Industry Super Australia (ISA) has continued its campaign for superannuation to be paid more frequently, saying that Australians are missing out on around $225 million in interest yearly because of the current quarterly payment requirements.
An analysis of Australian Tax Office (ATO) by the advocacy group founds that around 2.3 million workers aged 20-29 collectively missed out on $35 million in interest for their super balances in 2015, 1.9 million aged 40- 49 missed out on $55 million, and 1.6 million aged 50-59 missed out on $50 million.
For a person working full time on average wages from 20 to 67 years old, this would represent $12,475 by retirement.
Furthermore, recent polling by ISA found that 70 per cent of workers were unaware that the superannuation payments on their pay slips didn’t mean those payments had been made, with many employers waiting the full three months before payments.
“We’ve welcomed any and all efforts to improve compliance, but it won’t change the fact that some employers will go on using the payment hiatus for business cash flow,” ISA chief executive, Bernie Dean, said.
“Essentially, workers are subsiding businesses at the expense of their retirement savings … It’s not fair, and the rules must change.”
ISA had been calling for the Government to require superannuation payments be aligned with wage payments, reflecting a recommendation from a Senate Committee in 2017.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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