POWERED BY MOMENTUM MEDIA
ASFA, IFSA welcome super opt-out strategy
A voluntary opt-out additional super savings scheme recommended by a Federal Parliamentary Committee has been lauded by superannuation industry bodies the Association of Superannuation Funds of Australia (ASFA) and the Investment and Financial Services Association (IFSA).
The current default situation for new employees sees their superannuation contribution fixed at 9 per cent of their wages, unless they specify a higher amount.
A report by the House of Representatives Economics Committee has suggested that individuals commencing employment be placed in a voluntary contribution that adds 3 per cent of their wage onto the current 9 per cent Superannuation Guarantee contribution, bringing the total contribution to 12 per cent.
ASFA welcomed the proposal, citing US-based research that shows the success of such ‘soft-compulsion’ options, where employees voluntarily commit a part of their annual wage rise to their retirement plan.
According to Philippa Smith, chief executive officer of ASFA, encouraging such changes to individuals’ savings behaviour is particularly important in light of super changes proposed in the recent Budget.
“Importantly, it would signal to individuals, particularly younger workers, that the norm for saving for retirement should be 12 per cent of wages, not 9 per cent as currently set by the Super Guarantee,” she said. “[It] has great merit in that it would change savings behaviour, but importantly, it is not compulsory if individuals or families have other cash flow needs or priorities.”
IFSA also demonstrated its support for the proposal. “Overall, this inquiry has been a very productive consultation exercise and IFSA welcomes the Committee’s findings,” said Richard Gilbert, chief executive officer of IFSA. “Additional contributions of between 3-5 per cent on top of the compulsory 9 per cent Super Guarantee means that [young Australians] are far more likely to reach independent means in retirement.”
AUTHOR
Mike Taylor
Recommended for you
Following the roundtable, the Treasurer said the government plans to review the superannuation performance test, stressing that the review does not signal its abolition.
The Australian Prudential Regulation Authority (APRA) has placed superannuation front and centre in its 2025-26 corporate plan, signalling a period of intensified scrutiny over fund expenditure, governance and member outcomes.
Australian Retirement Trust (ART) has become a substantial shareholder in Tabcorp, taking a stake of just over 5 per cent in the gaming and wagering company.
AustralianSuper CEO Paul Schroder has said the fund will stay globally diversified but could tip more money into Australia if governments speed up decisions and provide clearer, long-term settings – warning any mandated local investment quota would be “a disaster”.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
