of contributions that can be split with your spouse:
1. Taxed splittable contributions: You can ask your super fund to transfer to your spouse up to 85% of a financial year's 'taxed splittable contributions'.
2. Untaxed splittable employer contributions: If you are a member of a public sector super scheme, the employer contributions that are made for you may be 'untaxed splittable employer contributions'. You can transfer to your spouse 100% of untaxed splittable employer contributions made for you in a financial year, if that amount is less than the concessional contributions cap for that financial year.

Here's a list of contributions that can and cannot be split:

Type of contribution Can they be split?
Employer contributions Yes
Salary sacrifice contributions Yes
Personal contributions that you can claim a deduction for (self-employed people may be able to claim this deduction) Yes
Personal contributions that you can't claim a deduction for (employees usually cannot claim this deduction) No
Contributions you make with a capital gains tax (CGT) cap election for small business or with a personal injury election No
Contributions made by your spouse to your super No
Contributions made for you if you are under 18 years old (unless made by your employer) No
Contributions made by family and friends (other than those made by your spouse or for a child under 18 years old) Yes
Transfers from foreign funds No
Allocations from reserves that are assessable, such as allocations to meet an employer's obligation to contribute Yes
Other allocations from reserves No
A rollover super benefit No
A contribution that has already been split No
Government co-contribution payment No
First home saver account payments and government contributions No
Temporary resident contributions No
Trustee contributions No
A super interest that is subject to a payment split (due to relationship breakdown) No

Undeducted contributions: These are all after-tax contributions (also referred to as non-concessional contributions) you have made to your super since 1 July 1983. As tax has already been paid on undeducted contributions, no further tax is payable on them.

Coupon Rate
A coupon rate is the stated percentage rate of interest, usually paid twice a year, for bonds, notes or other fixed income securities.
An organisation which safeguards and maintains assets on behalf of others. A custodian only holds the assets on behalf of others, it does not own these assets.
A bond backed by the general credit of the issuer and not by a specific security.
Defensive assets
Defensive assets include fixed interest (i.e. bonds), some hedge funds and cash. Defensive assets are generally regarded as lower-risk investments which have expected returns that are lower than those of growth assets over time.
Defined Benefit

A defined benefit is where a superannuation benefit is calculated using a mathematical formula. The benefit tends to be based on:

  • age
  • years of membership in the Fund, and
  • Final Average Salary
Defined Contribution or Accumulation-style account
An accumulation-style (also known as defined contribution) account operates much like a bank account where deposits (i.e. contributions) are made to the account and taxes, fees and insurance premiums (if applicable) are deducted. Investment earnings are applied to your account based on the returns (which can be positive or negative) of your chosen investment option.

Dependants are the people you may nominate to receive your benefit if you die. According to superannuation law your dependants include:

  • your spouse (including a de facto partner of the same or opposite sex who is living with you on a genuine domestic basis in a relationship as a couple or with whom you are in a relationship that is registered under relevant State or Territory law);
  • your children (including adopted children, step children and children born outside of marriage) and any child who is the child of your spouse;
  • any other person who, in the opinion of the Trustee, was wholly or partly financially dependent on you at the date of your death, and
  • any person with whom you have an interdependency relationship.
When determining whether a death benefit is tax free, a narrower class of dependants (for tax purposes) applies. For this purpose, a child will not be a dependant unless he/she was under 18 years or was financially dependent or was in an interdependency relationship with you at the date of death.
The spreading of risk by placing investments in several different asset classes such as shares, property, fixed interest and cash.
A dividend is a portion of a company's profit paid to shareholders.
Emerging Market
The financial markets of developing economies; such as those of Brazil, Malaysia and China.
Employer-sponsored fund
A superannuation fund established by an employer for its employees.
ERF (Eligible Rollover Fund)
An eligible rollover fund is a superannuation fund that meets certain requirements and is primarily designed to accept benefits transferred from complying superannuation funds, where members may have failed to nominate an alternative fund within a specified period of the benefit becoming payable; or the member becomes "lost". A lost member is generally a member who cannot be contacted because the fund was not advised of the member's address or mail sent to the last known member's address has been returned.
ETP (Eligible Termination Payment)
This is any lump sum payment from a superannuation fund or an employer on termination of employment or a rollover.
Excess contributions tax
Excess contributions tax refers to the additional tax you will be liable to pay if you exceed the relevant concessional or non-concessional contribution limit set by superannuation law.
Expected Rate of Return
The expected value of future investment returns.
Final Average Salary
Your Final Average Salary is your average superannuation salary over the last three years that you work for the Company. This measure applies for members in the Defined Benefit Division.
Financial Market
An organised institutional structure for creating and exchanging financial assets.
Fixed Income Market
The market for trading bonds.
Growth assets
Growth assets include shares, property and private equity. Growth assets are generally regarded as higher-risk investments which have expected returns that are higher than defensive assets over time.
Hedging is an investment position taken to offset the potential risk from another investment. The Trustee uses hedging to control currency exposure in international investments. If an investment is ‘hedged’ it ensures that significant increases in the price of the Australian dollar ($A) do not detract from the growth in value of shares held in the Fund in foreign currencies. If an investment is ‘unhedged’ this means the investment return is impacted by movements in the $A. A rise in the $A has a negative impact on the returns of unhedged international investments.
Income stream
An income stream is a periodic payment received by an investor. For example if you hold an investment in shares you are likely to receive dividends as a share in the profits of the company. If an investor purchases a rental property, that investor will receive an income stream in the form of rental income.
Inflation is a rise in the prices of goods and services, resulting in a decrease in purchasing power.
Inflation Rate
A percentage rise in the prices of goods and services, measured by the Consumer Price Index (CPI).
Inflation-linked bonds
An inflation-linked bond is a bond that is indexed to inflation. Such an investment is guaranteed to keep pace with inflation as the periodic interest earned and the bond value at maturity are adjusted to account for any price increases that would otherwise reduce the buying power of the invested assets.
Interdependent relationship
This is someone with whom you have a close personal relationship in which you provide them or they provide you with financial and domestic support.
Investment Management
The process of professionally managing an investment portfolio. Also called portfolio management and money management.
Legal Personal Representative
This is the executor of, or the person responsible for, your Estate.
Management costs
Management costs are the fees and charges incurred by the Fund for managing your superannuation benefit. These costs may include administration fees and investment management fees.
Market Capitalisation
The total dollar value of all outstanding shares on a market, a measure of corporate size. The market capitalisation of a security is equal to the number of shares outstanding multiplied by the price per share. Also known as market cap.
Money Market
A money market is a market for borrowing and lending money for three years or less. The securities in a money market can include government bonds, Treasury bills, and commercial paper from banks and companies. Many banks offer money market accounts, which are demand accounts that pay interest based on short-term interest rates.
Non-binding (standard) nomination

