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SG non-compliance a $2.5b problem
There needs to be greater cooperation between superannuation funds and the Australian Taxation Office (ATO) in dealing with instances of employer non-payment of superannuation guarantee (SG) contributions, according to new research.
The research has also confirmed that it could be many years before most super fund members see a result from the pursuit of the lost superannuation, with members taking up to two years to report perceived non-compliance, and the ATO taking between two and four years to actually take action.
The research, conducted by Tria Partners with contributions from the Association of Superannuation Funds of Australia, has pointed to SG non-compliance as being a $2.5 billion problem which needs to be addressed in a cooperative fashion.
And the reason why the research points to greater cooperation on the part of superannuation funds is that it has concluded that funds have a greater incentive to pursue SG non-compliance because recovered funds are remitted to them rather than the ATO.
What is more, the research has found that most (53 per cent) superannuation fund members look first to their super funds to pursue recovery of unpaid SG contributions compared to the 43 per cent who look to the ATO.
The research found that the industry in which SG non-compliance was most prevalent was construction, with other industries with elevated non-compliance including property services, mining, hospitality, and manufacturing.
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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.
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