Superannuation – what is it?

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It is often expected that young people know what superannuation is when they enter the workforce. But majority of the time this isn’t the case. You are then forced to choose a super fund with no knowledge around how this will affect you in the long run (we’ve all been there!)

If this, is you, we are here to help! Find out what superannuation is, how to choose a super fund and more below.

What is Superannuation?

According to the ATO (Australian Taxation Office), Superannuation or super ‘is money put aside by your employer over your working life for you to live on when you retire’.

Majority of the time, super starts accumulating when you begin working. It allows Australians to have another source of income when they retire, so they’re not relying solely on the government’s Age Pension.  Your employer is obliged to contribute 10% of your wage into your super fund and this contribution will grow over time. You can also make your own additional payments into your superannuation.

Choosing a super fund

When choosing a super fund, it is important to consider factors such as performance, fee cost, type of insurance, investment opportunities and services.

It is also beneficial to know that there are different categories of super funds which may suit specific jobs over others. There are five categories of super funds: Retail, Industry, Public Sector, Corporate and Self-Managed Super Fund. For most people entering the workforce as an employee – a retail or industry fund will suit your needs just fine to start out.

If you’re self-employed or own a business and would like to find out more about self-managed super funds, click here.

When can I access my super?

You can receive your superannuation after the age of 60, subject to meeting certain eligibility criteria.

However, you can gain access to your super earlier if:

  • You can’t work
  • You’re experiencing extreme financial troubles
  • You have a terminal medical condition
  • You need to pay for unpaid expenses

Make sure you get proper advice from a registered tax agent before dipping into your super fund early – there are major consequences to consider, and you may have alternative options!

Starting and changing jobs

When you begin a job, your superannuation journey begins. Your employee will give you a standard form outlining the super fund options, where you can either choose your own super fund or opt to use your employers chosen one.

If you don’t give your employer a chosen super fund when you start, they will have to first check if you have a stapled super fund, which is a previous one from another job. If they don’t find a stapled super fund, they will contribute your pay into a MySuper (link this) product which is a default super fund that they use.

It is important to check your superannuation regularly, as well as your payslips and super fund statements.  It is vital that your employer pays your super correctly.

When you change jobs, you can either choose to use the same super fund or use your new employers default fund. Bear in mind, having two super accounts can attract extra fees and be hard to manage. As well as this, the ATO have introduced the ‘Protecting your Super’ package to avoid unnecessary inactive accounts. Now, super funds must close inactive account with funds under $6,000. They will then transfer the balance to the ATO who will move the money to your current, active account (if there is one).

An account is inactive if:

  • No contribution has been made in the last 16 months
  • An investment option hasn’t been chosen
  • There is no insurance
  • It is not a defined benefit account

If you would like to change super funds at this time, we recommend that you move your super from an existing account so that you only have one account, and you can save on fees. For advice on consolidating your super accounts, contact your tax agent at Aintree Group.

To move your super balance over to your new account, you:

  1. Go to
  2. Log in or create an account
  3. Link your account to the ATO
  4. Click ‘super’, then ‘manage’
  5. Click ‘transfer super’
  6. At this stage, you will be shown all your super accounts and can transfer your existing balance/s to your new one

At the end of the day, Superannuation is about ensuring you can be financially independent in your retirement and maintain the lifestyle you worked so hard to build.

It’s crucial to know what superannuation is and how it works before you first enter the workforce. We are talking about your hard-earned money here, so it is important to keep track of where it’s going.  

If you have already started work, now is a good time to have a good look at your superannuation and use your new knowledge to inform your future decisions.