Jargon explained
Super and retirement is a highly regulated environment surrounded by a lot of ‘jargon’. We aim to make the information on this website as easy to understand as possible, but sometimes we have to use the technical terms.
On this page, we explain what these words mean. If you’re looking for the explanation of a word that is not included, please let us know and we’ll add it in.
A
ABN: Super funds have an ABN (Australian Business Number), which is used to identify the particular fund and help make transfers between funds. Since we look after more than one fund, you can look up the ABN for your super account on our website.
Absolute return funds: These are funds which aim to generate positive returns in any market environment by investing in one or a range of asset classes (see below to learn more about asset classes).
Accumulation scheme: This is a type of super fund where your account balance builds up over time from your employer contributions, your own personal contributions as well as from investment earnings. How much your account grows depends on the number and amount of contributions received, how long your super is invested, the fees and costs deducted and the overall performance of the assets you are invested in through your investment plan. GESB Super and West State Super are examples of accumulation schemes.
Asset-backed investment vehicle: This is a type of fixed-interest investment where its income payments and value come from (and are backed by) what’s known as a specific pool of underlying assets. The pools of underlying assets can include payments from mortgage loans, credit cards and car loans. Asset-backed investment vehicles are created by institutions and are responsible for bundling the underlying assets into a pool.
Asset class: This is a broad category of financial securities (or assets) that you can invest in. Examples include Cash, Fixed Interest, Property, Australian Shares and International Shares. Find out more about how we invest your super in a range of asset classes.
Average Contribution Rate (ACR): This is the average percentage of your salary you contribute to your Gold State Super account over the life of your membership.
Automatic rebalancing: With our Mix Your plan investment option for GESB Super and West State Super, you can choose to automatically rebalance your investment mix to keep the level of asset allocation you want. For example, if the Australian Shares component of your super outperforms other asset classes, your asset allocation will increasingly be weighted to Australian Shares over time. Automatic rebalancing makes sure the percentage held in each asset class stays the same over time. You can choose to rebalance your investment mix on a quarterly, half-yearly or yearly basis.
B
Bank bills: Bank bills are a type of short-term cash investment traded between investors on the money market. Cash investments such as bank bills carry a low level of investment risk and returns are generally very stable and relatively low.
Benefit: This is a term used to refer to your super money when it becomes payable to you, or when you withdraw it from a Retirement Income account. Simply, the money you’re entitled to receive from your super is your benefit.
Bond: See Investment Grade Bond below.
C
Cash investments: Cash investments can take various forms, including a cash deposit held at a bank, term deposits or short-term securities such as bank bills that are traded between investors on the money market. We invest in bank bills and other short-term to medium-term investments. Cash investments such as bank bills carry a low level of investment risk and generally achieve stable, although relatively low, returns.
Commodities: Commodities include bulk (iron ore, coal), industrials (metals) and agricultural (wool, wheat, sugar) goods. A common way to invest in commodities is through a futures contract. This is an agreement to buy or sell a specific quantity of a commodity at a specific price in the future.
Commonwealth Government Super Co-contribution: A co-contribution is a Commonwealth Government initiative designed to help eligible people increase their retirement savings by boosting their super. Find out more about the Super Co-contribution.
Commonwealth preservation age: Your Commonwealth preservation age is the minimum age at which you can access your super under government legislation. Until you reach this age, you can’t access your super benefit other than in certain defined circumstances.
Your preservation age depends on your date of birth:
- If you were born on or before 30 June 1964, you can access your super when you turn 59
- If you were born on or after 1 July 1964, you can access your super when you turn 60
Completed Months of Service: This is the number of months of full-time equivalent service you completed as a contributing Gold State Super member. This figure is used in the calculation of your Final Benefit.
Compound (interest): This is interest that is calculated on the initial money invested and the accumulated interest of prior periods. Compound interest is different from simple interest, which is calculated only as a percentage of the initial money invested.
Concessional contributions: These are any contributions made to a super account before tax is deducted, for example compulsory employer Superannuation Guarantee contributions or salary sacrifice contributions.
Concessional (before-tax) contributions cap: This is the limit on the amount of concessional contributions you can make to your super each year before you have to pay extra tax. For the current caps, see the How much can you contribute page.
