CANBERRA—Superannuation Minister Nick Sherry says he is cautious about using an opt-out system of employee contributions to superannuation because of the complexity it would entail for employers.
But it was one of a number of mechanisms being considered to boost super contributions as the baby-boomer generation enters and approaches retirement, he said.
Senator Sherry declined to discuss what super changes might or might not be made in the forthcoming federal budget but said he believed the nine per cent contribution paid by the employer was sufficient.
"I think where the focus has to be is improving the programs and incentives for employees and from Government," he told Sky News today.
"But that's a medium-term goal.
"This is a very, very complex issue."
Senator Sherry said the adequacy of current superannuation was still a big debate in Australia.
"I'm keen to identify ways where we can provide extra assistance. That will be over the medium-term," he said.
He had looked at the idea of a mandatory system of further contributions by the employee, where the employee must actively opt out. This type of system was being introduced in the United Kingdom in 2012.
"The idea is there's a level of contribution that is paid and you have to opt out. It reverses what is called inertia," Senator Sherry said.
"The one great concern I have with this approach as a principle is that it adds another layer of complexity around regulation decision-making.
"Whilst the Australian system is still very complex, it is remarkably simple in terms of the nine per cent. It's compulsory.
"Opting out decisions are quite complex. If you opt out, when do you opt out? When do you opt back in? What's the information that has to be made available.
"It has some attractions but I'm pretty cautious about it because of the regulatory complexity, which would be another set of regulatory complexity we have to deal with in our system."
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