Superannuation or ‘super’ is the money that is kept in a special account called a ‘super fund’ for when you retire. The money comes from contributions put into your super fund by your employer.

Your employer legally has to pay at least 11 per cent on top of your wage into a super fund. This 11 per cent is called the ‘Super Guarantee’. This means that your super won’t come out of your wage.

How does it work?

It’s important to know that super is paid on top of wages for your work. It should be paid to full-time, part-time and casual employees. Your workplace might have a designated super fund that they use, but you DON’T have to use this fund. You are free to use any super fund you choose. You can just give your employer the details of the fund that you choose and they will start putting money into your account. 

You can only use the money when you reach retirement age or if you are experiencing severe financial hardship. In the meantime, your super will be used by your super fund to make investments. Check out our article on investing your super for more info! 

This means that your super earns money throughout your lifetime. It is important to get a super account as soon as you start working because the money that you earn as a young person will increase significantly in value by the time you retire. 

Watch this video to find out in more detail how superannuation works. 

Are you entitled to super?

If you are paid over $450 (before tax) per month at work, you are entitled to superannuation. MoneySmart has a tool where you can calculate how much super you should be getting from your employer. The amount is based on what type of job you have and what is the minimum amount you should be paid (called the award wage). 

If you think super isn’t being paid you can make a complaint to the ATO. The Fairwork website provides information on how to approach your employer, if they aren’t paying you the right amount of super.

What if I have super in more than one fund?

Lots of people have super in multiple funds from when they’ve changed jobs or moved interstate. One of the challenges can be to find your super in different places and move it all into one fund. This is a very important step because having more than one super can be really bad for your savings. It could mean that you are paying unnecessary fees and charges, and it is harder to keep track of your overall savings. Most importantly, it can impact the amount of money you have in your super, costing you money in the long run. 

The first step is to find where your super is. Logging onto your MyGov account will help you to track down your lost super. Look at this guide to finding it. Money Smart also has a handy guide about moving your super into the one fund.

How can I find an ethical super fund? 

Unfortunately, many super funds invest in damaging industries like fossil fuel or nuclear waste. Ethical super funds on the other hand invest in industries that align with your moral compass – like renewable energy. And it’s not just the environment, ethical super funds do not invest in companies that abuse their workers or use slave labour in their supply chains. So if you’re with an ethical fund you’re doing good for people and the planet!

When choosing a super fund to be with it is good to consider these questions: 

• Do your values align with theirs?
• Are their fees and costs high in comparison to other funds?
• Are they performing well compared to other super funds?

Find out more details about ethical super funds here. If this is all too confusing, ask your parents or a trusted adult to help you! 

Why worry about it now?

Retirement is a long way off, but to make sure you get a good start it’s helpful to make sure a few things are in order.

• Find out if you are being paid the right amount of super
• Make sure you know which super fund you are with
• Confirm that your superannuation fund has your tax file number
• Check up on your super on your MyGov account.