Consolidate: This is when you transfer your super from one super fund to another super fund. This is also known as a rollover, a roll in or combining your super.
Contribution splitting: This allows you to split your super contributions with your spouse. When you split your contributions, you transfer or roll over a portion of the contributions you recently made to your super account to your spouse’s super account.
Contributory Service Benefit: This is your accrued Gold State Super benefit, which includes your member and employer contributions.
D
Death insurance: This type of cover provides a one-off lump-sum payment in the event of your death (and includes a terminal illness benefit).
Defined benefit scheme: If you have this type of super scheme, your final super benefit is determined by applying a fixed or 'defined' formula, usually based on your length of service, contributions and final salary. This type of scheme is not market-linked, as the benefit doesn't depend on investment market returns. Gold State Super is a defined benefit scheme.
Dependant: For super, this can include your spouse (or former spouse or de facto, of any gender), a child under 18 (including an adopted, step or ex-nuptial child), any person who is financially dependent on you, or any person with whom you have an interdependent relationship.
Diversification: Diversification is an investment approach that involves investing across a range of asset classes, rather than investing in only one type of asset. The aim of diversification is that the positive performance of one asset class may help balance the negative performance of another.
Downsizer contributions: The downsizer contribution scheme was introduced by the Federal Government to reduce pressure on housing affordability in Australia. If you meet eligibility requirements, you may be able to contribute proceeds from the sale of your family home into your super account. Learn more about Downsizer contributions.
E
Equivalent full-time contributory service: This is the equivalent number of months of full-time service you completed for your Gold State Super account, and is used in the calculation of your benefit. For example, if you worked 50% part-time for 12 months, you would only have accrued the equivalent of six months full-time service.
Eurozone: This refers to a group of countries in the European Union (EU) that have adopted the euro as their national currency.
Excess concessional contributions (ECC) charge: This is a charge you have to pay if your tax liability increases as a result of having excess concessional contributions for the relevant financial year. You can learn more on the ATO website.
F
Final Remuneration: This is your average salary, based on three key dates during your last two years of service while contributing to your Gold State Super account. For part-time employees, your Final Remuneration is based on your equivalent full-time salary. Your salary includes Higher Duties Allowance (HDA) or Temporary Special Allowance (TSA), if one of these is received for at least 12 months continuously within the last two years of employment, and is received on the date you stop being a contributing member and/or one or both Selection Dates. Please note, each member's situation may be different.
Financial derivatives: These are tradeable securities with a value which depends on another security. Financial derivatives include options, futures and swaps.
First Home Super Saver scheme: The First Home Super Saver (FHSS) scheme is a Commonwealth Government initiative announced in the 2017/18 Federal Budget, to help Australians aged 18 years or older save for their first home.
Learn more about the First Home Super Saver scheme.
Fixed debt security: A type of Bond that pays a regular, fixed rate of interest.
Floating debt security: A type of Bond where the interest payments change with official interest rate movements.
G
Growth asset classes: These are types of investment, such as Shares and Property, which typically generate high returns with higher levels of risk. Some asset classes may be classified as part Growth and Defensive. Find out more about how we invest your super in a range of asset classes.
H
High yield debt: Also known as sub-investment grade debt, are the borrowings by governments or corporations with a credit rating of BB or lower by Standard & Poor’s, or BA or below by Moody’s Investors Service. High yield debt securities are commonly traded on a recognised market.
I
Inflation: Increases in the cost of living, usually measured by the Consumer Price Index (CPI).
Inflation-linked interest rate securities: These are fixed interest investments that have their capital value and/or pay cash flows linked to inflation.
Interposed vehicle: We invest using a number of unit trusts. In line with ASIC Regulatory Guide 97: Disclosing fees and costs in PDSs and periodic statements (RG97), we have classified the unit trusts as interposed vehicles, which means they are positioned between us and the underlying assets. The fees for the interposed vehicles, as defined by RG97, are included in the investment fees and costs.
Investment choice/investment plan: If you have a GESB Super, West State Super or Retirement Income Pension account, you can choose from a range of investment plans with different objectives for target performance - from 'growth' (high risk) through to 'cash' (low risk). Each investment plan has a unique asset allocation, made up of different types of assets, such as Shares, Property and Fixed Interest - so you can choose a plan that suits your situation and investment goals. Learn more about our super investment options and retirement investment options.
