Construction industry fund Cbus has called on the government, the Australian Taxation Office and the superannuation sector to arrest the growth in non-payment of superannuation entitlements to workers.
Cbus has released a new report produced on its behalf by industry consultant Tria Investment Partners that shows $2.6 million is missing from Australians' superannuation accounts due to non-payment of super guarantee (SG) payments in 2013.
Tria identified a yearly growth pattern of five per cent per annum in estimated SG losses due to non-payment, affecting 690,000 Australians (almost seven per cent of the workforce), who lose an average of $3,800 per annum in SG contributions.
Despite the impression that failing companies are largely to blame for the non-payment of SG monies, Tria found that solvent employers failing to meet their SG contributions are the biggest contributor to SG losses.
The construction industry is most affected by non-compliance with SG payments, with other affected industries including property services, mining, hospitality and manufacturing.
Cbus chief executive David Atkin said the findings of the report, which estimate that $44 billion could be lost in retirement savings over the next decade due to the problem, highlight the need for government, industry and the ATO to ramp up their compliance activities.
"The federal government needs to legislate for tougher penalties and increase the level of resources provided to the ATO and other regulators so we can tackle the problem more effectively," Mr Atkin said.
“Recent legislation by the government that reduces penalties for employers who fail to make super contributions on behalf of their employees are a step in the wrong direction."
Mr Atkin said Cbus has worked hard to improve compliance in the construction industry, with the fund recovering "well over $400 million" in members' superannuation entitlements over the last 10 years.
"The vast majority of the employers we deal with do the right thing and pay their employees' entitlements," he said.
"They agree that it is unconscionable that a number of employers think it's okay to game the system and use their employees deferred wages as business cash flow, setting up an unfair advantage.
"There are a myriad of things we can do today to upgrade the system through technology, but as a minimum we should now move payment of superannuation to align with wages; we should better equip and resource our regulators; and we need to assist both employees and employers in understanding their rights and obligations," he said.
MLC Life Insurance has been appointed as Maritime Super’s new group insurer following an extensive tender process. ...
The Australian Institute of Superannuation Trustees have called on the incoming government to develop an online tool to help Australians mak...
AMP is planning to reduce its superannuation products and investment options as part of its bid to regain customer trust post-royal commissi...