Workers losing out on $2.6 billion superannuation a year
Article by Roisin Kelly-Goldsmith
Workers lost an estimated $2.6 billion in 2013 due to employers failing to pay superannuation accounts, revealed a report by the Construction and Building Industry Super.
These figures arrived just after new superannuation laws passed late last week that reduced penalties for employers who do not comply with paying the correct superannuation for their staff.
“Recent legislation by the Government that reduces penalties for employers’ who fail to make super contributions on behalf of their employees are a step in the wrong direction,” David Atkin, Cbus CEO said in the report.
According to the research conducted by Tria Investment Partners for Cbus, the construction industry is most affected by non-complying employers, as well as property services, mining, hospitality and manufacturing.
“Non-payment of superannuation contributions has a big impact on employees with lost retirement savings today having a compounding effect magnifying the losses over time,” Atkin said.
Employers are required by law to pay a minimum of 9.5% of ordinary time earnings for each eligible employee, according to the Australian Taxation Office. This minimum amount is called the “super guarantee”.
But the findings by Cbus showed a risk of $44 billion being lost in the next 10 years through non-compliance.
Atkin said the vast majority of employers Cbus deals with does the right thing and pays employees entitlements, but the government should be keeping a closer eye on employers.
“We need to ensure the rules are being enforced,” he said.
Want to grow your nest egg? Visit our term deposit section to compare some of the best deals available now.