6360.0 - Superannuation: Coverage and Financial Characteristics, Australia, Jun 2000

ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 17/09/2001

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Superannuation: Coverage and Financial Characteristics, Australia Superannuation: Coverage and Financial Characteristics, Australia Superannuation: Coverage and Financial Characteristics, Australia Technical Note Data Source	Account balance This term is used to refer to the amount of superannuation a person has accrued in an accumulation fund. Accumulation account An account in an accumulation fund, in which the final benefit is equal to the total contributions made, plus interest, less fees and tax. Some superannuation funds have both accumulation accounts and defined benefit accounts. See also Defined benefit fund and Hybrid fund. Accumulation fund A superannuation fund in which the final benefit is equal to the total contributions made, plus interest, less fees and tax. See also Defined benefit fund. Annuity A series of payments made at regular intervals, typically to provide retirement income. Annuities are usually purchased with a lump sum from a life insurance company. Where regular payments are made from a superannuation fund, the word 'pension' is more common. See also Deferred annuity. Approved deposit fund See Rollover fund. Benefit The amount of money in a superannuation fund to which a member is entitled. This amount may be determined in different ways, depending on the type of fund to which the member belongs. Many benefits will be subject to preservation, meaning that most superannuation benefits will have to be maintained in a superannuation or rollover fund until the person retires and reaches preservation age. This age will be progressively increased from 55 to 60 years for people born from July 1960 onwards. See also Benefit structure, Accumulation fund, Defined benefit fund and Hybrid fund. Benefit structure The way in which a member's superannuation benefit is determined. Superannuation benefits may be 'accumulated benefits', 'defined benefits', or a combination of both. For more information about the different types of benefits see Accumulation fund, Defined benefit fund and Hybrid fund. Contributing family worker A person who works without pay in an economic enterprise operated by a family member. Contributions See Employer/business contributions and Personal contributions. Couple income unit Any income unit where two persons are in a couple relationship with or without dependent children. A couple relationship consists of two people usually residing in the same household who share a social, economic and emotional bond usually associated with marriage and who consider their relationship to be a marriage or marriage-like union. This relationship is identified by the presence of a registered marriage or de facto marriage. Deferred annuity A type of rollover fund offered by life offices which is able to accept an eligible termination payment if a person retires early or changes jobs. The fund provides for an annuity which commences payment no later than when the purchaser turns 65 years of age. Defined benefit fund A superannuation fund in which the benefit is determined using a formula based on years of service, or years of membership with the fund, personal contributions, and average salary level over a few years immediately prior to retirement. See also Accumulation fund and Hybrid fund. Dependent children Dependent children are all persons aged under 15 years, and persons aged 15 to 24 years who are full-time students, live with a parent, guardian or other relative and do not have a spouse or offspring of their own living with them. Eligible termination payment Is generally composed of a lump sum payment made by an employer to an employee upon either the cessation of employment or the receipt of regular payments from superannuation. Eligible termination payments do not include payments of accumulated annual leave or long service leave. Employed persons Persons aged 15 years and over who, during the reference week: worked for one hour or more for pay, profit, commission or payment in kind in a job or business, or on a farm; or worked for one hour or more without pay in a family business or on a farm (i.e. contributing family workers); or were employees who had a job but were not at work and were: on paid leave; on leave without pay for less than four weeks up to the end of the reference week; stood down without pay because of bad weather or plant breakdown at their place of employment for less than four weeks up to the end of the reference week; on strike or locked out; on workers’ compensation and expected to be returning to their job; or receiving wages or salary while undertaking full-time study; or were employers, own account workers or contributing family workers who had a job, business or farm, but were not at work. Employees Persons who: work for a public or private employer; receive remuneration in wages, salary, or are paid a retainer fee by their employer and work on a commission basis, or for tips or piece rates or payment in kind; operate their own incorporated enterprise with or without hiring employees. Employees with some leave entitlements, not working on a fixed-term contract Employees excluding owner managers of incorporated enterprises who: were entitled to both paid sick leave and paid holiday leave; or were entitled to either paid sick leave or paid holiday leave (but not both) and did not identify themselves as casual; and were not employed on a fixed-term contract. Employees with some leave entitlements, working on a fixed-term contract Employees excluding owner managers of incorporated enterprises who: were entitled to both paid sick leave and paid holiday leave; or were entitled to either paid sick leave or paid holiday leave (but not both) and did not identify themselves as casual; and were employed on a fixed-term contract. Employees without leave entitlements who did not identify as casual Employees, excluding owner managers of incorporated enterprises, who were entitled to neither paid sick leave nor paid holiday leave, but did not identify themselves as casual. Employer or business contribution The amount contributed to a person's superannuation fund by their employer or business. The Superannuation Guarantee scheme, introduced in 1992, requires employers to contribute a minimum