Australia: Retail employees’ super lagging

The average superannuation balance of an employee in corporate Australia is currently $52,000 while those working in the retail industry are holding average balances of just $13,872.¹

This means employees working in an Australian corporation have four times more superannuation than those working in the retail industry², making them far more prepared for retirement.

This disparity can be attributed to a number of things, including a high incidence of part time workers in the retail industry, average age of employees and higher education for corporate workers leading to top salaries.

"These figures are not surprising but they do highlight the need for people working in retail to seriously think about their superannuation needs when they look at their finances," comments Shaun Williams, General Manager Group Business Development, Aviva Australia.

The retail industry employs over one million people in Australia, with 57 per cent of those working part time.³

"This means there are a lot of working Australians with low superannuation balances. In this era of ageing population growth this is very worrying because as we all now know we can no longer rely on the Government funded pension to look after us during retirement," Shaun said.

Research shows most people believe they will need $520,000 to retire comfortably⁴. To achieve this it is suggested that people need to contribute 15 per cent of their salary (including the nine per cent employer contribution).

"The 15 per cent figure that is regularly used will not cover everyone. For high income earners it may be a little high and for lower income earners it won’t be enough. It is important to see a financial adviser before deciding how best to structure your superannuation savings," comments Shaun.

One easy way to begin sorting out superannuation needs is to consolidate any multiple accounts into one - right now on average there are 2.6 superannuation account per Australian employee⁵. In the retail industry in particular this may be a particular issue as there is a relatively high level of job mobility, with people regularly changing employers.

"By bringing all your funds together you will get the most benefit from them, you will encounter less fees and paperwork and can begin working towards growing your money in one savings environment," said Shaun.

A financial adviser can help prepare a plan which works through individual superannuation needs and other financial choices.

¹Australian Prudential Regulatory Trends, June Quarter, October 2003, Sydney.

²Australian Prudential Regulatory Trends, June Quarter, October 2003, Sydney.

³Australian Bureau of Statistics, Retail Industry, Australia, October 2000, Canberra.

⁴The Association of Superannuation Funds of Australia Limited, An Adequate Retirement Income?, June 2001, Sydney.

⁵Australian Prudential Regulatory Trends, June Quarter, October 2003, Sydney.

For further information please contact:
Simon Morgan
(03) 9829 8892
0407 966 632

Notes to editors:

• Aviva Australia is a group of two specialist financial services companies: Navigator Australia Ltd and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
• Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
• Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$66.08 billion, and more than A$472 billion of assets under management (as at 1 January 2004). The group has more than 59,000 employees and 25 million customers worldwide.
• The information in this document reflects Norwich Union Life Australia Limited's (NULAL) and NULIS Nominees (Australia) Limited's ('NULIS') understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on specific circumstances. The securities advice or information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision on the basis of the advice above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the advice is appropriate in the light of their particular investment needs, objectives and financial circumstances.
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