Accrued Benefit Multiple

One of two factors that determine your final PSS benefit; generally determined by your years of contributory membership and rate

Active manager

Investment manager who is required to beat a benchmark; achieved by buying securities in different proportions from their benchmark weight; actively moves away from benchmark weight in individual investments where the manager has a conviction that those investments will either out- or under-perform the benchmark

Active management

Investment approach that aims to achieve returns above a set benchmark, identifying mispriced securities, traded for profit

Activity fees

A fee is an activity fee if:

a. the fee relates to costs incurred by CSC as the trustee of the superannuation entity that are directly related to an activity of the trustee: i. that is engaged in at the request, or with the consent, of a member; or

ii. that relates to a member and is required by law; and

b. those costs are not otherwise charged as an administration fee, an investment fee, a buy-sell spread, a switching fee, an exit fee, an advice fee or an insurance fee.

Administration fees

An administration fee is a fee that relates to the administration or operation of the superannuation entity and includes costs incurred by the trustee of the entity that:

a. relate to the administration or operation of the entity; and

b. are not otherwise charged as an investment fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.

Advice fees

A fee is an advice fee if:

a. the fee relates directly to costs incurred by the trustee of the superannuation entity because of the provision of financial product advice to a member by: i. a trustee of the entity; or

ii. another person acting as an employee of, or under an arrangement with, the trustee of the entity; and

b. those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee.

Alternative investments

Non-traditional assets outside those traditional asset classes of shares, property, fixed interest and cash; examples include infrastructure assets, buy-out funds and venture capital

Asset classes

Group of financial assets with similar investment characteristics such as Australian company shares in asset class of equity




Indexes or other market measurements to ‘benchmark’ investment performance and risk against for a comparable investment

Buy-sell spreads

A buy-sell spread is a fee to recover transaction costs incurred by the trustee of the superannuation entity in relation to the sale and purchase of assets of the entity.



Cash Investment Option

Provides preserved benefit members more earnings surety for their taxed accumulation components, rather than higher but more volatile earnings from a balanced option such as PSS Default Fund

Ceasing PSS membership

One of the following two situations will apply to you:

  • You will join Public Sector Superannuation accumulation plan (PSSap) if you are eligible to join this scheme

  • You join another superannuation fund of your choice, as long as your employer agrees to make super contributions on your behalf into that superannuation fund

Please discuss your intention to cease your PSS membership with your employer and the options that may be available to you for joining another super fund. Your PSS membership will not cease until you become a member of another fund (it is not sufficient that you simply cease your PSS membership; you must join another fund for your PSS membership cessation to take effect)

Child (within meaning of Family Law Act 1975)

Definition in Family Law Act 1975 includes children:

  • born to a woman as the result of an artificial conception procedure while that woman was married to, or was the de facto partner of, another person (whether of the same sex or opposite sex); and

  • who are children of a person because of an order of a state or territory court made under a state or territory law prescribed for the purposes of 60HB of the Family Law Act 1975, giving effect to a surrogacy agreement

Commonwealth Superannuation Corporation

Trustee of PSS (replaced ARIA on 1 July 2011); provides superannuation services and products to Australian Government employees and Military Personnel through nine schemes:

  • Commonwealth Superannuation Scheme (CSS)

  • Military Superannuation and Benefits Scheme (MilitarySuper)

  • Public Sector Superannuation Scheme (PSS)

  • Public Sector Superannuation accumulation plan (PSSap)

  • 1922 Scheme

  • DFRB Scheme

  • Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme)

  • Papua New Guinea Scheme (PNG Scheme)


Concessional contributions

Known in the past as deductible contributions, these contributions are made from before-tax income

Concurrent membership

You joined PSS with one Federal Government employer before joining PSS again with another Federal Government employer


You can choose a contribution rate of between 2% and 10% of your salary (as a whole percentage), or not to contribute at all. Your financial situation and circumstances can change over time, which is why PSS enables you to alter your contribution rate at any time

CPI-indexed pension


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Pension indexed half-yearly in line with consumer price index




