Almost 400,000 Australian salaried workers have not been paid any superannuation entitlements, a new report uncovers.
Mercer’s ‘Australia’s Unsupered’ report reveals 397,900 workers eligible for the compulsory 9.5 per cent superannuation guarantee did not receive any super payments over a 12-month period.
Using official 2016 Australian Taxation Office data close to one million workers earning more than $8,000 were not saving for their retirement, representing a $4 billion hole in annual super savings and a potential $145 billion deficit across their working life.
Alarmingly, 43 per cent of these “unsupered” workers were salaried staff eligible for the 9.5 per cent compulsory superannuation guarantee paid by employers, while the remaining 57 per cent were self-employed.
One employee featured in Australia’s Unsupereddiscovered the super contributions on her pay slip had never been paid into her fund, while another only discovered he had missed out on years’ of compulsory super entitlements when alerted by a new employer.
Mercer Australia Industry Fund and Public Sector Leader Jo-Anne Bloch said the report highlighted major problems with the compulsory superannuation scheme, saying that it had failed to keep pace with the changing workplace and enforce legislation requiring employers to pay workers their legal entitlements.
“Our data analysis highlights a widespread issue costing Australian workers across all industries billions in lost retirement savings, and shines a light on unscrupulous employers who aren’t doing the right thing by their staff by withholding their legal entitlements,” Ms Bloch said.
While a recent ATO-led crackdown on non-compliant employers would go some way to solving the issue of missed super payments, Ms Bloch said superannuation funds could help to stamp out the problem through more regular contact with members.
“An employee seeing super contributions on their pay slip isn’t necessarily going to check their super fund balance on a weekly or monthly basis, but they would check if they suddenly received an email from their fund to verify that contributions had ceased,” she said.
According to the ATO figures:
- 935,350 Australians were unsupered;
- One-third of the unsupered had no super savings and 49 per cent had less than $6000;
- Two-thirds earned between $8000 and $40,000 annually;
- 21 per cent were managers, 15 per cent technicians and trade workers, and 13 per cent were clerical and administrative workers;
- Projecting ahead to retirement, the unsupered will miss out on a potential $145 billion in super savings, with the self-employed taking the biggest hit ($80 billion)
Australia’s Unsupered recommends that superannuation funds do more to educate employees about their entitlements, as well as developing products that accommodate a wider variety of work styles to encourage dormant super members back into the super system.
Go to mercer.com.au to download Australia’s Unsupered.
For more information or to arrange interviews, contact Alison McClelland from Lahra Carey Media & Communications on 0421057246 or email firstname.lastname@example.org
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.