Superannuation basics
Let's start at the start!
Superannuation (often called super) is money saved during your working life for your retirement. Whilst you’re working, regular contributions are placed into your account so by the time you stop working; your super balance could have grown into a sizeable sum to support your retirement.
You are generally unable to access your super until you retire.
Money going into your super
This will generally consist of contributions made by your employer during your working life, however you are also able to make additional contributions yourself which can be:
- one-off lump sum contributions that you make
- regular personal (after-tax) contributions
- regular salary sacrifice (pre-tax) contributions
- any combination of these right up to the age of 75.
Employer contributions are compulsory and are generally 9% of the ordinary times earnings (OTE) part of your income. For more information about OTE, click here to read the Ordinary Time Earnings factsheet.
You can make your own contributions if you are under the age of 65 (please be aware of relevant contributions limits) or if you are aged between 65 and 74 and have worked at least 40 hours over 30 consecutive days in the relevant financial year.
In a nutshell
Your account should grow over time with your super contributions, plus investment earnings (which can be positive or negative). Taxes, fees and insurance premiums are deducted from your account.
In detail
Employer contributions
These are contributions made by your employer under an award or other industrial instrument or Superannuation Guarantee legislation. For most people, employer contributions are equivalent to 9% of their ordinary time earnings (OTE). Read more about how this earnings base is defined in our Ordinary Time Earnings factsheet.
Additional contributions
You can make additional contributions on top of your employer contributions. These will boost your retirement savings now, and can make a real difference over the long-term.
You can make:
- one-off payments
- regular personal (after-tax) contributions
- regular salary sacrifice (pre-tax) contributions
- any combination of these right up to the age of 75.
You can make contributions if you are under age 65, or if between 65 and 74 and have worked at least 40 hours over 30 consecutive days in the relevant financial year.
Read more about making additional contributions.
Investment returns
Super funds like RecruitmentSuper invest the money you save with the aim of maximising the benefits you will eventually receive when you retire.
Investment returns can both increase and decrease the value of your investment in the short term, but over a lifetime, a suitable investment strategy is likely to increase the value of your super.
That’s why RecruitmentSuper provides you with the option of being able to choose your own investment option in our SelectSuper division.
Read more about the different risk and return profiles available for investing your super.
Fees
Super funds charge fees to manage and administer your super. Since fees are deducted regularly from your account – and usually over a long period of time – any difference in the fees you pay can make a big difference to the amount you have at retirement.
If you have any old super accounts that you don’t make use of, you may want to consider consolidating your accounts to avoid paying unnecessary fees.
Industry funds like RecruitmentSuper are run only to benefit its’ members, like you, and generally have lower fees than retail funds that are run to benefit shareholders.
Tax
Superannuation is taxed concessionally by the government to encourage savings for your retirement. Be aware that contribution caps apply and these may affect your tax treatment.
Employer contributions
Contributions made by your employer under an award or Superannuation Guarantee legislation are taxed at a rate of 15%.
Salary sacrifice
Pre-tax contributions you make are treated as employer contributions for tax purposes and are taxed at 15%. This may represent a significant saving when compared to taking the same amount as salary.
Voluntary member contributions
Any contributions you make from your after-tax income are not taxed again within the super fund.
Insurance premiums
Taking up death, total and permanent disability or income protection insurance through super is easy. Payments are automatically deducted from your account and can also be tax-effective, because your super contributions are taxed at only 15%.
However, just like fees, insurance premiums are deducted regularly from your account - usually over a long time - so the cost of premiums and paying any unnecessary premiums could make a big difference to your retirement outcome.
About the Fund
RecruitmentSuper is Australia’s leading industry fund for the recruitment and employment services sector, a range of membership options will help you get the solution you need. Experience the benefits of great value, low–fees and personalised support. With our simple, straight-forward solutions, we’re proud to be known as specialists in the recruitment industry.
We offer three membership categories to make sure you get the best solution for your needs. Choose from our EasyChoice, SelectSuper and SelectPlus RecruitmentSuper products, and enjoy the convenience of flexibility, options and services tailored to suit you.
Chances are, you’ve probably changed jobs, states, and careers a few times, collecting little pockets of super all over the place. Make sure you don’t miss out on your lost or unclaimed super. We can help you to consolidate super accumulated from different jobs over the years, so you don’t lose valuable funds. Read more
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Service Providers
RecruitmentSuper is a division of Professional Associations Super, an industry fund with over 445,000 members across Australia and over $1.5 billion of funds under management. Professional Associations Super divisions include SMARTpension, Australian Enterprise Super, and Accountants Super
Find us by searching: Recruitment Super, Recruitment Super Australia, Recruitment Superannuation, Consolidate Super, Consolidate Superannuation, Consolidate Superannuation Funds, Consolidate your super, Consolidate Your Super Funds, Life Insurance Superannuation, Recruitment Super Fund, Recruitment Superannuation Fund
This information is of a general nature only and does not take into account your personal objectives, situation or needs. Before making a decision about RecruitmentSuper, you should consider your own requirements and the relevant Product Disclosure Statement. Contact us for a copy.