Investment in government bonds, fixed interest or cash investments; investing in debt generally offers less risk but also lower returns than other asset classes such as equity (shares) or property

Default Fund

Your PSS investment option if you have not changed your choice of option in the past (not all members have investment choice; only preserved benefit member); referred to as ‘Default’ Fund since the introduction of Cash Investment Option in December 2004

Defined benefit fund

Super fund where benefits paid to members are defined by a set formula in advance of retirement (such as PSS); benefits are generally expressed as a proportion of a member’s final average salary (FAS). In PSS, benefits are defined in terms of salary, contribution rate and length of membership. In a defined benefit fund, it is generally the employer not member who carries the investment risk.Most Australian super funds are accumulation or defined contribution style funds, in which a set contribution is paid to the fund which then accumulates investment earnings which may be positive or negative. In this case, the member generally carries the investment risk.


Individual holding office as a Director of Commonwealth Superannuation Corporation (trustee of PSS); includes Chairperson



Earning rates

Rates which PSS earns on its investments less fees and taxes; scheme earnings are applied on a regular basis to member accounts; earning rates may be positive or negative

Eligible child

In relation to a member who has died, an eligible child is a child of the deceased member or pensioner or of their spouse (including an adopted child, an ex-nuptial child, a foster child, a step-child, a ward, or a child of the member or spouse within the meaning of the Family Law Act 1975) who:

  • has not reached age 16


  • is age 16 or more but less than age 25 and:

    • is receiving full-time education at a school, college or university;


    • is not ordinarily employed or self-employed


  • immediately before the death of the member or pensioner:

    • ordinarily lived with the member (except where the child is a child of a spouse of the deceased person but not of the deceased person);

    • was, in the opinion of Commonwealth Superannuation Corporation (trustee of CSS), wholly or substantially dependent upon the member or pensioner;

orwhere the child is born, after the death of the member or pensioner, and would have, in the opinion of Commonwealth Superannuation Corporation, been living with the deceased member or pensioner or so dependent on them if the person had been born before the death of the deceased

Employer-financed component




Defined amount financed by your employer; this component is the balance required to make up your total PSS benefit after your member and productivity components are also included

Exit fees

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An exit fee is a fee to recover the costs of disposing of all or part of members’ interests in the superannuation entity.



Final average salary

Average of your superannuation salaries on your final three birthdays prior to leaving PSS; used as the base to calculate your retirement benefit; if you work part time, your equivalent full time salary is used to calculate your final average salary

Financial planning

Financial planning is the process of meeting your life goals through the proper management of your finances. Your life goals could include buying a home to live in, saving for your children's education, managing debt or planning for retirement

Full benefits membership

You are entitled (as opposed to a limited benefits membership) to maximum levels of invalidity and death cover under PSS, as well as maximum allowable retirement and pension benefits depending on your level of contributions, length of service and final average salary

Fully indexed

All PSS pensions are automatically adjusted twice each year in accordance with upward consumer price index percentage changes




Use of debt to finance assets, usually expressed as the ratio of debt outstanding to gross asset value



Indirect cost ratio

The indirect cost ratio (ICR) for an investment option offered by a superannuation entity is the ratio of the total of the indirect costs for the investment option to the total average net assets of the superannuation entity attributed to the investment option.

Note: A dollar-based fee deducted directly from a member’s account is not included in the indirect cost ratio.

Invalidity benefits

 Payable if Commonwealth Superannuation Corporation, trustee of PSS, agrees to your retirement because you suffer a permanent medical condition which is likely to stop you from working again; if totally and permanently incapacitated to the extent that you are unlikely to work again in any occupation for which you are reasonably qualified by education, training or experience (or could become so after retraining), you may be retired on invalidity grounds and become entitled to payment of invalidity benefits. A partial invalidity benefit is a form of income maintenance, paid as a pension when your salary is reduced because a permanent medical condition causes you to be downgraded or to work reduced hours; also payable if you retired on medical grounds and then returned to work in a position lower than the one you held when you were first retired on medical grounds

Investment fees

An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes:

a. fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and

b. costs incurred by the trustee that: i. relate to the investment of assets of the entity; and

ii. are not otherwise charged as an administration fee, a buy-sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.

