Your employer has to regularly put aside a specific amount of money for your super. This amount is equal to a minimum 10% of your pre-tax salary and is paid at least once every quarter into your super account.
Your employer’s super contributions are known as Super Guarantee or ‘SG’ payments. Your employer makes these payments straight into your super account, separate to the salary they pay you.
Even if you move to a new job, you can take the same super account with you. This makes it easier to keep track of your super and also means you can potentially avoid paying fees on more than one account.
Your super is a long-term investment – and the more money that goes into it, the more that can be invested to grow over time.
A popular way to boost your super is by salary sacrificing1, an arrangement between you and your employer to pay a bit extra from your pre-tax salary into your super. This is on top of the Super Guarantee contributions your employer is legally required to make.
Did you know?
See how a small amount each pay could potentially make a big difference to your super balance at retirement.
Even if you don’t have extra cash on hand to boost your super, don’t worry. Every little bit helps, and can potentially end up making a big difference by the time you retire.
Your super is designed to fund your retirement. That’s why you can’t touch it for most of your working life so it has the chance to grow as much as possible over the long term.
After you reach your ‘preservation age’, you can start accessing your super either when you retire or as part of a transition-to-retirement strategy. Once you turn 65, you can access your super regardless of your work status.
Your preservation age is the age you’re generally allowed to access your super. It depends on your date of birth.
There are other special circumstances when you may be able to access some or all of your super, for instance, on compassionate grounds or if you’re experiencing hardship eg financial difficulties caused due to the Coronavirus pandemic.
If you’re a temporary resident leaving Australia, you can also withdraw your super via a Departing Australia superannuation payment.
How do I withdraw my super?
Once you’re allowed full access to your super, you can choose to receive it either as a lump sum or a regular income stream – or a combination of both. The option you choose may affect your financial circumstances and tax position so it may be worth getting financial advice before making a decision.
If you’ve changed jobs you may have multiple super accounts with different funds.
In this case, you’re probably paying multiple sets of fees which can make a dent in your retirement savings in the long run. Having more than one account can make it harder to keep track of your super.
It’s a good idea to find any other super accounts you may have and consider bringing them together into one account to avoid paying more fees than you need to. Before you make a decision, remember to compare the costs, risks and benefits of your other super fund against Essential Super including any insurance you may hold elsewhere as it will end if you choose to leave those super funds.3
You can search for your other super and bring your super together via the Australian Tax Office at MyGov.
You can check your transactions in your Essential Super account via NetBank > select Essential Super > Transactions.
Your employer is legally required to pay your super at least every 3 months. If you want to check when your super is paid, check with your employer and ensure they are paying your super into the account of your choice.
For most jobs in Australia, you can choose which account you want your employer to pay your super into. To do this, you will need to download a Superannuation standard choice form from your preferred super fund and provide the completed form to your employer.
You can see your super balance alongside your banking via the CommBank app and NetBank anytime. When you receive your Essential Super statement every 6 months, it’s a good time to check some other features of your account:
As an Essential Super member, you are probably invested in one of the Lifestage options like over 90%5 of our members. This means that not all your super is invested in one asset class, e.g. shares. If you have invested in a Lifestage option, your super is invested in a portfolio of assets including growth assets like shares and defensive assets like cash and fixed interest. These options are invested in a variety of assets and is designed to diversify risk. There are other options to consider such as a Balanced, Australian Shares and Cash Deposit option. If you would like to know more about these options, give us a call on 13 4074.
It’s important not to panic as super is a long-term investment. Although financial markets may fall in the short term, historically, over the long-term they typically recover. Even though the balance has dropped, you only crystallise this loss if you withdraw or switch. If you are unsure about what action to take, a financial adviser may be able to help you.
1 Contributions caps apply.
2 The highest marginal tax rate is 45% plus 2% Medicare levy. Concessional contributions such as salary sacrifice are generally taxed at just 15% when received by your fund. However, a higher rate of tax may be payable on part or all of these contributions if your income and before-tax contributions are more than $250,000 in a financial year.
3 Before you make a decision on consolidating your super, you should compare the costs, fees, risks and benefits of your other super funds against Essential Super. It makes sense to consider whether you can replace any insurance cover you may lose upon rolling over, potential costs for withdrawing from other super funds as well as any investment or tax implications. You should also decide which super fund you want your employer to pay your future employer contributions to and complete a Super Choice form if necessary.
4 Source: moneysmart.gov.au: Insurance through super, September 2020.
5 As at 30 June 2021.
Important Information: Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the issuer of interests in Commonwealth Essential Super ABN 56 601 925 435 (Essential Super) and is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 (Commonwealth Bank). This document is issued by CFSIL and may include general financial product advice but does not consider your individual objectives, financial circumstances or needs. You should read the Product Disclosure Statement (PDS) and the Reference Guide for Essential Super carefully and consider whether the information is appropriate for you before making an investment decision. Download the PDS and Reference Guide at commbank.com.au/essentialsuper-documents or call us on 13 4074 for a copy. The Target Market Determinations (TMD) for our financial products can be found at www.cfs.com.au/tmd and include a description of who the financial product is appropriate for, and any conditions on how products can be distributed to customers. The Commonwealth Bank provides certain distribution and administrative services to CFSIL. The Commonwealth Bank and its subsidiaries do not guarantee the performance of Essential Super or the repayment of capital by Essential Super. An investment in Essential Super is via a superannuation trust and is therefore not an investment in, deposit with, or other liability of the Commonwealth Bank or its subsidiaries and is subject to investment risk, including loss of income and capital invested. Where we mention `we’, `us’ or `our’, we mean CFSIL.
The insurance provider is AIA Australia Limited ABN 79 004 837 861 AFSL 230043 (AIA Australia). AIA Australia is not part of the Commonwealth Bank Group. The insurance cover is provided under policies issued to the Trustee.