5th Nov 2009 by Tobias John Sterling
'Super' is short for 'superannuation', and this is the name given to the government-regulated and compulsory scheme in Australia that is designed to provide an income for people after they retire from work (i.e. a pension).
A super fund is a legal entity that workers can have a superannuation account with. Contributions are made by workers and on behalf of workers throughout their working lives into their superannuation accounts, and the idea is that the balance of their account will then provide them with an income after they retire from work. The money is held on trust by the super funds.
Super funds pool the money that they hold and actively invest it, for example in the stock market, with a view to getting a return. If done successfully, this of course means that account holders will be able to enjoy a larger income in retirement than if the money was simply held in cash.
While most people contribute to large super funds that aggregate member accounts, it's also possible for individuals to set up and run their own self-manged super funds.
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