Superannuation

The aim of superannuation, since its introduction by the Keating Government in 1992, is to enable all working Australians to accumulate savings to fund their retirement. The most common means of contributing to superannuation is through employer superannuation guarantee contributions (SGC), which by law, must currently be paid at a rate of 9.5 per cent. There are plans to gradually increase this to 12 per cent by 2025.

Australians are encouraged to make contributions to superannuation by favourable tax benefits and many take advantage of these incentives by salary sacrificing to superannuation. This enables an employee to pay an amount of pre-tax salary into superannuation, which when taxed at 15 or 30 per cent, is often less than their own marginal tax rate. These are known as concessional contributions and are capped at $25,000.

Non-concessional contributions can also be made – these come from after-tax income. The current limit on such non-concessional contributions is $100,000 per year, although a scheme exists whereby $300,000 can be made in one year, as long as no other contributions are made in the following three-year period.

Other factors, such as age and hours worked, can determine whether an individual can contribute to superannuation.

Through investment of contributions by fund trustees, individuals hope to see their superannuation fund balances increase by payment of returns on investment and compound interest. As investments can go down as well as up, most people choose a mix of different investment types based on their risk profile.

Super fund fined $20m, paying $67m back

Colonial First State ordered to pay a penalty of $20 million for misleading members.

Super fund fined $20m, paying $67m back to members

Colonial First State ordered to pay a penalty of $20 million for misleading members.

Super setback, but fees fall and it's likely to continue

For the first time in a year, superannuation funds have lost value.

The changes that could take our pension system from B+ to A

Australia has the sixth best retirement income system in the world, according to Mercer.

What to do if your super fund is underperforming

APRA revealed 13 funds failing performance tests. Here's what to do next.

Your ex may be able to claim half your superannuation

… even if you are not married.

The super funds that are growing fat on your nest egg

Stockspot report reveals best and worst superannuation funds.

New laws to make retirees spend their super exempt SMSFs

The government released details of its retirement income covenant on Monday.

Why those born in the 1960s have missed out on super growth

Older Australians have missed out on a large share of super's recovery.

Super strategy allows Aussies to save big on life insurance

Australians on a tight budget can still afford life insurance - with this strategy.

More Aussies retiring with a mortgage. Is super the answer?

Retirees are increasingly leaving the workforce with mortgage debt.

Concessions help wealthiest Australians avoid tax with super

Tax breaks meant to help battlers are being exploited by the rich.

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