3%, what’s all the fuss about?
August-30-2011Hello fellow super enthusiasts!
Saturday 20 August, 2011 marked a special day in my heart…it was of course, the 20th birthday of our dear friend, the Superannuation Guarantee (SG). It was a dark and stormy night – oh sorry, wrong story… It was a budget speech given on 20 August, 1991 by the then Treasurer John Kerin where he first announced the concept of SG. A year later, it would become law.
When first introduced, the SG started at a measly 3% before gradually increasing to the 9% we know and love today. However, getting it to 9% wasn’t easy and at the time, there was a lot of commentary suggesting that lifting the SG would result in substantial costs to employers with the follow on effects of job losses, a rising unemployment rate and even businesses going broke. Let’s not forget that we were in the middle of “a recession that Australia had to have”.
Interestingly, what the 9% SG in fact did was assist the economy in enduring the global financial crisis, (and we didn’t fair too badly in comparison to our international neighbours) improve dignity in retirement and positively affect economic growth. And cop a load of this, when the rate of SG was increased from 3% to 9%, unemployment rates actually dropped along with real unit labour costs…just a bit of food for thought.
So in my humble opinion and it is very humble, I think it’s time. Time we took the next step down the retirement reform journey and headed for the sign that reads ‘dignity in retirement’ for everyone because that’s what this is all about. Treasury has estimated that lifting SG to 12% means people aged 30 today, on average weekly earnings, will end up with an extra $108,000 in super when they retire. Not exactly small change is it!
With that, I’ve got some questions for the three people reading this:
- What do we need to do as an industry to get SG to 12%?
- Is 12% enough, should we just aim higher and be done with it?
- Lifting the retirement age overseas saw people out with their signs and megaphones, so why aren’t people rioting in the streets to support the SG increase?
With that, it’s cup of tea time.
Yours in Super
Hans
•What do we need to do as an industry to get SG to 12%?
Long-time reader, first time responder. I think the answer to this question is at our very fingertips every day.
How many people have money in their super accounts? How many people want more money? How many people with money in their super accounts would like to have more of it?
We have such a vast capacity in this area to work collectively as an industry to spread the message.
Social Media [twitter/facebook] are the tools of trade that people use every day and are increasingly spend their spare time and energy on. This is the new world media.
The superannuation collective should be spreading the message through these platforms continuously. We need to use these tools and take the message to our people!
Are you aware that there is a facebook page already out there called “12%: your future, your call”? It isn’t very widely known (only 337 likes), yet how many people were just sent their annual statement or sent a welcome pack recently?
Why isn’t the industry drawing member’s attention to the cause? Should we rely on the media to wait until it becomes a story full of scaremongering (think “Pensioner eats can of dog to food to get by” styled stories)?
Maybe there is some legality that prevents funds and associated partners from spruiking the message, but if not, and if we truly believe in it, then we need to take the mantle on and promote it.
So few Super Funds actually have a twitter account, let alone a facebook page, it is a little embarassing that the industry seems to be so far behind. Such brilliant tools that allow you, at the push of a button, to get a key message accross.
As I like to say these days “Tweet it, and they shall come.”
•Is 12% enough, should we just aim higher and be done with it?
I don’t own a crystal ball.
•Lifting the retirement age overseas saw people out with their signs and megaphones, so why aren’t people rioting in the streets to support the SG increase?
There is a whole sociological debate as to why people do or do not riot in the streets, so I’ll leave this one alone.
Hello Brett,
Great to hear from you, I was starting to think I am the only person who is excited (probably an understatement) by super, so it’s nice to know that’s not the case!
I agree with you that we can harness social media to get the message about super ‘out there’ and it’s fantastic to see funds like HESTA and HOSTPLUS have really embraced mediums like Facebook. There are a number of funds on Twitter now too and even YouTube has superannuation content. Just search for ‘superannuation’ and you’ll see what I mean. Of course, I myself am on Twitter (@SuperClog) and whilst I don’t have as many followers as the rappers and pop stars on there do, I’m sure following me is just as riveting.
As you rightly mentioned, our friends over at AIST are also doing their bit with the Facebook page “12%: your future, your call” and compared to how little marketing time/presence super had ten years ago, the industry has really stepped up to the plate. However, members are still disengaged and so getting through is often a pretty hard task…perhaps if members were as excited about super as I am, things would be different!
But, that is not the case. So it is up to us, as an industry to make sure we are ‘talking’ to our engaged members using the approach that best suits them (i.e. we need to be using lots of different tools and channels, including face-to-face) whilst making sure we get the system design right to look after those members who aren’t engaged. Hello Stronger Super…..now that we are on my favourite topic, let’s talk about Tax File Numbers….ok, sorry, I forgot that this entry isn’t about that.
Keep your comments and thoughts coming…that goes to all 4 people reading my blog!
Yours in Super
Hans