Mandatory Super Contributions What Should It Be?

Trying2SaveABuck on 04/07/2022 - 23:11
Last edited 04/07/2022 - 23:13

Mandatory Superannuation was introduced in 1992 it was set at 3 percent which was incredibly low.

on July 1 2022 it has ticked over to 10.5 percent and will be slowly increased to 12 percent by July 2025.

as super 'crept' 9 percent it started to do what it was intended to do and that is reduce the amount of people drawing an aged pension
https://www.aihw.gov.au/reports/australias-welfare/age-pensi…

according to this in 2002 there was around 74 percent of retirees drawing some kind of aged pension and this has been slowly trending down to the low 60 percent region in 2021

Superannuation is 'working' it is reducing the burden on the aged welfare system - ill be honest i was not a 'believer' in super initially but when looking into it the data the numbers support super and more of it seems be to better.

We have an aging population this could be one way to best ensure we all have a retirement that doesn't burden the social welfare system. I understand not everyone likes superannuation but it is completing its intended role and i personally think he should be higher perhaps as high as 20 percent maybe more….

what do you think mandatory superannuation should be at there is a poll below, select the close option to your opinion.

Poll Options

  • 12
    0%
  • 6
    <10%
  • 5
    12%
  • 87
    15%
  • 9
    20%
  • 16
    >20%
Financial Superannuation

Comments

  • jv on 04/07/2022 - 23:16
    +1

    Mandatory Super Contributions What Should It Be?

    10.5%

    • KangaDrew on 05/07/2022 - 00:12
      +5

      10.5%

      *FTFY

      • SF3 on 05/07/2022 - 00:47
        +3

        jv might be serious when text isn't bold.

  • jizmo on 04/07/2022 - 23:22
    -2

    Bob Hawke's book claims Paul Keating called Australia the "arse end"of the world, in the development of the ABC's Labor in Power series and in several conversations around the time of his demise as PM, Hawke alleged Keating had described Australia as the "arsehole" of the world.
    Labor being Labor I guess

    • Trying2SaveABuck on 04/07/2022 - 23:25
      +16

      im trying to work out what this has to do with super i dont really understand am i missing something

      • jizmo on 04/07/2022 - 23:26

        your history. thats where it came from

    • Headless on 05/07/2022 - 11:33
      +1

      lol, so true in reality compared to so many countries

  • Hybroid on 04/07/2022 - 23:24
    +1

    It can be whatever it wants as long as employers continue to happily pay it on top of salary which they do currently. They've even committed to paying the extra 0.5% increase themselves, so I'm not fussed. Nice nest egg accumulating for future with no real impact on me.

    • singlemalt72 on 05/07/2022 - 09:49
      +1

      My employer is taking this 0.5% increase from our annual wage increase, just as they did for the last one.

      • Hybroid on 05/07/2022 - 10:04
        +1

        Ah that's not great. We got this message:-

        As you would most likely be aware, the Federal Government has confirmed a staged increase in superannuation rates over a five year period.

        I am pleased to confirm that we will again be covering the 0.5% superannuation increase, bringing our employer superannuation contribution to 10.5%. This increase is on top of your current base salary and will therefore be an increase in your total salary package including superannuation by this amount. This payment will be made effective beginning with the July payroll.

        • onetwothreefour on 05/07/2022 - 12:52

          Same for my employer, no change to our take home salary.

      • Mr Haj on 05/07/2022 - 13:08

        Same here. I work in local government. Our EBA grants us a 1.8% pay rise which was okay before this spike in inflation. I guess that's only a 1.3% pay rise now. We do have the option to opt-out of our additional super contributions.

        • Chandler on 06/07/2022 - 12:11
          +1

          We do have the option to opt-out of our additional super contributions.

          That'd be your voluntary super contributions, which you opt to have taken out of your pay pre-tax.

          The increases are to mandatory super contributions, which you have no say in apart from where they go (which can be an SMSF).

          • Mr Haj on 06/07/2022 - 13:17

            @Chandler: Ah I misunderstood what my employer is doing. So our employer is adding 0.5% of our pay each year (until it reaches +3%) into our super in addition to the mandatory changes. So my contributions will be 15% in July 2025.

  • nephilim on 04/07/2022 - 23:26
    -1

    Honestly 12% is good, plus a UK style years worked style pension.

    • mskeggs on 05/07/2022 - 07:44
      +4

      No, the means tested pension for all is an important way to reduce poverty without paying money to people who are well off - reducing total taxes. Around 12% does seem like it will be a reasonable balance of savings.

  • CyberMurning on 04/07/2022 - 23:29
    -7

    Im happy with 5% if government stops centrelink, baby bonus and all those craps. Put the money into infrastructures, public hospitals and libraries. Make the country great and smart not lazy!

    • Trying2SaveABuck on 04/07/2022 - 23:31
      +1

      super is paid by the employer not the government….but fair enough i agree with your point about people needing to help themselves a bit more

    • sjj89 on 05/07/2022 - 00:13
      +11

      The vast majority of welfare spending is aged pension

    • [Deactivated] on 05/07/2022 - 00:49
      +3

      if people don't want a welfare state, why do they keep voting politicians who promise we'll get a better one in?

