Superannuation (also known as "super") is money that employers are legally required to put aside on behalf of their employees. When you reach retirement age, you're allowed to access the money paid into any superannuation account in your name.
It may seem a long way away now, but when you retire your superannuation can be an important way of supplementing your age pension.
How does it work?
If you're eligible for superannuation, every time you get paid your employer pays a set amount of money into a superannuation account in your name. The money is then invested by the managers of the fund into things 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.
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) Employees page 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.
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 payout 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 super contributions page.
How much super should I be getting?
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 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 me enough super?
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 list of steps you can take to make sure you're getting paid enough super on its Unpaid super from your employer page.
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 "Choosing a super fund" information on the ATO's Employees page.
The MoneySmart website has some information about things to consider when choosing a super fund.
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. See "How do I keep track of my super?", below, for more information.
How do I keep track of my super?
Different employers use different superannuation funds, 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.
You can see how many superannuation funds you have by using the Federal Government's myGov service. By registering for a myGov account and linking it to the ATO, you can access a list of all of your superannuation accounts.
When you first connect your ATO details to your myGov account you should have the following handy:
- Your tax file number (TFN)
- Your bank account details
- A notice of assessment from the ATO about your taxable income and tax refund (if any) from the last five years
- A superannuation member statement from any the last five years
Australian Taxation Office (ATO) - 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.
MoneySmart - Superannuation & retirement
Financial tips and information about managing your superannuation.
Advice about super from the peak body for superannuation in Australia.
Superannuation Complaints Tribunal
Independent tribunal set up to investigate complaints about superannuation funds and savings accounts from consumers.