This glossary explains the most common terms in Australian superannuation. Use it to understand your super statement, fund correspondence, or information from the ATO.
A
Accumulation fund A super fund where your retirement balance depends on contributions made and investment returns earned. Most Australians are in accumulation funds. Contrast with defined benefit fund.
Account-based pension (ABP) A retirement income product funded from super savings. In pension phase, fund earnings are taxed at 0% (up to the Transfer Balance Cap). You draw regular income from your balance.
APRA (Australian Prudential Regulation Authority) The federal regulator responsible for overseeing super funds, banks, and insurers. APRA runs the Annual Performance Test for MySuper products.
ASFA (Association of Superannuation Funds of Australia) An industry body that publishes the widely cited Retirement Standard — estimates of how much super is needed for a “comfortable” or “modest” retirement.
ASIC (Australian Securities and Investments Commission) Financial services regulator. Oversees super fund licensing, disclosure, and advice obligations.
B
Binding death benefit nomination (BDBN) A written instruction to your super fund directing where your death benefit is paid. If valid, the trustee must follow it. Non-binding nominations are guidelines only. Standard BDBNs expire every 3 years (non-lapsing BDBNs do not expire).
Bring-forward rule Allows eligible members to contribute up to 3 years’ worth of non-concessional contributions (NCCs) in a single year (up to $360,000 in FY2024–25). Eligibility depends on your Total Super Balance.
Bucket strategy A retirement income strategy that divides savings into “buckets” based on time horizon — cash for short-term needs, balanced for medium term, and growth for long term. See Bucket Strategy.
C
Capital gains tax (CGT) Tax on the gain made from selling assets. Within super, CGT in accumulation phase is 15% (10% if the asset was held more than 12 months). In pension phase, CGT is 0%.
Catch-up concessional contributions If your Total Super Balance is below $500,000, unused concessional contribution cap from prior years (up to 5 years back) can be used in addition to the current year cap.
Concessional contributions (CCs) Pre-tax contributions taxed at 15% in the fund. Includes employer SG, salary sacrifice, and personal deductible contributions. Cap: $30,000/year (FY2024–25).
Co-contribution Government contribution to low and middle income earners who make personal (after-tax) super contributions. Maximum $500 co-contribution for those earning under $43,445 (FY2024–25). See Government Super Co-Contribution.
CSS (Commonwealth Superannuation Scheme) Legacy defined benefit scheme for Commonwealth Government employees who joined before 1990. Closed to new members.
D
DASP (Departing Australia Superannuation Payment) Super refund available to eligible temporary residents when they permanently leave Australia. Taxed at 35–65% depending on visa type. See DASP Guide.
Death benefit Amount paid from your super fund to your nominated beneficiary (or dependants) when you die. Can include life insurance.
Defined benefit fund A super fund where the retirement benefit is determined by a formula (typically based on salary and service) rather than investment performance. Most are closed to new members. Tax treatment differs — many have untaxed elements.
Division 293 tax Additional 15% tax on concessional contributions for high-income earners (income + CCs > $250,000/year), bringing effective CC tax to 30%.
F
FHSS (First Home Super Saver Scheme) Allows eligible first home buyers to withdraw voluntary super contributions (up to $50,000) for a home deposit. Associated earnings benefit from super tax rates. See FHSS Guide.
Fund earnings tax 15% tax applied to investment earnings in accumulation phase. 0% in pension phase. CGT rate is 10% in accumulation (for assets held 12+ months).
I
Income protection (IP) insurance Insurance providing income replacement (typically 75–85% of salary) if you are unable to work due to illness or injury. Can be held inside super.
Investment option The way your super is invested. Common options: cash, conservative, balanced, growth, high growth, ethical/ESG. Default for most members is a “balanced” or “MySuper” option.
L
LISTO (Low Income Superannuation Tax Offset) A government payment that refunds the 15% contributions tax paid by low-income earners. Applies to those earning under $37,000 p.a. Maximum payment: $500/year.
Low-rate cap The tax-free threshold for taxable super withdrawals made between preservation age and 59. $235,000 lifetime (FY2024–25) — amounts above the cap taxed at 17% (plus Medicare levy).
M
Medicare levy 2% levy on taxable income used to fund Medicare. Applies when calculating tax on super withdrawals below age 60 in some circumstances.
MySuper The default, simple super product that all funds must offer. Designed to be cost-effective and diversified. Authorised by APRA. Subject to the Annual Performance Test.
N
Non-concessional contributions (NCCs) After-tax contributions — no upfront tax deduction. Cap: $120,000/year (FY2024–25), subject to Total Super Balance thresholds.
Non-lapsing BDBN A binding death benefit nomination that does not expire (unlike a standard BDBN which expires every 3 years). Not all funds offer non-lapsing BDBNs.
Notice of intent to claim a deduction A form (NAT 71121) you must lodge with your super fund before your tax return to claim a personal super contribution as a tax deduction. Must be lodged before you lodge your return or 30 June following the year.
O
OTE (Ordinary Time Earnings) The base for calculating employer SG contributions. Includes regular pay and some allowances. Does not include overtime.
P
Pension phase When you convert your accumulation super into an account-based pension. Fund earnings taxed at 0% (up to TBC). You draw regular income.
Personal deductible contribution A personal after-tax contribution for which you then claim a tax deduction — effectively converting it to a concessional contribution. Requires a notice of intent form.
Preservation age The age at which you can access super (if you also retire). Currently 60 for anyone born after 30 June 1964.
Preserved benefits Super that must remain in the fund until a condition of release is met. Most super is preserved.
PSS (Public Sector Superannuation Scheme) Legacy defined benefit fund for Commonwealth employees who joined between 1990 and 2005. Closed to new members.
PSSap Public Sector Superannuation Accumulation Plan — accumulation fund for current Commonwealth employees. Employer rate: 15.4%.
R
Reversionary pension An account-based pension that, on the member’s death, continues to be paid to a nominated reversionary beneficiary (typically a spouse).
Rollover Transferring super from one fund to another.
S
Salary sacrifice An arrangement where your employer redirects a portion of your pre-tax salary into super. Taxed at 15% in the fund.
SG (Superannuation Guarantee) The compulsory employer super contribution. 11.5% in FY2024–25, rising to 12% from 1 July 2025.
SMSF (Self-Managed Super Fund) A super fund you manage yourself (1–6 members). Subject to strict ATO and ASIC rules. Requires an annual audit.
Stapling From November 2021, new employees without an existing super fund are automatically “stapled” to their existing fund — employers cannot default new employees to a fund of their choosing if the employee already has a fund.
Super choice (fund choice) The right of most employees to choose their own super fund rather than their employer’s default.
T
TBC (Transfer Balance Cap) The maximum amount that can be transferred into pension phase (currently $1.9 million). Applies per person, not per fund.
TFN (Tax File Number) Your personal tax identification number. Critical for super — without a TFN, super contributions are taxed at 47% (top marginal rate).
TPD (Total and Permanent Disability) An insurance benefit payable if you are permanently unable to work. Often held inside super. Definitions vary: “any occupation” vs “own occupation.”
TSB (Total Super Balance) Total super across all accounts. Determines eligibility for bring-forward NCC, catch-up CC, and co-contribution. Check via myGov.
U
Untaxed element The component of a super benefit that was not taxed in the fund. Common in public sector defined benefit schemes (CSS, PSS, GESB). Taxed differently on withdrawal.
This glossary is educational only. For advice on your super situation, speak with a licensed financial adviser. Find one via MoneySmart. For more, visit the Superannuation home page.