What is superannuation?

Superannuation is a long-term savings arrangement that provides income for retirement and other related purposes (such as advances for housing and income for unemployment).

Members contribute a portion of their income and their employer also makes a contribution.

Over the years, compound interest and other ‘gratuities’ help the amount to increase.

When the member is discharged, they can access the retirement savings in various ways, depending on the type of fund they have.

Difference between the types

The accumulation type is the most commonly used superannuation fund available. Members are paid a large lump sum payment upon retirement.

As at 1 January 2016, all new Fund members contribute under the accumulation scheme.

Read more about the accumulation scheme, including benefits and calculations.

In a defined benefit type, retirement and other benefits are pre-calculated using a formula that considers salary, length of service and age.

Members can receive these payments as a pension or as part-pension, part-lump sum.

Note: As at 1 January 2016, the defined benefit scheme is closed to new members. However, if you are already contributing to this scheme, you will continue to do so.

Read more about the defined benefit scheme, including benefits and calculations.

For more details about superannuation, read the Member Benefit Manual.

Also, contact us at CTSL if you have any questions.