Superannuation is basically a retirement savings scheme; a nest egg that's funded by your employer for you to live on when you retire. Under the Superannuation Guarantee (Administration) Act your employer is legally obliged to pay contributions into a super account (of your choosing) on top of your base salary if you're over 18 and earning $450 or more (before tax) each month. Full-time, part-time or casual workers are all entitled to super as long as they meet those two requirements. Good news for working teens, too. They qualify for super if they meet the same salary expectations and work more than 30 hours a week.
When you start a new job, you'll be asked to fill out a choice of superfund form. Always do this and nominate your existing superannuation fund to avoid failing prey to multiple super accounts and multiple fees. If you fear you might have heaps on the go already or have no idea where your past super is, don't stress. You can easily find and consolidate your super online at REST Industry Super. Essentially your employer takes care of the rest, however financial experts advise that higher super contributions – closer to 12% of your gross salary (your employer contributions only cover 9.5%) – will leave you in a better place financially at retirement and hopefully help you avoid the same superannuation gender-pay gap that currently affects women at retirement age now. Experts suggest that you make salary-sacrifice super contributions or personal top-up contributions from your wages after-tax - these extra contributions, no matter how small, can make a big difference further down the track. Remember that legislation can also change so it pays to keep abreast of superannuation shake-ups and policy changes. One big change out of the 2016 Budget: as of 1 July 2018 you'll be able to make "catch-up" super contributions if your superannuation balance is $500,000 or less. A win for anyone returning to the workforce after a substantial break.
Compulsory superannuation came into effect on 1 July 1992. The Keating Labor government introduced the Superannuation Guarantee (SG) system making employer superannuation contributions mandatory. The minimum employer contribution was initially set at 3%, eventually rising to 9% over the first decade that the scheme was in place. Prior to that, Australia had Aged Pension and "industry funds" retirement schemes, but these weren't legally enforced or always widely available.
The current annual superannuation rate is 9.5%. This SG will apply until 30 June 2021, when it will then increase to 10%, gradually rising to 12% from July 2025.
There isn't a sole preservation age (the age in which you can access your super benefits) and, just to confuse matters more, preservation age is not the same as your pension age. Currently, the minimum preservation age is 55 if you were born before 1 July 1960, but the age raises to 60 for anyone born after 1 July 1964. Fall in between the two? Use this chart from the ATO to work out your preservation age based on your DOB. It's worth noting that you can only access your super at preservation age if you're retired or have at least transitioned to a retirement income stream.