Industry demanding change

The Federal Government and some major superannuation industry organisations may have misjudged their constituencies by abandoning policy proposals that would see an eventual lifting in the superannuation guarantee beyond the present 9 per cent.

The latest IUS/Super Review survey, conducted by independent economic consultancy firm Classical Economic Analysis, has revealed a strong belief in the superannuation sector that people should be encouraged to build on their retirement savings by both ‘soft compulsion’ and by an increase in the level of the superannuation guarantee.

The survey stated that the major political parties had abandoned proposals to lift the superannuation guarantee above the existing level of 9 per cent and asked respondents whether this was wise.

In a somewhat surprising result, 79.5 per cent of respondents said they did not believe it was wise to leave the superannuation guarantee at 9 per cent, while 20.5 per cent thought it was appropriate.

On the somewhat more complex question of ‘soft compulsion’, the survey pointed out that some industry organisations were recommending ‘soft compulsion’ in lieu of increasing the superannuation guarantee. It then asked whether they would support a system that saw 1.5 per cent of any pay rise paid into superannuation unless a person specifically opted out.

The survey found 84.4 per cent of respondents favoured ‘soft compulsion’, while just 15.6 per cent were opposed.

Commenting on the outcome of the survey, a spokesman for Classical Economic Analysis said the result appeared to reflect a strong belief on the part of superannuation and investment industry professionals that more needed to be done to assist people in lifting their superannuation savings.

He said the strong support for ‘soft compulsion’ probably reflected the fact that most respondents believed increasing the superannuation guarantee, while desirable, was no longer regarded as politically expedient.