A non-binding (or standard) nomination is where the Trustee will take into consideration your nominated beneficiaries as well as your personal circumstances known at the time of your death. For instance, if you had one child when you completed your nomination form but died a few years later without having updated your nominated dependants to include a second child, the Trustee would take this into consideration.

Whilst the Trustee has discretion in deciding how to allocate your benefit between the persons nominated (or otherwise) and therefore is not legally bound by the information you provide on your nomination form, it will carefully consider your nomination together with any other relevant information, including your Will, when deciding how to distribute your death benefit.

Non-commutable pension
This is a pension that cannot be converted into a lump sum but must be taken as a series of periodic payments.
Non-concessional contributions
Non-concessional contributions are typically contributions made from your after-tax money.
Non-preserved benefit
Non-preserved benefits are generally a portion of superannuation savings you may have rolled in from another fund or any after-tax contributions made before 1 July 1999. Your annual Benefit Statement will indicate if you have any non-preserved funds. Non-preserved amounts can be taken in cash when you leave the Company.
A pension is a tax effective facility that allows you to convert your lump sum superannuation benefit into a flexible source of income in retirement. Your lump sum benefit and any investment returns provide the capital to fund regular pension payments. You have the flexibility to vary the amount of your pension (within limits set by superannuation law). Payments continue until you decide to withdraw your entire account balance as a lump sum or your account balance is nil.
Policy Committee
A Policy Committee is made of an equal number of member and company representatives. The main function of the Policy Committee is to act as a link between the Trustee (Total Risk Management), the Fund members, and the Company. The Policy Committee will also advise the Trustee about issues that a member or employer-sponsor has raised as a matter of concern.
Portability is the Government’s legislation that allows you to transfer your existing superannuation benefit to another complying superannuation fund.
Passive Management
An investment management approach that seeks to eliminate active decision-making from the investment process. The most widely used passive technique is index-matching, in which a portfolio is managed to replicate the performance of some market index.
A collection of investments that may include company shares, fixed interest securities, property trusts, etc.
Pre-retirement pension
A pre-retirement pension (also known as a transition to retirement pension) is a pension you can purchase prior to retirement provided you have reached your preservation age (currently age 55).
Preserved benefit
All contributions made to superannuation funds from 1 July 1999 are “preserved” as are certain contributions made before that date. Generally, you can only withdraw your preserved benefit when you permanently retire from the workforce after you reach your ‘preservation age’ (currently age 55).
Preservation is the Government’s requirement that part or all of your superannuation benefit remain invested within the superannuation system until you retire from the workforce after reaching your preservation age.
Preservation Age

Your preservation age depends on your birth date, as set out in the table:

