Superannuation going up: should this cost be shared?
Recently, there’s been more talk regarding the rise in superannuation guarantee rates. This has been in the pipeline for quite some time, but basically the short story is the rate of superannuation paid by employers for their staff will rise to 12% by 2025.
The first increase is scheduled for 1st of July 2021 from 9.5% to 10%.
In principle, I get it.
The government wants to shift the stress and likelihood of people relying on a welfare system, combined with a growing and aging population, there may not be enough in the pot to feed everyone. I’ve been an employee, but even then I always thought that superannuation shouldn’t be the sole responsibility of the employer. I think this should be shared between the employer and employee. In other parts of the world, both parties pay half and half, there’s also a matching system whereby whatever the employee contributes the employer matches. Personally, I’m a fan of the 50/50 principle (up to a point of course). They say that many hands make light work and I believe that sharing this responsibility helps in a various ways:
- It reduces cashflow stress on employers
- It reduces resentment from employers who feel like they may need to forgo part of their retirement in order to fund someone else’s
- It creates accountability on the part of the employee to take a more active role in planning for their retirement
While the logistics of implementing a 50/50 contribution policy may be obstructed by red tape and bureaucracy, I like the whimsical – some may think it naive – notion that we can achieve more together than apart.
For more information, here’s a link: https://www.smh.com.au/politics/federal/take-home-pay-or-put-it-in-super-government-considers-opt-in-super-model-20210112-p56tiz.html