    • brendanm on 05/07/2022 - 06:42
      +2

      Wtf does that have to do with employer paid super?

    • morse on 05/07/2022 - 06:59
      +5

      stops centrelink, baby bonus and all those craps.

      Perhaps they should start with education.

      The government doesn’t pay for super. Regardless if you get rid of ‘Centrelink’ that means getting rid of the aged and disability pension all together. There’s no such thing as a ‘baby bonus’ anymore there’s paid parental leave for 14 weeks at the minimum wage for people who were working before baby was born.

      Not sure I want to live in a society with thousands of homeless older people and people with disabilities, and babies going straight into budget childcare (which is still expensive) so their parents get get back to work instantly so they can afford to survive. Doesn’t sound ‘great’ or ‘smart’ to me.

      • Mokr on 05/07/2022 - 16:18
        +1

        The government doesn’t pay for super.

        It does, through co-contributions (low inocme)

        And providing tax benefits for people putting money into it

        • morse on 05/07/2022 - 18:14

          This is true. I guess I was more commenting on the majority of super and the obligations for employers if a higher % was mandated.

    • mskeggs on 05/07/2022 - 07:49
      +4

      Is there any limit of poverty you would find a problem? Or just let any number go hungry and homeless?
      In a lot of American cities with the poor safety net you describe the libraries and hospitals are clogged with the homeless. Is that what you are aiming for?

    • Mr Haj on 05/07/2022 - 13:11

      Do people still use libraries? Libraries are a great public resource but I think a lot of that funding would be better used in alternative methods for education. Does the government actually fund libraries? Isn't that something that local governments are responsible for?

  • SF3 on 04/07/2022 - 23:36

    As long as there is enough for shopping for bargains and beat inflation!

  • LemonShapedRock on 05/07/2022 - 00:01

    Whatever the number is, it will need to be high enough to counteract the outflow of money from the wave of retiring baby boomers drawing down on their super I guess.

    • brendanm on 05/07/2022 - 06:43

      What does this even mean.

      • mskeggs on 05/07/2022 - 07:51
        +2

        They mean the demographic bulge of baby boomers has switched to net sellers, not savers, so that part of the market is pushing investment prices down.
        So they want more investment from younger age groups to keep investment prices supported.

        • Chandler on 06/07/2022 - 12:13
          +2

          Boomers want the youth to give them their (youth's) money to fund their (Boomer's) retirement, basically.

  • Mokr on 05/07/2022 - 00:04
    +4

    Cashed up super retires causing inflation

  • morse on 05/07/2022 - 06:41

    If the employer is paying for the extra is it presumed that the salary would be lower or wage growth slow down? If so I’m not sure it should go up when one of the mainstays of investment in Australia is/was home ownership. I like the idea of people owning their own place in retirement as at least they have somewhere to live. Housing affordability needs to get a lot better though. Though more people need to get used to the idea of not having a free standing house and building standards/regulation need to improve significantly.

    • mskeggs on 05/07/2022 - 07:53
      +1

      Locking some money away for retirement improves house affordability, as otherwise people bid up prices further, committing all their savings to housing for no benefit, just higher house costs.

      • morse on 05/07/2022 - 09:54

        Definitely not against people have super for retirement, just not sure about upping the percentage if it would negatively impact wages.

  • DarkOz on 05/07/2022 - 08:08
    +4

    Mandatory super comes from the employer and that won't be good for inflation. That's the reason it takes 7 years to adjust it from 9% to 12% so the pain is small but long.

    I am happy with the scheduled increase to 12% and I don't mind it to go up to 15%.

    15% or higher is just too much and it should be up to individuals to top it up by salary sacrifice.

  • apple2016 on 05/07/2022 - 09:26
    +7

    Super should be zero tax atleast for the minimum (10.5% currently)

    • Guerilla89 on 05/07/2022 - 11:25
      +3

      Super should just be taxed normally (it's a huge tax loophole for the rich) or they could have 0% tax for anyone who hasn't yet reached savings equivalent to 10 years on the equivalent 38 hours a week of minimum wage (10 years x 52 weeks x 38 hours x $21.38 = $422,468.80). That way if the politicians want to increase the amount of disposable income they can stow away, they need to raise the minimum wage.

  • Guerilla89 on 05/07/2022 - 11:16

    The problem with super is the fees. Most super funds charge at least 1% of the total balance annually. There's a tonne of other things they could do to allow people to actually save for retirement. If housing actually reflected the cost of the land and the price to build a house instead of "everyone thinks it's worth this much and I'm going to put my money into a house because property only goes up". Bitcoin and gold only have value because people believe they have value, so does currency and so does housing. If the government simply made it abundantly clear that housing is not an option for speculative investing by removing tax incentives and preventing overseas investors entering the market in that sector it would do a huge favour to the average citizen.

