The superannuation industry should focus on assisting members in setting an appropriate level of contributions rather than what the level of super guarantee (SG) should be, QMV believes.
QMV legal partner, Jonathan Steffanoni, said the industry needed to set an appropriate level of contributions based on member’s living expenses, projected future income, and goals for retirement.
“Many Australians assume that government calculated minimum level of savings must be enough. Giving individuals the ability to opt out can promote greater interest and involvement, which can also result in personally aligned decisions around the right level of contributions from savings for retirement,” he said.
Steffanoni pointed to the UK’s extended coverage of default employer and employee contributions to most of the workforce where contributions had risen from 3% to 8% of salary, with opt out rates remaining relatively low.
He also noted the UK’s ‘Pensions Dashboard’ that provided an online platform to view of all pension benefits and entitlements, which could be beneficial to the Australian super system.
“The UK Pensions Dashboard will include detail of any government pension entitlements that an individual has, in addition to any occupational pensions,” he said.
“Obtaining access to information about government benefits and entitlements in a standard and secure format has been an ongoing challenge for superannuation trustees and financial planners in providing technology-enabled personal financial advice, so there are very possibly lessons to be learnt here.”