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Mercer finds $4bn hole in super system

Mercer finds $4bn hole in super system

Reporter
— 1 minute read

A new report has identified almost 400,000 Australian salaried workers are not receiving any superannuation entitlements.

Mercer’s Australia’s Unsupered report released today reveals 397,900 workers eligible for the compulsory 9.5 per cent superannuation guarantee did not receive any super payments over a 12-month period.

According to 2016 Australian Taxation Office data, close to one million workers earning more than $8,000 were not saving for their retirement, representing a $4 billion hole in annual super savings and a potential $145 billion deficit across their working life.

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The Mercer report found that 43 per cent of these “unsupered” workers were salaried staff eligible for the 9.5 per cent compulsory superannuation guarantee paid by employers, while the remaining 57 per cent were self-employed. 

One employee featured in the report discovered the super contributions on her pay slip had never been paid into her fund, while another only discovered he had missed out on years’ of compulsory super entitlements when alerted by a new employer.

Mercer Australia industry fund and public sector leader Jo-Anne Bloch said the report highlighted major problems with the compulsory superannuation scheme, saying that it had failed to keep pace with the changing workplace and enforce legislation requiring employers to pay workers their legal entitlements.

“Our data analysis highlights a widespread issue costing Australian workers across all industries billions in lost retirement savings, and shines a light on unscrupulous employers who aren’t doing the right thing by their staff by withholding their legal entitlements,” Ms Bloch said.

While a recent ATO-led crackdown on non-compliant employers would go some way to solving the issue of missed super payments, Ms Bloch said superannuation funds could help to stamp out the problem through more regular contact with members.

“An employee seeing super contributions on their pay slip isn’t necessarily going to check their super fund balance on a weekly or monthly basis, but they would check if they suddenly received an email from their fund to verify that contributions had ceased,” she said.

According to the ATO figures, 935,350 Australians were unsupered; a third of them had no super savings and 49 per cent had less than $6,000.

 

Mercer finds $4bn hole in super system
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