Smarter Super - Invest in your future and make the most of your retirement
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Important Notice

This booklet gives information of a general nature and is not intended to be relied on by readers as advice in any particular matter.

You should consider consulting a financial adviser regarding how this information may apply to your own circumstances.

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Superannuation is an investment which operates by putting aside money during your working life so you have savings upon retirement. Your money gradually builds up because once it is in a super fund, generally it must remain in a super fund until you reach a minimum age set by the Government and meet the rules for accessing the benefit.

Superannuation money is invested and the earnings are reinvested in the super fund.

By law, most working Australians generally have 9% of their salary paid by their employer into superannuation. Some employers choose to contribute more than this amount for their employees as a form of added remuneration.

Many employees also choose to put money into super themselves – either from their after-tax income, or they arrange with their employer to take home less money and have some of their salary put pre-tax into superannuation, known as 'salary sacrifice'. Some employees choose to contribute money into their spouse’s super fund.

Superannuation is not compulsory for self-employed people, although many do make contributions.


  • Australia's population is ageing: The proportion of the population that has reached retirement age is increasing. There are now five people of working age for every person aged 65 and over, but by 2047 that will reduce to just 2.4. By 2047 a quarter of Australia's population is expected to be aged 65 and over1. That's nearly double the current proportion. It would put incredible pressure on Australia's tax system if all these people were to rely solely on the age pension. That's why the Government encourages people to save for retirement through superannuation by offering tax concessions not available on other forms of saving.
  • We are living longer: Better nutrition and medical advances mean we are living longer, healthier lives. Average life expectancy for men is increasing from 79 today and forecast to be 86 by 2047. Average life expectancy for women is also increasing – from 83 today and forecast to be 90 by 20471. We continue to lead active lives and expect to do a lot in our retirement – which could last 25 years or more. The age pension alone is unlikely to adequately fund retirement lifestyle expectations.
  • Inflation raises prices: Over time, the cost of goods and services rises due to inflation. What might seem a lot in today's dollars won't stretch so far in the years ahead. You need to consider this when looking at your current super balance and thinking about how much you need when you retire. You'll probably need to save more than you expect.

1.Intergenerational Report 2007. Commonwealth of Australia. April 2007. This report provides a basis for considering the Australian Government's fiscal outlook over the long-term and the sustainability of economic growth in light of Australia's ageing population and other factors

  A graph of the propotions of total Australian population in different age groups

Source: Intergenerational Report 2007, Commonwealth of Australia April 2007.


Your super is held in a separate fund (a trust), managed by a trustee which can be a person or company. The trustee runs the fund and must meet legal standards designed to protect your benefits and guard against fraud or gross mismanagement.

By law, the trustee must act honestly and prudently and make decisions in the best interests of all fund members.

The trustee usually works with other professionals such as investment managers and legal specialists to help operate the fund. Even though these professionals perform roles, such as investing the fund’s money and looking after membership records, the trustee still retains legal responsibility for all areas of fund operations. Trustees hold office under the rules of each fund. If they fail in their duties, courts or Government agencies can remove or penalise them.


Are you self-employed? From 1 July 2007, you may be eligible to claim a full tax deduction for your super contributions. If you meet the eligibility criteria, you could also be entitled to a co-contribution made by the Government on your personal after-tax contributions. For more information on the Government’s Super Co-contribution initiative, click here.


It’s a good idea to check with your employer that you are registered as a member of a super fund and that contributions are being made to your super account. This is especially important if you are a casual or part-time employee. Ask your employer the name of the fund they contribute to on your behalf and when they send your contributions.



By law, employees who are paid $450 or more before tax in a month must generally have 9% of their salary or wages contributed to a super fund by their employer, subject to some exemptions. This contribution is known as the Superannuation Guarantee (SG).

For most people, the 9% is based on ‘ordinary time earnings’ which means earnings for your ordinary hours of work. Some individuals who are independent contractors are also entitled to superannuation.

Employers must pay contributions into a super fund at least every three months. They have 28 days after the end of each quarter to make the payment. If you're not sure whether you're entitled to employer super contributions, speak to your employer or a licensed financial adviser.


