Investment and Superannuation Saving / Investment Saving Essay

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What is superannuation?
Superannuation is a regular payment made into a fund by an employee towards a future pension.
Advantages of Superannuation Saving/Investment
Saving –

Employer and salary-sacrificed contributions are generally taxed at 15%. If you earn $37,000 or less the tax you have paid on your super contributions will be automatically added back into your super account through the Low-income super contribution.
Personal after-tax contributions and those received under the government’s co-contribution scheme are not taxed.
When money is transferred from one super fund to another when consolidating or switching funds, no additional tax is payable.

Investment -
You have experts doing the hard work for you.
There are many superannuation funds to choose from.
For many superannuation funds, you can set up regular savings programme and make lump-sum payments.
Your resources are pooled with other investors, allowing you to make investments impossible for an individual investor.
It helps you to easily diversify your investments.
You get the benefits of greater economies of scale, such as reduced transaction costs.
Having your savings locked for a predefined period may be an attractive benefit for those people who may be tempted to "dip" into their retirement fund.

The obligations of the employers to employees in relation to superannuation-

The obligations that employers must consider towards their employers consist of various rules. The employer must make super contributions for an employee if they are considered an employer for super guarantee purposes. An employee over the age of 18 or is working 30+ hours per week is entitled for a super. The superannuation guarantee applies to full time and part time employees. It may be considered for casuals.
Currently, the employer must pay a minimum of 9.5% of the eligible employee’s ordinary time earnings each quarter in their super. The government has made it clear that the rate will remain at 9.5% until June 30 2018. From there it will then increase by .5% points each year until it reaches a whopping 12%.
If your super hasn’t been paid, it is recommended you:
1. Know the award covering your employment
2. To Check if these extra terms about super
3. Check a pay slip to see if it mentions anything about you super payment
4. Talk to the employer if you have any concerns
5. Contact your super fund to find out whether a payment is made.
You superannuation has to be paid at least every 3 months into the employees superannuation account.

The disadvantages of superannuation funds are:
: INVESTMENT-

The majority of your savings will be locked for a predefined period
The funds will be tax inefficient for those on a marginal
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