Superannuation pensions are not heavily taxed with the intention of encouraging increased contribution from the employee and employer. This also increases the amount of the potential payout at the end of the term.
With average age expectancy rising and workforce in a country expanding, superannuation pensions become essential for optimal financial planning and asset management. Superannuation pension policies are different in every country, but the objective of providing a steady income in life after employment remains the same.
In the US, the Social Security Administration is by far the most prominent provider of superannuation pensions. The pensions here are funded by contributions from both employer and employees. The accumulated pension funds become prime investment capital for various financial instruments. The laws that regulate the tax liability of a superannuation pension fund have been reduced. Taxes on the interest are deferred till the withdrawal of the funds from the account upon retirement.
Superannuation pensions in Australia are paid through employment related contributions. The Australian superannuation scheme is employer funded and the deposits to the pension fund account are regulated by the government. Employers are entitled to pay up to 9% of the employer’s earnings into the retirement fund.