Investment fees and costs: An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes:
- Fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees)
- Costs that relate to the investment of assets of the entity
A fee is applied that would ordinarily be regarded as an investment fee under the above description, which varies depending on the investment plan that is applicable to your account. However, this fee is deducted from the relevant investment plan’s assets before the daily unit price is calculated. The fee is therefore not a separate investment fee charged to members and is captured within the investment fees and costs.
Investment Grade Bond: This is a bond with a credit quality which is considered to have a relatively low level of default risk by an independent bond-rating agency.
Investment returns and risk: 'Return' is the gain or loss in the value of your investment and 'risk' is the variability of those returns. Generally, the higher the potential return, the higher the potential risk. In the same way, investments offering lower returns tend to have a lower level of risk.
Investment timeframe: This is the period of time you expect to hold your investment or portfolio. Your investment timeframe is an important factor in determining your risk profile.
L
Life stage investment option: Most MySuper options adopt what’s known as a single diversified investment strategy. This strategy invests in a mix of asset classes (including Cash, Fixed Interest and Equities) to target a fixed risk and return profile. Some MySuper funds offer a Life stage investment option which automatically moves members into a different risk and return profile based on their age. Generally, this option will allocate more to growth investments when the member is younger and switch to more conservative investments as the member gets older.
Low rate cap: The low rate cap is a limit that applies if you reach your preservation age but are under 60 years old. It limits the amount of taxable components (taxed and untaxed element) that can be taxed at a concessional (lower) rate of tax. The low rate cap is a lifetime cap. For the current limits, read our Tax and super brochure.
M
Market-linked: If you are a member of one of our market-linked schemes, your investment is linked to the performance of financial markets. We invest your super into a range of financial assets such as Shares and Bonds and the balance of your super depends on the performance of these assets (along with any contributions, withdrawals or deductions from your account).
We have four market-linked super schemes: GESB Super, West State Super and Retirement Income Pension (includes RI Allocated Pension and Transition to Retirement Pension) and RI Term Allocated Pension.
Mix Your plan: This is an investment option which allows you to choose from one or more of the asset classes available. Instead of choosing one of our Readymade investment plans, Mix Your plan allows you to select your own asset allocation, and manage it yourself. If you choose Mix Your plan, you can also choose to automatically rebalance.
MySuper investment options: Most MySuper investment options adopt what’s known as a single diversified investment strategy, which has a mix of asset classes (including Cash, Fixed Interest and Equities) to target a fixed risk and return profile. In contrast, the life stage investment option automatically moves members into a different risk and return profile based on their age. Generally, the life stage investment option will allocate more to growth investments when the member is younger and switch to more conservative investments as the member gets older.
N
Non-commutable income stream: This is an income that pays you a regular amount from your super, but does not allow lump-sum withdrawals.
Non-concessional contributions: These are contributions made from your after-tax income (as opposed to your employer's contributions, which are made before tax is deducted). These are also known as personal contributions.
Notional service: If one of our Gold State Super members becomes permanently disabled or passes away, notional service is used to work out the potential number of equivalent months of service they would have worked until they turned 60.
P
Pension: This is a type of income stream you might receive in retirement. This may involve putting your super into a product such as an allocated pension, where you would receive a regular income drawn from your super. You might also be eligible for the Commonwealth Government Age Pension.
Permanent incapacity: If, due to ill health, you are unlikely to ever again engage in gainful employment (for which you’re reasonably qualified by education, training or experience), you can apply to the GESB Board to access your super under grounds of permanent incapacity.
Personal after-tax contributions: These are contributions that you can make to grow your super rather than relying on just the compulsory Superannuation Guarantee contributions that your employer must make on your behalf. These are sometimes called non-concessional contributions.
Preservation age: You can’t access the money in your super until your 'Commonwealth preservation age' which is a requirement by legislation. Until this age, you can only access your super benefit in certain defined circumstances. Visit the When can you access your super page for more information on these circumstances.
Your preservation age depends on your date of birth:
- If you were born on or before 30 June 1964, you can access your super when you turn 59
- If you were born on or after 1 July 1964, you can access your super when you turn 60
Perth Consumer Price Index (Perth CPI): This is a measure of the average change over time in the prices paid by Perth households for a fixed basket of goods and services.
