Plum applauds ASFA submission as Escalator Program gets underway

28 March 2007

Plum Financial Services (Plum) has welcomed an ASFA submission encouraging Australians to contribute more to super, following Plum's survey results indicating most Australians know they need to save more for a comfortable retirement… but are not taking action!

The Association of Superannuation Funds of Australia (ASFA) is calling on the Federal Government to compel employers to adopt an 'opt out' style of program that automatically increases voluntary contributions for employees – a similar initiative to Plum's Escalator Program launched for the first time in Australia in August 2006.

Plum's Managing Director Mike Fitzsimons said he is pleased ASFA has made the submission, as Plum's pilot Escalator Program results, and the US experience of a similar program, have shown is a very effective way for members to increase their savings – something Plum's 2006 Super Fitness Survey indicated Australians felt they needed.

'According to the results of Plum's 2006 Super Fitness Survey, 80% of Australians think the Super Guarantee (SG) alone is not enough to retire on and although they understand they need to put more in to super they just never get around to doing it,' Mr Fitzsimons said.

'By introducing the Escalator Program, we taking action for our members to help them get what they want.'

'I think this is a great recommendation from ASFA and I would be delighted if the whole industry went this way.'

The ASFA submission suggests it should be compulsory for all employers to automatically increase an employee's own voluntary super contributions by a small percentage whenever they receive a pay rise – only giving employees the opportunity to 'opt out' of the arrangements rather than 'opt in'.

Read the full version of this story - Plum appluds ASFA submission (PDF 40kB).

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