Glossary

ABN (Australian Business Number)

This is a unique identification number which a business is required to hold for dealings with the Australian Taxation Office (ATO) and other government agencies.

Account based pension

A product that enables you to draw your super in the form of regular income payments until the account is exhausted. You must take a minimum amount in pension payments each year based on your age and balance, however there is no maximum amount you can take. In the event of your death, any remaining balance is usually paid to a beneficiary or your legal representative (or estate). Learn more about REST Pension.

AFSL (Australian Financial Services Licence)

This is a licence issued by Australian Securities and Investments Commission (ASIC) which an organisation is required to hold in order to provide financial services.

Age Pension

Government income support to eligible older Australians who do not have enough income or assets to support themselves.

Alternatives

A category of investments which do not fit into the more traditional asset classes such as shares, bonds or cash. Alternatives can include agricultural investments, a range of credit instruments, private equity (investments in companies not listed on the stock market) and hedge funds (which can invest in a range of assets and use sophisticated trading techniques).

Annual report

A report which a super fund is required to produce detailing its financial position. To obtain REST’s annual report, go to the Annual reports and financial statements section.

Asset allocation

The asset allocation is the mix of asset classes (e.g. shares, bonds, cash, property, etc.) for an investment option. The asset allocation of each REST investment option is available in the Investments section of our website.

Asset class

A category of investment such as shares, bonds and property.

Assets test

This is used by the government to determine the amount of Age Pension a retiree may be entitled to, if any. This test assesses how much assets a person can have before their pension is impacted. An assets test is performed in conjunction with an income test.

Benchmark (also known as an Index)

Measures the performance of an asset class as a whole, against which the performance of an individual investment option is compared. For example, the S&P/ASX 300 Accumulation Index is the benchmark against which our ‘Australian Shares’ investment option is compared.

Beneficiary

The person(s) nominated by you to receive your superannuation in the event of your death. Your chosen beneficiaries must either be your dependants or your legal personal representative (estate).

Bonds

Bonds are one of the major asset classes and covers both Australian and overseas debt securities. The issuer of the bond (typically governments or a corporation) acts as a borrower, while the holder of the bond acts as a lender. The bond is issued for a set period of time and the principal must be repaid along with interest, or coupon, payments.

Buy/sell spread

Represents the estimated transaction costs, including brokerage fees and stamp duty, incurred when buying or selling underlying assets in relation to each investment option.

Capital gain/loss

Broadly, the difference between the purchase price and the sale price of an asset. For example, if an asset is bought for $100 and sold for $120, the capital gain is $20.

Cash

In the context of superannuation, cash is one of the major asset classes. Cash investments held by super funds can include (but are not limited to) bank deposits, bank bills, commercial paper and short term residential mortgage backed securities.

Cashing restrictions

Cashing restrictions are rules that restrict how a member can cash their superannuation on satisfying a condition of release. For example, if a member satisfies a condition of release such as attaining their preservation age and begins a transition to retirement income stream.

Choice (of superannuation fund)

This is the ability for employees to select which super fund their compulsory employer contributions are paid to. This choice is available to many but not all employees, and for more information visit the Australian Taxation Office website.

Co-contribution

Personal super contributions you make from your after-tax income which may attract a top-up from the government, known as a co-contribution. You can learn more about co-contributions at www.rest.com.au/co-cont/.

Compound returns

The rate of return that represents the cumulative effect, either gains or losses, on the original sum invested over a period of time (i.e. interest on interest).

Concessional contributions

Super contributions break down into two main categories: concessional and non-concessional contributions. Concessional contributions may entitle the payer to a tax deduction and include compulsory employer contributions and salary sacrifice contributions.

Concessional contributions cap

The maximum amount of concessional contributions that can be made for a member without incurring additional tax. For more information read our Contributing to Super factsheet.

Conditions of release

The general term used to describe the various ways by which it is possible to access superannuation benefits. The main conditions of release are:

  • You have retired (i.e. reaching preservation age and you have genuinely retired or on or after reaching age 60 and you cease employment
  • You have reached preservation age and commence a transition to retirement income stream
  • You have reached age 65
  • You die
  • You are diagnosed with terminal illness with a life expectancy of less than 24 months
  • You become totally and permanently disabled
  • You are temporarily disabled
  • You satisfy severe financial hardship requirements (REST does not release money on this basis)
  • You satisfy the Department of Human Services (DHS) that an amount of your super should be released for compassionate reasons
  • You've left your REST employer and your account balance at the time of leaving is less than $200 or
  • You are an eligible temporary resident permanently departing Australia (excludes New Zealanders).

