Despite a tsunami of media coverage and an outpouring of community concern culminating in a parliamentary inquiry, Australia’s major banks and their superannuation funds have maintained a chilling silence on the issue of unpaid superannuation, according to Industry Super Australia.
In submissions to the recently concluded Senate inquiry into unpaid super, the Financial Services Council, which represents the big bank-owned super funds, observed that the banks had “a threshold concern in relation to the legitimate role of a superannuation fund in undertaking and investigating potential SG compliance and enforcement activities."
This is despite Industry Super analysis that employers failed to pay an aggregate $5.6 billion in Super Guarantee contributions in 2013/14 costing an estimated 2.6 million employees more than $2,000 each on average in a single year.
ISA chief executive David Whiteley said that the ongoing silence on such an important issue was ‘revealing’ and brought into question the banks’ suitability and legitimacy as providers of default superannuation.
"The banks are running a major lobbying campaign to get their hands on the super nest eggs of millions of Australians, but don’t appear to have any systems or services in place to assist their members recover unpaid super,” said Whiteley.
“Today, unpaid super leaves Australian workers tens of thousands of dollars worse off in retirement. The impact on future generations facing lower home ownership rates and tightened pension access, will be far-reaching”.
"It is inconceivable that a bank-owned superannuation fund could be a workplace default fund and not chase up unpaid super,” he said.
This week the Senate committee recommended that superannuation funds seeking default status in industry awards be required to have a rigorous arrears collection process in place.
The Industry Super analysis of unpaid super draws from a 2013-14 ATO sample file. Employers are required to pay 9.5 per cent in super towards every employee over the age of 18 earning more than $450 (gross) a month
David Whiteley is available for interview. Media contact: Phil Davey 0414 867 188
Industry Super Australia provides policy, research and advocacy on behalf of 15 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of five million Australians.
Industry Super Australia Pty Ltd ABN 72 158 563 270, Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514
*The above material, whilst correct at the time of publication may include references or statements which are no longer current.