How superannuation works

During your working life, your employer will make mandatory super contributions (known as Super Guarantee Contributions or SGC) to your superannuation. These contributions, as well as any voluntary contributions you may make, are invested in your Accumulation account. Your super funds will generally only be accessible once you meet a 'condition of release' (usually around the time of your retirement).

For many, super will become the main source of income once they stop working. That's why it's important to make sure your Accumulation account is on track from as early as possible.

To encourage you to invest in your retirement throughout your working life, super has been set up as a tax-effective environment. Investment earnings within your super account are taxed up to 15% and tax on your super contributions may be lower than your income tax rate.

Thinking about slowing your work life down but not quite ready to retire? Once you've reached your preservation age, you can choose to ease into retirement by opening an NGS Transition to retirement account. This account allows you to access part of your super as income payments. Many people use this option to reduce their work days while supplementing their income using super.

Your preservation age depends on your date of birth as set out in the table below:

If you are aged 60 or older, in most cases, your TTR income payments will be tax free. For those aged 55-59, your marginal tax rate will apply to the taxable portion of your TTR income payments; however, you will receive a 15% tax offset.

Each financial year, you can access up to a maximum of 10% of your Transition to retirement account balance. More details can be found in our Retirement PDS.

For many people, adjusting to life in retirement is much easier to manage if they continue to receive a steady income. Once you’re eligible, you can set up an income stream through super by opening an Income account. By choosing to move your Accumulation or Transition to retirement account into an Income account:

• you have the flexibility to choose how often and how much you receive as an income
• your money remains invested and gaining earnings
• you gain access to two more investment options
• you benefit from tax-free income payments and investment earnings (unless you’re aged under 60).

In order to open an Income account, you'll need to meet a 'condition of release', for example:

• you have reached your preservation age (based on your date of birth as set out in the table below), ceased employment and permanently retired from the workforce
• you're at least 60 years of age and have ceased a gainful employment arrangement, even if not permanently retired
• you're at least 65 years old.

For more information on our Income account, read our Retirement PDS.