CANBERRA, AAP – One of Australia’s largest industry funds has thrown its weight behind calls for superannuation to get to 15 per cent.
The compulsory super levy for employers increased to 10 per cent last week and is legislated to step up to 12 per cent over the next four years, despite a campaign by some government members to block the rise.
Cbus chief executive Justin Arter told the first parliamentary hearing for superannuation industry this year that 12 per cent was the aim but 15 per cent would be better.
The $63 billion fund’s My Super option has made almost 20 per cent for members in 2020/21, its largest ever annual return, and Cbus was one of a handful of funds making a positive return the previous year.
The fund manages the savings of many contractors who experience insecure work and who are more likely to have work-related injuries and be forced into early retirement.
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The average balance of its members is modest, just $137,000 at retirement.
Australia’s largest superannuation fund, Australian Super was coy about a larger rise.
“We’ve got a major challenge, I expect, to get to 12 per cent,” chief executive Ian Silk told the economics committee.
Chair Tim Wilson wants super savings unlocked to allow young people to buy a home.
Mr Arter rejected Mr Wilson’s assertion a rising levy would come at the expense of wage growth.
Aware Super, representing many nurses, paramedics and emergency workers, is also focused on locking in 12 per cent.
Getting to that level would increase members’ retirement balances by $80,000 to $100,000.
The Australian Council of Trade Unions wants new laws to lift super to 15 per cent.
It is also calling for women to get there sooner to grow what tend to be their more modest nest eggs.
Cbus and Aware Super said insurance was essential protection through superannuation, particularly for workers in hazardous industries who would otherwise find it too expensive.
Laws passed last month will attach a worker to one super product to stop the fee drain from unintended multiple accounts when people change jobs.
Funds remain concerned workers will end up underinsured if they unwittingly keep old insurance in a more dangerous new job.
Treasury is reviewing exclusions in insurance but the stapling is set to commence on November 1.