1. superannuation system
The Australian
superannuation system
Presentation to The Irish Chamber of Trade Unions Trish Curry, AustralianSuper Regional Head UK

2. Union stakeholder organisations

3. Agenda Unions and Super The Super system today The Policy debate
A Proud History
Campaigning for Universal super
The Super system today
Key statistics
Default super
Retirement income – lump sum v annuity
The Policy debate
Taxation
Fairness
Fund consolidation
Gender Gap
Agenda

4. The role of Trade Unions in securing universal super
2/10/2017
The role of Trade Unions in securing universal super
1980
1992
< 40% working Australians had super
“Prices and Incomes Accord” struck b/w Govt. and ACTU
3% super introduced in awards Creation of industry funds (IFs) Equal Representation on IF Boards
SG legislation introduced
SG increased from 3% to 9.50%
Increase to 12% was deferred by Abbott Govt. and will remain at 9.5% until 2021.
$2 trillion in super industry
by 2015
Unions helped secure superannuation for most workers in the 1980’s. In 1985 less than 40% of the workforce had super
Women and blue collar workers were least likely to have super
Today:
- employers are required by law to contribute at least 9% of salary to super, increasing July 2013
- most awards and some EBAs contain clauses on super
- about 90% of Australian workers have super
- for many Australians superannuation is their largest asset after the family home.
Member presentation

5. ‘Universal’ Super
Unions campaigned for a super system with these characteristics:
Compulsory super for all workers
100% vesting (workers own their super)
Portability (take super from job to job)
Preservation (until retirement)
Equal representation (as Trustees of Industry Funds)
Affordable disability/death insurance within default super
The main objective of the ACTU and the unions was to achieve a universal system of compulsory super, which had the following characteristics:
Super for all workers
Irrespective of age, gender, occupation, industry or work pattern.
Vesting
Superannuation to belong to workers, so that they kept their entitlement even if they left their job prior to retirement.
Portability
When someone left their employer they took their super benefits with them to their next employer – assuming they worked within the same industry, it would be with the same super fund, thus “industry funds”.
Preservation
The purpose of super is to provide an income for retirement. It is therefore important that unless there are special circumstances (financial hardship and/or permanent disability) employer contributions should be preserved until retirement.
Equal representation
Unions wanted employee as well as employer representatives to act as trustees of super funds – not just employers.
Insurance
Unions sought insurance provisions for workers through their super fund.
The principle of “deferred pay”
The provision of super came about through union-employer negotiations and was provided by employers in place of pay rises. Super was therefore regarded as “deferred pay” and a “right” for workers

6. The Super system today 9.5% super for all workers* (on top of wages)
Superannuation clause in Industrial Awards and Agreements
Employer default system
Choice of Fund available to most Australians
‘MySuper’ legislation introduced in 2014 to protect consumers
Financial Advice Reforms (FoFA) “must operate in the best interests of members”
* 9.5% super is paid to any worker who earns at least $450 in a calendar month. This equates to ~ €305pm

7. The retirement system today
3 Pillar system = Govt. Pension + Compulsory Super + Voluntary savings
Today’s retirees have not had the benefit of super for their entire careers. This won’t occur until the 2030’s.
Fully mature system will not arrive until 2060’s.
80% of retired Australians receive a full or part aged pension
Lump sum v Annuity / Income Stream
Research shows Australians live too frugally – scared money will run out.
Research shows if you have more than $100,000 in super (~ €68,000):
25% likely to take a lump sum
75% likely to take an income stream
Super is a supplement to the Aged Pension

8. Current Policy debate Taxation reform Super in Industrial Awards
Fund consolidation
Addressing the Gender gap

9. Unions and Industry Super changing super policy together:
Improve adequacy of retirement incomes by increasing SG and negotiating EBAs beyond SG levels
Reforms to taxation of super so low paid workers are treated more fairly
Regulating fees and banning commissions
LISC – ACTU’s successful campaign to save Low Income Super Contribution in 2014
Super for women while on maternity leave