Industry Super Australia (ISA) has released its four-point plan which it says it will use to frame debates over superannuation policy during the forthcoming election.
The four most important changes on ISA’s agenda were to bridge the gender super gap, plug a hole in the $5 billion a year unpaid super issue, protect members from joining what it calls “dud funds” and stop future governments from tinkering with the foundations of superannuation.
“Members’ retirement savings are built on the policy foundations of super, these foundations – of compulsion, preservation until retirement and universality – need to be protected,” it said.
It called on any future government to not alter the incoming 12% superannuation guarantee or relax early release of super rules.
ISA chief executive, Bernie Dean, said: “We need to make sure young mums are paid super when they take time off to raise children, get workers’ super paid with their wages and protect them from ending up stuck in a dud fund”.
ISA said too many people were still at risk of retiring into poverty as women retired with 30% less super than men, a gap which was forecasted to last for at least another four decades.
“Not paying super on Commonwealth parental leave contributes to the gender savings gap, this has cost young mums $1.6 billion and will leave a mother of two $14,000 worse off at retirement,” ISA said.
“Super tax concessions are also poorly targeted and further entrench the gender super gap.”
ISA believed the $5 billion a year unpaid super issue needed to be urgently addressed by mandating super be paid at the same time as wages, rather than quarterly.
ISA was urging the major parties to:
- Mandate employers pay their employees super with wages;
- Pay super with the Commonwealth Parental Leave Pay Scheme;
- Review distribution of tax concessions to ensure they helped close the gender super gap;
- Expand the Australian Prudential Regulation Authority (APRA) performance tests to include 10 years of historical fund performance on all fees and products;
- Ban workers from being stapled to a fund that did not pass the annual performance test;
- Legislate super’s objective of generating income to provide workers with a dignified life in retirement;
- Maintain the legislated schedule for increasing the super guarantee to 12% by 2025; and
- Rule out relaxation of existing rules for early release of super and rule out allowing people to opt out of saving for their retirement.