Superannuation (also known as super) is a way of saving for retirement by putting aside a portion of your wages or salary throughout your working life. 

 

Super is an investment in your future. The more you know about it, the better off you’ll be later in life when it’s time to retire.

 

How does superannuation work?

The purpose of super is to help people save for their retirement. 

 

Your employer makes mandatory super contributions for you. And you can choose to make additional contributions if you want your super balance to grow faster. The money is invested and you generally can’t access it until you retire.

Types of super funds

Fund type
What is it?
Who is it for?
Fund type
Retail super fund
What is it?
Retail super fund

Retail super funds (such as CFS FirstChoice Wholesale Personal Super) are designed to cater for a broad range of people, with a wide range of investment options and styles to choose from. They often offer people greater choice and control when it comes to selecting and managing how money is invested. Fees vary, and most retail super funds now offer competitive options when it comes to fees. 

Who is it for?
Retail super fund

Open to anyone

Fund type
Industry super fund
What is it?
Industry super fund

Industry super funds were originally set up for people working in particular industries (e.g. health or education). These days, most industry super funds are open to anyone who wants to join them. They’re run as profit-for-member funds. This means they don’t pay profit or dividends to shareholders. Industry super funds generally have a limited selection of investment options to choose from which means fees may be low. 

Who is it for?
Industry super fund

Originally intended for people working in specific industries – now usually open to anyone

Fund type
Public sector fund
What is it?
Public sector fund

Public sector funds are for people working in the public sector as government employees. However, some funds are now open to anyone who wants to join. They’re run as not-for-profit funds. Like industry super funds, they generally have low fees and a limited selection of investment options.    

Who is it for?
Public sector fund

Government employees 

Fund type
Corporate fund
What is it?
Corporate fund

Corporate funds are super funds set up by large companies for their employees. The company may manage the fund themselves, or they may outsource it to a retail or industry super fund. 

Who is it for?
Corporate fund

Employees of a specific company

Fund type
Self-Managed Super Fund (SMSF)
What is it?
Self-Managed Super Fund (SMSF)

Self-Managed Super Funds (SMSFs) are funds that you set up and manage yourself. You can have up to six members in your fund. The members are responsible for making all the investment decisions and ensuring the fund is compliant with Australian superannuation rules. See our SMSF page for more information about how SMSFs work and who they may be suitable for. 

Who is it for?
Self-Managed Super Fund (SMSF)

Open to most people

Benefits of super

Having enough money for your retirement is just one of the benefits of super. Here are some more:

 

1. You may pay less tax. 

Super can be an extremely tax-effective form of investing. Your concessional (before-tax) contributions are generally taxed at 15%, which may be lower than your marginal tax rate (depending on your income). You may also get a government co-contribution if you make non-concessional (after-tax) contributions, or a tax offset if you make contributions for your spouse.

 

Earnings on your accumulation (pre-retirement) super balance are also concessionally taxed at a maximum of 15%. And if you commence an income stream in super after retirement, earnings on that balance are not taxed at all. 

 

2. Someone else manages your money for you.

Unless you have an SMSF, your super will be managed for you by a professional investment manager according to the investment option you choose. The investment manager may invest in assets that you wouldn’t be able to access as an individual investor. They monitor the markets constantly and adjust the portfolio in line with the investment option’s objectives and parameters.

 

3. You may have automatic access to insurance with discounted premiums.

Many super funds offer a default level of Death and Total and Permanent Disablement (TPD) insurance to their members. They may also include Salary Continuance Insurance. Unless you want to increase your cover amount, you may receive insurance cover without having to complete any health checks or provide evidence of your health. Super funds negotiate discounts with the insurer, which means you may pay less for your insurance premiums.

 

4. The government rewards you for adding extra money to your super.

If you’re an employee, have annual income of less than $58,445 (for the 2023-24 financial year), and you make a personal contribution to super that you don’t claim a tax deduction for, you may be eligible to receive a government co-contribution. The government will pay up to $500 per year into your super, depending on your income and the amount of your contribution. 

 

5. You can withdraw your super tax-free when you retire. 

Once you can access your super (e.g. at retirement), if you are aged 60 or over you can generally withdraw your super tax-free as either a lump sum or an ongoing income stream. You can read more about how super can help you in retirement

What is the superannuation guarantee?

By law, your employer must contribute some of your pay into a super account for you. This is called the superannuation guarantee. The required amount is 11% of your pay (before tax) for the 2023-24 financial year. 

