More than a third of Australian businesses believe the current superannuation system should be overhauled to better serve emerging and future generations of workers, according to new research by Mercer.
A Mercer survey of 80 businesses, in partnership with leading social demographer and futurist Bernard Salt, found 36 per cent did not believe the super system was suitably structured for the future workforce, with a further 56 per cent acknowledging the system needed “adjustment”.
Surveyed businesses also believe the government and super funds are failing to engage young workers, with more than half finding that workers under the age of 30 years did not consider superannuation as important.
Mercer CEO Ben Walsh said it was time to reassess an “outdated” Superannuation Guarantee system to ensure it was “future fit” for a modern workforce.
“Today’s workplace is no longer recognisable from the workplace of 1992, which was predominantly nine to five Monday to Friday, with full-time positions largely held by men. Wide-ranging changes driven by the adoption of technology and automation have revolutionised businesses’ needs and how employees choose to work,” Mr Walsh said.
“A savings scheme structured 28 years ago to reward a lifetime of uninterrupted employment with one firm no longer reflects the trend towards casualisation and contract work, and the job flexibility increasingly being demanded by emerging generations.’’
Almost all businesses expected the workplace transformation to continue, with 49 per cent predicting the work space would be “extremely” different in 30 years’ time.
Demand for more flexible working arrangements, including flexible hours, working remotely and job sharing, more staff turnover and shorter job tenure were among the major trends identified by businesses in the Mercer report, Keating’s super meets the digital natives: The next generation of super.
Other significant findings in the next 30 years include:
Speaking at today’s Sydney launch of the report, Mr Walsh said the findings were further evidence that the super system required a major review.
“We know the current system doesn’t work well for women taking career breaks or working reduced hours, or for contractors and those reliant on the growing gig economy. If we don’t act now, more and more employees will be left out of pocket when they will need their money the most,” he said.
Leading social demographer and futurist Bernard Salt, who collaborated with Mercer on the report, said the time was right time to re-examine the super system to ensure it was "still on track" to deliver to its original charter.
"The nature of work has changed, as has the gender mix, the ethnic mix and the technology skills of the workforce. And yet, throughout these profound changes, the essence of superannuation has not changed substantially,” Salt said.
“Superannuation of the future needs to be portable both within Australian workplaces, and even globally. It needs to be ‘pauseable’ so that women, and men, can come into and out of the workforce as they deem appropriate to their life choices. The next generation of super needs to reflect the agility, the diversity, the globalness, the lifestyle choices of Australians today, that indeed the workplace now recognises.”
Go to mercer.com.au/NextGenSuper to download Keating’s super meets the digital natives.
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Mercer delivers advice and technology-driven solutions that help organisations meet the health, wealth and career needs of a changing workforce. Across the Pacific, organisations look to Mercer for global insights, thought leadership and product innovation to help transform and grow their businesses.
Mercer’s more than 23,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With more than 65,000 colleagues and annual revenue over $14 billion, through its market-leading companies including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com.au