Superannuation

It’s a fancy name for what’s otherwise referred to as a pension plan. Companies will set up these programs in order to provide money for their employees in retirement.

Contributions are invested, allowing the funds to grow over time. Meanwhile, the government provides tax advantages, allowing for further growth over time. This way, relatively small contributions can provide enough cash to pay out everyone’s benefits once they hit their golden years.

In theory, anyway. Pension plans don’t always end up adequately funded. If returns are less than expected, or retirements happen earlier than expected, or if contributions fall behind, the pension plan can end up with a shortfall.