Australians losing out on AUD10bn in superannuation savings, report finds
An estimated 2.3 million Australian workers are missing out on some AUD10bn (€6.4bn) in superannuation each year as a result of the rise of the gig economy and the shift to casual employment, according to a new study.
The study was commissioned by AustralianSuper and Cbus Super, which have a combined membership of almost three million and assets of some AUD173bn.
It said that without action, the number of workers missing out will rise to 3.1 million – one in five workers – by 2027 and AUD23bn yearly in contributions will be lost.
Those missing out on Australia’s universal superannuation levy of 9.5% were employed in the ‘gig’ economy and ‘non-traditional’ work environments, according to the study.
In this changing world of employment, technology had made it easier to segment work into smaller parcels, with employees often falling outside the scope of superannuation.
Women especially were penalised by the current model, being more likely to participate in part-time or casual work that increasingly came in the form of a contractor rather than employee relationship.
“Abolition of the $450 threshold could help up to one million Australian workers boost their superannuation savings”
Rose Kerlin, AustralianSuper group executive, membership
The study said women – particularly those in part-time work - were also overwhelmingly caught by an outdated provision that restricted superannuation payments to individual jobs paying more than AUD450 per month.
The problem was large enough to undermine the success of Australia’s retirement income system and required an urgent response from policy-makers, regulators and the industry, the report said.
Rose Kerlin, AustralianSuper group executive, membership, called for reform, including abolition of the AUD450 threshold, to ensure the superannuation system kept pace with the changing nature of work in the economy.
“AustralianSuper believes that, without meaningful reform, the superannuation system will leave vulnerable workers behind when it comes to retirement,” she said.
“Abolition of the $450 threshold could help up to one million Australian workers boost their superannuation savings.”
Cbus chief executive officer David Atkin said that in the construction industry – for which Cbus is the leading industry superannuation fund – transient contract work, casualisation and self-employment were not new, but were increasing and affecting people’s retirement savings.
“Not surprisingly, the construction industry features prominently in the research around those not receiving compulsory super contributions, with an estimated gap of nearly $2 billion a year affecting the retirement savings of nearly 350,000 people,” Atkin said.
“After 25 years of compulsory superannuation in Australia, it is clear that there is a large and growing number of Australians not sufficiently saving for their retirement.
“It’s time for industry, regulators, policy-makers, employers and unions to come together to discuss solutions.”