amount to superannuation for most of their employees. From 1998-1999 employers were required to contribute an amount equal to 8% of an employee's wages or salary into superannuation. This will rise to 9% in 2002-2003. Employers are not obliged to contribute for employees earning below $450 per month and those under 18 years of age who are working less than 30 hours a week. Superannuation contributions can also be made through 'salary sacrifice', whereby an employee sacrifices pre-tax salary and, in return, the employer contributes the sacrificed amount to superannuation. Superannuation contributions made through salary sacrifice are considered to be employer contributions. Employment type The classification of people with one or more jobs according to the following groups: Employees with some leave entitlements not working on a fixed-term contract; Employees with some leave entitlements working on a fixed-term contract; Self-identified casuals; Employees without leave entitlements who did not identify as casual; Owner managers of incorporated enterprises; and Owner managers of unincorporated enterprises. Fixed-term contract A contract of employment which specifies that the employment will be terminated on a particular date or on completion of a specific task. This term is applied to employees. Full-time job A job in which a person usually works 35 hours or more a week. Hybrid fund A fund in which benefit entitlements are based on a combination of accumulated benefits and defined benefits. Hybrid and Defined benefit funds are grouped together for the purposes of SEAS. See also Accumulation fund and Defined benefit fund. Income See Total cash income Income unit One person or a group of related persons within a household, whose command over income is assumed to be shared. Income sharing is assumed to take place within married (registered or de facto) couples, and between parents and dependent children. Incorporated enterprise An enterprise which is registered as a separate legal entity to its members or owners (also known as a limited liability company). Industry Classified according to the Australian and New Zealand Standard Industrial Classification 1993 (cat. no. 1292.0). Jobholders Persons aged 15 to 69 who, at the time of the survey, reported that they: worked for one hour or more for pay, profit, commission or payment in kind during the reference week in a job or business, or on a farm (comprising employees, employers and own account workers), and usually worked for one hour or more per week; or worked for one hour or more without pay during the reference week in a family business or on a farm (i.e. contributing family workers) and usually worked for one hour or more per week; or were employees who had a job in which they usually worked for one hour or more, but were not at work during the reference week and were: on paid leave; or on leave without pay for less than four weeks; or stood down without pay because of bad weather or plant breakdown at their place of employment for less than four weeks; or on strike or locked out; or on workers' compensation and expected to be returning to their job; or receiving wages or salary while undertaking full-time study; or were owner managers of unincorporated enterprises or contributing family workers who had a job, business or farm in which they usually worked one hour or more a week, but were not at work during the reference week. This definition is very similar to that for 'Employed persons', but whether a person is defined in SEAS as having a job is determined according to the usual hours worked in that job, instead of the actual hours worked in a particular reference week, because many SEAS questions relate to the usual arrangements in a person's job. In addition, another very small group of people is included in the population 'Jobholders', although they are not included in the population 'Employed persons'. This group comprised those who were waiting to be called back to a full-time or part-time job from which they had been stood down without pay for less than four weeks up to the end of the reference week (including the whole of the reference week) for reasons other than bad weather or plant breakdown. The difference between the two populations 'Employed persons' and 'Jobholders' is very small (less than 0.5%). Labour force status A classification of the population aged 15 years and over into 'Employed', 'Unemployed' and 'Not in the Labour Force', as defined. Life assurance Insurance providing payment of a sum of money to a beneficiary on the death of the insured person or if the insured person reaches a certain age. Also known as life insurance. Lump sum payment A benefit payable in cash as a single amount to a member of a superannuation scheme on retirement (or, in exceptional circumstances, after ceasing employment but prior to retirement). This does not include any annual leave payments, sick leave or other payments due to termination of employment. Main accounts Accounts in which a respondent has or expects to have the largest superannuation balance. Main job The job in which most hours were usually worked. Median The median value is that value which divides the population into two equal parts, one half having values lower than the median, and one half having values higher than it. Not in the labour force Persons who were not in the categories 'Employed' or 'Unemployed', as defined. They include persons who were keeping house (unpaid), retired, voluntarily inactive, permanently unable to work, persons in institutions (hospitals, gaols, sanatoriums, etc.), trainee teachers, members of contemplative religious orders, and persons whose only activity during the reference period was jury service or unpaid voluntary work for a charitable organisation. Occupation Classified according to the Australian Standard Classification of Occupations, Second Edition 1996 (cat. no. 1220.0) One parent income unit An income unit comprising a lone parent and dependent children. One person income unit An income unit comprising a person who is not party to either a couple or parent/dependent child relationship. Owner managers Jobholders who work in their own business, with or without employees, whether or not the business is of limited liability. Owner managers of incorporated enterprises Persons who work in their own incorporated enterprise, that is, a business entity which is registered as a separate