Superannuation (also known as "super") is a way of putting money aside now and saving for the future. For most of us who are employed, it's compulsory for employers to put money away on our behalf.
It may seem a long way away now, but when you retire your superannuation will be an important way of supplementing your age pension.
Who Gets Superannuation?
Nearly everyone with a job is required to join a government-approved superannuation fund.
Whether you are full-time, part-time or casual, if you're between 18 and 70 years of age and earning more than $450 in a calendar month your employer should be contributing superannuation on your behalf.
If you're paid under an award and earn less than $450 per month, your employer may still be required to pay, but some people are exempt. Check out the Australian Tax Office's (ATO's) Superannuation Guarantee - Information for Employees page (new window) for more information.
Super for u18s
Employers have to make contributions for employees who are under 18 if they are working more than 30 hours per week. If you are under 18 and working less than 30 hours a week your employer does not have to make superannuation contributions for you.
How Does It Work?
If you are eligible for superannuation, every time you get paid, your employer pays a set amount of money into a large account, which is then invested into portfolios like shares, property, government bonds and cash deposits.
You can only access your super when you reach "preservation age" and retire, or when you turn 65 (even if you haven't retired). There are also some - very limited - circumstances where you can access your super savings early.
You can also choose to pay extra money out of your wages into your superannuation fund on top of what your employer pays in. Some people choose to do this in order to increase the amount of their super payount when they retire. This is called "making a personal contribution".
It's also possible in some circumstances to pay extra money into your partner's or spouse's super fund.
To find out more about personal contributions and how to make them, check out the ATO's Personal Contributions page (new window).
If you're eligible for superannuation your employer should be paying a percentage of your gross wage (that means what you get paid before the tax comes out) towards your super, which may include overtime.
This amount varies, and sometimes employers do not pay the required amount. You can contact the Australian Taxation Office on 131 020 or use their online superannuation calculator (new window) to check how much you should be receiving and how much you actually are receiving the correct amount.
How Do I Check to See If My Employer is Paying?
There are ways to check that your employer is doing the right thing and contributing the correct amount towards your retirement. The ATO has a guide for checking to see if the right contributions are being made by your employer (new window).
Will I Lose My Super if I Change Jobs?
It's quite common for people to have worked lots of different jobs for lots of different employers by the time they reach retirement age. When you change jobs, your new employer might not pay your super into the same fund as your old employer.
Any superannuation paid to you by any of your employers is still legally yours. If you want to you can combine all of your superannuation funds into a single fund. You just have to let the fund managers know that you want to do this.
Because there are lots of different superannuation funds out there, keeping track of your money as you move from job to job is extremely important.
If you have changed jobs at any time and you think you might have left some of your super behind, you can visit the Australian Taxation Office (ATO) to find your lost superannuation money (new window).
Can I Choose My Own Super Fund?
There are rules that control what funds you can join. Depending on what industry you are in, or what employment arrangement you have, you may be able to nominate your own fund.To find out if you're eligible, and how you can choose your own fund, check out the ATO's Choosing a super fund page (new window)
If you find you are able to choose your own fund, there are some important things to consider (new window).
Every superannuation fund must tell you about its main features, including:
- What benefits you get, including any death and disability benefits
- Who can make contributions and how to make them
- What fees you will pay
- Whether you can choose your own investment strategy
- The objectives of the investment strategy, its risks and returns
- What the fund earned for members in the last five years
How Do I Keep Track of My Super?
There are lots of different superannuation funds out there, so keeping track of your money as you move from job to job is extremely important. Any time you change jobs, make sure you take your super with you. Having more than one superannuation account means you’re paying more fees, which means less money in your account.
SuperSeeker (new window) is a free and secure site that allows you to see details of your active accounts and find any lost super (including any super that the ATO is holding on your behalf). You can also request a transfer of funds between accounts with one simple online form.
When you log in to SuperSeeker you will need your tax file number (TFN) handy so you can do an initial quick search. You'll also need to have two of the following documents handy to verify your identity and create a secure login:
- A notice of assessment or super account member statement (from any of the past five financial years)
- Bank account details
- A PAYG payment summary from either of the past two financial years
- A dividends statement from either of the past two financial years
- A Centrelink payment summary from either of the past two financial years.
Tax File Number (TFN) – Your Key to Superannuation
One of the best ways you can avoid losing track of your super is to make sure your super fund has your Tax File Number (TFN). Changes have been made to the use of TFNs by super funds, making it easier to keep track of and transfer super and to find any lost super or super that the ATO is holding on your behalf.
To take full advantage of these changes, check that you have provided your TFN to your super fund. This will be indicated on your super fund member statement.
Useful Superannuation Links
Australian Taxation Office (ATO) - Your Super
This should be your first step when it comes to learning about superannuation and is also the best place to check to see what information is correct.
Australian Taxation Office (ATO) - SuperSeeker
Keep track of your super using the ATO’s free online tool. Use this tool to locate lost super and consolidate your accounts.
This website is full of financial tips and information for investors and consumers of financial products, including superannuation.
The Association of Superannuation Funds of Australia Ltd
This is the peak regulatory body for superannuation issues in Australia and includes useful things for consumers including a dictionary for all that super jargon!
Superannuation Complaints Tribunal
This is an independent tribunal set up by the Federal Government to investigate complaints about superannuation funds and savings accounts from consumers.