Wages and super should be aligned: Cbus

Cbus is calling on the Federal Government to align the payment of workers' superannuation with the payment of wages.

The industry super fund claims the quarterly payment cycle for the superannuation guarantee creates a significant risk of non-compliance and increases opportunities for payments to be missed.

"The most effective solution to the growing problem of unpaid superannuation is to try and prevent it happening in the first place," Cbus chair Steve Bracks said in his submission to the Senate inquiry into unpaid superannuation.

"Paying superannuation at the same time as wages is a key part of the answer."

Cbus found that non-compliance with superannuation guarantee payments had four main sources, including employer non-compliance, the rise of the cash economy, sham contracting and employer insolvency. Late last year, Cbus and Industry Super Australia released a report which estimated Australians were missing $3.6 billion in superannuation each year.

A recent survey of Cbus member also found 14.7% reported experiencing a problem with unpaid superannuation and only 60% of members were confident their super had been paid. More than a third of those who had experienced unpaid super reported that their issue had not been resolved.

Cbus also called for the current loophole that allows salary sacrifice to be counted towards superannuation guarantee compliance to be closed.

"We appreciate that superannuation can be complex for employers and for employees; however, given the tools available, we do not believe there is any compelling reason super cannot be paid at the same time as wages," Bracks added.

"The impact of missing superannuation can be dramatic on individuals and the wider community with lost tax revenue and increased reliance on the age pension. We all lose from unpaid super."

Cbus also called for the current loophole that allows salary sacrifice to be counted towards superannuation guarantee compliance to be closed.

The Senate Economics Committee is holding hearings in Melbourne today into unpaid superannuation and will be making recommendations on how to improve the system.

Read more: CbusFederal GovernmentAustraliansIndustry Super AustraliaMelbourneSenate Economics CommitteeSteve Bracks
Editor's Choice
EMMA RAPAPORT
Industry super thought leaders have urged the sector to harness the power of the collective and collaborate more closely on problem solving to ensure longevity and continued member engagement.
ALEX BURKE
Citi is expanding its wealth management business with four new hires.
ALEX BURKE
ASIC's investigation into CommInsure found no evidence of claims managers applying pressure on medical staff to change assessments, although the regulator said claims handling fell short of community expectations.
KARREN VERGARA
AZ Sestante, a subsidiary of Italian wealth management firm Azimut Holdings, recently entered the Australian market by launching three new funds on the Colonial First State platform.
Videos
Brought to you by
31 JAN 2017
Achieving the 7% return targeted by most pension funds is a far more complex and riskier process than it was 10 years ago, according to State Street Global Advisors' head of investments for Asia-Pacific ...
Get it Daily
Keep up to date, don't be the last to know! Get the Financial Standard Daily Newsletter.
SUBSCRIBE
Products
Pocket investment guides featuring adviser case studies and a glossary.
Investing trends and strategies from the industry’s thought leaders.
Putting the spotlight on investment products that matter.
Expert Feed
Christopher Page
FS ADVICE
A new era
After years of back and forth, the legislation to increase the professional standards of financial advisers has been passed. The new ...
Stephen Fay
FS SUPER
Starting at the insurance base camp with focus on value
Insurance can be a complex beast, but in a period where its reputation may be strained it is all the more important to talk of some ...
Christopher Page
FS PRIVATE WEALTH
Redefining the family office
While the family office model has traditionally been the preserve of the ultra-rich, this may be changing very soon. Last week, Findex ...
Michelle Baltazar
FS MANAGED ACCOUNTS
Like rocket fuel to a Spaceship
When a superannuation fund calls itself a Spaceship and nobody bats an eyelid, you know you're entering a new era in retirement investing. Spaceship's ...
Featured Profile
Professional Subscription for $295
(inc GST) for 1 year.
SUBSCRIBE
OTHER PUBLICATIONS
FS Advice
The Australian Journal of Financial Planning.
Get the free iPad app
Download the Financial Standard iPad app for FREE.
DOWNLOAD
Link to something r37lTWin