Large publicly listed companies including Telstra, AGL, ANZ and Macquarie Group are among employers that are asking some of their staff to use money out of their own pockets in order to fund the upcoming 0.5 per cent increase in superannuation payments.
But some big companies are sending letters to their workers saying the staff member will have to fund the super rise from his or her wages, which means a pay cut.
The superannuation guarantee is the proportion of wages that employers must contribute to their workers’ retirement savings.
It is legislated to increase from 9.5 per cent to 10 per cent from July 1, and then rise 0.5 per cent each year, until it reaches 12 per cent by 2025.
Workers have employment contracts that either state their super should be paid on top of their base salary, or that it is included as part of their total package.
It is employees in the second category who face taking home a smaller pay cheque.
If an employee’s contract says their super is included in their total package, it is legal for their boss to take that money out of their base pay — so long as the workers’ salary does not drop below the minimum permitted wage stipulated in their award or employment contract.
Employers are allowed to take super rises out of a worker’s base pay if the contract says so
ABC News has been contacted by employees of big publicly listed companies that have already received emails and letters confirming that their super increase will be funded out of their base pay, meaning they go backwards in pay.
Often companies have different contracts for different employees, meaning not all staff face the same fate.
A spokesman for Telstra noted about 5 per cent of its workforce would have the super increase taken out of their base pay — therefore going back in wages.
He said Telstra offered its staff “industry-leading terms and conditions”, and only senior managers and executives made up this 5 per cent that would have to fund their own super rise, as the rest of their workforce in Australia was on enterprise agreements that did not allow that.
“The promise of a minimum of 10 per cent superannuation has been included in our enterprise agreements since 2015,” he said.
“The EA applies to all employees in Australia who aren’t in senior management roles.
“For our [Telstra] senior managers and executives not covered by the EA, their super contribution of 9.5 per cent will increase to 10 per cent from 1 July in line with the new legislation — this group represents around 5 per cent of our overall workforce and their overall fixed remuneration will remain unchanged.”
A spokeswoman for AGL also confirmed the gas and electricity provider was making some of its workers fund their own super increase rather than pay it on top of their current salary.
A letter was sent to AGL staff last week.
“AGL undertakes a careful assessment of market trends, business conditions and company results to determine how the increase to the superannuation guarantee contribution will be applied,” she said.
“In 2013, the increase was absorbed by AGL, whereas in 2014, the increase was absorbed by our total fixed remuneration employees.
She said the upcoming 0.5 per cent superannuation guarantee increase to 10 per cent would be borne by employees who have a total fixed remuneration contract.
“The increase to the superannuation guarantee contribution will result in a redistribution between base salary and superannuation components,” the AGL spokeswoman said.
ANZ is another company that has sent similar letters to its staff confirming that staff could see their “gross take-home pay/salary reduced slightly”.
An ANZ spokesman said the bank “carefully weighed up the implications of the decision”.
“It’s important to note this will not impact the take-home pay of our branch staff and contact centre people,” he said.
“The staff affected are our more senior employees in head office roles.”
He said an employee on $100,000 a year would see a reduction in their after-tax salary of $10 a fortnight.
A Macquarie Group staff member also contacted ABC News about the same issue impacting the investment firm’s employees.
The letter states: “When the superannuation contribution rate increases on July 1, the superannuation component of your TPV (total package value) will increase and your annual base salary component will decrease, to reflect the changes”.
Macquarie Group was contacted by ABC News but did not wish to provide a comment.
Research firm Mercer recently surveyed 145 organisations. It found almost two-thirds of organisations with a “total package” approach – where their super is bundled in with their salary — were passing on at least some of the cost to employees.
ACTU President Michele O’Neil says she was shocked that employers would not be passing on the super increase as the legislation intended.
“My message to employers is that it’s working people that have got us through the pandemic, and in many cases, paid the price of losing hours, losing jobs and losing pay,” she said.
“Now’s the time, we should be supporting people — making sure that they have fair wage increases, and that they have that confidence of knowing they’re going to have enough to retire on when they come to that point in their life.”
She urged employees to check their contracts carefully and for those who have union representation, to contact their relevant union.
‘We’d encourage every worker to check … it has gone up to 10 per cent,” Ms O’Neil said.
“And of course, contact the union if that [the super rise] is not there. It’s really important that workers do pay attention to this because so many people just don’t look at the detail. And it’s their right — it’s their entitlement.”