Emulate industry funds on SG pursuit says former planner
A recently-retired financial planner believes retail superannuation fund administrators need to follow the example of the industry funds that are leading the way in protecting the interests of members whose employers are not paying their superannuation guarantee obligations.
Wiseman said the long-term adverse impact and damage to the personal retirement benefits of employees where employers failed in their obligations to send the contributions to the designated superannuation funds was immense.
Putting the scale of the problem into context, Wiseman said around $200 million in unpaid superannuation guarantee contributions had proven unrecoverable by the Australian Taxation Office.
"Approximately 9,000 underpayments or non-payment of workers super are pursued each year by the ATO and sadly about 2,000 will be lost as a result of the employer being insolvent or it is uneconomic to pursue the businesses," he said.
He said the issue was not as simple as lost superannuation contribution, because there was a danger that insurance policies could also be lost — something which represented a significant risk to young families.
"The cover is likely to be lost fully and/or the future insurability risk for many that may have been insured under the automatic cover advantages that the super fund provided and may not be offered at the next place of employment," he said.
Wiseman said that if account balances were small and contributions were not being paid, the insurance premiums would be taken from the account balance and in many cases the balance would be depleted even more.
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