Superannuation

Superannuation

After a lifetime of work, all Australians deserve a comfortable retirement. For most people their superannuation will play an important part in helping them secure a modest lifestyle.

As a result of campaigning by unions and their members, the Labor government introduced new laws that will increase the minimum superannuation from 9% to 12%.   As a result on 1 July 2014 the Superannuation Guarantee increased from 9.25% to 9.5%. 

For many workers these changes will deliver a big increase in their superannuation when they retire.

In the 2014-15 Federal Budget, the Treasurer announced the government's intention to change the schedule for increasing the super guarantee (SG) rate to 12%.

The SG rate increased from 9.25% to 9.5% from 1 July 2014 as currently legislated.  The Government amendments to the legislation mean that the rate will remain at 9.5% until 30 June 2021 and then increase by 0.5 percentage points each year until it reaches 12%.

You can see other current and proposed changes to superannuation on the Industry SuperFunds website.

Standing up for superannuation

Today almost every worker has the right to their own superannuation account. But that right would not exist had it not been for the campaigns fought by union members in the 1970s and 1980s. 

Superannuation was deeply unfair with less than one in four women and blue-collar workers having an account. High income earners such as permanent public servants and full-time white-collar workers were more likely to have access to super.

Thanks to the campaigning and hard work of unions a system of compulsory superannuation began operating in 1992. 

Unions agreed to forgo a national 3% pay increase which would be put into the new superannuation system for all employees in Australia and from 1992 to 2002, the level of compulsory super (the Superannuation Guarantee) rose to 9%.

Under the Coalition government of John Howard, there was no further increase in the Superannuation Guarantee. 

Unions also played a leading role in establishing ‘industry funds’ — these are low cost, not-for-profit superannuation funds dedicated to putting the interests of members first. 

Today, almost 5 million Australian workers are members of industry funds and these funds manage hundreds of billions of dollars of workers’ contributions.

Over the past 25 years industry super funds have developed into sophisticated, competitive providers of retirement income products. Industry super funds have a unique structure:

  • They are ‘run only to benefit members’
  • They are governed by trustee boards specifically representing employees and employers – typically these trustees are appointed by both the ACTU and/or unions and employer associations. A two-thirds majority is necessary for all decisions
  • They have never paid commissions or sales incentives to financial planners or staff
  • They have sound investment strategies, which include long-term investment in Australian infrastructure
  • These differentiating factors have contributed to the impressive and competitive performance of industry super funds over the long term – a fact that is consistently reported by superannuation industry ratings agencies*

Industry Super Australia (ISA) manages collective projects on behalf of the 16 Industry SuperFunds, with the objective of maximising the retirement savings of five million industry super members. These projects include research, policy development, government relations and advocacy on topics such as the gender super gap and unpaid super. You can see more about the work ISA do here. 

You can see a list of 16 Industry SuperFunds here. See if you could have been better off with an Industry SuperFund, by using the Compare the Pair tool.

Helping union members

Unions help members make the most out of your super and savings. 

Through collective bargaining unions ensure that employees have enough super and that it is paid regularly by your employer, preferably into a low-cost industry fund.

Through our association with industry funds we provide union members with financial advice and a range of benefits including low cost loans and banking services.

ME Bank was created with the support of industry super funds and unions to benefit our members. ME Bank provides an alternative to the profit-driven big banks, offering products that are fair, transparent and provide better value banking.

To find out more about the great range of benefits and financial services for union members, go to http://www.australianunions.org.au/member_benefits

Bargaining Resources

To make Superannuation a bargaining priority, the ACTU has developed a Model Superannuation Clause to ensure workers’ superannuation contributions go to the best funds.  Funds that are not-for-profit, charge low fees and deliver good returns.

For more information download the Model Super Clause flyer below or phone our Contact Centre on 1300 362 223.

ACTU Super Trustee Forum

This annual event is a unique opportunity for union and employee nominated directors to discuss and debate key issues around superannuation with each other. To find out more about this forum and when it is held please visit our events page.