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Pro rata super model will help failing system
A pro rata model of compulsory superannuation contributions would address the super system that is failing young people, Vision Super and the John Curtin Research Centre believe.
In an upcoming joint report, the organisations said the pro rata model would address the disappearance of traditional nine-to-five jobs and the emergence of the “gig economy”.
The John Curtin Research Centre’s executive director, Dr Nick Dyrenfurth, pointed out that a third of young people were missing out on super contributions because they did not reach the $450 threshold from a single employer.
“In decades to come, if a third of the workplace has no retirement savings, it will have a massive impact on the Age Pension,” he said.
Vision Super chief executive, Stephen Rowe, said the super system was failing young people as work had changed since the system was designed.
“There is a growing problem that will require sophisticated, bipartisan public policy solutions to prevent millions of Australians falling through the cracks,” Rowe said.
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Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”.
The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members.
Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financial year, but an economist has warned that the rally may be harder to sustain as key risks gather pace.
AustralianSuper has reported a 9.52 per cent return for its Balanced super option for the 2024–25 financial year, as markets delivered another year of strong performance despite the complex investing environment.
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