A " Crime " Amnesty !

Half a century ago many Australians simply faced life on the aged pension when they retired.  Walking out the door for the last time with a pension from their employer seemed constricted to the big end of town and many economists warned that the ever increasing numbers drawing the aged pension was unsustainable.

The government of the day acted to create superannuation accounts that they hoped would take care of both problems.  All employers were required to make payments into the superannuation account of staff they employed based on their wage level and employees were supposed to make their own contributions, ensuring that all retired with a substantial nest egg to fund their retirement years.

That is the law that applies today, but it has been revealed that there is a vast number of employers who have failed to meet their obligation.  Failing to pay into an employees superannuation fund is really a form of wage theft.  In particular, when a firm goes into insolvency it is common to find that this superannuation debt has been unpaid for years and that is money the employee never recovers.

We have just seen an amnesty plan proposal to force employers to bring their superannuation payments up to date - or face severe penalties.   It is estimate that there is about six billion dollars owing  and this amnesty would enable firms with arrears to " wipe the slate " clean without further penalties by bringing their superannuation entitlements up to date.   There was a warning that they would face higher penalties for any further infringements by way of a fine calculated on fifty percent of the shortfall.

Unfortunately, this rather generous proposal failed to get parliamentary approval when it was blocked by Labor and the cross-bench.  We now have the ridiculous situation that the amnesty is deemed to be in operation despite it lacking the parliamentary approval to become law.

One of the problems seems to be the lack of protocols to ensure that these superannuation payments are made on time and this is accentuated by the vast number of schemes in place across all aspects of industry.  An employee who frequently changes jobs can have small amounts scattered across the superannuation spectrum - and often loses track of what and where money is placed.

This superannuation boondoggle needs fixing.  The number of schemes needs to be condensed to achieve economy of scale and the correct payment of superannuation needs to be an automatic function of the accounting industry when preparing a firms books for its annual audit.   Those payments are a legal requirement and both non payment and under payment should be part of the normal accountancy procedure submitted to the tax office.

It is a sure sign that the present procedure to ensure wages are fully paid across Australia is deficient when six billion dollars is a shortfall in their retirement contributions.  Because it is not money in hand in the weekly pay envelope the loss is not apparent to the employee, until he or she retires many years later.

Another helpful initiative to bring these superannuation payments into clarity would be their inclusion on the statement that accompanies those weekly pay envelopes.  That should name the superannuation entity and the money transferred, enabling the employee to verify that their pay slip is correct.

It is time we took superannuation payments seriously because it is obvious that the present system is not meeting the intended need.