Superannuation Law glossary
Superannuation law in Australia is governed by the Superannuation Industry (Supervision) Act 1993 (Cth) and a complex overlay of Corporations Act, tax, and regulatory requirements. This glossary covers 40 of the most commonly used terms.
This is a glossary of 40 key terms used in Australian superannuation law. Each term has a plain-English definition and, where applicable, a reference to the SIS Act 1993 (Cth) or related tax and regulatory provisions.
Definitions
Accumulation interest
A superannuation interest where the benefit is the account balance accumulated from contributions and investment returns.
APRA-regulated fund
A super fund regulated by the Australian Prudential Regulation Authority — typically retail, industry, corporate, or public-sector funds.
Best financial interests duty
The trustee duty introduced in 2021 to act in the best financial interests of members — a heightened version of the common law best interests duty.
Binding death benefit nomination
A nomination that directs the trustee to pay a death benefit to specified dependants or the estate. Binding if formal requirements are met.
Concessional contribution
A super contribution made from pre-tax income (for example, SG, salary sacrifice). Taxed at 15% in the fund, subject to the concessional cap.
Condition of release
An event that permits a member to access preserved benefits — for example, retirement, age 65, terminal medical condition.
Contribution cap
The annual limit on contributions (concessional or non-concessional) above which excess contributions tax applies.
Death benefit
A benefit paid on the death of a member. Taxed differently depending on whether paid to a death benefit dependant.
Defined benefit interest
A super interest where the benefit is defined by formula (typically salary and service), not the account balance.
Dependant (superannuation)
A spouse, child, financial dependant, or interdependent. Eligibility to receive a death benefit depends on dependant status.
Early release
Access to preserved benefits before a condition of release — permitted only in limited circumstances (severe hardship, compassionate).
Excess contributions tax
Tax applied to contributions exceeding annual caps. Members may elect to release excess non-concessional contributions.
Family law split
The division of superannuation interests between separating parties under Part VIIIB of the Family Law Act.
Financial advice (super)
Advice regulated under the Corporations Act — must be given in the member's best interests (best interests duty for personal advice).
Income stream
A pension or annuity paid from a superannuation interest after retirement. Different types (account-based, non-commutable, defined benefit).
Intra-fund advice
Advice provided by a fund to members at no additional cost, limited in scope — for example, contribution settings.
MySuper product
A low-cost, simple default super product authorised under Part 2C of the SIS Act. Default employer contributions flow to MySuper.
NALI (Non-arm's length income)
Income derived from a non-arm's length arrangement, taxed at 45% in the super fund.
Non-binding nomination
A death benefit nomination that the trustee may take into account but is not bound to follow.
Non-concessional contribution
A super contribution made from after-tax money. Not taxed in the fund but subject to a cap.
Performance test
The annual test APRA applies to MySuper and choice products against a benchmark. Underperformance triggers disclosure and potential closure.
Preservation age
The age at which a member can access preserved benefits (typically 60 for those born on or after 1 July 1964).
Preserved benefit
Super benefits that cannot be accessed until a condition of release is met. Generally all benefits are preserved by default.
Prudential standards
APRA-issued standards binding on RSE licensees — cover governance, risk, investment, insurance, and operational risk.
Retirement
A condition of release under which a member ceases gainful employment with no intention to return. Requires compliance with the SIS test.
RSE licensee
A Registrable Superannuation Entity licensee — the trustee of an APRA-regulated super fund, licensed under Part 2A of the SIS Act.
SG contribution
A Superannuation Guarantee contribution — the mandatory employer contribution on behalf of employees under the SG Act.
SIS Act
The Superannuation Industry (Supervision) Act 1993 (Cth) — the principal federal superannuation statute.
SMSF
A self-managed superannuation fund — a fund with fewer than seven members, all of whom are trustees (or directors of the corporate trustee).
Sole purpose test
The requirement that a super fund be maintained solely for the provision of retirement benefits (and ancillary purposes).
Splitting order
A family court order splitting a super interest between parties to a separation.
Superannuation complaint (AFCA)
A complaint about super decisions heard by the Australian Financial Complaints Authority. Includes death benefit, insurance, and TPD disputes.
Superannuation interest
A member's interest in a super fund. Family law treats it as property for settlement purposes.
TPD (Total and Permanent Disability)
A condition of release and insurance benefit triggered by permanent inability to work, assessed against the policy definition.
TPD claim
A member's claim against a super fund's group life policy for TPD benefits. AFCA has jurisdiction to review dispute outcomes.
Transfer balance cap
The lifetime cap on the amount that can be transferred into the retirement phase. Indexed annually.
Trustee covenants
The covenants implied into the governing rules of all super funds under s 52 of the SIS Act — best financial interests, prudence, sole purpose.
Unpaid present entitlement (UPE)
A distribution declared but not physically paid. Relevant in SMSF context where beneficiaries are related parties.
Wrap account
An administration platform that holds investments for superannuation and non-super purposes. Regulated as a financial product.
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These definitions are general explanations for educational purposes — not legal advice. Always verify against current legislation and case law before relying on them in a client matter.
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