How super works
Super can be complex to get your head around, but in general it works like this:
- You or your employer contribute to a super fund—Your employer is required to contribute a percentage of your salary to a super fund and you can generally contribute extra if you want.
- You or the super fund choose how to invest this money—The super fund takes care of the investment decisions, or you can have a say in how it’s invested.
- When you reach a certain age you can access your money—You can take your money out of your super as either a lump sum or an income stream.
Ways to grow your super
Investments made within super will usually grow faster than the same investments made outside super because of tax advantages. But you can also grow your balance through:
- Super contributions — Your employer must currently pay 9.5% of your gross pay into a super fund or you can make extra contributions.
- a ‘salary sacrifice’ arrangement — With your permission, your employer deducts more than the minimum required percentage from your gross pay to go into your super.
- consolidating your super — If you have multiple super accounts, bring these together and avoid paying multiple sets of fees.
Choosing your super fund
You can usually choose your super fund. The difference between funds generally comes down to investment options, fees, performance, insurance cover, extra benefits or customer service.
If you don’t make an active choice of fund, your employer will make super contributions to a ‘default fund’. Default funds meet government requirements called MySuper. But it may be better to have a say where your super goes, and this may make it easier to track and manage.
You can usually transfer your super balance to another fund, but you can only move your entire balance. If you choose to do this, make sure to check if there are any implications, such as exit fees or changes in your insurance cover.
Keep track of your super
When you receive your pay slip, check that the correct amount of money has been deducted and deposited into the right super account. Your super fund will also provide you with annual statements, so you can see your balance and how the fund is performing.
If you’ve worked in more than one job or moved house and not told your super fund, you may have lost super. If you suspect that you have missing super, you can use SuperSeeker, a free service from the Australian Taxation Office (ATO).
If you’ve identified lost super, you can contact your super fund to help you consolidate it into one place. This way you may avoid paying multiple sets of fees and keep track of your total super balance.
Important informationShow more
It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement before deciding what’s right for you. This information hasn’t taken your circumstances into account.
This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.