The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia. Overview of superannuation


This topic covers the following matters:

  • the purpose of superannuation, and
  • how superannuation operates.

Purpose of superannuation

The primary purpose of a superannuation scheme is to provide its members with financial resources and other benefits during their retirement.

Explanation: Other benefits in some schemes include death benefits for surviving dependants and disability benefits.

Extended superannuation coverage, due to award provisions and the SGC legislation, has increased the level of retirement benefits available to Australians. This, together with voluntary savings and the age pension, will fund higher living standards during retirement.

Most Australians in the workforce are now covered by superannuation schemes with membership and contributions that are either:

  • compulsory, through SGC legislation or industrial awards
  • voluntary, both for the employer and employee (1.1.E.87), or
  • a combination of both.

How superannuation operates

To provide eventual retirement benefits, both employer-sponsored and personal superannuation schemes:

  • receive contributions from employers and members
  • manage the invested contributions, and
  • distribute benefits to beneficiaries of the superannuation fund.

The fund's trustee is responsible for implementing an appropriate investment strategy to protect the interests of members while increasing the value of the fund's assets. Depending upon the type of fund, benefits paid on retirement or earlier departure from the fund consist of:

  • a lump sum
  • a pension, or
  • a combination of both.

Act reference: SSAct section 9(1)-'superannuation fund'

Last reviewed: