Super Guarantee Rate Increase May Not Be Beneficial For All Workers

The superannuation guarantee was increased from 9% to 9.25% recently, but according to analysts, not everyone will benefit from this increase as employers are expected to start reducing their part of the contribution.

While it is compulsory and part of the law for employers to implement the increase for this financial year, analysts say that many employees, particularly the senior staff, will have to negotiate this if they are expecting to get the full benefits of the increase. Most senior staff are already in total remuneration, with an already higher superannuation guarantee. Meanwhile, workers whose employers pay premium contribution may also decide to reduce their super payments, or offer no change in pay because of other company benefits and agreements.

Based on a survey conducted last year, about 30% of employers are contributing higher for superannuation. But of this 30%, only 10% said that they will maintain the margin, even if the guarantee rises. The rest has expressed in reducing or decreasing contributions, should guarantee change.

Companies usually abide by superannuation laws. But they have also worked around a few ways so that they can pay less and have employees absorb the costs. Although experts say this is not illegal, employees will have to negotiate for their pay individually so that everything is in order.

Experts advise that employees have to seek out their employers and see what the company plans to do with the guarantee adjustment as soon as possible, instead of negotiating this in the next pay review.