The introduction of the Compulsory Superannuation came on the heels of the depletion of the age pension funds in the mid 1980’s. The payments into these funds while deemed to be compulsory are not always paid in a timely manner and the employee has no direct knowledge of the payment being made. Many dismissed workers find that there are significant amounts of the compulsory payments that have never been paid. This affects the final payments to the policy holder.
The compulsory superannuation contribution will hold the same status as income tax instalments – that is a primary secured debt to the business in any bankruptcy matter.
- The evidence of the contribution must be forwarded to the employee within 14 days of each payment that must be paid within 14 days of the contribution coming due for payment.
Failure to make contributions on time will become a criminal offence.
- The employee will have the capacity to transfer payments to a preferred fund within 6 months of commencing employment without any cost to the employee.
- It is recognised that superannuation contributions will not, for very many years, adequately cover the cost of retirement of middle to low income earners as well as those people who are in and out of employment.
Self-employed persons will need to be urged to make preparations for the retirement years.
Costs of administration must be minimal to maximize benefits.