 

There are some exceptions, but employers are generally required to pay superannuation guarantee contributions if you're a:

  • full-time worker
  • part-time worker
  • casual worker
  • permanent resident, or
  • temporary resident.

Each pay day, or on at least a quarterly basis, your employer makes your superannuation guarantee contributions to your super account. Other contributions might also be included if you’re covered by a state award or industrial agreement.

 

The government is gradually increasing the Super Guarantee percentage over time. From 1 July 2025 it will be 12%. 

 

You can read more about the different types of super contributions here

Can I contribute to my super?

Topping up your super with an extra contribution – even if it’s only a small amount – can make a big difference over time.

 

You can add extra money to your super, above your employer’s superannuation guarantee payments, as long as the total amount you contribute within a financial year is below the concessional or non-concessional contributions cap

 

Concessional (before-tax) contributions
Non-concessional (after-tax) contributions
Concessional (before-tax) contributions

Includes super guarantee, salary sacrifice, and personal contributions that you claim a tax deduction for. 

Concessional contributions cap

Concessional (before-tax) contributions

Includes spouse contributions made for you, and personal contributions you make that you don’t claim a tax deduction for.

Non-concessional contributions cap

 

In certain circumstances, you may be able to make a higher amount of concessional or non-concessional contributions in a single year. Learn more here.

 

Some types of contributions are exempt from the above caps, including downsizer contributions, contributions of certain small business asset sale proceeds, and contributions from certain personal injury payments.

 

There are restrictions about contributing extra money to your super if you:

  • are 75 or older (except for downsizer contributions and compulsory employer contributions such as superannuation guarantee payments)
  • have greater than or equal to the general transfer balance cap in super just before the start of a financial year (your non-concessional contributions cap for the year will be nil if this is the case)
  • are aged 67 to 74 and make personal contributions that you want to claim a tax-deduction for (you must satisfy a work test or work test exemption in this situation).

When can I access my super?

Generally, you’re able to access the money in your super when you:

  • turn 65 (even if you haven’t retired)
  • reach your preservation age and have permanently retired (except if you start a transition-to-retirement pension), or
  • cease a paid work arrangement after reaching age 60 (even if you’re not planning to permanently retire).

Your preservation age depends on your birth date:

 

Your birth date
Preservation age
Your birth date
Before 1 July 1960
Preservation age
Before 1 July 1960

55

Your birth date
Between 1 July 1960 and 30 June 1961
Preservation age
Between 1 July 1960 and 30 June 1961

56

Your birth date
Between 1 July 1961 and 30 June 1962
Preservation age
Between 1 July 1961 and 30 June 1962

57

Your birth date
Between 1 July 1962 and 30 June 1963
Preservation age
Between 1 July 1962 and 30 June 1963

58

Your birth date
Between 1 July 1963 and 30 June 1964
Preservation age
Between 1 July 1963 and 30 June 1964

59

Your birth date
After 30 June 1964
Preservation age
After 30 June 1964

60

 

You may be able to access some or all of your super early in certain circumstances, including:

How is my super taxed? Are there tax benefits?

When an employer makes a contribution on your behalf, or you make a personal contribution that you claim a tax deduction for, it’s taxed at 15% instead of your marginal tax rate. 

 

If you earn $37,000 or less per year, the government may make a contribution to your super account of up to $500 to offset the tax. 

 

If your income and concessional (before-tax) contributions are more than $250,000 per year, you may have to pay an additional 15% tax on some or all of these contributions.

 

When you make personal contributions that you don’t claim a tax deduction for, or your spouse makes a contribution for you, contributions tax doesn’t apply. This is because you or your spouse have already paid income tax on that money. 

 

Earnings on your accumulation (pre-retirement) super balance are also concessionally taxed at a maximum of 15%. And if you commence an income stream in super after retirement, earnings on that balance are not taxed at all. 

 

Once you can access your super (e.g. at retirement), if you are aged 60 or over you can generally withdraw your super tax-free as either a lump sum or an ongoing income stream.

What is a MySuper product?

A MySuper product is a simple, low-cost product within a super fund. 

 

If you start a new job and you don’t tell your employer where you want your super contributions to go, they have to check with the ATO to see whether you already have an account set up with a super fund (this is called ‘super stapling’). If you do, your employer has to contribute to that account. If you don’t, they must pay your super into a MySuper product.

 

A MySuper product will generally invest your money in a diversified or lifecycle investment option. 

