What is superannuation?

Superannuation is money saved during your working life to help support your financial needs when you retire.

Under the terms of most employment arrangements, your employer must pay a minimum percentage of your income into a superannuation fund. This is known as the Superannuation Guarantee (SG) and is in addition to your salary or wages.

You can withdraw funds from a superannuation fund once you meet one of the conditions of release, such as reaching retirement age, as set out in the Superannuation Industry (Supervision) Act 1993 and the Regulations under that Act.

What is the purpose of super?

Superannuation is intended as a compulsory means of saving for your retirement.

Before the introduction of compulsory superannuation in 1992, income in retirement was generally reliant on personal savings and investments with a means-tested Government age pension system as a safety net.

With demographics shifting toward an aging population, reductions in personal saving rates and a trend toward increasing household debt, the anticipated increase in age pension payments would potentially place an unaffordable strain on the Australian economy.

Under a set of reforms aimed at addressing Australia’s retirement income policies, the compulsory Superannuation Guarantee (SG) was introduced into industrial awards to create a pool of savings designed specifically to provide income when you retire.

Can I opt out?

If you are eligible for compulsory Superannuation Guarantee from your employer, your employer must pay those contributions on your behalf into a complying super fund, such as Media Super. Eligible employees cannot opt out from having their superannuation entitlement paid into a complying super fund but most employees can choose which super fund their entitlement is paid into.

Under some arrangements, such as being self-employed or contracting, superannuation contributions may not be compulsory. The government provides a range of tax rebates and initiatives for people in these circumstances to make voluntary contributions to their super savings on their own behalf.