Self-provision for retirement must be encouraged by the Federal Government, said AIST’s Fiona Reynolds, because – despite compulsory superannuation – about 80 per cent of Australians will still retire wholly or partly on the age pension.

The biggest losers are low- to middle-income earners, and women, said Reynolds, who is CEO of the industry super funds’ peak body.

Salary-sacrifice for super contributions, while legal, was used by very few Australians, said Reynolds, speaking to AIST’s pre-Budget submission for 2011-12.

Information was only available to employees “when they proactively seek the information from the employer”, said Reynolds, and so AIST advocated legislation which made salary-sacrifice easy and accessible.

More than 1 million self-employed Australians were at risk of ‘under-saving’, so the SG increase from 9 to 12 per cent should be “coupled with a phased introduction of compulsory contributions for self-employed individuals”, said Reynolds.

Women continued to be overly reliant on the age pension, with nearly two-thirds of retired women relying solely on it for income. The average Australian woman retired with $73,000, compared to $155,000 for men, while most women retired with less than this average and about one-third of women retired with no super at all.

AIST recommended a ‘super baby-bonus’ of $1,500 to be paid into new mothers’ super accounts, along with a one-off $2,000 return-to-work bonus to encourage women to re-enter the workforce as soon as possible.