History of Superannuation
Superannuation is basically long term savings designed to provide a lump sum or income stream in retirement.It first commenced in Australia around 1850. At this time some banks, large private companies and governments started paying private pensions to their senior, long serving employees. Other employees had to rely on their personal savings to fund their retirement. For the first 130 years of superannuation, there was little change in the way it operated.
The government then introduced compulsory super for all employees from 1 July 1992. The government uses both encouragement and compulsion to ensure that those in the workforce save for their retirement. The objective is to improve total retirement income in a way that taxpayers can afford.
There are laws and government agencies that control and supervise superannuation funds. The aim is to ensure that your benefits are properly protected, that any fraud is detected and that any damage is reduced. Your employer must pay a contribution on your behalf to a superannuation fund. The superannuation fund must operate according to Australian superannuation laws. If you are employed, you have been entitled to superannuation since at least 1 July 1992. The amount your employer must contribute is currently 9% of your wages or salary. These contributions are called the Superannuation Guarantee contributions.
The Superannuation Guarantee legislation requires employers to provide a minimum level of superannuation support for employees or become liable to pay a Superannuation Guarantee Charge.
Initiatives to encourage and require superannuation savings have contributed to the very rapid growth in the level of superannuation assets in the Australian economy. The total value of superannuation assets was around $40 billion in 1983. After only 25 years of compulsory contributions, Australian consumers have nearly $1 trillion ($1,000,000,000,000) invested in superannuation.
All contributions made to superannuation since 1 July 1999 must be, with a few strict exceptions, preserved in the system until a set age.
