Fund trustees should step in to mitigate unpaid super: IFS
Early intervention by superannuation fund trustees is critical to addressing unpaid super, Industry Fund Services (IFS) believes.
Pointing to data by the Australian Taxation Office (ATO) that found Australian workers had been underpaid $17.1 billion in compulsory super entitlements from 2009 to 2015, IFS said 90 per cent of employers with unpaid super employed 10 or fewer fund members.
The tax audit also found that small-to-medium businesses in the construction, retail, food services, and accommodation sectors were the worst offenders.
IFS chief executive, Cath Bowtell said: “Most employers do not set out to fall behind with super payments, and most cases are resolved, without recourse to litigation”.
Bowtell said that often the fund trustee was the first to know that a payment was missed.
“The earlier the super fund trustees act to recover unpaid super, the more likely the debt will be paid with a simple phone call,” she said.
IFS said this was apparently in insolvency cases, where the age and size of the debt was smaller for members of funds with an active arrears process compared to those with a less robust process.
IFS also welcomed the Government’s changes to give the ATO greater power to crack down on non-compliant employers.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