legal entity to its members or owners (also known as a limited liability company). Owner managers of unincorporated enterprises Persons who operate their own unincorporated enterprise, that is, a business entity in which the owner and the business are legally inseparable, so that the owner is liable for any business debts that are incurred. This includes those engaged independently in a trade or profession. Part-time job A job in which a person usually works less than 35 hours a week. Personal contributions After-tax contributions made by a person to his or her own superannuation account. Pre-retired persons This group includes those who were currently working, and those who intended to work in the future whether or not they were currently looking for work. Principal source of cash income That source from which the most positive income was received. If total income is nil or negative the principal source was undefined. Retired persons Persons who were no longer working and did not intend to work in the future. Roll over To transfer a superannuation benefit to a rollover fund or to another superannuation fund. See also Rollover, Rollover fund and eligible termination payment. Rollover An amount of money which has been transferred to a rollover fund or another superannuation fund. Concessional tax rates apply to any earnings on the money rolled over. Rollover fund A fund which can accept eligible termination payments and which is eligible for the same concessional tax treatment as a superannuation fund. Rollover funds were created to provide a place within the superannuation system for the superannuation benefits of people who retired early or changed jobs. Sector Used to classify persons according to whether their employer is a public or private enterprise. Public sector enterprises include government controlled corporations as well as local government authorities, government departments, agencies and authorities created by, or reporting to, the Commonwealth and State Parliaments. Private sector enterprises include all employers not classified as public sector. Self-identified casuals Employees (excluding owner managers of incorporated enterprises) who: were entitled to either paid sick leave or paid holiday leave, or were entitled to neither paid sick leave nor paid holiday leave; and identified themselves as casual. Spouse contributions Contributions paid into a person's superannuation account by their husband, wife or de facto spouse. The person receiving the contributions must be under 65 years of age. Superannuation A long-term savings arrangement which operates primarily with a superannuation fund to provide income for retirement. Superannuation fund A fund established primarily to provide income for retirement for members. In order to receive concessional taxation treatment, a superannuation fund must elect to be regulated under the Commonwealth's Superannuation Industry (Supervision) Act 1993 (SIS Act). These funds are supervised by either the Australian Prudential Regulation Authority (APRA) or the Australian Taxation Office. Public sector funds, being funds sponsored by a government employer or government controlled business enterprise, are exempt from direct APRA supervision. Most funds (apart from some with less than five members) must be registered with the APRA. Superannuation guarantee Legislation which requires employers to provide a minimum level of superannuation contributions for most employees. The schedule of contributions started at 3% of salary (or 5% for employers with payrolls over $1 million) in 1992 and will rise to 9% for all employers from July 2002. Superannuation income Regular payments derived from superannuation funds to provide income for retirement, in the form of pensions and annuities. Total cash income Cash receipts that are of a regular and recurring nature, and are received at annual or more frequent intervals. It includes regular receipts from employment, own unincorporated business and from the lending of assets. It also includes pensions and allowances provided as cash transfers from government, as well as private cash transfers from institutions and other households. Capital receipts and receipts derived from the running down of assets, or from the incurrence of liabilities, are excluded. Also excluded are intra household cash transfers. Refer to 'Notes on estimates' in the Explanatory notes for more information about the collection of income data. Total superannuation balance The total amount of superannuation a person has accrued in any type of superannuation fund. In SEAS, information about account balance and/or withdrawal or resignation benefit was sought in relation to a respondent's three main accounts only, so the Total superannuation balance does not include amounts held in additional accounts. These additional amounts are expected to represent a small proportion of a person's total superannuation in most cases. See Appendix 1 under 'Data collection' for more information about coverage of superannuation accounts in SEAS. Unemployed Persons aged 15 years and over who were not employed during the reference week, and: had actively looked for full-time or part-time work at any time in the four weeks up to the end of the reference week and: were available for work in the reference week, or would have been available except for temporary illness (i.e. lasting for less than four weeks to the end of the reference week); or were waiting to start a new job within four weeks from the end of the reference week and would have started in the reference week if the job had been available then; or were waiting to be called back to a full-time or part-time job from which they had been stood down without pay for less than four weeks up to the end of the reference week (including the whole of the reference week) for reasons other than bad weather or plant breakdown. Unincorporated enterprise A business entity in which the owner and the business are legally inseparable, so that the owner is liable for any business debts that are incurred. Withdrawal/resignation benefit A proxy measure of accrued benefit reported for defined benefit and hybrid funds. In some cases it will underestimate a person's full benefit entitlement. See Appendix 1 under 'Account balance, withdrawal or resignation benefit and total balance' for more information. Document Selection These documents will be presented in a new window.