Superannuation in Australia

Superannuation in Australia are the arrangements in place to enable people in Australia to accumulate funds to provide them with income in retirement. Superannuation in Australia is partly compulsory, and is further encouraged by the government and supported with tax benefits. The government has set minimum standards for contributions for employees as well as for the management of superannuation funds. It is compulsory for employers to make superannuation contributions for their employees on top of the employees' wages and salaries. The employer contribution rate has been 9.5% since 1 July 2014, and is planned to increase gradually from 2021 to 12% in 2025. People are also encouraged to supplement compulsory superannuation contributions with voluntary contributions, including diverting their wages or salary income into superannuation contributions under so-called salary sacrifice arrangements.

An individual can withdraw funds out of a superannuation fund when the person meets one of the conditions of release contained in Schedule 1 of the Superannuation Industry (Supervision) Regulations 1994.

As of 30 June 2015^[update], Australians have over AUD$2.02 trillion in superannuation assets. Though the main purpose of the superannuation scheme in Australia has been and continues to be to create an environment in which people can put funds aside to provide an income in retirement, the tax incentives available have also come to be used, especially by wealthy individuals, as a tax reduction strategy. As a consequence the government has set limits on the amounts that can be brought into the scheme at concessional rates with a number of "caps". Amounts above those caps can still be brought into the superannuation scheme but are generally taxed at the top marginal tax rate.

For many years until 1976, superannuation arrangements that had been in place were set under industrial awards negotiated by the union movement.

A change to superannuation arrangements came about through a tripartite agreement between the government, employers and the trade unions. In the Prices and Incomes Accord of 1983, the trade unions agreed to forgo a national 3% pay increase which would be put into the new superannuation system for all employees in Australia. This was matched by employers contributions. Since its introduction, employers have been required to make compulsory contributions to superannuation on behalf of most of their employees. This contribution was originally set at 3% of the employees' income, and has been gradually increased. Though there is general widespread support for compulsory superannuation today, at the time of its introduction it was met with strong resistance by small business groups who were fearful of the burden associated with its implementation and its ongoing costs.

...
Wikipedia