16 October 2015
Aussies losing $2.75bn in compulsory super payments each year: ASFA
$2.75 billion each year is lost through non-payment of superannuation by employers, affecting more than 650,000 Australians, according to estimates from the Association of Superannuation Funds of Australia (ASFA).
The average person affected loses nearly $4,000 per annum in superannuation, or around 9 months’ worth of super for someone on average weekly earnings.
The loss of superannuation impacts more heavily on younger Australians, who are not only missing out on the immediate amount but also its potential growth over the years until retirement. Also affected are lower-income earners who will be reliant on their superannuation savings to supplement the Age Pension in retirement.
“It is really important that Australians of all ages keep track of their super and ensure that they are being paid the compulsory 9.5 per cent Superannuation Guarantee (SG) that they are entitled to,” said Pauline Vamos, CEO, ASFA.
“Estimates show that for a 25 year old, a one-off loss of $4,000 in super could equate to a loss of over $14,000 at retirement in today’s dollars. Australians who are facing more vulnerable circumstances and broken work patterns may endure multiple losses throughout their working life.”
“It is important to know what you are entitled to when it comes to SG so you are not missing out on a large sum in retirement.”
If you think you are not receiving the SG you are entitled to, here are Super Guru‘s steps for getting back on track:
Notes to editor
In October 2014 research commissioned by Cbus, AustralianSuper and REST on Superannuation Guarantee non-compliance was released. That research was primarily conducted by the research house Tria Partners with significant input from ASFA.
It found that in 2012 the non-payment of superannuation by employers affected around 650,000 Australian workers, leaving them collectively out of pocket by almost $2.5 billion annually, around 4 per cent of the total SG contributions made in that year. The report also estimated that the average person affected lost around $3,750 per annum in superannuation.
In September 2015, ASFA revised these figures to include growth in the number of employees and contractors eligible for SG payments, along with growth in average wages. ASFA also took into account the increase in minimum SG contribution to 9.5 per cent (since 1 July 2014).
Accordingly, the estimated current annual non-payment of superannuation obligations by employers is likely to be around $2.75 billion a year and the average loss per person affected approximately $4,000.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation, which aims to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.