The Government bodies involved in the regulation of the superannuation industry include:

  • Australian Securities and Investments Commission (ASIC): ASIC enforces and regulates company and financial services laws to protect consumers, investors and creditors. ASIC licenses the businesses that may give you financial advice about super or sell you financial products. Among other things, ASIC administers the laws that require super funds to give you the information you need to make an informed decision. It also oversees how super funds deal with consumer complaints.
  • Australian Prudential Regulation Authority (APRA): APRA is the prudential regulator of the Australian financial services industry. It supervises most of the superannuation industry as well as banks, credit unions, building societies and insurance companies. APRA’s main task is to make sure trustees understand their obligations to manage the benefits under their control prudently and in the interests of members. It is also responsible for licensing of trustees of Registrable Superannuation Entities (RSEs) and registration of RSEs.
  • Australian Taxation Office (ATO): The ATO regulates Self-Managed Superannuation Funds (SMSFs), which are funds with less than five members that have been set up and managed by the members themselves. Each member of the fund is a trustee or, if the trustee is set up as a company, each member of the fund is a director of that company. The ATO also oversees the tax rules applying to superannuation.


Many Australians can choose which fund their compulsory employer superannuation contributions are paid into. For more information on ‘Choice of Fund’, click here.

Most super funds allow you to choose what types of investments your money is put into, known as 'investment choice'. Some funds allow you to choose investment strategies – such as growth or balanced. While others allow you to choose asset classes – such as Australian shares, international shares, fixed interest, cash or property. Some allow you to blend a range of investment options – such as mixing asset classes with different investment techniques that may utilise alternative investments.

If you don’t make an investment choice, your money will be invested in the fund's default investment option. This may not be the most appropriate option for you. For more information about investment choice, click here.


Because super is specifically intended for your retirement, the Government has restrictions on when you can access it, known as your 'preservation age'. This age will vary depending on when you were born.

Previously, you would’ve had to permanently retire from the workforce to access your super. The 'Transition to Retirement' rules means there is now some flexibility around this requirement. Now you can have access to your super once you have reached your 'preservation age' without having to permanently retire from the workforce. For more information on ‘Transition to Retirement’, click here.

There are some limited circumstances where you might be able to get early access to your super, including severe financial hardship, compassionate grounds, permanent incapacity or death. For more information on early access to super, click here.

Your date of birth
Preservation age (minimum age you are able to access your super)

After June 1964


July 1963-June 1964


July 1962-June 1963


July 1961-June 1962


July 1960-June 1961


Before July 1960



  1. It’s tax effective:

    To encourage Australians to save for retirement, the Government provides tax concessions on contributions to super and on investment earnings within super. It also allows people aged 60 and over to take their superannuation benefit tax free – whether they take it as a lump sum or an income stream from a taxed source. These tax advantages maximise your super benefit and may help your money grow faster than it would in non-super investments. For more information on the tax advantages of super, click here.

  2. Provides the opportunity to grow:

    Because super is designed to be a long-term investment, earnings on your money are reinvested. This means you earn interest on your interest, known as compounding. The earlier you start to save, the greater the benefits over time, and the more you have in retirement.

  3. Opens access to a wide range of investments:

    Because your super money is pooled with other investors, you can access investments that would generally be reserved for larger 'institutional' investors. You may also be able to combine a wider variety of investment options than would be available to you as an individual investor.

  4. It’s convenient:

    Super is a regular form of saving that's generally compulsory and is done for you automatically. Your employer sends your contributions directly to your super fund. And if you've chosen to salary sacrifice to super, because you don’t see the money, you’re not tempted to spend it. You don’t have to do tax paperwork on super – your super fund does it.

  5. It usually provides some insurance cover:

    Many super funds provide their members with ‘automatic acceptance’ insurance cover. Due to their size, super funds generally access insurance at group rates which can mean lower premiums for members than if they purchased the same insurance individually. There can also be other advantages in terms of cover inclusions and not having to answer health questions or undergo medical tests for basic cover. Most funds also give you the option to take out increased cover if you require. For more information on insurance, click here.


By law, each super fund must provide a retail investor with an information booklet, known as a Product Disclosure Statement (PDS). The fund’s PDS contains information about what the fund offers and how it works, including investment strategies and options, risks and likely returns, fund features and services, fees and costs, death and disability benefits and insurance premiums. A financial adviser will be able to help if you want assistance choosing a fund.


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