How super works

Let’s take a look at an overview of what superannuation is and how it works.

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What is super?

At its simplest, super is a form of savings. While some people think of it as a tax, it's not. Super is an ongoing way to save for the future.

Types of super funds

CSC has three types of super funds—accumulation funds, defined benefit funds, and hybrid funds (i.e. a mix of accumulation and defined benefit). Generally speaking, the date you join CSC will determine which product(s) you can access. Find out about the eligibility criteria for each of our funds and products.

Here’s an overview of the difference between accumulation and defined benefits super funds — we’ve saved you some of the technical details. If you want the nitty gritty, you can get all the information in our Product Disclosure Statements.

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Contributions

It's important that you continue to build your retirement savings while you are working, this is why employers are required by law to contribute a percentage of your income to your super. This money is then pooled and invested with the contributions of other members.

How super is invested

Superannuation funds generally operate as trusts, with trustees being responsible for the operation of their funds and in formulating and implementing an investment strategy. CSC spends a lot of time selecting the right type and amount of different investments we believe will deliver a return for an acceptable level of risk—that is, the expected target return compensates for the likelihood of losing money.

When money (contribution) goes into your super account, what you're actually doing is buying units in the fund, which is somewhat similar to buying and owning shares in companies listed on the stock market. You buy shares in a company and over time, the value of those shares may go up or down, but you still have the same number of shares in that company.

With superannuation, your superannuation amounts purchase units in a particular investment option or options—such as the Aggressive or Balanced options.

Like shares, a unit represents the value of an interest in that investment option at any point in time. Also, like shares, the value of an interest in that investment option can go up and down over time.

Depending on your investment option, investments may include cash, shares in companies, government or corporate bonds, property, and infrastructure.

The net asset value of those investments are then divided by the number of units issued to members like you to derive the unit price.

Over time, as contributions are made to your account, you purchase more and more units in your investment option or options.

The value of those units generally change on a daily basis as the value of investments change. When you hear about changes in the market, this just means that the value of the units may have changed. You still hold the same number of units.

Like any other investment, super is subject to the risk of investment loss. However, as super is usually invested until your retirement date, and beyond, we focus on high quality assets that are expected to grow in the longer-term, even though there may be short-term drops in value due to market fluctuations.

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Super and tax

Since super is a form of income, it’s taxed by the Australian Government. Generally, super can be taxed when making contributions, on your investment earnings and when accessing it in retirement.

Learn more about Super and tax

Super is with you for the big events in life—like job changes or unexpected circumstances—and in your day-to-day living—like knowing you are covered by insurance.

It’s important to understand what super means for you—how it can help you achieve your goals and support you throughout life’s ups and downs.

Add to your super

Beyond what your employer contributes for you, you may want to add more money to your super through your own contributions. This could be before your income is taxed, called ‘salary sacrificing’, or after. You might also be eligible for some government contributions. Visit ato.gov.au for more information on what government contributions are available and their eligibility criteria.

Boost your super

Combine your super

If you have multiple super funds, you can combine them. Having only one super account can mean less paperwork and reduced fees, which can make a big difference to your total balance when you retire.

Find and combine your super

Employers are required by law to contribute a percentage of your income directly to your super. Most Australian Public Service (APS) employers pay 15.4% and the Australian Defence Force (ADF) pays 16.4%, which is more than the 11% super guarantee most Australians receive.

However, different super funds and employers may have different contribution rates.

Commonwealth Superannuation Corporation (CSC) looks after super funds designed specifically for Australian Government and Defence Force employees. With over 30 years’ experience, you can count on us to help you navigate the world of super, but ultimately you are in control of your super.

As a not-for-profit, we focus on achieving your goals rather than worrying about delivering profits to shareholders. We invest your money using strategies designed to work for your benefit. Our focus is always on delivering the best long-term results for your future.

We know super can be hard to understand, and we’re dedicated to ensuring you’re not left in the dark. We have a range of advisors, events and tools to help you find your way, wherever life takes you.

We’re your guide.

Why CSC

You benefit from our award-winning investment strategy, a century of experience, and products designed for members just like you.

Read more about Why CSC

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Video resources

Learn more about how you can manage and maximise your superannuation with our recorded webinars.

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We can help you to maximise your super through strategic contributions and better retirement planning.

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