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The final increase to the superannuation guarantee has taken effect, meaning employers are now required to pay a minimum contribution of 12 per cent into their employees’ super funds.
But around a third of people are unaware where their retirement funds are invested — a similar proportion don’t know their super balance, and one in 10 have never checked.
These were the findings of a survey of 3,146 Australians conducted by the Commonwealth Bank, which suggested the knowledge gap about how super is invested was higher among gen Z and women, at 43 per cent.
Jessica Irvine, the bank’s personal finance expert, said people have more confidence in managing their day-to-day finances, but need more assistance to understand retirement options.

Echoing her views, Wayne Swan, the former federal treasurer who oversaw the legislation guaranteeing the increase from nine to 12 per cent, told SBS News that more needed to be done to engage Australians with their retirement planning.

Swan, now chair of Cbus, an industry super fund, said: “I think that all superannuation funds acknowledge and do their best to achieve [that], and there’s always more that can be done.”

What is happening with superannuation?

Thirty-four years ago, former prime minister Paul Keating shared his vision of an Australian future that included a 12 per cent target for compulsory super contributions.

Now, he said, that system “finally matures”.

The rise of superannuation

The superannuation guarantee has risen since 2012 to reach 12 per cent.

In a statement to mark the 1 July increase to 12 per cent, Keating said it “will guarantee personal super accumulations in excess of $3 million at retirement” for someone entering the workforce today.

“Superannuation, like Medicare, is now an Australian community standard, binding the whole population as a national economic family, with each person having a place,” he said.

How did we get here?

Superannuation in Australia stretches back to the early 20th century, but there were no attempts to institutionalise universal compulsory contributions before the mid-1980s.

In 1985, the Australian Council of Trade Unions, with the support of the then-Hawke government, presented a National Wage Case to the Conciliation and Arbitration Commission about a 3 per cent compulsory contribution for all Australian workers.
The tribunal sided with the union in 1986 but ruled it as optional — subject to agreement between employers and employees.
Five years later, in Keating’s final federal budget as treasurer, the 3 per cent superannuation guarantee levy was made compulsory.
It came into effect the following year, when Keating was prime minister, with the introduction of a superannuation guarantee charge to penalise employers who don’t meet their contribution obligations.
The mandatory rate then gradually increased to 9 per cent by 2002.
It was supposed to reach 12 per cent by 2000, but, under the Howard government, there were no further increases until 1 July 2013.
In 2010, two years after the Global Financial Crisis and in response to the findings of the Henry Tax Review, then-treasurer Swan unveiled a plan to incrementally lift the superannuation guarantee levy to 12 per cent.

He said it would increase by 0.5 per cent each year between 2013 and 2019.

Two men wearing suits are walking in front of the media personnel inside a corridor.

In 2010, then-treasurer Wayne Swan (pictured right) announced a plan to gradually increase the superannuation guarantee levy from 9 per cent to 12 per cent. Source: AAP / Alan Porritt

But two months after it rose to 9.25 per cent in 2013, Tony Abbott stormed to a landslide election victory — and followed through on an election promise to delay increases to the guarantee due to cost pressures on small businesses.

The government failed to legislate the delay the following year, and the rate was lifted to 9.5 per cent — a level it remained at for seven years.
It wasn’t until Australia was in the midst of the COVID-19 pandemic that the incremental increases began.

Starting in 2021, it rose by 0.5 per cent each year.

The 12 per cent milestone
Australia’s superannuation system now manages over $4 trillion in assets, ranking as the fourth-largest pension market in the world.
The 12 per cent milestone is expected to propel Australia to second place within a decade — just behind the United States — despite its relatively small population.
Swan said the superannuation guarantee levy not only delivers a secure retirement for all Australians, but “fundamentally alters the distribution of wealth in our community”.

“It gives access to growth assets to everyone in the community. From a building worker through to a professional in the office tower, everyone in Australia gets to own a piece of the wealth of this great country in a way that’s never before been possible,” he said.

Swan said he’s “absolutely proud to have been part of this story”.
“I always think of those pioneers, particularly the unionists, who fought to establish this scheme 40 years ago. What it really shows is that ordinary working people can effect change in a society like ours,” he said.

“What visionaries they were, and what they have done to make our country not only a bigger and more successful economy, but a fairer one as well.”

What is a ‘comfortable retirement’?
Swan said while the six-year delay in achieving a 12 per cent increase came at a cost to Australian superannuation balances, the benefits are greater from having finally reached that milestone.
“For someone who’s, say, 30 years old now, it’s going to mean an extra $130,000 in their retirement,” he said.
That follows recent modelling by the Association of Superannuation Funds of Australia (ASFA).
The super peak body’s retirement standard for June 2025 projects a 30-year-old today on the median wage of $75,000 and a $30,000 super balance would witness that figure rise to $610,000 by the retirement age of 67.

This amount exceeds ASFA’s estimate of the $595,000 needed to afford a comfortable retirement for singles and $690,000 for couples.

ASFA defines a ‘comfortable’ retirement as someone who owns their home outright, is in good health, can afford top-level private health insurance, has a good car, and engages in a range of leisure and recreational activities, including taking one domestic trip a year and one international trip every seven years.

Business concerns
There are concerns that a string of 1 July changes, including the increase to the superannuation guarantee levy, could hit businesses and place further pressure on cash flow.

Luke Achterstraat, CEO, Council of Small Business Organisations Australia, said: “The increase of the superannuation guarantee comes at a time when award rates have also increased 3.5 per cent, national productivity is in decline, and payroll tax and workers’ compensation insurance will also increase.”

A stack of coins is placed over Australian currency notes.

There are concerns that an increase to the superannuation guarantee levy and other changes that took effect on 1 July could negatively impact small businesses and further pressure their cash flow. Source: AAP

“This puts small businesses between a rock and a hard place, needing to either absorb or pass on these costs to consumers,” Achterstraat said.

Beyond 12 per cent: Where to from here?
The 0.5 per cent increase to 12 per cent is the last one legislated by the Australian government.
However, with life expectancy improving, would we need more in our nest egg, and is there a case for raising the superannuation guarantee even further?
“I think there’s going to be a debate about whether we need to go above 12 per cent,” Swan said.
“I think 12 per cent can certainly guarantee quite a dignified retirement for all Australians, but that will be a discussion that will be had in the years ahead.”
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