Glossary - Superannuation

A scheme that provides retirement benefits based on accumulated employer contributions, and any investment earnings on those contributions. It is also known as a defined contribution scheme.

Australian Government Employees Superannuation Trust. AGEST is the default superannuation scheme for persons covered by the Superannuation (Productivity Benefit) Act.

Before the establishment of CSC on 1 July 2011, ARIA was the Board responsible for the administration of the CSS, the PSS and the PSSAP. ARIA was also the Trustee for the CSS Fund, the PSS Fund and the PSSAP Fund.

Refers to the requirement under the Superannuation Guarantee (Administration) Act 1992 for employers to offer eligible employees choice of a complying superannuation fund or retirement savings account to receive their superannuation guarantee contributions.

ComSuper was the Commonwealth Superannuation Administrator, until merged with Commonwealth Superannuation Corporation on 1 July 2015.

Commonwealth Superannuation Corporation. CSC was established on 1 July 2011 by merging ARIA, the Military Superannuation and Benefits Board and the Defence Force Retirement and Death Benefits Authority. CSC is responsible for managing the main Commonwealth civilian and military superannuation schemes. From 1 July 2015 they became responsible for the Administrations Services previously performed by ComSuper. The relevant schemes are:

• the Commonwealth Superannuation Scheme
• the Public Sector Superannuation Scheme
• the Public Sector Superannuation Accumulation Plan
• the Military Superannuation and Benefits Scheme
• the Defence Force Retirement and Death Benefits Scheme
• the Defence Forces Retirement Benefits Scheme
• the Defence Force (Superannuation) (Productivity Benefit) Scheme
• the superannuation scheme established by the Superannuation Act 1922
• the scheme provided for under regulations made by the Papua New Guinea (Staffing Assistance) Act 1973.

Commonwealth Superannuation Scheme. The CSS provides for a combination of defined benefits and accumulation benefits. The defined benefit in the CSS is usually a pension based on the length of membership, age and salary at retirement. The accumulation benefits include the 3% employer productivity contribution, if applicable, and the employee component. The CSS was closed to new members from 1 July 1990.

A scheme that provides a retirement benefit usually based on salary and/or a pre-determined formula for calculating that benefit. Unlike an accumulation scheme, the retirement benefit and method of calculation is known to the member at all times.

A scheme where contributions are paid to a superannuation fund by or on behalf of members of that fund. For taxation purposes the scheme is also known as a taxed scheme. Some schemes provide a combination of funded and unfunded benefits.

Ordinary Time Earnings. OTE is the default earnings base under the Superannuation Guarantee (Administration) Act 1992 for calculating the SG 9% employer contribution. Since 1 July 2008 all employers have been required to contribute at least 9% of OTE to satisfy their SG obligations. Members of the PSSAP will receive employer contributions in all circumstances that are at least 9% of OTE.

Superannuation (Productivity Benefit) Act 1988.

The Public Sector Superannuation Scheme. The PSS provides defined benefits that are usually based on the average of the member's superannuation salary on the member's last three birthdays, multiplied by an accrued benefit multiple (which is dependent on the level of the member's contributions and length of membership). The PSS was closed to new members from 1 July 2005.

The Public Sector Superannuation Accumulation Plan. The PSSAP provides accumulation lump sum benefits largely based on employer contributions at 15.4% of superannuation salary and investment returns on these contributions. The scheme is generally available to Australian Government employees who commenced employment or appointment on or after 1 July 2005, including persons employed by an Approved Authority (within the meaning of the Superannuation Act 2005) or persons who hold a statutory office.

Retirement Savings Accounts. These accounts are typically offered by financial institutions as a low risk/low income accumulation account.

Superannuation Guarantee is the minimum superannuation provision that an employer is required to provide under the Superannuation Guarantee (Administration) Act 1992.

A scheme where the employer does not pay contributions to a superannuation fund. Instead, the employer contributes when the employee's benefit is paid. For taxation purposes, it is also known as an untaxed scheme. Some schemes provide a combination of funded and unfunded benefits.