Account-Based Pension

A pension purchased with superannuation money on retirement. You can choose the amount of pension you receive each year within minimum and maximum levels set by law. Your super money is progressively drawn down until it runs out. For most people aged 60 and over, these pension payments have been tax-free since July 2007. Account-based pensions were previously known as allocated pensions.

Accumulation Fund

A superannuation fund where your retirement benefit depends on the money put in by you and your employers and the investment return generated by the fund.


Something you own. It may be a financial item like money, bonds, shares or a bank account or physical item like a house, land or a car.


A medium to long-term investment issued by governments and companies which pays a regular, fixed interest amount for the term of the investment. The invested funds (the principal) are repaid at the end of the term (maturity).


A payment made by the government to the superannuation fund of a low or middle income earner to reward them for making personal contributions to super. If you earn less than $36,021, the Australian Government will contribute $0.50 for every $1.00 of after-tax super contribution you make, up to a maximum of $500.The maximum co-contribution will reduce if your income is higher and no co-contribution is payable if you earn more than $51,021.

Concessional Superannuation Contributions

Payments put into your superannuation fund from your pre-tax income and are tax deductable for self-employed people. They include your employer’s super guarantee (SG) contributions. Concessional contributions are taxed at 15% when they are received by your super fund.

Defined Benefit Fund

A super fund where your retirement benefits are calculated by a predetermined formula. Retirement benefits are usually calculated using your average salary over the last few years before you retire and the number of years you worked in the company or public service. In general, market fluctuations have limited effect on the value of your benefit, although in periods of prolonged economic downturn, your defined benefits could be affected. If the fund performance is poor, the trustee will generally ask an employer to help pay member benefits as required.


An asset bought with the aim of producing an income and/or an increase in value over time.

Salary Sacrificing

When you and your employer agree to pay a portion of your pre-tax salary as an additional contribution to your superannuation. This can be a tax-effective strategy and usually suits middle to higher income earners.

Savings Bond

A type of government bond offered to retail investors as a medium term investment. May also refer to a type of fixed term deposit or investment bond offered by an Australian bank.


In relation to financial assets, a security is an investment such as shares or bonds which can be traded in financial markets.

Self-Employed Deductible Contributions

If you are self-employed you can claim a tax deduction for your super contributions. You can contribute up to $25,000 per year in concessional super contributions and an additional $100,000 a year in non-concessional super contributions, where at least 10% of total income must be derived from self-employed business activities.

Self-Managed Super Fund

A private super fund you can manage yourself. SMSFs are regulated by the Australian Taxation Office and can have one to four members. All members must be trustees to ensure they are fully involved in the decision making of the fund.


A share is part ownership of a company. Shares are also known as equities or stocks. Shareholders are entitled to dividends which represent their portion of the company’s profits.

Share Fund

A managed fund in which the investment manager invests in range of shares to satisfy a specific investment goal, such as maximising capital growth, dividend income or franking credits. May focus on a specific geographic region or industry sector.

Spouse Contributions Splitting

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.

Statement of Advice (SOA)

A document that sets out the advice given to a consumer by their licensed financial planner or adviser. It must include the basis on which the advice is given, details of the providing entity, and information on any payments or benefits the adviser or licensee will receive.

Stamp Duty

A state tax imposed on certain transactions, such as car registrations, mortgages and property transfers.


Money that you and your employer put into a special fund during your working life to provide you with money to live on when you retire.

Super Guarantee (SG) Contributions

The minimum amount that your employer must pay into your superannuation fund. It is currently 9.5% of your gross salary.

Tax File Number

A unique number assigned to tax payers by the Australian Taxation Office for tax administration. You need to quote the number to employers, benefit and allowance providers, banks and other investment bodies.

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