ARTICLE · 15 JULY 2022

Difference between accumulation and defined benefit super funds

Hall Payne Lawyers

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Discusses the 2 primary types of funds & the differences between them.

AustraliaEmployment and HR

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Most Australian workers have a superannuation fund into which monthly or quarterly deposits are made by their employer as well as the option for contributions to be made by the worker themselves. There are two primary types of funds; defined benefit funds and accumulation funds. This article looks at the differences between these types of funds.

What's the purpose of superannuation?

The main purpose of a superannuation fund is to build a pool of savings for retirement.

Employers need to make super guarantee payments (a legislated percentage of the employee's wages) and some employers will also offer higher contributions as part of a salary package, employment contract or enterprise agreement. You should seek legal advice if your employer is not meeting its statutory requirements in relation to super guarantee payments. You can learn more about this in our blog, "My employer hasn't been paying my superannuation guarantee".

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