The government and industry should develop and promote new initiatives to encourage further super contributions, according to ING Employer Super executive director, Ross Bowden.
“With tax cuts about to be delivered, now is an opportune time to aggressively promote further super contributions, which will benefit long term savings and potentially dampen inflation,” Bowen said.
More than 55 per cent of ING’s corporate super members have access to the superannuation co-contribution scheme, however only nine per cent of this segment have made the after tax contribution required to receive it.
Bowden suggested that the scheme could either be extended to cover more Australian taxpayers by increasing the salary threshold, or through lifting the $1500 cap.
“In the last 12 months ING has noticed increased member interest in their superannuation, but a reluctance to add to super contributions through extra payments,” he said.
ING modelling of a co-contribution change to the salary threshold from $58,980 to $70,000 found an additional 11 per cent of the ING corporate super membership would have access to the scheme.
Bowden said the co-contributions scheme was providing a significant benefit to low and middle income earners wishing to boost their retirement savings, but called for more to be done.
“An expanded scheme, combined with an ongoing awareness program, will lift participation rates and benefit those in most need of extra super,” Bowden said.
“It’s encouraging to observe that the Federal Government is considering extending the superannuation co-contribution scheme.”
“ING Australia supports any enhancement which would further encourage members to make the after tax contributions required to receive the co-contribution.”
