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Superannuation Law & Lawyers

Superannuation disputes, TPD claims, and fund administration.

Superannuation is a way of saving for your retirement. Both you and your employer can make contributions that accumulate over time and this money is then invested in shares, government bonds, property, or other appropriate investments.

Superannuation is a retirement (including pensions) program in Australia. It has a compulsory element whereby employers are required by law to pay an additional amount based on a proportion of an employee's salaries and wages (currently 9%) into a complying superannuation fund.

An individual's superannuation fund can be accessed when the employee meets one of the conditions of release contained in Schedule 1 of the Superannuation Industry (Supervision) Regulations 1994.

If you would like legal help regarding superannuation law, please complete your free legal enquiry form on the right, or click here.

Total and Permanent Disability Compensation Claims

If you become Totally and Permanently Disabled, you can claim your superannuation early. Most superannuation funds also have a TPD insurance component. Therefore in addition to receiving your super early, you may be entitled to a lump sum payout through the TPD insurance component.

For more information click here:  Total and Permanent Disability Compensation Claims

Superannuation - Compulsory employer contributions

Most people are entitled to compulsory super contributions from their employer. These super guarantee contributions must be at least 9% of your ordinary earnings, up to the 'maximum contribution base'. You may also be entitled to choose the fund your super is paid into.

Other contributions and co-contributions

You can boost your super by making your own contributions and may be eligible for government co-contributions. You might also want to consider a salary sacrifice arrangement to grow your super.

The amount of tax on your contributions depends on whether they are concessional (sometimes referred to as 'before tax') or non-concessional (sometimes referred to as 'after tax') contributions, and whether you exceed the contribution caps.

Keeping track of your super

If you've ever changed your name, address or job, you may have more than one super account or even have some lost super. Combining your super into one account will save you fees and makes it easier to keep track of your super.

Accessing your super benefits

You can access your super when you reach 'preservation age' and retire, or turn 65 (even if you haven't retired). There are very limited circumstances where you can access your super savings early.

The tax treatment of super and death benefits depends on a number of factors, such as when and how the benefits are paid. They may have both taxable and tax-free components.

If you're a temporary resident working in Australia, you can apply for your super when you leave.

If you have a legal issue regarding your superannuation, please complete your free legal enquiry form on the right, or click here.

Self managed super funds

You can set up your own private super fund and manage it yourself, but only under strict rules regulated by the Australian Taxation Office (ATO). They are sometimes called a 'self-managed super fund' (SMSF).

An SMSF can have one to four members. Each member is a trustee.

Running your own Super fund is complex so think carefully before setting up a Superannuation Fund. If you set up a self-managed super fund you must:

  • Carry out the role of trustee, which imposes important legal duties on you
  • Use the money only to provide retirement benefits
  • Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs
  • Keep comprehensive records and arrange an annual audit by a qualified auditor
    Smart tip
  • Don't forget to take out separate life insurance cover if you have a self-managed super fund.

If you're running a self-managed super fund, you will typically need:

  • A large amount of money in the fund to make set-up and yearly running costs worthwhile - usually at least $250,000
  • To allow for ongoing expenses such as professional accounting, tax, audit and legal advice
  • Plenty of time to manage the fund
  • Financial experience and skills so you are more likely to make sound investment decisions
  • Separate life insurance, including income protection and total and permanent disability cover.

You can pay an adviser a fee to do the administration for your self-managed super fund. However, you cannot pass on the responsibility of being a trustee.

If you would like legal help in regards to self managed super funds, please complete your free legal enquiry form on the right, or click here.

The main laws that apply to superannuation are the:

  • Superannuation Industry (Supervision) Act and Regulations (regulates most private superannuation funds);
  • Superannuation Guarantee (Administration) Act and Regulations (tells employers the minimum contribution they must pay);
  • Superannuation Act (covers Commonwealth government superannuation funds)

If you would like legal help regarding superannuation law, please complete your free legal enquiry form on the right, or click here.

Operation Employer contributions

Employers must make superannuation contributions to the employees' at 9% to a designated superannuation fund at least every three months. The superannuation contributions are invested over the period of the employees' working life and the sum of compulsory and voluntary contributions, plus earnings, less taxes and fees is paid to the person when they choose to retire. The sum most people receive is predominantly made up of compulsory employer contributions.

