What is superannuation?

Superannuation is a form of compulsory savings which ensure that employees accumulate funds for their retirement. The Federal Superannuation Guarantee Act currently provides almost all workers at least a 9 per cent superannuation contribution from their employer on top of their ordinary pay.

Employers do not have to pay superannuation for you if you are:

• paid less than $450 (before tax) per month;
• aged under 18 and work no more than 30 hours per week;
• aged 70 or over;
• paid to do work of a domestic or private nature for 30 hours or less a week.

However, you should check your award or agreement as some give additional people the right to employer superannuation contributions. These entitlements will be preserved for both existing and new employees until 30 June 2008.

What are the advantages of investing in superannuation?

• You receive significant tax concessions on your investment earnings;
• You can add to your investment on a regular basis;
• Your access to your investment is restricted, so you can't be tempted to spend it before you retire;
• You may be eligible to receive a tax deduction for your superannuation contributions;
• Your superannuation can go with you when you move around the workforce.