My Super News
Hands off our Super: Education industry fund members support SG increase to 12 per cent
Source: The Age, Melbourne, 13th November 2019
13 November 2019: New research by specialist education industry superannuation fund, VISSF, shows strong support for increasing the employer superannuation contribution to 12 per cent - even if that is delivered instead of a pay rise.
Created over 60 years ago for teachers by teachers, VISSF today has over 8,000 members working in the education sector and over $800 million in assets under management. It retains a female member majority who choose VISSF for its intimate knowledge of the sector and familiar service.
In its recent Member Survey1, VISSF members overwhelmingly backed the current Federal Government plan to increase employer superannuation contributions to 12 per cent, with close to three quarters (72.75 per cent) agreeing it forces people to save more. Only 14 per cent of respondents said that they needed the money now. Over half (55 per cent) of the respondents still supported the increase to 12 per cent, even if it came at the expense of a pay rise.
The planned legislated increase in employer superannuation contributions from 9.5 to 12 per cent by 2025 has come under scrutiny in recent months, but VISSF Chairperson Peter Sharples said the feedback from its members reinforces the importance of sticking to the current timeframe.
“Our number one priority is to help members achieve a financially secure retirement. The increase in compulsory superannuation is a key pillar in ensuring more Australians retire with sufficient retirement savings - and our members clearly recognise the importance of this too,” Mr Sharples said.
“Being self-reliant, comfortable and not having to worry about money were common themes of the survey and the increase in the superannuation guarantee is an important initiative to make this a reality for more Australians.”
Members retirement savings concerns
As a specialist superannuation fund, VISSF members are engaged with 94 per cent saying super is important. 85 per cent of respondents had checked their superannuation in the past year and 46 per cent in the past month.
However, they have real concerns about their retirement savings, with over 60 per cent of respondents saying they are worried about funding their retirement. A large majority of members (90 per cent) said they would need an annual income of over $50,000 to be comfortable.
That becomes even more difficult for women who often have disrupted work patterns. Close to half of the respondents to the VISSF Survey had taken or intended to take a career break to start a family, raise children or care for elderly parents. Of those who have taken a career break, the average time out of the workforce was almost 5 and a half years.
“With a vast majority of female members, we are acutely aware of the challenges they face and the retirement savings gap that exists more broadly. We are focused on engaging and educating members at every stage of life to help them along their journey,” Mr Sharples said.
Planning for the future
Over three quarters indicated they planned to talk to a financial adviser about their super or retirement plans at some point in the future, but only one quarter currently engage a financial adviser.
There remains a significant education gap, especially as members approach retirement. This was reiterated by almost 70 per cent of members not aware that moving super into a retirement income product can extend the life of your savings by reducing the tax paid on investment earnings.
“The value of personal advice, especially as you approach retirement, cannot be underestimated. It is critical for members to look at their personal circumstances and understand their options,” Mr Sharples concluded.
VISSF is an education industry superannuation fund for anyone working in the education sectors. Founded in 1958 – before Superannuation was even compulsory – VISSF today has over 8000 members and more than $800 million in Funds Under Management.
By sharing administration and investment arrangements, employers participating in VISSF enjoy the economies of scale advantages available to a large fund while maintaining the ability to select the type and level of benefits to be provided to their employees.
1The survey was sent to VISSF members in September 2019.