Understanding Superannuation

Superannuation in Australia is effectively a retirement savings program. It is designed to ease the burden that increased pension payments would place on the Australian economy due to the anticipated demographic shift to an increasing aging population.

Since the introduction of the Superannuation Guarantee in 1992 employers have been required to contribute to their employee’s superannuation. The current contribution rate is 9% however this is to increase to 12% in coming years.

Individuals can also choose to make additional voluntary contributions to their superannuation and may receive tax benefits for doing so.

Depending on when they were born, people can currently access their superannuation between the ages of 55 and 60. There are some circumstances, such as financial hardship, whereby a person may be able to access their super funds earlier than this.

There are many different types of superannuation funds, including industry funds, self-managed super funds, retail & wholesale master trusts. There are also many different investment strategies available within these funds and depending on the person and fund they may be able to elect a ‘low risk’ investment strategy (i.e. cash or bonds) or a higher risk or ‘growth’ investment strategy (shares and options). There are pros and cons associated with different types of investment strategies.

Superannuation funds charge fees and often include life and other types of insurance options that can be purchased through superannuation.

One of the problems with super is that often people will change address or employer and lose track of their superannuation. When they move, their employer will simply sign them up to a default fund without rolling or consolidating their super. This means they can be paying multiple sets of fees in multiple funds. If someone moves jobs 4 or 5 times over a 10 year period then very quickly these fees can add up, and people can lose track of where all their superannuation is, how much they actually have, how much they are paying for in fees and insurance, and what the investment strategy for their superannuation is.

That’s why we are here – at lostsuper.com.au we will endeavor to get your superannuation back on track and have you back in control of your retirement nest egg.