Maximising your super

For many Australians, the two biggest assets we acquire in our lifetime are our home and our superannuation. That’s why it’s important to make sure you’re making the most of your superannuation savings. To do this you really need to understand the type of scheme you’re in and the different rules which apply.

Understand your scheme

There are two main types of superannuation schemes operating in Australia. The first is an accumulation fund and the second is called a defined benefit scheme.

• Accumulation style schemes operate much like your bank account. You have your own superannuation account into which you make pre tax and/or after tax contributions. Your employer may also be making Superannuation Guarantee contributions (SGC) into this account. The fund earns interest, charges and taxes are deducted and at the end of the day the balance of that account is yours.

• Defined benefit schemes are different. The final benefit, which could be paid as a lump sum and/or a pension, is calculated using a formula. Each defined scheme tends to have its own unique formula, which may consider issues such as the employer’s and employee’s contributions, years of service and final salary. Determining which type of scheme applies to your superannuation is very important.  If you’re a member of a defined benefit scheme, you need to have an understanding of how your benefit will be calculated to ensure you’re making the most of your superannuation.  

Deferred benefit members

If you're a member of the:

• State Superannuation Scheme (SSS), 
• State Authorities Superannuation Scheme (SASS), 
• Police Superannuation Scheme (Police),
• Commonwealth Superannuation Scheme (CSS); or the
• Public Sector Superannuation Scheme (PSS).

and leave the public sector, you have the option to retain your superannuation benefit within your scheme until you reach retirement age.

Retaining your benefits within the scheme is called 'preserving' or 'deferring' your benefit. It generally means that you can keep your accrued benefit rights and receive a larger employer financed benefit. Each defined benefit scheme has different issues for deferred members to consider. To find out more give your financial planning team a call on 1800 620 305.

Related links:

For State members
For Commonwealth members