Reforms to Super helping Australians make the most of their super
Research released today by Minister for Financial Services and Superannuation Bill Shorten, shows broad support for the super system, but many people continue to find it a difficult topic to understand.
“With over $1 trillion currently invested in Australian super and $20 billion in lost super it’s vital that all Australians have confidence that the super system is working in their best interests – regardless of their level of engagement with their super,” Minister Shorten said.
“Reforms to super announced by the Gillard Government will make it easier for Australians to be re‑united with their lost super so they make the most of their savings for the future. The reforms will also help to ensure that these savings are protected.”
Key research findings showed that:
- People’s level of interest with their super varies depending on how old they are, how financially literate they are and the amount of superannuation they have saved;
- the majority of people across all age groups were not confident they would have enough superannuation to retire and live comfortably on; and
- overall, employers believe that super is beneficial to their employees and the general Australian population to reduce the reliance on the pension.
The Government is taking steps to protect and grow the savings of all Australians and give people the confidence that the super system is working in their best interests.
We are doing this by:
- increasing the Superannuation Guarantee rate from 9%-12% benefitting 8.4 million Australian workers;
- abolishing the age limit for Superannuation Guarantee, meaning no matter what your age if you are working, you will get super;
- providing an extra superannuation contribution for 3.6 million Australians who are earning up to $37,000, which includes a lot of part time workers as well as low income earners.
- making it easier for people to see all their super accounts (active, inactive and lost) in the one place and consolidate this money with a simple online form;
- giving employees certainty by requiring their superannuation information to be on every payslip;
- introducing a simple, low cost MySuper product so people only pay for what they need; and
- introducing greater efficiencies to reduce overhead costs for super funds, resulting in lower fees for fund members.
For individuals the central focus of these reforms is to help improve retirement incomes by removing unnecessary complexities and ensuring that the system operates in the best interest of its members.
“These reforms will save members $2.7 billion a year in fees and will mean in excess of an extra $100, 000 in super savings at retirement, for a 30 year old worker on average full-time earnings (earning $65,000) today.”
“The Government is also making it easier for Australians to be reunited with their lost super so they make the most of their savings for the future.
Recent enhancements to the online tool SuperSeeker will make it much easier for people to keep track of their super.
By logging into a secure system people will be able to see details of their active accounts, as well as any lost super and super that the Australian Taxation Office (ATO) holds on their behalf.
The process for consolidating lost super has also been improved with a simple online form that can be accessed through SuperSeeker.
For employers the Government remains committed to working with them on how to implement the reforms. In particular it has been consulting with small business around the need to help with the transition to a modern, efficient super system with common electronic standards.
Businesses with less than 20 employees can also take advantage of the free small business super clearing house designed to reduce red tape and compliance costs associated with meeting their super guarantee obligations. Businesses can register for the service by visiting www.medicareaustralia.gov.au/super or phoning Medicare Australia on 1300 660 048.
The research reports are available by visiting the ATO website