Superannuation is part of the government’s plan to ensure you have an adequate income in retirement by encouraging you to save for your retirement. It is easier to think of superannuation as a tax efficient wrapper that surrounds a number of investments such as managed funds, shares, cash, property, bonds etc.
Superannuation is a form of savings whereby employers, self-employed people and employees can contribute towards retirement. The fund then invests these savings for members until their chosen retirement date at which point the fund can be used to provide an income.
Additionally, the super fund can also be used to provide an income or lump sum in the event of a member suffering a serious disability or death.
The Superannuation Guarantee
The superannuation guarantee is the responsibility of employers not employees – you are not obliged to pay or do anything unless you employ someone.
With people living longer and longer, the Government realised that not enough was being done about the retirement shortfall in Australian’s savings. As a result, the guarantee was introduced to ensure that a minimum level of savings was going towards retirement.
The aim of the superannuation guarantee is to ensure as many Australians as possible enjoy the benefits of an income in their retirement, ensuring that less people fall below the poverty line.
If you are an eligible employee, your employer should contribute a minimum of 9.5% of your earnings to a complying fund or a retirement savings account at least once every 3 months.
Most employees are eligible to choose the fund that their employer’s payments go into
Many employer sponsored funds have been set up with using a provider with high upfront/ongoing management fees. Appoint us as your servicing agent and see if we can reduce the charges on your plan or offer you an alternative contract with reduced charges.
Alternatively check out our fund comparison tool to see if you can find a lower cost or better performing fund than your employer’s default option.
Remember, it’s your money, your retirement, your lifestyle