Survey backs SG increases

Respondents in Financial Standard's latest spot poll have welcomed the pending increases to the Superannuation Guarantee beyond 9.5%.

The majority (79%) of respondents support the legislated incremental increases to the SG starting from 1 July 2021, in which the minimum percentage employers must contribute to an employee's ordinary time earnings will go from 9.5% to 10%.

The rate will gradually increase over one-year intervals on: 1 July 2022 (10.5%), 1 July 2023 (11%) and 1 July 2024 (11.5%). From 1 July 2025 and beyond, the SG will hit 12%.

A minority (13%) of readers polled disagreed, believing the minimum rate should stay as is.

The Grattan Institute reignited the debate of the benefits of increasing the SG, claiming that after crunching the numbers middle-income earners would end up poorer over their entire lifetime.

Raising the SG from 9.5% to 12% would see a 30-year-old worker fork out $30,000, Grattan found.

Industry associations were quick to debunk the calculations.

Industry Super Australia said the institute is contradicting itself when it recently released research claiming increasing the SG to 12% would not ease the burden on the Age Pension.

Now, Grattan is claiming that an increase will leave workers poorer because it will reduce the amount they are entitled to through the pension, ISA said.

Mercer commented that Grattan's assertions were founded on flawed assumptions, including that all Australians will work until the future pension eligibility age of 67.

Financial Standard's newest poll asks: How are you currently providing downside protection in your clients' portfolios?

Read more: Financial StandardSuperannuation GuaranteeGrattan InstituteAge PensionIndustry Super AustraliaMercer
Link to something DMpdP7AI