How the Australian super system compares to others around the world [VIDEO]


Many countries have systems in place to give people an income after they have stopped working. They include public or private pensions, employer pension funds and personal savings.

Super around the world

It is common for retirement incomes to be funded through a pension system, but these systems can be different from country to country.

In China, for example, retirement is funded through a mix of government pension, employer pension funds, and family support. Japan has a well developed employer-sponsored super fund system. Family support for older people is common in many Asian countries, although this seems to be changing.

European countries mostly rely on government pensions as the primary source of retirement income. For example, in the UK, retirees will receive a means-tested government pension that may be supplemented by an employer-sponsored pension. In some European countries, like Switzerland, pensions are based on average lifetime earnings.

Retirees in the USA rely on income from personal savings, private (401K) pension plans and a government benefit based on lifetime earnings.

Super in Australia

In Australia, retirement income is funded through a mix of personal savings, a government pension and superannuation (super).

Super is made up of employer contributions, your own personal contributions and sometimes additional Government contributions. Money deposited into your super fund is invested by the fund’s trustee, who aims to grow your account balance while you are still working.

When you have reached retirement age and stop working, your super fund is usually converted to a pension that will give you money to live on. See how super works for more information.

Video: Why is super important to you?

Superannuation can make a big difference to your lifestyle in retirement. Watch people explain why superannuation is important to them.

How money is paid into super

Employer contributions

While you are working, your employer must put an amount equal to 9.5% of your regular wage or salary, as a minimum, into your super fund. This is an extra payment on top of your wages or salary. This is known as the super guarantee contribution (SGC), see employer contributions for more details

Most employees can choose the super fund their employers must pay into. There are many different types of super funds but if you don’t choose one yourself, your employer will choose one for you. This is known as their default fund and it must have a MySuper account.

If your employer has chosen a fund for you, you can change this at any time by giving your employer the account details of your preferred fund.

Your contributions

You can top up your super savings by making personal contributions to your super fund. If you are on a low income you may also be eligible for government contributions. See super contributions for more details.

Looking after your super

Combine multiple funds

If you have more than one super fund, think about consolidating your money into a single fund. You’ll save on fees