One in 11 working Australians slip through super crack

“It wasn’t until I started my third job in Australia that I was asked about where to pay my super, and I said, ‘what is this super?’ I had never heard of it before.”

Meet Deepak, just one of Australia’s 935,350 “Unsupered” workers who is not saving for their retirement through superannuation from their employer or voluntary contributions.

In Mercer’s groundbreaking report, ‘Australia’s Unsupered’, we reveal that close to one million working Australians earning more than $8,000 per annum are not making or receiving any super contributions at all. That’s one in 11 working Australians who are slipping through the cracks in our superannuation system.

WHO ARE AUSTRALIA’S UNSUPERED?

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Using ATO data, Australia’s Unsupered highlights a widespread issue across all industries and age spectrums – from low-income earners to the wealthy, from casual staff to full-timers, and from blue collar workers to those in professional services. The report also contradicts the notion that younger workers who may work in less secure conditions comprise a large proposition of the Unsupered. For example, more than 90,000 of the Unsupered are aged under 25 years, and more than 127,000 are aged between 60 and 69 years old.

It is of particular concern that of the one million working Australians with no super contributions, 43 per cent are salaried employees who are eligible for the minimum 9.5 per cent Superannuation Guarantee. This result clearly suggests that there are some employers who are not doing the right thing.

STAMPING OUT THE PROBLEM

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.

Mercer’s Australia’s Unsupered recommends that superannuation funds do more to educate employees about their entitlements, as well as developing products that accommodate a wider variety of work styles to encourage dormant super members back into the super system. 

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