Compulsory superannuation in Australia started in 1992 with the introduction of the Superannuation Guarantee (SG) legislation. This law required employers to make compulsory contributions of 3-4% of their employees' wages into a superannuation fund. This system was introduced by the government led by Prime Minister Paul Keating and marked a significant step in ensuring retirement savings for most Australian workers.
Background and Development
- Superannuation as a concept existed in Australia in various forms since the early 1900s, with some employer-based super funds starting as early as the mid-19th century.
- Before compulsory super, coverage was limited largely to public servants and white-collar workers, with only about 32% of the workforce covered by superannuation in the mid-1970s.
- The 1980s saw union and government bargaining to expand coverage and introduce employer contributions that would become compulsory.
The Superannuation Guarantee Act 1992
- The SG Act mandated employer contributions starting at 3%, with higher rates for larger payrolls.
- The contribution rate was gradually increased over the years to the current rate of 9.5% (as of 2014).
- The system ensured broader workforce coverage and helped build a funded retirement savings system to supplement the Age Pension.
Thus, compulsory superannuation in its modern, legally mandated form began in 1992 in Australia.