Date of Birth Preservation Age
Before 1/7/1960 55
1/7/1960 – 30/6/1961 56
1/7/1961 – 30/6/1962 57
1/7/1962 – 30/6/1963 58
1/7/1963 – 30/6/1964 59
After 30/6/1964 60
Private equity
Private equity investments are assets that are traded privately as opposed to those traded on public stock exchanges.
Property securities trust or property trust
A property trust is a pool of funds, typically sourced from many investors, that invests in real estate investments. It allows investments in real estate projects not otherwise available to individual investors.
Purchasing power
Purchasing power is the extent to which your money retains its value to purchase goods and services over time given the effects of inflation. For example, $1 today will not buy you the same goods and services as it would have 10 years ago.
Registrable Superannuation Entity (RSE) Licence
From 1 July 2006 all trustees are required to be licensed by the Australian Prudential Regulation Authority (APRA) and meet the applicable standards in the SIS legislation.
RBA (Reserve Bank of Australia)
The Reserve Bank is Australia’s central bank and its main responsibility is monetary policy. The Bank is an active participant in financial markets, manages Australia's foreign reserves, issues Australian currency notes and serves as banker to the Australian Government.
Accounts held by the Trustee of a superannuation fund to cover certain claims on the Fund’s assets (such as a reserve to cover any self-insured death claims).
Restricted non-preserved benefit
This is that part of your benefit that does not have to be preserved, but you cannot withdraw it in cash until you leave your employer.
This is a superannuation benefit transferred directly from one superannuation fund to another. Generally no tax is payable at the time of the rollover. Tax may be payable when you cash the rollover (i.e. withdraw it from the Fund). The amount of the tax will depend on the components and the timing of the benefit payment.
Salary Sacrifice Contributions
Salary sacrifice contributions are contributions made from your ‘before tax’ salary, before income tax has been deducted.
SCT (Superannuation Complaints Tribunal)
The SCT is an independent body set up by the Federal Government to assist superannuation fund members or their beneficiaries to resolve certain types of complaints with fund trustees. The SCT cannot be approached until the Fund’s dispute resolution process has been followed and it cannot consider complaints relating to the general operation or management of a fund.
Small Cap Manager
An investment manager who concentrates on stocks of companies with small capitalization (small cap).
Spouse contributions
These are contributions you make on behalf of your spouse to their (spouse) account in the Fund.
Superannuation Guarantee
This is the minimum amount of superannuation that an employer must provide for each employee as required by Government legislation.
Superannuation Industry (Supervision) Act (SIS)
SIS is the Government legislation that governs the operation of superannuation funds in Australia.
Surcharge Tax

The surcharge tax was an additional tax imposed on employer contributions for members with an assessable income exceeding a threshold set by the Government.

The surcharge tax was abolished effective from 1 July 2005. However, the Fund may still be required to pay surcharge tax for periods up to 30 June 2005 for some members. These amounts would be deducted from the relevant members’ accounts.

TPD (Total and Permanent Disablement)
Total and Permanent Disablement typically means that an individual is physically or mentally disabled (through illness, infirmity or accident) such that the Trustee considers that he or she is permanently incapable of obtaining or continuing in suitable employment, having regard to the member’s qualifications, training and experience.
Transition to retirement pension
Refer to Pre-retirement pension.
Trust Deed (Governing Rules)
This is the legal and binding document that sets out matters governing the Fund. It sets out the responsibilities of the Trustee in running the Fund and the entitlements of members.
This is a separate company called Total Risk Management Pty Ltd (ABN 62 008 644 353 AFSL 238 790 RSE L0000260) which has overall responsibility for the operation of the Fund.
Undeducted contributions
These are all after-tax contributions (also referred to as non-concessionsl contributions) you have made to your super since 1 July 1983. As tax has already been paid on undeducted contributions, no further tax is payable on them.
Unitised/Unit Prices
A simple way to understand the concept of unitisation and unit pricing is to compare it with the purchase of shares in a company. When you purchase shares, the money you invest buys you a certain number of shares based on the ‘share price’ on a given day. A unitised superannuation fund works in a similar way. Contributions made to your accumulation account are converted to units based on the unit price of the investment option on the day the Fund processes those contributions. This means that, at any given time, the value of your accumulation account is expressed as a number of units at a declared unit price. In our shares example, the value of your investment is the number of shares you have multiplied by the given share price on the day.
Value Manager
An investment manager who seeks to buy stocks that the manager believes are at a discount to their "fair value" and to sell them at or in excess of that value.
Volatility relates to the level of movement in the value of an asset. All investments display some degree of volatility, but some are more volatile than others. For instance, movements in the value of bonds tend to be less volatile than movements in the value of shares.
The income earned from an investment (i.e. interest rate) expressed as a percentage.

Disclaimer Issued by Total Risk Management Pty Limited (ABN 62 008 644 353 AFSL 238 790) as Trustee for BlueScope Steel Superannuation ABN 42 459 430 081.