Private debt: This investment is typically the borrowings by small and medium sized companies which are not traded on public markets.
R
Readymade plan: This is an investment plan managed by our investment team, which has a pre-determined objective for target performance: from 'growth' (high risk) through to 'cash' (low risk). Each Readymade plan has a different asset allocation.
Recognised unpaid leave: This is leave that your employer counts as good service, e.g. parental or sick leave. Recognised unpaid leave only applies to Gold State Super.
Restricted non-preserved benefits: These are benefits which are not preserved, but can’t be cashed until you meet a condition of release such as termination of employment.
Retirement Options Service (ROS): This is a one-on-one meeting with one of our experienced consultants, who knows and understands our unique schemes. They will provide you with factual information and explain the options you have for your retirement. A fee is charged for this service, which you can pay from your GESB Super, West State Super or Retirement Income Pension account. ROS is not financial planning advice. Book a Retirement Options Service appointment.
Reversionary beneficiary (or reversionary pensioner): This is someone who will continue to receive your pension when you pass away. If you want to nominate a reversionary pensioner, you need to do this on the Retirement Income Pension application form when you establish your account. It cannot be changed at a later date.
Risk profile: This is a description of you, based on how much risk you are willing to take when you invest your money. Investors willing to take on a lot of risk, or 'growth' investors, typically seek to maximise their longer-term investment and are less worried about the possibility of a negative return. On the other hand, conservative investors typically look for more stable returns.
Roll in: This is when you transfer your super from one super fund to another super fund. This means the same as when you consolidate your super.
S
Salary Continuance Insurance (SCI): This type of cover is available to eligible GESB Super and West State Super members and provides a monthly income of up to 75% of your pre-disability income (subject to a maximum amount) for up to two years, if you become disabled due to sickness or injury. In addition, you may also be entitled to a Superannuation Top-Up Benefit.
Salary sacrifice: This is a way to make concessional (before-tax) contributions to your super. The money you 'sacrifice' is paid by your employer into your super account before you pay income tax. Salary sacrifice is sometimes also referred to as salary packaging.
Selection Date: This is the date each year we use to calculate the amount you need to contribute to Gold State Super, taking into account your chosen contribution rate and salary information.
Single diversified investment option: Most MySuper options adopt what’s known as a single diversified investment strategy. This strategy invests in a mix of asset classes (including Cash, Fixed Interest and Equities) to target a fixed risk and return profile. In contrast, the life stage investment option automatically moves members into a different risk and return profile based on their age. Generally, the life stage investment option will allocate more to growth investments when the member is younger and switch to more conservative investments as the member gets older.
Spouse contributions: These are contributions you make to a super fund or retirement savings account holder on behalf of your spouse. You may be entitled to a tax offset if you make contributions on behalf of your spouse. Spouse contributions count as non-concessional (after-tax) contributions for the receiving spouse.
Spouse contribution splits: We allow contributions made to your GESB Super or West State Super account to be ‘split’ with your spouse or partner. You can generally split concessional contributions, such as employer contributions, salary sacrifice contributions and personal contributions for which a tax deduction has been claimed (GESB Super only). The amount and type of contribution you can split depends on whether you have a GESB Super or West State Super account. Your spouse on whose behalf you split contributions with must be aged under 65.
Standard Risk Measure (SRM): This is a measure the Australian Superannuation Funds Association (ASFA) has produced as a guide to help members compare the potential risk of various investment plans.
The SRM is not a complete assessment of all forms of investment risk. For example, it doesn't detail what the size of a negative return could be or the potential for a positive return to be less than a member may require in order to meet their objectives. It doesn’t take into account the impact of administration fees and tax on the likelihood of a negative return. It’s a good idea to make sure you are comfortable with the risks and potential losses associated with your chosen investment option(s).
