A boost for your super from the Gillard Government

07 July 2010

AWU members can expect to have bigger, better retirement savings if the Federal Government can get planned big changes passed by Parliament.

The Gillard Government has reacted strongly and positively to plans to improve the standard of retirement that working people can expect, after receiving two big reviews of our national taxation and superannuation policies.

Key changes

The key changes they want to see introduced are designed to help union members improve their retirement packages:

•  9% to 12% Super Guarantee (SG) contributions 
• Your employer pays Super Guarantee until you are 75 years old.
• Receive an extra 15 per cent of your SG on top of normal SG payments if you earn less than $37,000 up to a maximum of $500.
• Government co-contribution to continue at the current level for two years.
• $50,000 before-tax contribution limit for over 50’s with less than $500,000 in super.

Important first step to 15% union goal

Many AWU members are already receiving well over the legal minimum for their superannuation accounts, thanks to union campaigns for better enterprise agreements, in some workplaces the guaranteed super paid by employers is still only the minimum 9 per cent.

 While our union has argued for a long time that the minimum payments into our super savings should be 15 per cent we’ve welcomed, as an important first step, the fact that the Federal Government is now moving to increase that legal minimum to 12 per cent.

Workers score big lump sum increases at time of retirement

According to the Super Funds Association chief executive, Pauline Vamos, “a person 30 today, earning $50,000 a year and with a current super account balance of $23,000, their lump sum on retirement will increase from $300,000 to $385,000 with the move to 12 percent SG”.

 AustralianSuper, an ‘all profits to members’ industry fund that many AWU members belong to, working with Rice Warner Actuaries, have calculated that for a 35 year old male with annual salary of $100,000 and $80,000 account balance, retiring at age 67, the person’s retirement balance would increase by $96,207 as a result of the increase to 12 per cent SG.

 On top of these big dollar increases in our super savings the Treasury Department in Canberra  has predicted that other changes to improve super industry efficiencies could raise our retirement balance by an extra  $40,000, on average.

Helping workers get reunited with their lost super

Australian workers could also be reunited with $13.6 billion in lost retirement savings, about $1000 a person, under the planned  superannuation revolution.

A small and simple reforms by the Gillard Government will see  a worker's tax file number matched to their super accounts.This would stop Australians losing track of their nest eggs when they switch jobs.

The $13.6 billion in lost super equals about $1000 for every person in the system and that's money that people have actually worked for, but they're not going to retire on

Gillard government needs to get the tick off in Parliament for these changes

 Unfortunately as it stands, many people will now retire without an adequate retirement income and be dependent on the Age Pension, particularly as so we all now expect to live long lives well after we stop working.

 If the Gillard government can get the tick off for these changes in Parliament then the bigger retirement savings proposed will allow all Australians to maintain quality of life in retirement.

 If you would like to learn more about how to maximise your super savings or the proposed changes, please visit the  Australian Super website