Special rules apply in relation to employers providing defined benefit arrangements. There are less common traditional employer funds where benefits are determined by a formula usually based on final average salary and length of service. Essentially, instead of minimum contributions, employers need to provide a minimum level of benefit.

Superannuation Guarantee law applies to all working Australians, except those earning less than $450 per month, or aged under 18 or over 70. Individuals can choose to make extra voluntary contributions to their superannuation and receive tax benefits for doing so.

Access to superannuation

As superannuation is money invested for one's retirement, strict government rules prevent early access to preserved benefits except in very limited and restricted circumstances, including severe financial hardship or on compassionate grounds, such as for medical treatment not available through Medicare.

Generally, superannuation benefits fall into three (3) categories:

  1. Preserved benefits;
  2. Restricted non-preserved benefits; and
  3. Unrestricted non-preserved benefits.

Preserved benefits are benefits that must be retained in a superannuation fund until the employee's 'preservation age'. Currently, all workers must wait until they are 55 before they may access these funds. All contributions made after 1 July 1999 fall into this category.

Restricted non-preserved benefits although not preserved, cannot be accessed until an employee meets a condition of release, such as terminating their employment in an employer superannuation scheme.

Unrestricted non-preserved benefits do not require the fulfilment of a condition of release, and may be accessed upon the request of the worker. For example, where a worker has previously satisfied a condition of release and decided not to access the money in their superannuation fund.

Types of superannuation funds

There are seven main types of superannuation funds:

  • Industry Funds are multiemployer funds run by employer associations and/or unions. Unlike Retail/Wholesale funds they are run solely for the benefit of members as there are no shareholders.
  • Wholesale Master Trusts are multiemployer funds run by financial institutions for groups of employees. These are also classified as Retail funds by APRA.
    Retail Master Trusts/Wrap platforms are funds run by financial institutions for individuals.
  • Employer Stand-alone Funds are funds established by employers for their employees. Each fund has its own trust structure that is not necessarily not shared by other employers.
  • Self Managed Superannuation Funds (SMSFs or Do-It-Yourself Funds) are funds established for a small number of individuals (fewer than 5) and regulated by the Australian Taxation Office. Generally the Trustees of the fund are the fund members (where there is a Corporate Trustee, the members are the directors of that company).
  • Small APRA Funds (SAFs) are funds established for a small number of individuals (fewer than 5) but unlike SMSFs the Trustee is an Approved Trustee, not the member/s, and the funds are regulated by APRA. This structure is often used for members who want control of their superannuation investments but are unable or unwilling to meet the requirements of Trusteeship of an SMSF.
  • Public Sector Employees Funds are funds established by governments for their employees.

Retail and Wholesale Master Trusts are the largest sector of the Australian Superannuation Market.

If you would like legal help regarding superannuation law, please complete your free legal enquiry form on the right, or click here.

Superannuation - Some further Information

What is super?

Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by your employer and, ideally, topped up by your own money. Sometimes the government will add to it through co-contributions too.

Your employer must pay 9% of your salary into a super fund. This is called the Super Guarantee and it's the law.

Over the course of your working life, these contributions from your employer add up, or 'accumulate'. Your super money is also invested by your super fund so it grows over time. When you retire, you will have money to live off – a nest egg.

Super is a lifetime investment that has many benefits.

Save for your retirement
Start saving for your retirement early. The longer you have to save, the more chance your savings have to grow. Use our retirement planner to find out if your super savings are on track.

Enjoy tax advantages

For most people, super will be taxed at a lower rate than a similar investment outside super.

Receive bonus contributions from the government

If you put your own after-tax money into super, you could receive a government co-contribution, depending on how much money you earn.

How to choose a super fund

Most people can choose which super fund they'd like their super contributions paid into. If you want to choose your super fund, tell your employer by filling in a Standard choice form from the Australian Taxation Office (ATO) or from your employer.

In some cases your employer will decide which fund your super is paid into. If you don't (or can't) choose your super fund, your employer will put the money into a 'default' super fund, a fund nominated under an industrial award or by your employer.