Using the SRM guidelines, we estimate the risk of each investment option based on assumptions about how investment markets may perform, the likely fluctuation in returns and the relationship between asset classes. Being estimates, the outcomes cannot be guaranteed.
| Risk band | Risk label | Estimated number of negative annual returns over any 20-year period |
|---|---|---|
| 1 | Very low | Less than 0.5 |
| 2 | Low | 0.5 to less than 1 |
| 3 | Low to medium | 1 to less than 2 |
| 4 | Medium | 2 to less than 3 |
| 5 | Medium to high | 3 to less than 4 |
| 6 | High | 4 to less than 6 |
| 7 | Very high | 6 or greater |
Superannuation Guarantee (SG): This is the compulsory rate (defined by the Commonwealth Government) of contributions your employer must make to your super. Currently the rate is set at 11%.
Superannuation Top-Up Benefit: This is an amount, for GESB Super and West State Super Salary Continuance Insurance (SCI) purposes, that may be paid and preserved in your GESB Super or West State Super account where your SCI sum insured is greater than 75% of your pre-disablement income. See Insurance and your super for more information.
Superannuation Contributions Surcharge: Super Contributions Surcharge is an additional tax on certain contributions made to a super fund after 20 August 1996 and before 1 July 2005. It generally affects members who earn higher incomes.
Although the Commonwealth Government abolished super surcharge, it does not affect any existing and future surcharge liabilities that arise for certain contributions made between 20 August 1996 and 30 June 2005.
If you are a member of constitutionally-protected funds like Gold State Super, Pension Scheme and West State Super, you won’t need to pay your surcharge liability until you have left the fund or begin receiving a pension. You may still have a future obligation under the surcharge legislation.
Surcharge notice assessment: This is a notice issued by the Australian Taxation Office (ATO) for members with a Superannuation Contributions Surcharge debt account. This account was set-up if you were assessed for super contributions surcharge for the financial years 1997 to 2005 and your contributions were made to a constitutionally-protected fund. Your final liability for constitutionally-protected funds is not calculated by the ATO until we send them a member exit statement.
T
Taxable component - taxed element: This is a component which includes amounts where a fund has paid 15% tax on the contributions or earnings.
Taxable component - untaxed element: This is a component which generally only applies where a fund has not paid any tax on the contributions or earnings. Our West State Super and Gold State Super are ‘untaxed funds’. It doesn’t mean no tax applies, just that tax applies later. It includes funds in super, such as before-tax contributions, that have not yet been taxed. The tax on this component is calculated when the funds are either moved to a taxed super environment (such as a taxed fund, or account-based pension), or accessed as a payment.
Taxed scheme: GESB Super is a taxed scheme, which means that a 15% contributions tax is payable on taxable contributions (such as employer or salary sacrifice contributions). Investment earnings in a taxed fund are taxed at a maximum rate of 15% in the year that they are earned. You might also need to pay tax when you are able to access your super benefit, but this depends on your individual circumstances.
Tax-free component: The tax-free component of a member's super interest is not taxed when accessed. It is the sum of the value of the contributions segment and the crystallised segment. The contributions segment is generally made up of your non-concessional contributions made after 30 June 2007, or other contributions we’ve received that are not taxed in a super environment. The crystallised segment is the amount of several tax-free components as at 30 June 2007, such as the concessional component and pre-July 1983 component.
Tax-free element: The tax-free element of a member's super interest is the sum of the value of the contributions segment and what’s known as the crystallised segment. The crystallised segment is generally made up of after-tax personal contributions, or other contributions we’ve received that are not taxed in a super environment.
Tax offset: This is an entitlement which reduces the amount of income tax to be paid.
Total and Permanent Disablement insurance: This type of cover provides a one-off lump-sum payment if you are totally and permanently disabled and cannot work due to that condition.
Traditional asset classes: These are types of investments which include the basic categories of Equities, Fixed Interest and Cash.
Transaction costs: Transaction costs are costs incurred when we or our investment managers buy or sell investments, including such costs incurred in or by an interposed vehicle. They may include costs such as brokerage, settlement costs (including settlement related custody costs), bid-ask spreads, stamp duty on investment transaction costs and clearing costs, and buy-sell costs for our underlying investments (where applicable). Transaction costs do not include borrowing costs or property operating costs.
The buy-sell costs of our underlying investments are not passed on to you as a fee to be paid to us or an external manager, as no buy-sell spread is currently applied directly to your GESB Super account. However, buy-sell costs will reduce the returns on your selected investments.
All explicit transaction costs are included in the transaction costs for each investment plan. Transaction costs are an additional cost to you and are deducted from the fund’s underlying assets before the daily unit price is calculated.
