The proportion of superannuation members contributing above the compulsory superannuation guarantee (SG) level has declined substantially since 2010, according to the latest Roy Morgan research.
Roy Morgan’s “Single Source Survey” showed in the 12 months to January 2018, just over one in five (20.8 per cent) super contributors, or 2.2 million current super members, were putting more than the compulsory level of 9.5 per cent into their fund.
This is down from 25.5 per cent in 2010, with levels decreasing almost consistently since then. In 2013, the level declined to 21.7 per cent, while 2014 showed a marginal increase to 22.1 per cent. However, it has struggled to stay above 20 per cent since then.
Roy Morgan Research industry communications director Norman Morris said the federal government’s super reforms, including the $1.6 million transfer balance cap in the retirement phase and reduced contribution levels to $25,000, along with the Labor Party’s dividend imputation proposal, had placed increased pressure on superannuation, with the latter announcement particularly affecting SMSFs.
“The recent changes announced by both parties relating to superannuation have the potential to reduce the confidence in the long-term nature of superannuation, which has to potentially cover a period of 50 to 60 years,” Morris said.
A larger number of high-income earners contributed to super over the compulsory rate, illustrating a major problem for low-income earners.
Almost half (45 per cent) of those earning $150,000 a year contributed beyond the SG rate, followed by those on incomes of $100,000 to $149,000 a year where the average is around one-third (33.8 per cent).
Those earning below $25,000 a year are well below the market average, at 11.4 per cent, with the $25,000 to $49,000 group at 13.2 per cent.
Life stage also affected contributions above the compulsory rate, with competing priorities, such as mortgage repayments, lifestyle choices and family expenses, having an impact.
Only 26.8 per cent of gen Xers contributed above compulsory levels, while the level was at 12.2 per cent for millennials. This is compared to 40.8 per cent of baby boomers who contributed above compulsory levels.