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. For the most of us, our tax burden reduces during retirement, a 15% tax rate is fair and reasonable. 

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. Getting out of that old school private superannuation was the best move I made despite the fines involved.