What is superannuation?
Superannuation is a way of saving money to support yourself after you have retired from work. It is money your employer is legally required to deposit into a superannuation fund. This grows during your working life and earns interest, so you have money available to you when you reach official retirement age.
Who receives superannuation?
The law requires employers to pay 9% in superannuation to employees who:
- earn at least $450 per month; and
- if aged below 18, work at least 30 hours a week.
That 9% does not come from your take-home wage, but is in addition to it.
Some Awards and Agreements have Superannuation clauses written in to them which mean that even if you don't meet these criteria, superannuation contributions will be made for you by an employer to a superannuation account.
If you meet these criteria, or are entitled through your Award or Agreement to superannuation, you need to ensure your employer is making appropriate contributions to a superannuation fund. You are probably entitled to choose the fund you will belong to, and your employer will give you a 'Standard Choice form'.
You don't have to choose. If you don't your employer will choose for you. However, this could make it hard to keep track of when you leave that job and start another job. It is best to compare the costs and benefits of different funds to make sure you are getting the best deal for you.
Make sure you keep any information relating to your superannuation account so you know where to find it when you move through the workforce.
The Australian Securities and Investments Commission (ASIC) offers a lot of advice about choosing a Super fund, changing funds, and help with comparing funds.
Click here for the ASIC website section on Superannuation