Transfer balance cap: This is a lifetime limit on the total amount of super that can be transferred into or held in a tax-free retirement account, such as our RI Allocated Pension. The current transfer balance cap is $1.9 million for the 2023/24 financial year. The transfer balance cap doesn’t apply to Transition to Retirement Pension accounts.
Transferred Contributions and Interest: If you were previously in the WA Public Sector Pension Scheme, this part of your benefit is made up of the contributions you made plus interest that was previously transferred from the WA Public Sector Pension Scheme to Gold State Super. This only applies if you have Gold State Super.
Transferred Service Benefit: If you were previously in the WA Public Sector Pension Scheme, this extra service benefit is based on the past full-time employment you accrued when you transferred from the WA Public Sector Pension Scheme to Gold State Super. This only applies if you have Gold State Super.
Transition to retirement: This is a strategy that allows you to access your super benefit once you have reached your preservation age for your fund, in the form of a non-commutable income stream, while you continue to work full or part time. For more information visit our transition to retirement page.
Total superannuation balance (TSB): Generally, your total superannuation balance is calculated on 30 June each year, by adding together any super amounts you have in accumulation or pension accounts. This includes any super you are transferring between super funds or moving to a pension account on this date. You can check your TSB using myGov, or visit the ATO website for more information.
U
Unit pricing: Your super account is valued using units. When you or your employer contribute to your account, you purchase units in your investment plan. These units change in value as the value of the asset classes which make up your plan either increase or decrease. Learn more about how unit pricing works or view the unit price history for your chosen investment plan.
Unrecognised leave: If you have Gold State Super, this is leave that your employer does not count as good service, such as an extended holiday.
Untaxed plan cap: For the 2023/24 financial year, you can accumulate up to a maximum of $1.705 million in concessionally taxed benefits in your West State Super or Gold State Super account. If you exceed the cap, you may have to pay more tax. Amounts up to the untaxed plan cap of $1.705 million per super fund are taxed at 15% when you move to a taxed fund. Any amount exceeding the untaxed plan cap will be taxed at 47% before rolling over.
Untaxed scheme: This is a type of super fund where the government does not tax either concessional contributions that you or your employer make, or your investment earnings. Instead of paying tax upfront, tax is paid when your benefit is paid to you or rolled over to a taxed super fund or retirement income stream. Untaxed does not mean ‘no tax’, so it can be useful to think of it as deferred tax. Gold State Super, West State Super and the WA Public Sector Pension Scheme are all untaxed schemes.
Unrestricted non-preserved: These are benefits for which a condition of release has previously been met, and may be accessed at any time (subject to your super fund's rules).
Unique Superannuation Identifier (USI): This is used to facilitate transfers in and out of your account. Each of our schemes has a different USI. If you need the USI for your super to arrange a transfer to another fund, you can look up the USI for your account on our website. Please be aware that we can only accept employer contributions from WA public sector employers or their packaging providers. Your employer or their approved package provider will already have the necessary information to contribute to your super account.
V
Voluntary contributions: These are extra contributions you can make to grow your super instead of relying on just the compulsory Superannuation Guarantee that your employer must make on your behalf. You can make contributions after tax (non-concessional contributions) or before tax (concessional contributions), also known as salary sacrificing. They can also be regular or lump-sum payments.
W
Waiting period: Refers to the amount of time you have to wait to receive an insurance benefit payment after being certified by a registered medical practitioner as being totally disabled and ceasing work due to the condition you have claimed. You can make an insurance claim as soon as you meet the medical requirements, but the benefit may not be paid into your account until after the waiting period has expired (if the claim is approved by the Insurer).
For Salary Continuance Insurance with GESB Super and West State Super, the default waiting period for any benefit payment is 90 days. You can change your waiting period to 30, 60, 120 or 180 days, which will affect the premium you pay. See Insurance and your super for more information.
For Total and Permanent Disablement insurance with GESB Super and West State Super, the waiting period is generally three months (except where you suffer the total and irrecoverable loss of limbs and/or sight). See Insurance and your super for more information.
Thank you for printing this page. Remember to come back to gesb.wa.gov.au for the latest information as our content is updated regularly. This information is correct as at 28 April 2024.