Glossary and acronyms

Glossary

Accrued Benefit	The amount of a benefit in a superannuation scheme that has accrued to a member on the basis of completed years of service and/or membership at a particular date.
Accumulation Scheme	A superannuation scheme where all members have defined contributions (accumulated benefits). The assets of the fund are invested and any earnings (or losses) are credited (debited) to the member’s account less any charges such as administration fees and insurance premiums. Members bear the full effect of fluctuations in investment earnings. Under the new proposed scheme there will be no administration fees or insurance premiums charged to the accounts of serving ADF members.
Better Super	Measures announced in the May 2006 Federal Budget to simplify superannuation taxation arrangements, most of which took effect from 1 July 2007. These measures included tax-free benefits from age 60 and the introduction of contribution limits in respect of taxed funds.
Commutation	Conversion of all or part of a pension or annuity benefit to a lump sum.
Commutation Factor	A multiple applied to an annual pension benefit to achieve a lump sum equivalent. An actuarially determined commutation factor takes account of: § life expectancy of the member; § life expectancy of the member’s spouse; § the percentage of the member’s pension to which the spouse is entitled in the event of the member’s death; and § the indexation factor.
ComSuper	Commonwealth Superannuation Administration, the Australian Government agency responsible for the administration of the principal occupational superannuation schemes for the Australian Government’s public sector employees and Defence Force members.
Defined Benefit Scheme	A superannuation scheme where the member’s benefit is calculated on a specified formula. Usually the member’s final benefit depends on years of service, level of salary near retirement and the benefit scale.
DFRB	Defence Forces Retirement Benefits Scheme. The superannuation scheme for members of the ADF from 1948 until 30 September 1972. In this report, reference to DFRDB pensions is also taken to include DFRB pensions.
DFRDB	Defence Force Retirement and Death Benefits Scheme. The superannuation scheme for ADF members from 1 October 1972 until 30 September 1991. In this report, reference to DFRDB pensions is also taken to include DFRB pensions.
ESO / Ex-Service Organisation	An organisation dedicated to the welfare of members and former members of the ADF, includes the Returned and Services League, the Regular Defence Force Welfare Association and others.
Final Average Salary (FAS)	The average of remuneration received by the member in the years prior to exit, as defined in the relevant trust deed or legislation. In the MSBS, FAS is the average superannuable salary over the last three years.
Funded Scheme	A superannuation scheme in which contributions (either member or employer or both) are held in a fund from which benefits are paid.
MGYS	Military Gap Year Scheme, a 12-month scheme to enable young Australians to experience ADF training and the Service lifestyle.
Re-entered Recipient	For DFRDB purposes is a person receiving a DFRDB pension who rejoins the ADF. If rejoining for more that one year, retirement pay is cancelled and contributions re-commence.
Preservation	From 1 July 1999, all contributions made by, or on behalf of members must be preserved on entry to a superannuation fund or Retirement Savings Account. All earnings from that date must also be preserved until the member meets a condition of release. The general condition of release is retirement from the workforce after reaching Preservation Age.
Preservation Age	The Preservation Age for individuals depends on the person's date of birth as follows: Date Of Birth                            Preservation Age Before 1 July 1960                                55 1 July 1960 – 30 June 1961                   56 1 July 1961 – 30 June 1962                   57 1 July 1962 – 30 June 1963                   58 1 July 1963 – 30 June 1964                   59 After 30 June 1964                               60
Superannuation Salary	The salary used for superannuation purposes (i.e. both contributions and benefits) as defined in the relevant trust deed or legislation. In the DFRDB, superannuation salary is the maximum rate of pay for rank and pay level plus Service Allowance. In the MSBS, superannuation salary is currently the sum of base salary, Service Allowance and any Higher Duties Allowance. In the proposed new scheme, superannuation salary will be base salary plus Service Allowance.
Uhrig Report	Review of the Corporate Governance of Statutory Authorities and Office Holders.
Unfunded Scheme	An unfunded super scheme is one where neither the employer nor the member pay contributions into a fund to cover future benefits payable.

Acronyms

ADF	Australian Defence Force
ADFFSCC	ADF Financial Services Consumer Council
AFSL	Australian Financial Services Licence
AGA	Australian Government Actuary
APRA	Australian Prudential Regulation Authority
ATO	Australian Taxation Office
CPI	Consumer Price Index
CSS	Commonwealth Superannuation Scheme
DFRB	Defence Forces Retirement Benefits Scheme
DFRDB	Defence Force Retirement and Death Benefits Scheme
ILO	International Labour Organisation
MBL	Maximum Benefit Limit
MRCA	Military Rehabilitation and Compensation Act 2004
MSBS	Military Superannuation and Benefits Scheme
OECD	Organisation for Economic Co-operation and Development
PSS	Public Sector Superannuation Scheme
PSSap	Public Sector Superannuation accumulation plan
RDFWA	Regular Defence Force Welfare Association
RSL	Returned and Services League of Australia
SG	Superannuation Guarantee
SIS	Superannuation Industry (Supervision) Act 1993
The Actuary	The Australian Government Actuary (AGA)
TORs	Terms of Reference
TTR	Transition to Retirement