A pension program which is a compulsory element for the employers to pay some extra amount to their employees on the basis of some proportion of their salaries during their retirement is known as superannuation fund. The superannuation Guarantee system was a major compulsory package for different Australia’s retirement policies. Not only in Australia but also other western nations are looking forward to increase the payments for pensions which will ultimately result into less strain on the Australian economy. The Australian government had proposed a three pillar solution for the retirement scheme such as:
Different tested means by the government for the pension system.
Some sort of private savings must be created through compulsory contributions towards the superannuation system.
Various forms of voluntary savings through other investments as well as through superannuation.
The change had come into Superannuation guarantee system when there is a tripartite agreement between the government, employers as well as trade unions too. The trade unions were agreed for 3% national pay increase which could be implemented into the superannuation system for all employees of Australia. On behalf of the employees most of the employers will make important contributions to the superannuation system. The contribution from the employers has been set to 3% of the employee’s income and it will eventually increase by the Australian government in the coming future too. Since July 2002, the minimum contribution was set to 9% of total employees’ income .This rate of interest is not payable at overtime rates but are payable on some remuneration items such as bonuses, commissions, shift as well as casual loadings too.
Even the Howard government had criticized the former Prime Minister Paul Keating who was reluctant to increase towards the compulsory art of superannuation. The Australian people have invested their more money in some managed funds as compared to other economy. At least in every three months the employers have to pay contributions for the employees at 9% rate of interest in superannuation funds. These contributions are normally invested during the employees working life for the sum of earnings and the whole of the money is paid to the employees whenever they choose the option of retirement. In the end the total money will composed of compulsory employer contributions. You must know that there are some special rules which are to be applied from the employers’ side for providing the benefit arrangements for the employees.