What is Superannuation?

A Superannuation Fund is essentially a trust which is governed by a Trustee. The Trustee is responsible for the operation of the trust. If the Trustee does not conduct the Superannuation Fund correctly the trustee can be held liable under Trust Law or under duties prescribed in the Superannuation Industry (supervision) Act 1993. The Trustee of a Superannuation Fund is responsible for the collection of member’s contributions and the prudent investment of such contributions which would include preservation and liquidity so that benefits can be paid.

Types of Superannuation

There are various types of Superannuation Funds but one of the most popular of Australian Superannuation is the Self Managed Superannuation Funds or SMSF or do-it yourself funds. In most instances the Trustee of the Superannuation Fund is the Superannuation Fund members or often a Corporate Trustee for perpetuity with the members as directors. These funds are established for a small number of members. Australian Superannuation would have fewer than 5 members.

History in Australia

Superannuation or Super as it is regularly called took a radical change in 1992 when the Superannuation Guarantee Act directed employers for the first time to make compulsory contributions to Superannuation Funds for all employees wages. The superannuation contribution was initially 3% but this has now increased to a super contribution of 9% of employee wages.

Australian Superannuation

Super contributions are compulsory payments by employers to Super Funds designated by the employee. These super contributions are invested in the trust Super Fund and managed with a fully documented plan by the fund trustee. Voluntary contributions to the Super Fund are allowed. The retirement benefit most members eventually receive is the compulsory and voluntary contributions paid on their behalf to the Superannuation Fund plus their share of net earnings after tax.

Control of Australian Superannuation

There are many rules and regulations governing Superannuation in Australia. Superannuation is controlled by 3 main Acts:

1. Superannuation Guarantee (Administration) Act 1992
2. Superannuation Industry (Supervision) Act 1993
3. Financial Services Reform Act 2002

Our practice has specialists who can immediately respond to any questions you may have to matters included in these Acts.