The Australian Superannuation Fund

The article explains why the superannuation fund was created and the advantages of the superannuation fund in Australia.
The superannuation fund in Australia was started because it was felt that the level of savings that Australians were doing was just not enough to maintain lifestyles. It is claimed that on an average an Australian saves about 4% of the salary; a number that is far below various other countries.

Before the concept of the superannuation fund was introduced in Australia, tax payers pensions were used for paying the pensions of the retired population in the country. However, with an increased life span and lower number of children in each household, a strain on the federal budget can be forecasted.

It is with this in mind that the government introduced the superannuation fund and forced employers to also contribute a minimum of 9% of the employees wage towards the fund. This superannuation fund is made available to the employee only after retirement. It is a forced investment that Australians now have to make.

An added advantage of the superannuation fund is the fact that all money that is deposited in the superannuation fund attracts a tax of only 15% against the much higher percentage of normal income. For those who earn average salaries, it makes a lot of financial sense to put extra monies in their superannuation fund so as to avail the benefits of a reduced tax along while also ensuring savings.

It is important to note that when people shift jobs they tend to lose track of the various superannuation funds that have been created for them by their employers. There is about 7 billion dollars of unclaimed superannuation fund that resides in the Federal books today.
Mel C writes about superannuation funds, self managed superannuation among other finance topics.