One of my favourite mantras is the importance of taking an active interest in our super, and new research highlights a pressing need to keep an eye on your nest egg.
A recent study commissioned by several industry bodies reveals a worryingly high level of non-payment of compulsory super contributions.
Those are the super contributions your boss is required to pay into your fund if you are aged 18 and over and earn at least $450 (before tax) in salary or wages in a calendar month. If you are aged under 18 years, you’ll need to work more than 30 hours per week and earn at least $450 in before-tax salary or wages each month for compulsory super to apply.
If you meet these conditions it doesn’t matter if you work casually, part-time or full-time. You are still entitled to employer super contributions set at 9.5% of your base wage or salary. Remember, these contributions are not taken out of your pay – they are made in addition to your regular pay.
As a guide to the scale of non-payment of super, around 650,000 Australian workers are collectively shortchanged to the tune of $2.5 billion annually. The average unpaid super contributions amount to $3,750 for each of these workers, and it turns out the construction and building industry is hugely overrepresented when it comes to unpaid super.
At present, employers are required to include super contributions on staff pay slips. But it is up to individual employees to check that these contributions have actually reached their fund.
Missing out on super contributions hurts the retirement savings of all workers though younger people, who are considerably further out from retirement, are impacted more heavily by unpaid super. The national superannuation body – the Association of Superannuation Funds of Australia (ASFA) estimates that for a 25 year old, missing out the average unpaid contributions of $3,750 in just one year could mean having $13,500 less in their nest egg by the time they hang up their work boots.
Employers are required to pay contributions into your superannuation account at least quarterly, and as the most recent payment deadline was 28 October, it is worth checking your account over the next few days to see if the boss paid your contribution. Many funds allow online access to your account, which makes it easy to keep tabs on your super.
The vast majority of employers do the right thing and regularly pay their staff super contributions. Nonetheless, if it looks as though a contribution hasn’t been paid to your account speak to your employer. I realise this can be a difficult conversation but it’s a fair bet you’d have no hesitation approaching the boss if your normal wage was unpaid.
If you get no joy from your employer, you can ask the Tax Office to chase the matter up. For the steps involved, visit the Tax Office website at www.ato.gov.au, click on ‘Individuals’ followed by ‘Super’ and follow the links to ‘Compulsory employer contributions’.