Superannuation: A Quick Overview

Ever sat down and added up how much it costs for you to live for a single year? Where will this money come from when you retire?


Ever sat down and added up how much it costs for you to live for a single year?  Where will this money come from when you retire?

In 1992, the federal government introduced compulsory superannuation, known as the Superannuation Guarantee Charge (SGC).   It requires employers to put 9% of their workers’ income into a superannuation fund for the benefit of each employee.  This will remain in place until 2013 when it will increase incrementally the financial year 2019 / 2020 when the rate will ultimately be 12%.  Individuals can also contribute, but it is not compulsory.

In Australia, the federal government provides some financial support through the age pension, under the social security system, which is conditional upon assets and income.  Yet most people still need extra income to supplement the pension.  There are those who will not qualify for an age pension so will need to live solely off their own investments.  One option to do this is by investing in superannuation.

When can I access my super?

Broadly speaking, superannuation is generally inaccessible until retirement.

You can access your super:

  • when you reach preservation age and retire
  • when you turn 65, or
  • under the transition to retirement rules (if you are eligible), while continuing to work

Date of birth

Preservation age

Before 1 July 1960


1 July 1960 - 30 June 1961


1 July 1961 - 30 June 1962


1 July 1962 - 30 June 1963


1 July 1963 - 30 June 1964


From 1 July 1964


There are also limited circumstances in which you may be able to access your super before you retire i.e. death, incapacity and severe financial hardship.

Under the super laws you don't have to cash out your super just because you've reached a certain age, but the rules of your particular super fund may specify otherwise.

Types of Superannuation

There are three main types of superannuation:

Employer organised schemes, personal funds schemes and industry schemes.

Other benefits of superannuation:

  • may also provide benefits on resignation or if a member is retrenched before reaching retirement age
  • may also be included to provide a benefit on disability
  • provide for dependants in the event of untimely death
  • superannuation funds pay tax at a flat rate of 15 per cent

Superannuation complaints

To assist consumers with their superannuation and the financial industry in general, a ‘Complaints Tribunal’ and ‘Complaints Service’ have been established.

Both rely upon conciliation as the first stage to solve any dispute. Conciliation involves the consumer and a representative (of the company) to come together (with the assistance of a mediator) to discuss the issue and try to seek a resolution.

The aim of conciliation is to resolve disputes by sharing information, identifying both areas in dispute and then finding options to solve them. This form of ‘dispute resolution’ is usually successful as they are not a forum to determine who is right or wrong.  They are designed to produce mutually beneficial outcomes.

Both the ‘Complaints Tribunal’ and the ‘Complaints Service’ are expected to be fair and informal with the aim of settling the dispute in the most economical and efficient way.