More than one third of small business owners spend fewer than five minutes selecting a default super fund for their workers, a new study has found.
The Bridge the Gap report – released on Monday by REST Industry Super – found that 38 per cent of small and medium-sized (SME) owners spent only a few minutes deciding which super fund would be best for their workers.
Mangers working in SME’s care even less, with almost half (48 per cent) of them spending less than five minutes of the task of picking a default super fund for the work place. An alarming 68 per cent of owners and 39 per cent of managers thought that the administration of super was a chore to be finished as quickly and cheaply as possible.
“There are many pressures facing SMEs and it is not surprising that owners and managers within SMEs would be ambivalent at best about the administrative burden attached to managing payment of their employees’ superannuation contributions,” the report found.
REST released the research against the backdrop of a major Productivity Commission review into which super funds should receive the default flows from superannuation. Currently, $9 billion a year flows into the default sector, which is dominated by industry funds.
According to the Bridge the Gap report, 82 per cent owners and 79 per cent managers believe it is the responsibility of the employee to pick the super fund that is right for them.
“While the primary responsibility for superannuation lies with the employees, actions taken by employers can make a difference to the financial wellbeing of their workers when they retire,” REST chief executive Damian Hill said.
He added it might only take another five minutes, but taking that additional time could mean tens of thousands of dollars in retirement savings accrued by employees, if they remain in the same fund over the long term.
SME owners are responsible for ensuring the livelihood of around 4.7 million working Australians. REST has approximately 1.9 million members, and more than 90 per cent of its employers are SMEs.
The Bridge the Gap report was conducted as an online quantitative survey between May 27 and June 6, among 1,701 workers and employers, including 184 entrepreneurs, 282 SME owners/managers and 64 sole traders.
The report also found:
- One in five SME owners surveyed believe their business would be unable to fund their livelihood and living expenses for longer than a week in the event of their unplanned absence.
- SME owners link retirement to the success of their business, with 55 per cent of respondents considering the sale of their business important in funding their retirement.
- Sixteen per cent of the Australian workforce has started a business at some point.