Superannuation or super, is simply money – YOUR money - put away for your retirement.
A super fund, like Hostplus, invests the money in your super account for you, so it can grow over time.
Because your super account is built over your entire working life, it may to be one of the largest investments you’ll ever have.
Your super account is made up of compulsory contributions (referred to as Super Guarantee or SG contributions) that your employer makes for you by law while working and eligible.
This money comes from your employer and it’s in addition to your ordinary time earnings (e.g. salary/wages) – it doesn’t come from your pay packet.
Super Guarantee law was created to ensure all Australians have some kind of savings in retirement – the government knows that not everyone would save for their future if it wasn’t compulsory and that relying on the age pension probably won’t be enough for most people.
Generally, all employees aged over 18, who earn $450 (before-tax) or more in a calendar month are covered by the SG legislation, whether you work full-time, part-time or on a casual basis.
You may be excluded from receiving an SG contribution if you earn less than $450 in a calendar month, are under age 18 and work less than 30 hours a week, or are paid to do work of a domestic or private nature for less than 30 hours a week.
The amount of your employer’s contributions is required to be at least 9.5% of your ordinary time earnings (ie. 9.5% of your salary).
This minimum superannuation guarantee percentage is scheduled to gradually increase to 12% for financial year ending 30 June 2026 and later years.
If you don’t think your employer is paying your super, or isn’t paying enough super, the ATO has some advice about what to do here.
For many people, the age pension won’t be enough to maintain their current lifestyle or the kind of lifestyle they'd like to have in retirement.
Even the government knows that the age pension won’t be enough for most people, so they encourage you to maximise your retirement savings by providing tax concessions for extra super contributions, and through initiatives like the co-contribution scheme.
Generally, your super is preserved until you retire from the workforce on/or after reaching your preservation age, which varies between 55 and 60 years of age, depending on your birth date (see below). If you are born after June 1964 your preservation age will be 60.
|Date of birth||Preservation age|
|From 1 July 1964||60|
|1 July 1963 – 30 June 1964||59|
|1 July 1962 – 30 June 1963||58|
|1 July 1961 – 30 June 1962||57|
|1 July 1960 – 30 June 1961||56|
|Before 1 July 1960||55|
Under special circumstances, such as temporary residents permanently departing Australia or during times of financial hardship, it may be possible to access some or all of your funds prior to reaching preservation age.
Super Choice law gives eligible employees the ability to choose the fund that their super contributions are paid to.
Employers are also obligated to choose a ‘default’ super fund, for employees who don’t make a choice, so Hostplus may be your employer’s default super fund.
Choosing the right fund now can make a lifetime of difference.
You may want to compare super funds online using the AppleCheck tool provided by independent research consultant, Chant West. ASIC’s MoneySmart website also has some great tips for choosing a super fund.
For information on Super Choice, including eligibility, talk to your employer or call 1300 467 875, 8am – 8pm, Monday to Friday.