Unpaid super would cost workers tens of thousands of dollars as people who are about to retire and are short changed on their superannuation entitlements will have nest eggs much lower than those who were paid correctly, according to the Industry Super Australia (ISA).
The research found that, on average and across all ages and salaries, people whose super had been underpaid would have their balances $19,709 or 47 per cent lower than those who had received it.
According to ISA, this situation would have huge implications for policy makers as it indicated that retirees with lower balances would have to rely more on the Age Pension in the future.
ISA public affairs director, Matt Linden, noted that the impacts were far reaching and the processes and enforcement around unpaid superannuation guarantee (SG) needed to be strengthened.
“It’s unacceptable that some employers are deliberately dodging their super obligations but it is disturbing that compliance systems are allowing it to go unchecked year after year,” he said.
“The disparity in super balances suggests that while unpaid SG is more likely to occur at a younger age, it persists over many years compounding with devastating later life effects.”
Under Australian law, employers are required to contribute 9.5 per cent in superannuation towards every worker over age 18 earning more than $450 (gross) a month.
