Removal of $450 super threshold to boost retirement savings
19 June 2017
David Atkin, Chief Executive Officer of Cbus, the industry super fund for the construction and building industry said the Federal Government should support the proposal by Senators from both parties to remove the income threshold for compulsory superannuation contributions.
“The current threshold that exempts contributions for incomes below $450 per month is unfair on workers who have multiple part-time or casual jobs.
“Australia has the third highest rate of part-time employment in the Organisation for Economic Cooperation and Development (OECD) and many of these workers miss superannuation contributions because they fall below the income threshold.
“This has a big impact on their final retirement income and ensures a greater reliance on the age pension in retirement.
“The change proposed by the Senate Economics Committee will have a positive impact for workers and help reduce government expenditure in the future.
“The nature of superannuation means that even modest contributions today can build up over time to a sizable superannuation balance when you retire.
“For example, $1,000 invested over 20 years ago in the Cbus Growth Fund would have grown to $4,415# today.
“We encourage the Government to look carefully at this measure along with other steps to ensure workers receive their superannuation entitlements.
“The Senate Committee has also recommended aligning super payments with wages to avoid non-payment by employers - this would also ensure workers receive their valid entitlements,” Mr Atkin said.
“These requirements are legacy pieces from the introduction of superannuation and are a straightforward easy fix that the Government can make today.”
Media contact: Carla De Campo 0410 579 575
* SuperRatings is a ratings agency that collects information from superannuation funds to enable performance comparisons.
# Based on return for Cbus Growth (Cbus MySuper) 20 years to 30 June 2016 @ 7.71% per annum. Return is net of investment cost, ongoing trustee operating costs and investment earnings tax only. Return does not include deduction of insurance premiums, account keeping fees or contribution tax. Past performance is not a good indicator of future performance.