Making super contributions

For most people, your employer must pay an amount equal to 9% of your salary into your super fund account.

It's important that you get paid what's rightfully yours. The 9% employer contributions are based on your 'ordinary time earnings'. For example, if your ordinary time earnings are $50,000 then you should be paid an additional $4,500 into super.

Ordinary time earnings are what employees earn for their ordinary hours of work including over-award payments, bonuses, commissions, allowances and certain paid leave. See the ATO's information on using ordinary time earnings to calculate the super guarantee.

You can make extra contributions by:

  • Putting some of your savings into your super account
  • Asking your employer to deduct extra money from your pay (before tax is taken out) and pay this into your super account – this is called contributing extra to super
  • Transferring super from another fund into your main super account on a regular basis
  • For self-employed people, your super contributions may be tax deductible.

What happens to your super money

Money in your super fund account is invested by your super fund. Most super funds offer a variety of investment options.

For example, if you choose a market-linked investment, the value of your super will move up and down with market movements. Or you might select a stable option with lower expected returns but fewer ups and downs.

You can choose how you'd like your money invested, if you want to. You can also transfer your money to a different investment option within the fund, or transfer to another super fund at any time.

Maximise super when you retire

If you retire and have reached your preservation age (i.e. 55 to 60), you can withdraw your super. There are three ways you can get your super:

  • As a lump sum
  • As a retirement income stream (e.g. a monthly payment)
  • A combination of both

If you choose to take your super as a retirement income stream, the money that you're not accessing continues to work for you and earn interest.

If you would like legal help regarding superannuation law, please complete your free legal enquiry form on the right, or click here.

Links to Further Resources - Superannuation Law & Lawyers

Superannuation Law & Lawyers News

News, updates and further information - Superannuation Law & Lawyers

Superannuation Legislation:

  • Superannuation Industry (Supervision) Act 1993
  • Superannuation Industry (Supervision) Regulations 1994
  • Retirement Savings Accounts Act 1997
  • Retirement Savings Accounts Regulations 1997

Choice of superannuation fundsFrom 1 July 2005, changes to the law mean that many Australian employees are able to choose the fund their employer's future superannuation guarantee contributions are paid into. Choice of superannuation funds allows workers to:

  • change funds when their current fund is not available with a new employer;
  • consolidate superannuation accounts to cut costs and paperwork;
  • change to a lower-fee and/or better service superannuation fund;
  • change to a better performing superannuation fund.

Superannuation funds are principally regulated under the Superannuation Industry Supervision) Act 1993 and the Financial Services Reform Act 2002. Compulsory employer contributions are regulated via the Superannuation Guarantee (Administration) Act 1992

Superannuation Industry (Supervision) Act 1993 (SIS)The Superannuation Industry (Supervision) Act sets all the rules that a complying superannuation fund must obey (adherence to these rules is called compliance). The rules cover general areas relating to the trustee, investments, management, fund accounts and administration, enquiries and complaints.

SIS also:

  • regulates the operation of superannuation funds; and
  • sets penalties for trustees when the rules of operation are not met.

In June 2004 the SIS Act and Regulations were amended to require all superannuation trustees to apply to become a Registrable Superannuation Entity Licensee (RSE Licensee) in addition each of the superannuation funds the trustee operates is also required to be registered. The transition period is intended to end 30 June 2006. The new licensing regime requires trustees of superannuation funds to demonstrate to APRA that they have adequate resources (human, technology and financial), risk management systems and appropriate skills and expertise to manage the superannuation fund. The licensing regime has lifted the bar for superannuation trustees with a significant number of small to medium size superannuation funds exiting the industry due to the increasing risk and compliance demands.

The Financial Services Reform Act 2002 (FSR)

The Financial Services Reform Act covers a very broad area of finance and is designed to provide standardisation within the financial services industry. Under the FSR, to operate a superannuation fund, the trustee must have a licence to run a fund and the individuals within the funds require a licence to perform their job.

With regard to superannuation, FSR:

  • provides licensing of 'dealers' (providers of financial products and services);
  • oversees the training of agents representing dealers;
  • sets out the requirements regarding what information must be provided on any financial product to members and prospective members; and
  • sets out the requirements that determine good-conduct and misconduct rules for superannuation funds.

