Industry Super Australia (ISA) is campaigning against laws that cost Australians millions in lost super interest.
Analysis of Australian Tax Office (ATO) data in 2015 revealed that laws allowing employers to pay super quarterly rather than fortnightly have cost Aussie workers around $225 million in interest.
ISA found that around 2.3 million workers aged 20-29 collectively missed out on $35 million in interest in 2015 alone, while 1.9 million aged 40-49 missed out on $55 million, and 1.6 million aged 50-59 missed out on $50 million.
This represents around $12,475 by retirement for a full-time worker aged between 20 and 67 years old.
Super payments can be withheld by employers for up to four months at a time, which ISA chief executive Bernie Dean said, “highlights the absurdity of continuing with laws that allow superannuation entitlements to be withheld for up to four months”.
“We’ve welcomed any and all efforts to improve compliance, but it won’t change the fact that some employers will go on using the payment hiatus for business cash flow,” said Mr Dean.
“Essentially, workers are subsiding businesses at the expense of their retirement savings.
“Every penny counts in retirement, and this interest could be the difference between having enough and going without. It’s not fair, and the rules must change,” said Mr Dean.
A recent ISA poll found that 70 per cent of Australian workers are unaware that even though their payslips show super contributions on a weekly or fortnightly basis, those super payments weren’t actually made.
ISA has called on parliament to align superannuation payments with wage payments, as per a Senate Committee recommendation in 2017.
Were you aware that your super payments weren’t being paid in line with your wages? How much super would you have missed out on?