Involuntary retirement

Retrenchment or redundancy, when your employment is compulsorily terminated by your employer, or when you accept an offer of retrenchment or a redundancy package, or when your employment is terminated on inefficiency grounds, due to having lost essential qualifications or, in restricted cases, on termination of contracts



Limited benefits membership

If a medical assessment (generally taken before joining PSS) suggests you may take excessive sick leave during the first three years of membership, you may be classified as a limited benefits member;  benefits payable to you or your dependants if you are involuntarily retired or die are reduced in your first three years of membership



Marital or couple relationship

Relationship between a member or pensioner and a person of the opposite or same sex who lived together as husband and wife or partners in a permanent and bona fide domestic relationship for a continuous period of at least three years at the date of the member or pensioner’s death; if this relationship existed for less than three continuous years at the date of death, eligibility can still be determined where Commonwealth Superannuation Corporation, the trustee of PSS, is satisfied that the person ordinarily lived with the member or pensioner as husband and wife or as partners

Maximum benefit limit

Maximum potential lump sum benefit payable to you under PSS rules based on now abolished Reasonable Benefit Limits (RBLs) that applied to all Australian superannuation schemes and funds on 1 July 1990; once you reach your maximum benefit limit, you must stop contributing to PSS (changes to RBLs effective from 1 January 2008 were announced in the 2007 Federal Budget)

Member component

An amount equal to all personal member contributions plus scheme earnings which may be positive or negative

Member Statement

To help you keep a record of your contributions and super position in PSS, each year PSS calculates your accrued contributions, scheme earnings and potential benefits as at 30 June; your Member Statement is also available in your secure Member Services Online area

Minimum retirement age


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Age which applies to an individual in respect to minimum retirement and the terms and conditions of their employment



Non-concessional contributions

Previously known as undeducted contributions, these are personal contributions made after June 1983 from after-tax money



Passive manager

Investment manager who is required to track the performance of a relevant investment index as closely as possible

Passive management

Investment approach that aims to equal the overall change in a specific index such as the Dow Jones Index


Pension paid to you under PSS scheme rules

Period of membership

Period from your first to last day of scheme membership

Post-June 1990 productivity component

Fortnightly contributions paid by your employer after June 1990; paid from a ‘taxed’ source

Post-June 1994 invalidity component

Paid due to total and permanent incapacity, in consequence of employment termination

Pre-assessment payment

Partial income maintenance from the time any sick leave expires until an assessment is made about retirement on invalidity grounds

Pre-July 1983 component

Amount of your super for eligible service before 1 July 1983

Pre-July 1990 productivity component

Productivity contributions paid by your employer for the period before July 1990; it is paid from an ‘untaxed’ source

Preservation age

Minimum age for when you can take a cash lump sum from your superannuation without restriction

Productivity component

Employer-contributed amount dependent on your salary, paid fortnightly, to which scheme earnings are applied; it forms part of any benefit paid to you from PSS; it is from a ‘taxed’ source


Investments including office buildings held directly or through a property trust; returns derive from rent, property development and increases in property market values. Over the long term, property investments provide lower risk and return than equity (or shares)



Reasonable Benefits Limit (RBL)

Abolished on 1 July 2007; despite RBLs no longer applying to contributions made after 1 July 2007, PSS is required by law to continue to maintain member RBL information

Regular employee

Individual who is a permanent full-time employee, a permanent part-time employee or a temporary full-time employee for at least three months; also a temporary part-time employee who is employed for at least three months and can access sick and recreation leave

Retrenchment or redundancy

Please see Involuntary Retirement

Rollover or transfer of funds

Transfer of lump sum amounts into a super fund, approved deposit fund or deferred annuity in order to avoid requirement to pay lump sum tax (if amount is not accessed until minimum retirement age)



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Commonwealth Superannuation Corporation (trustee of PSS) administers PSS in accordance with provisions in the PSS Act and is responsible for managing and investing PSS funds



Shares (or equity)

Shares (or equity) represent part-ownership of a company; shares deliver profits via share price increases and dividends; shares may provide greater long-term returns than other investments, though fluctuations may also be greater in the short term