Regulatory bodies

Four main regulatory bodies keep watch over superannuation funds to ensure they comply with the legislation:

  1. The Australian Prudential Regulation Authority (APRA) is responsible for ensuring that superannuation funds behave in a prudent manner. APRA also reviews a fund's annual accounts to assess their compliance with the SIS.
  2. The Australian Securities and Investments Commission (ASIC) ensures that trustees of superannuation funds comply with their obligations regarding the provision of information to fund members during their membership. ASIC is also responsible for consumer protection in the financial services area (including superannuation). It also monitors funds' compliance with the FSR.
  3. The Australian Taxation Office (ATO) ensures that self-managed superannuation funds adhere to the rules and regulations. It also makes sure that the right amount of tax is taken from the superannuation savings of all Australians.
  4. The Superannuation Complaints Tribunal (SCT) administers the Superannuation (Resolution of Complaints) Act. This Act provides the formal process for the resolution of complaints. The SCT will try to resolve any complaints between a member and the superannuation fund by negotiation or conciliation. The SCT only deals with complaints when no satisfactory resolution has been reached.


Changes for self-managed super funds
In the 2011-12 Federal Budget the government announced a range of reforms that would be introduced for self-managed super funds.
Changes to the super guarantee
In the 2010-11 Federal Budget the government announced future changes to the super guarantee.
Deductions for disability benefit premiums
This measure is intended to provide transitional relief to complying superannuation funds for the deduction of insurance premiums for disability superannuation benefits (TPD benefits).
Increase to the self-managed super fund supervisory levy
In the 2011-12 Federal Budget the government announced that for the 2010-11 income year, the annual self-managed super fund (SMSF) supervisory levy will increase.
Increasing the concessional contributions cap
In the 2010-11 Federal Budget the government announced future changes to the super concessional contributions caps.
Minor amendments to superannuation
The government has announced a number of minor amendments to improve the operation of the super system.
Payment of small and insoluble lost member accounts to the Tax Office
From 01 July 2010 the Government will require superannuation providers to transfer small and insoluble lost accounts to unclaimed monies.
Reduction in minimum payment amounts for account-based pensions
The pension drawdown relief has been reduced by 25 per cent for the 2011-12 financial year.
Refund of excess concessional contributions
In the 2011-12 Federal Budget the government announced individuals who breach the concessional contributions cap by $10,000 or less can request that the excess contributions be withdrawn from their super fund and refunded to them.
Reportable employer superannuation contributions
Minister for Financial Services, Superannuation and Corporate Law and the Minister for Human Services, the Honourable Chris Bowen MP, announced that the Government will amend the definition of reportable employer superannuation contributions.
Self-managed super funds investing in collectables and personal use assets
Outline of the changes to SMSFs investing in collectables and personal use assets with links to the relevant legislation and supporting material.
Stronger super
This document summarises the government's response to the Super System Review.
Super co-contribution thresholds
In the 2011-12 Federal Budget the government announced that the freeze of the indexation applied on the co-contribution income thresholds will apply for an additional year.
Super contributions on payslips
In the 2011-12 Federal Budget the government announced employees will be informed of the amount of super they have received on their payslips.
Super contributions tax rebate for low-income earners
In the 2010-11 Federal Budget the government announced a new super contributions tax rebate for low-income earners.
Superannuation - terminal medical condition benefits - deductions for funds
In the 2010-11 Budget the Government announced it would make amendments to extend the range of benefits for which premiums are deductible.
Tax relief for investors in instalment warrants
This measure treats the beneficiary of an instalment warrant trust as the taxpayer for income tax purposes in relation to the underlying asset in the trust.
Three month extension of optional CGT loss rollover for complying super funds
On 3 May 2011, the government announced a three month extension for the optional CGT loss rollover measure.
Transfer of state and territory unclaimed super money to the Commonwealth
The government has introduced a new measure to allow the states and territories to transfer unclaimed super money to the Australian Taxation Office.
Trustee of a self-managed super fund
In the 2011-12 Federal Budget the government announced a minor amendment to the rules of being a trustee of a self-managed super fund (SMSF).
Use of tax file numbers for super purposes
The government has passed legislation that will allow super funds to use tax file numbers to locate members' accounts.

