Superannuation was introduced to Australia in 1992 through the Superannuation Guarantee (SG) system. This landmark reform mandated that employers contribute a percentage of their employees’ earnings to a dedicated retirement savings fund.
Superannuation has since become a critical pillar of Australia’s retirement income system, ensuring financial security for retirees.
Australia’s superannuation scheme is relatively unique. While many countries have mandatory pension systems, they may differ in structure and implementation.
Some countries with similar systems include New Zealand and Singapore, but the specifics can vary significantly. It’s essential to examine each nation’s pension regulations individually.
What should I understand regarding my own Superannuation?
Most Australians are in superannuation funds selected by their employer. Over 60% of Australians make no choice on how their super is invested and sadly 37% of Australians have little to no understanding of how superannuation works.
Of the 23.8 million superannuation fund members, 24% have multiple super fund accounts, this is as a result of changing jobs over the years.
So, as you can imagine, each of these individual funds has annual running costs, this seem painless because it gets paid out of your fund. But having multiple funds running at the same time means long term you could be clocking big fee’s associated with having these accounts. Collectively its costing Australians $2.6 billion in additional fees each year. Most Australian’s super is heavily invested in the share market.
Helping shed some light on the mystery of Superannuation, we have Tyron Mitchell, the boss of Orange and Bathurst Financial Planning.
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