 

The CFS MySuper product is CFS Lifestage

How to compare super fund performance and fees?

Think all super funds are the same? They’re not. That’s why it’s important to compare funds and choose one that’s right for you. Your super is likely to be one of your most valuable assets by the time you retire, so it’s worth taking the time to find a fund that fits your needs.

 

The ATO’s Super Comparison Tool can be an easy way to weigh up your options, but keep in mind that this only looks at MySuper products

 

Here are some things to keep in mind when comparing super funds:

 

What to compare
How it works
What to look for
What to compare
Fees and costs
How it works
Fees and costs

All super funds charge fees, but the fees will vary. There are generally administration fees, investment costs and transaction costs (e.g. for switching investment options). 

What to look for
Fees and costs

How often are the fees charged?

Are they charged as a fixed fee or a percentage of your super balance?

What to compare
Investment options
How it works
Investment options

Super funds usually give members a range of investment options to choose from, so you can match your investment profile to your needs. 

What to look for
Investment options

How many investment options can you choose from?

Does the fund offer a range of growth and defensive investment options? 

Is it easy to switch from one option to another?

What to compare
Investment performance
How it works
Investment performance

Your fund’s performance can have a significant impact on your super balance over time. Make sure you compare funds over the same timeframe and with a similar level of risk. 

What to look for
Investment performance

How has the fund performed over the short term (e.g. one year)?

How has the fund performed over the long term (e.g. five or more years)?

What to compare
Insurance
How it works
Insurance

Many super funds give you the option to include life, disability and income protection insurance in your super. They may automatically give you cover or provide the option to apply for it. 

What to look for
Insurance

Is insurance automatically included in the fund?

What’s the default level of cover?

Can you apply to increase the level of cover or add additional types of cover? 

How much will the insurance premiums be and how often will they be deducted from your account?

What to compare
Other considerations
How it works
Other considerations

Take into account everything the super fund offers its members, including its services. Some super funds have limited services while others offer a broad range of services and benefits to their members free of charge.  

What to look for
Other considerations

What services are available for members?

What type of super education is available for members?

Is there a member app?

Does the super fund have a good reputation?

Is the fund rated highly by comparison sites?

What happens to my super if I moved overseas?

What happens when you leave will depend on whether you’re an Australian citizen, permanent or temporary resident of Australia, or a New Zealand citizen.

 

I'm an Australian citizen, permanent resident of Australia, or New Zealand citizen

Your super will remain subject to the normal rules if you leave Australia – even if you’re departing permanently. Generally, this means you won’t be able to access your super until you reach your preservation age and retire, cease a paid work arrangement after reaching age 60, or reach age 65 (unless you meet a special condition of early release).

 

However, if you depart permanently, you’ll generally no longer receive super guarantee contributions from an Australian employer. Even if you work for the same employer when you’re overseas they won’t have to make contributions for you if you’re considered a non-resident for tax purposes.

 

If you're an Australian employee sent to work temporarily in another country, your employer must generally continue to pay super guarantee contributions in Australia for you. 

 

If you’re an Australian citizen moving permanently to New Zealand, or a New Zealand citizen leaving Australia permanently, you may be able to transfer your super to the KiwiSaver scheme

 

Once you’ve left Australia, you should check your super regularly to make sure your investment strategy and any insurance arrangements continue to suit your lifestyle. 

 

I'm a temporary resident

If you're a current or former temporary resident (but not an Australian citizen or permanent resident, or a New Zealand citizen), you may be eligible to access your super when you leave Australia and cease to be a temporary resident. To do this, you need to claim a Departing Australia Superannuation Payment. Depending on your situation, up to 65% tax can apply to this type of payment.

 

If you leave Australia and cease to be a temporary resident, your super fund will generally be required to transfer your super balance to the ATO (you can then claim this payment from the ATO).  

What’s next?

Grow your super

Grow your super

 

Learn how to boost your super savings, and how it can benefit you. 

 

Retirement planning

Retirement planning

 

Create a strategy for your wealth that helps you retire with financial freedom, security, and purpose. 

Consolidate your super

Consolidate your super

 

Bring all your super into one account and save on management fees. 

 

Unleash in ways you never thought possible

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Disclaimer

Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.

 

Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at  https://www.cfs.com.au/tmd which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36.

 

Tax considerations are general and based on present tax laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

 

AIL and CFSIL are not registered tax (financial) advisers under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise under a tax law.