Accessing your super benefits
When you can access your super?

You can access your super when you reach your preservation age and retire, or you turn 65 (even if you haven't retired).The preservation age will increase from 55 to 60 between 2015 and 2025. You may also be able to access your super under the transition to retirement rules.

Accessing your super before retirement

There are very limited circumstances where you can access your super savings early. These circumstances are mainly related to specific medical conditions or severe financial hardship.

Some promoters claim to offer early access to your super savings by transferring your super into a self-managed super fund. These schemes are illegal and heavy penalties apply if you participate. For more information, refer to Beware of promoters offering early access to super.

Temporary residents

If you're a former temporary resident who has left Australia, you can apply to have your Australian super paid out to you.

How tax applies to super and death benefits

How tax applies to your super benefits depends on a number of things, such as your age and whether your super comes from a taxed or untaxed source. The tax treatment of both super and death benefits is also affected by whether the benefits are paid as a lump sum or income stream.

Pensions and other benefits

If your super benefits won't fully support you when you retire, you may qualify for government support, such as age and service pensions or benefits. You may also be eligible to claim certain tax offsets.

Superannuation resources

Superannuation
Choosing a super fund
Many employees are now able to choose the super fund or retirement savings account (RSA) that will receive their super contributions under the superannuation guarantee. This Australian Taxation Office page provides further information for employees.
http://www.ato.gov.au/individuals/content.asp?doc=/content/00105466.htm&pc=001/002/064/002/001&mnu=1101&mfp=001/002&st=&cy=1
Consolidating super funds
How many superannuation statements did you receive this year? Do you find it hard to keep track of your super accounts? Consider combining your small accounts into a single fund.

Stronger super
On 16 December 2010, the government responded to the recommendations made in the super system review. The Stronger Super package will introduce significant changes to the super system which will lead to efficiencies for members and funds.
http://strongersuper.treasury.gov.au/
Super co-contributions
The Australian Government assists eligible individuals to save for their retirement through the Super Co-contribution. If you are eligible and make personal super contributions, the Government will match your contribution with a Super Co-contribution up to certain limits.
http://www.ato.gov.au/super/content.asp?doc=/content/42616.htm
Super System Review
The Review into the Governance, Efficiency, Structure and Operation of Australia's Superannuation System was announced on 29 May 2009. It is focused on achieving an outcome that is in the best interests of members and which maximises retirement incomes for Australians.
http://www.supersystemreview.gov.au/
Superannuation & retirement
Knowing how to get the most out of your superannuation will help you save for your retirement and reduce stress. Includes links to information about how superannuation works, keeping your superannuation on target, consolidating superannuation funds, self-managed superannuation, retirement income planning and calculators and planners.

Superannuation - departing Australia
If you are a former temporary resident, you can claim super benefits you accumulated while working in Australia. To claim the Departing Australia superannuation payment (DASP) you must have visited on an eligible temporary resident visa (which has expired or been cancelled), and permanently departed Australia.

Superannuation essentials
Australian Taxation Office homepage for superannuation. Contains key superannuation information such as reporting and lodgment dates and the Register of Complying Superannuation Funds. Resources and services include online services, calculators and superannuation law.
http://www.ato.gov.au/super/
Superannuation home
Australian Prudential Regulation Authority page listing superannuation funds and approved trustees and retirement savings account providers. It also provides access to information about legislation, type of funds, superannuation fund elections and benefits.
http://www.apra.gov.au/superannuation/
SuperSeeker lost superannuation search
Do you have any lost superannuation? You can use the SuperSeeker tool to look for lost super in real time.

Taxation and superannuation obligations
A business with employees or contractors has tax obligations and must make superannuation payments for eligible employees. This page links to information on determining the status of workers for tax purposes; fringe benefits tax (FBT); pay as you go (PAYG) withholding; pay-roll tax and superannuation.
http://www.business.gov.au/BusinessTopics/Employingpeople/Employerobligations/Taxationandsuperannuationobligations/Pages/default.aspx
Youth - ATO
Australian Taxation Office (ATO) page for young people, with links to information about tax returns, tax file numbers, payments and refunds, and superannuation.
http://www.ato.gov.au/youth/

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