And it all began in NSW.

Superannuation in Australia has evolved over more than a century, transforming from an exclusive benefit for public servants and wealthy individuals into a universal retirement savings system.

The concept of superannuation in Australia can be traced back to the 19th century when some government employees were provided pensions upon retirement. The first formal superannuation schemes were introduced for Public Sector workers in the late 1800s. In 1900, the NSW government established a pension scheme for state employees, setting a precedent for other states and the federal government.

During the early 20th century, superannuation remained largely restricted to white-collar professionals, particularly those in government and large corporations. Most private-sector employees did not have access to retirement benefits and relied on personal savings or government pensions.

The introduction of the age pension in 1909 was a significant milestone in Australia’s retirement income system. It was a means-tested payment funded by general taxation.
After World War II, superannuation schemes expanded within the public sector and certain private industries, such as banking and manufacturing. However, these schemes were largely voluntary and often required substantial personal contributions, limiting accessibility for lower-income workers.

By the late 20th century, concerns grew over Australia’s ageing population and the sustainability of the government-funded pension system. Trade unions, particularly the Australian Council of Trade Unions (ACTU), campaigned for a broader superannuation system to ensure workers had adequate retirement savings.

In the early 1980s, under the leadership of Prime Minister Bob Hawke and Treasurer Paul Keating, the Federal Government began negotiating with unions and employers to introduce superannuation as part of industrial awards. In 1985, the Accord between the government and unions led to the introduction of award-based superannuation, which required employers to make superannuation contributions as part of workers’ employment conditions. This arrangement covered only certain sectors and remained limited in scope.

In 1992 the Keating Government introduced the Superannuation Guarantee. This legislation made it compulsory for employers to contribute a percentage of their employees’ earnings into a superannuation fund. Initially set at 3 per cent, the contribution rate gradually increased over time.

This was a landmark policy that shifted responsibility for retirement savings from the government to individuals and employers. It aimed to reduce reliance on the age pension and ensure Australians could maintain their standard of living in retirement. The system was designed to be universal, covering nearly all employees.

In 2005, the introduction of choice-of-fund legislation allowed employees to select their superannuation provider rather than being restricted to employer-nominated funds. This reform increased competition among super funds, leading to better services and lower fees.

The past decade has seen further reforms to improve the sustainability and effectiveness of the superannuation system. In 2012, the Gillard Government legislated a gradual increase in the Superannuation Guarantee rate from
9 per cent to 12 per cent, set to be reached in 2025.