There are cashing restrictions on the amount you can access with some conditions of release. For more information read our Accessing your super early factsheet.

Consumer Price Index (CPI)

This is a measure of inflation that compares the cost of living (i.e. goods and services) over time. CPI is calculated and reported by the Australian Bureau of Statistics.

Contributions tax

Tax of 15 per cent applied to concessional contributions (including compulsory employer contributions and salary sacrifice). If your income (including super contributions) is more than $300,000 per annum, contributions tax will effectively be 30% (plus the Temporary Budget Repair Levy) on some or all of the concessional contributions. (Note: the government has proposed to lower this threshold to $250,000).

Death benefit

The money payable by a super fund to an eligible beneficiary or the legal personal representative (estate) of a member following his/her death.

Death cover (also known as life insurance)

A type of insurance available through your super fund. Death cover provides a lump sum or pension in the event of your death or if you become terminally ill. For more information visit the insurance section.

Default fund

The super fund your compulsory employer contributions, i.e. Superannuation Guarantee contributions, are paid to, in the event that you do not or cannot exercise choice of fund. An employer must choose a super fund that is authorised to offer a MySuper product as their default fund.

Defensive assets

Lower risk investments which typically produce modest, steadier returns but may not outpace inflation in the long-term. For example, cash and bonds.

Diversification

In investment terms, diversification refers to the spreading of risk (i.e. not putting all your eggs in one basket). Our Core Strategy investment option – which many REST members invest in – offers diversification in that it reflects a mix of asset classes, geographies and investment managers.

Eligible rollover fund (ERF)

A fund which is eligible to receive benefits automatically transferred in from other funds. 

REST may rollover a member’s benefits to its ERF (AUSfund) if:
 
  • A member’s account balance is less than $4000, and
  • Either:
    • REST has attempted to contact the member via mail or electronic means and their correspondence has been returned unclaimed OR
    • No contributions or rollovers have been paid into a member’s account in the past 12 months

Growth assets

Higher risk investments, prone to greater fluctuation, referred to as volatile. While these investments tend to be more volatile and can produce negative returns in the short-term they offer the potential of higher long-term returns than defensive assets over the longer term. For example, shares and property.

Inactive account

An account with REST is considered to be inactive if the member joined through an employer, more than two years ago, and there have been no contributions or rollover amounts in the last five years. However if it is shown the member knows about their account, they can be excluded from the inactive classification. If an account is inactive for more than 12 months and the balance is under $4,000, by law REST must transfer the money to the ATO.

Income Protection cover

A type of insurance available through your super fund. This pays an income in the event that you’re unable to work for a prolonged period due to injury or illness. For more information read the relevant Insurance Guide.

Income stream

Superannuation benefits taken as regular income payments, rather than a lump sum.

Income test

This is used by the government to determine the amount of Age Pension a retiree may be entitled to if any. It assesses how much income a person has from all sources to support themselves in retirement. An income test is performed in conjunction with an assets test.

Industry fund

A superannuation fund established to accept and manage super contributions for a particular industry. For example, REST was established as the super fund for retail workers. However, these days most industry funds, including REST, are open to everyone.

Inflation

The rise in the prices of goods and services often measured by the Consumer Price Index.

Interest

The return earned on money lent or invested.

Investment manager

A third party contracted by a super fund to invest members’ contributions.

Investment option

The pool of money your super is placed into, and distinguished by its investment mix. For example, many REST members have their super invested in the Core Strategy investment option, which is made up of a mixture of cash, bonds, infrastructure, property, shares and alternatives.

Investment return

The change in value of an investment over time (positive or negative). This is usually expressed as a percentage

Investment return objective

The goals set for an investment option, usually to be achieved over a set time frame. It is not a guaranteed rate of return.

Investment risk

The risk that the actual return on an investment will be different to the expected return. Generally, the higher the potential return of an investment, the higher the risk.