Short position

Investment position that benefits from a decline in market price


Superannuation Industry (Supervision) (SIS) Regulation; governing federal legislation for superannuation and the super industry; SIS provides legislative basis for Superannuation Guarantee (SG)

SIS upper limit

The Superannuation Industry (Supervision) (SIS) Regulations introduced a number of changes from 1 July 1999; one is for lump sum amounts accessed before reaching preservation age; your SIS upper limit is the amount you could have taken as a lump sum had you received an involuntarily retirement (retrenchment) on 30 June 1999. Any lump sum benefit paid to you before you reach preservation age cannot exceed your SIS upper limit. If you preserve your PSS benefit and claim your benefit before reaching your preservation age, your lump sum cannot exceed your SIS upper limit. You must pay any balance in excess of your SIS upper limit to an eligible rollover fund


For PSS rules, a spouse is a person who had a marital or couple relationship with a member or pensioner at the time of their death. If that person previously had a marital or couple relationship but the relationship finished before the death of the member or pensioner, a spouse benefit may still be payable if:

  • at the time of the deceased person’s death, the deceased person will still married to the person

  • the person was wholly or substantially dependent upon the deceased person at the time of the deceased’s death

Super co-contributions

Additional super contribution amount paid by the Australian Government into super for low income earners who have made after-tax superannuation contributions in the financial year

Superannuation Guarantee (SG)

SG ensures all employers must contribute a prescribed level of contributions on behalf of their employees to a complying superannuation fund; PSS exceeds the SG prescribed minimum

Superannuation Contributions Surcharge

Tax on certain contributions in specific relation to high income earners; introduced on 20 August 1996 and abolished in July 2005. Surcharge debts for this period are recorded on member accounts and, if not paid during membership, must be paid when their benefit is claimed

Superannuation lump sum

Previously known as an Eligible Termination Payment (ETP), this payment consists of two components – tax-free and taxable

Superannuation salary




Contributions to PSS are based on a percentage rate of your ‘superannuation salary’ which is your basic salary plus any  recogniseable allowances; your superannuation salary does not include additional payments such as accommodation or travel

Switching fees

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A switching fee is a fee to recover the costs of switching all or part of a member’s interest in the superannuation entity from one class of beneficial interest in the entity to another.



Taxable component

Benefit component including concessional contributions made since 1 July 1983; may contain taxed and untaxed elements

Taxed element

Benefit component consisting of post-June 1990 productivity member contributions, super co-contribution amounts and transfers from other funds; this component was previously known as ‘funded’

Tax offset

Reduction in tax liability; often a tax offset is described as a percentage, for example, an offset of 10% to a pension; offsets differ from tax deductions, which reduce your taxable income

Ten year rule

This rule is one of two limits on the amount of PSS benefits you can accrue; your employer’s maximum share of your PSS benefit is calculated as if you had contribute 5% for 10 years for the balance of your PSS membership (irrespective of your actual contribution rate)

Terminal illness

A member is terminally ill if it is certified by two medical practitioners (at least one of being a specialist) that they are suffering from an illness which in the normal course would result in death within a period of 12 months (new rules took effect on 12 September 2007)

Top marginal tax rate (MTR)

Highest income tax rate

Total and permanent incapacity

If you suffer a physical or mental condition resulting in you being unlikely to work permanently ever again in a job for which you are reasonably qualified by education, training or experience or could be so qualified after retraining

Transfer value

Superannuation lump sum payment from a superannuation scheme on employment termination which is not on invalidity grounds



Unallocated earnings

Previously related to notional fund earnings applied to a member’s account from 30 June 2003 to 30 June 2007; from 1 July 2007, Commonwealth Superannuation Corporation (ARIA before 1 July 2011)  has allocated fund earnings to reflect actual investment performance; these earnings may be positive or negative

Unlisted pooled property trust

Investment structure whereby multiple investors commit funds to a pooled trust, which purchases and manages direct interests in property

Untaxed element


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Your employer component and any pre-July 1990 productivity contributions; previously referred to as ‘unfunded’