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As an accountant and tax agent, I'm here to help you understand one of the most important aspects of your financial future: your superannuation. It's not just a set-and-forget thing; taking an active role in managing your super, even from a young age, can make a significant difference to your lifestyle in retirement.
What is Superannuation?
Superannuation, or "super," how we call it, is a system designed to help you save for your retirement. Your employer is generally required to pay a portion of your earnings into a super fund on your behalf. This is called the Superannuation Guarantee (SG). You can also make your own contributions.
Current Superannuation Guarantee Rate
As of 1 July 2025, the Superannuation Guarantee rate is 12%. This is the minimum percentage of your ordinary time earnings that your employer must contribute to your super fund.
Why You Should Pay Attention to Your Super Early
Many people think of super as something to worry about later in life, but that's a mistake. The key benefit of starting early is the power of compound interest. Even small contributions made when you're young have decades to grow and multiply. Over a long period, this can significantly increase your final retirement balance.
Choosing Your Super Fund: The "Choice of Fund" Form
When you start a new job, your employer must give you a Superannuation standard choice form. This form gives you the opportunity to choose which super fund your employer will pay your contributions into.
You have a choice: If you have a preferred fund (e.g., one with low fees, good returns, or insurance you like), you should complete this form and provide it to your employer. This is the best way to consolidate your super and avoid having multiple accounts.
What if you don't choose? If you don't complete the form, your employer has to take an extra step. They must check with the ATO to see if you have an existing super account, which is known as a 'stapled' fund. This stapled fund is an account that is linked to you and follows you as you change jobs. Your employer will then pay your super into this stapled fund. If you don't have a stapled fund, your employer will pay your contributions into their default fund.
Consolidating your super into a single fund can save you money by reducing the number of fees you pay and making it easier to track your retirement savings.
Superannuation Fund Options
In Australia, there are five main types of superfund to choose from, three main types of super funds are open to public and the other two are restricted to certain groups of people (public sector funds and corporate funds). The three main types which are open to public are:
Industry Funds
These are "profit-for-member" funds, meaning any profits are returned to the members, not shareholders. They were originally created for specific industries but are now generally open to all. They are known for their competitive fees and solid performance.
Retail Funds
These funds are typically run by large financial institutions, such as banks and wealth management companies. They are "for-profit" funds, with profits going to shareholders. They often offer a wider range of investment options and can be recommended by financial advisers.
Self-Managed Super Funds
An SMSF is a private super fund that you and up to five other members manage yourselves. While the name suggests you do it all yourself, you can, and often should, engage professionals to assist you in managing the fund, similar to how other types of funds are managed. These funds give you ultimate control over your investments, but you are also personally responsible for all decisions and must comply with super and tax laws.
Checking Your Super Fund's Performance
Choosing the right fund is a crucial step. The Australian Taxation Office (ATO) provides a useful tool to help you compare funds.
YourSuper comparison tool on the ATO website allows you to:
View a table of MySuper products (basic super accounts) ranked by net returns.
Compare up to four MySuper products side-by-side on factors like investment performance, total annual fees, and investment strategy.
Access a personalized version through myGov to see how your current fund stacks up against others.
This tool is a great starting point, but it's important to also consider other factors like the level of insurance, the fund's services, and your own risk tolerance before making a decision.
An Important Change: Payday Super
From 1 July 2026, there will be a significant change to how employers pay super. This change, known as "Payday Super," means that employers will be required to pay your super contributions at the same time as they pay your salary and wages, instead of the current quarterly requirement.
This change is designed to benefit you by:
Helping you to better track your super payments.
Giving your super more time to grow through compound interest.
Making it easier for the ATO to detect and address unpaid super.
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