There's one critical reason that lifting compulsory super contributions from 9 per cent to 12 per cent is a good idea. Left to our own devices, most of us simply wouldn't save for retirement ourselves.
Humans are creatures of instant gratification. Given a choice between a good lifestyle in our old age and a good lifestyle now, most would unquestionably take the latter. That's not totally irrational - who knows whether we'll be here, or in shape, to enjoy it later?
But take the decision out of our hands and we feel rather good, indeed virtuous, about saving for retirement. Rationally, we know it's something we should be doing even if we wouldn't do it voluntarily.
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That's why, despite super funds having earned less than 1 per cent for the past five years thanks to turmoil on the world's financial markets, survey after survey has shown support for increasing compulsory super contributions.
Both the major super bodies, the Association of Superannuation Funds and the Australian Institute of Superannuation Trustees, released research this week showing high levels of community support for the increase - 67 per cent and 70 per cent respectively.
The research was timed to coincide with the tabling of legislation to bring about the increase and is subject to the usual accusations of industry groups commissioning research to push their own barrow.
But this is by no means a manufactured finding. Over the past years, survey after survey has turned up the same result. They might not always be happy with their funds but they like the idea of compulsory savings.
It's true that Australia's super system isn't perfect. It is still highly inequitable in giving bigger tax breaks to higher earners than those on low incomes (and to those who can salary-sacrifice or make their own tax-deductible contributions than to those who can't).
As we've seen recently, the ''balanced'' funds most of us belong to are heavily reliant on world sharemarkets to generate the return needed for our comfy retirement.......... story continues
Read more: http://www.smh.com.au/money/getting-a-fix-on-superannuation-contributions-201...
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