Superannuation is designed to earn interest by investing. Super also helps pay for insurance and advice to keep you on track for a decent retirement.
Super should be paid on top of every dollar you earn and should be paid each pay day. At present, it’s paid on most, but not all earnings.
Super should be paid
- to all under 18s, irrespective of the number of hours they work. The average under-18 worker could see their super balance boosted by almost $10,000 (in today’s dollars) by the time they retire if super was paid when they were 16 and 17 years of age.
- on parental leave, to reduce the gender super gap and help women retire better off. Here we have had a WIN – from 1 July 2025, super will be paid on top of the government paid parental leave. Unfortunately, super is not paid on other forms of leave that are often taken by women and are working to change that.
- with appropriate tax rates for low-income workers – the Low-Income Superannuation Tax Offset (LISTO) should keep up with marginal tax rates. The top of the second tax bracket is now $45,000 per year, and so too should the LISTO be $45,000.
- by the Fair Entitlements Guarantee if a company goes bust. Today the Fair Entitlement Guarantee will pay the lost wages but not the associated superannuation. This too should be changed.
Retirement for retail, warehousing and fast-food workers is better today because of guaranteed superannuation. Older workers from our industries would have no nest egg at all without super. And it’s important that it make good returns. Profit to member super funds (Industry Funds) have both unions and employers on their boards, and this means that workers are represented in the decisions about their super.
This union and employer governance model works! In 2023, Profit-to-member ‘MySuper’ products outperformed benchmarks by $18 billion. Rest, the super fund for retail workers, had its default option return 11.19% in the year ending December 2024. It has delivered 8.34% since it began on 1 July 1988. In 2024, the REST Sustainable Growth option returned 14.08%.
In addition to good returns, super also pays for insurance. Insurance can give you peace of mind and protection if something unexpected happens. In the case of REST, it offers default insurance that includes death and total and permanent disability cover and is one of the few super funds to also offer default income protection.
If the cover isn’t enough to meet your needs, you can top it up. If you don’t want the default level – or any cover at all – that’s OK too. You can opt out. As a general rule, those under 25 or who have less than $6,000 in super, will need to opt in. For others, you’ll get it automatically – through a ‘default’. The great thing about default insurance is that you don’t have to undergo health and other checks; premiums are lower because it’s a group buying the insurance not just you and the insurers are well practiced at supporting workers back to work – and back to earning super for their retirement.
And if you need help and assistance, your super also helps with advice and information. The government is working on “Delivering Better Financial Outcomes” reforms and the SDA hopes that will make it easier to get affordable, accessible, clear and easy-to-understand financial advice.
By Gerard Dwyer,
SDA National Secretary