    • brad1-8tsi on 05/07/2022 - 16:21

      I pay 0.63% total fees. My youngest pays 0.18%.
      Maybe search for a new super fund?

      • Guerilla89 on 06/07/2022 - 07:15

        Can you name the super funds? I'd appreciate it because I did look and failed to find anything good.

        • brad1-8tsi on 06/07/2022 - 15:15
          +1

          Look beyond the default options.

          My daughter is with q-super with an asset allocation of 50% international shares and 50% Australian shares. There's no flat fee for admin, just a % of the balance. No insurance

          I'm with Aware Super. Asset allocation 25% Growth (1.09% investment fee); 35% Diversified Socially Responsible (0.53%); 20% Australian Equities (0.06%); 20% International Equities (0.07%). No insurance.
          $52pa Admin + 0.15% of the balance (max $750)

          • Guerilla89 on 07/07/2022 - 00:40
            +1

            @brad1-8tsi: I'm with QSuper as well. By opting to set your own investment percentage you are using self-invest, self-invest charges a flat 1% (which you don't see and is just reduced from the performance of those assets https://qsuper.qld.gov.au/investments/options/self-invest/ex…) after that the .08% fee of that fund is applied and the .22% admin fees for having your money in QSuper is also removed (https://qsuper.qld.gov.au/our-products/our-fees/fee-details).

            Edit: read through it again, ignore me I'm completely wrong. It seems I should be happy with QSuper. The fee refers to the ETF management fee charged by the ETF itself which is up to 1%. Derp.

            • brad1-8tsi on 07/07/2022 - 20:39

              @Guerilla89: At least you had a good look and understand it. :-)

              When I was researching a suitable fund for her with her low (<$1k) I had to ring them and confirm the fees as it seemed too good to be true.

              For the year ending 30/06/2021 she started with $0 and finished with $793. Total Investment/admin fees were 45c

    • Trying2SaveABuck on 05/07/2022 - 20:14

      Bitcoin and gold only have value because people believe they have value, so does currency and so does housing.

      this could be pretty much applied to anything that isnt essential to life ie expensive painting, fine wine, cars, rare gem stones etc

      If the government simply made it abundantly clear that housing is not an option for speculative investing by removing tax incentives and preventing overseas investors entering the market in that sector it would do a huge favour to the average citizen.

      2/3rds of Australians own property, 1/3 have home loans on said property averaging around 500k debt how is tanking the housing market 'good for the average citizen. It would also inflate the cost of rentals in which the other 1/3rd of the population would also be stuffed…..

      Most super funds charge at least 1% of the total balance annually

      change super funds there is way cheaper options out there

  • tsunamisurfer on 05/07/2022 - 19:48
    -3

    Anyone born after 1972 should be ineligible for the Age Pension.

    They were already adults when Super (mandatory) was introduced. They have had their whole working lives to build their super and been lucky to been on some of the biggest property and equities bull runs in the history of money.

    • Chandler on 06/07/2022 - 12:15

      And if your super provider tanked your funds? You get nothing?

      • tsunamisurfer on 06/07/2022 - 12:25

        Yes.

        There are common measures to put in place to mitigate such risks.

        There is nothing wrong with rolling the dice and staying in high growth high risk investments I have personally seen people close to retirement have their balances go gangbusters on high growth.

        I have seen it go the other way.

        • Chandler on 06/07/2022 - 12:32

          There are mitigation measures, but they all still rely on individual awareness and literacy.

          A lot of people use the super fund their employer initially put them on
          Some people have the one fund that their first employer put them in
          Some people have multiple funds, and could easily have one for every employer that's had a different default super fund

          Some people's fund are configured the same as they were when they were opened (Balanced, Growth, etc)
          Some people changed their fund to High Growth (since they were young) and didn't look at it since
          Some people might have changed it to Cash only, being severely risk averse

          Some people don't realise the fees that their fund charges, both for administration and for other inclusions like insurance

          There's a lot of things that can go wrong with your super, and a lot of people are that financially illiterate that they don't know what it is, what is wrong, what they can do.

          Yes, in part this is people not helping themselves; but some people literally don't know how to help themselves.

          Do we just leave them all in the dark, since "they should know better" ?

          • tsunamisurfer on 06/07/2022 - 15:01

            @Chandler:

            There are mitigation measures, but they all still rely on individual awareness and literacy.

            Most major funds have age based models.

            If you are a low touch client, you can let the fund's system adapt your investment profile to your age (appetite for risk).

            Do we just leave them all in the dark, since "they should know better" ?

            The Australian taxpayer should not have to pay for an individual's lack of financial acumen.

            As long as adequate warning has been given that Age Pension ceases to exist for those born on / after 1972 then everyone is on notice that they must be careful with their retirement.

    • brad1-8tsi on 07/07/2022 - 20:42

      Anyone born after 1972 should be ineligible for the Age Pension.

      They were already adults when Super (mandatory) was introduced. They have had their whole working lives

      The aged pension is a safety net and many people don't have the opportunity to work the full period of their working lives.

  • Gros21 on 06/07/2022 - 22:56

    I just want super payed on OT as well

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