APA16 Paper 50+ Finance
Bruce Gregor is delivering the following presentation at the 2016 Australian Population Association Conference in Sydney on Friday 2 December 2016.
The presentation includes a radical change in Australia's Compulsory Superannuation system to address the significant inequity of the level of superannuation accumulated for women versus men, arising primarily because of the higher part time employment of women versus men. This uplift will also pay full SGC contributions for all employees on parental leave.
It proposes the establishment of a new Future Super Fund for funding the uplifting of all part-time employees' SGC contributions to make annual SGCs for part-timers equal to full time equivalent contributions. If also proposes uplift in SGC contribution rates paid by all employers, from 9.5% to an average of 15% of wages over working life, over an 11 year phase in period to 2027.
The new Future Super Fund proposed will in future receive the flow of 15% Contributions Tax paid by all superannuation funds (currently $10 billion pa) which is currently lost in consolidated revenue. This tax was originally intended, when introduced in 1988, to be returned to superannuants when they retired, so long as they annuitised their super. Progressive governments since then have unraveled the whole incentive for annuitisation. This money can now be re-purposed to fix women's inequity through the part time uplift and parental leave funding proposed, as well as provide reinsurance guarantees for not-for-profift annuities.
Currently women at age 60 have average superannuation accumulated (ASFA study 2014) which is 52% below male average. My proposal will reduce this differential to 10% after all the changes proposed above.
The new Future Super Fund will be managed by the same group of government employees responsible for managing the existing Future Fund, which only supports Commonwealth Government Employees.
The Future Super Fund proposed will also establish reserves for an annuity reinsurance company to support annuities provided by the not-for-profit superannuation funds. This will level the playing filed for retirees choosing such annuities, compared to the existing government guarantee applying to bank term deposits up to $250,000 per bank. If you wish to discuss this proposal further please contact Bruce Gregor at firstname.lastname@example.org
Posted Thursday, 1 December 2016
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