Does compulsory superannuation increase saving? The answer to this question is less obvious than many people suppose. A recent study prepared for CPA Australia, ‘Twenty years of the superannuation guarantee: The verdict,’ claims that "nothing has been saved during the 20 years of compulsory superannuation contributions". This is an overstatement, for reasons discussed below, but the report is at least asking the right questions.
Employees receive compulsory superannuation contributions equal to 9.25 per cent of their gross earnings. Compulsory superannuation is designed to increase household saving for retirement and reduce future demands on the budget from the age pension.