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The golden number that super associations are dreaming of

Superannuation, paid workers, savings, money

Three superannuation bodies have agreed that the superannuation paid to workers should be raised to 12 per cent sooner rather than later and are pushing the government to do so.

The Australian Institute of Superannuation Trustees (AIST), Women in Super and the SMSF Association have all claimed that workers should be paid at least 12 per cent in superannuation, rather than the current 9.5 per cent.

As it stands, legislation mandates that an increase of the super guarantee (SG) from 9.5 per cent to 12 per cent will occur in 2025. However, the SMSF Association put to Treasury that this date is too far into the future.

In a pre-18/19 budget submission, the SMSF Association said: “We believe the government should recommit to increasing the SG rate from 9.5 per cent to 12 per cent and do so with a faster timetable than currently legislated.”


The association urged the government to consider increasing the SG two years ahead of schedule, with 0.5 per cent increases occurring from 1 July 2019 until the 12 per cent benchmark is reached on 1 July 2023.

It continued: “For most people, saving for retirement through contributions to superannuation is not a priority in earlier stages of their life. Increasing the SG rate will assist people contributing enough to superannuation throughout their life to have adequate retirement savings. 

“A higher SG rate, increasing from 9.5 per cent to 12 per cent will also assist those with broken work patterns to have higher superannuation balances when they retire.”

The SMSF Association noted the large gap between the amount required for a comfortable retirement and the actual amount most people save, arguing that this gap is another reason to raise the SG amount.

CEO at the SMSF Association, John Maroney added that the increase to 12 per cent should be “supplemented by reforms which allow individuals to choose which superannuation fund they want to receive their SG contributions and to prevent unscrupulous employers from using loopholes to avoid paying their full SG entitlements”.

The AIST, together with Women in Super put to Treasury that an increase in the SG to 12 per cent should occur as of July 2022, a year earlier than the SMSF Association’s goal. They claimed that this could be achieved by increasing the SG by 0.5 per cent at the onset of every financial year beginning with 2018-19.

Women in Super explained: “The current 9.5 per cent SG will not enable most women to accrue sufficient savings for a comfortable retirement even under a mature retirement income system or after a working lifetime of compulsory super.

“For the majority of women – and a substantial number of men – pressures on family finances at the low to middle income level make it extremely difficult to take up existing voluntary contribution schemes. For many Australians the main and often only method of saving for retirement is through employer-based SG payments.”

The advocacy group argued that an increase in the SG would aid all Australians in enjoying a “dignified retirement”.

Noting that earlier legislation had a goal for the SG to reach 12 per cent upon the 2019-20 financial year, the AIST said changes to the schedule in 2014 were a “major setback” to the superannuation system’s long-term objective. 

Continuing, the AIST warned: “Delays to the SG timetable will also create more fiscal pressure on future governments in relation to age pension funding.”


The golden number that super associations are dreaming of
Superannuation, paid workers, savings, money
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