The value of superannuation

Compulsory superannuation was introduced in Australia in the early 1990s with employers contributing 3% of worker's salary into a forced retirement account. This was phased in over a number of years and was initiated in lieu of pay rises at the 3% level moving to 6% and finally the 9% contribution level. This is an untaxed payment, throughout the accumulation phase, the accumulated benefit grows untaxed with the tax liability paid upon withdrawal.

However, as I was employed by a small businesses, they were not obliged to immediately contribute to the scheme. When those lucky enough to work for large companies moved to the 6% level, I was just beginning on the 3% compulsory stage. Likewise, we were not all equal moving from 6% to 9%, this put a large section of the population at a distinct disadvantage in regards to retirement savings.

I tried to sacrifice part of my salary into superannuation post 2000 but was denied the opportunity as the business I worked for stated their payroll was too small to warrant this. Basically, the company I worked for could make extra untaxed payments into my retirement account for my future but they were uninterested in the extra effort.

I gained my first lucky break when I began employment with the state government, this was my first large employer in 20 years of employment. I was able to join the state government scheme where the unit purchase price was well priced and contribution rules were favourable. For those employed a year later, the unit prices were not so generous, contribution rules were much tighter and significantly less restrictive.

I finally have joined a scheme where I have the ability to accumulate a reasonable retirement benefit, I have lost the opportunity to benefit from compounding interest but I have to put the wasted twenty years behind me and just get on with it for remainder of my working life.