Glossary of terms

Glossary of terms

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Partnership

Married or in a committed relationship.

Passive fund manager

Fund managers that don't move the money they manage between different assets a lot as much as active fund managers . A passive fund manager usually buys a range of assets to spread the risk, then holds the same assets for a long time. Passive fund managers generally rely on the market to dictate the performance of their fund. A passive fund is likely to be a lower risk investment than an active fund, but also has less potential for higher returns.

Glossary: passive fund manager
Fund managers that don't move the money they manage between different assets a lot as much as active fund managers . A passive fund manager usually buys a range of assets to spread the risk, then holds the same assets for a long time. Passive fund managers generally rely on the market to dictate the performance of their fund. A passive fund is likely to be a lower risk investment than an active fund, but also has less potential for higher returns.
Glossary: risk
An investment is normally considered to be risky if there is a reasonable chance that its value will vary significantly in the future. For example, an investment in shares is more risky than an investment in a bank term deposit. The value of shares may fall below the price paid for them while the value of bank deposits generally do not. High risk investments should only be taken on with long term intentions. You would expect a high long-term return to compensate for high risk.
Glossary: investment
A way to use your money to make it grow.
Pay As You Go

The situation in New Zealand where taxes paid by today's taxpayers are used to pay New Zealand Superannuation to today's retired people. An alternative system would establish a dedicated fund into which each generation of taxpayers puts aside funds which finance their own retirement income.

Pension

An income paid at regular intervals to a retired person, by a government or through an employer superannuation scheme.

Glossary: employer superannuation
A scheme operated by an employer to help their employees save for their retirement. In some cases employers add money to the amount the employer saves, in other cases the employer meets some of the costs of the scheme, such as bank fees. Sometimes the employer superannuation scheme provides life insurance cover for the employees. Also called a corporate or group superannuation scheme.
Per annum

Yearly. Often shortened to "p.a."

Physical assets

Assets that have a physical presence, such as real estate or jewellery, as opposed to financial assets, such as shares or government bonds.

Glossary: shares
Shares and equities refer to the same thing - a share in the ownership of a company and entitlement to any distributions (eg dividends).
Private provision

The saving that people undertake to fund their own retirement income.

Provider

A company such as a bank, finance or insurance company that creates and provides insurance, mortgage, banking, savings or investment products.

Glossary: investment
A way to use your money to make it grow.
Public provision

Retirement income provided on a pay-as-you-go basis from general tax revenues. New Zealand's public provision is New Zealand Superannuation (NZS). Other taxpayer-funded assistance is available to elderly people.

Glossary: public provision
Retirement income provided on a pay-as-you-go basis from general tax revenues. New Zealand's public provision is New Zealand Superannuation (NZS). Other taxpayer-funded assistance is available to elderly people.