Investment switching

Moving some or all of your superannuation balance from one investment option to another. You can switch your investments online by logging in to MemberAccess, or you can complete and return an ‘Application to make an investment choice’ form. Please note that any switching of investment options will incur a buy/sell spread.

Lump sum

Superannuation taken as a single payment, rather than an income stream.

Member statement

A statement issued to members at least annually by a super fund. The statement generally includes the member’s account balance, contributions received over the period, investment earnings (could be positive or negative), fees and charges deducted, and details of any insurance the member holds.

Minimum suggested timeframe

The minimum suggested period of time for investing in a particular investment option.

Modern Award

A modern award sets out the minimum terms and conditions of employment for employees that are covered by it within a particular industry or occupation. It may include terms about superannuation. A modern enterprise award is a modern award that applies to one or more business and its employees.

Non-concessional contributions

Super contributions break down into two main categories: concessional and non-concessional contributions. Non-concessional contributions are contributions for which you have not claimed a tax deduction and which are made from your take home (after tax) pay. For more information read our Contributing to Super factsheet.

Non-concessional contributions cap

The maximum amount of non-concessional contributions a member can make without incurring additional tax. For more information read our Contributing to Super factsheet.

Ordinary time earnings

Generally, the earnings on an employee’s ordinary hours of work, upon which compulsory super contributions , (i.e. Superannuation Guarantee contributions), are calculated.

Portability

The ability for members to transfer their super monies from one superannuation fund to another.

Preservation

The regulatory requirement that certain super benefits be maintained within the superannuation system. Preserved benefits can only be accessed once a condition of release is satisfied.

Preservation age

The age at which a member can generally access preserved super benefits (between ages 55 and 60 depending on the member's date of birth). You can learn more about preservation at www.rest.com.au/facts.

Product Disclosure Statement (PDS)

A document describing the key features of a financial product, required to be produced and given to clients. REST has a PDS for each of its four products: REST Super, REST Corporate, REST Pension, and Acumen.

Property

One of the major asset classes. It includes retail, industrial, and commercial property investments. Property investments provide rental income and can rise and fall in value over time.

Return target

Represents the mean annualised estimate of return over ten years above CPI, after deducting investment and administration fees, costs and taxes. It may change over time and is not a guaranteed return.

Salary sacrifice contributions

An arrangement with your employer where money is deducted from your salary before tax and paid to your super fund. For more information read our Contributing to Super factsheet.

Shares

One of the major asset classes. Also known as a stock or equity, a share is part ownership of a company. The value of shares can rise and fall over time.

Superannuation Guarantee (SG) contributions

Also known as ‘compulsory employer contributions’, these are the minimum level of super contributions that an employer must make for eligible employees. For more information, visit the ATO website.

Total and Permanent Disablement cover

This is a type of insurance available through your super fund. Provides a lump sum or, if chosen, an income stream, if you’re sick or injured to the extent that you’re not expected to ever work again. For more information read the relevant Insurance Guide.

Transition to retirement’ provisions

Enables a person who has reached their preservation age to convert part of their superannuation to a pension without the need to retire. This enables the person to reduce their income from work while receiving supplement income from the transition to retirement pension so their overall income is similar.

Trustee

In your dealings with us, ‘trustee’ refers to Retail Employees Superannuation Pty Limited.

This website is provided by Retail Employees Superannuation Pty Limited ABN 39 001 987 739, AFSL 24 0003, trustee of Retail Employees Superannuation Trust ABN 62 653 671 394, of which Rest Super, Rest Corporate, Rest Select, Rest Pension and Acumen are part. It contains general advice that has been prepared without taking account of your objectives, financial situation or needs. Before acting on the information or deciding whether to acquire or hold a product, consider its appropriateness and the relevant Product Disclosure Statement (PDS), which is available on this website.

Rest Advice is provided by Rest advisers as authorised representatives of Adviser Network Pty Limited AFS Licence 232729 ABN 25 056 310 699

Awards and ratings are only one factor to consider when deciding how to invest your super. Further information regarding these awards can be found at Rest.com.au/about-Rest/awards. Past performance is not an indicator of future performance. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite this product. Go to www.superratings.com.au for details of its ratings criteria. For further information about the methodology used by Chant West, see www.chantwest.com.au