Plumping for default super
Posted by Nicholas Gruen on Tuesday, September 11, 2007
When Peach Home Loans was first launched it was called Plum Home Loans, and the avalanche of calls that we got after appearing on A Current Affair did not endear us to Plum Financial Services, of which we had not been aware. I had thought that having registered our business name we were entitled to use it and didn’t do further searches. Silly me.
In any event, I was in Paris talking to the OECD at the time and so the ‘issues’ that arose were quite tricky to deal with. What with them being backed by a $40 billion company and all, we thought we should be the ones to solve the problem and became Peach and we both lived happily ever after.
Meanwhile I’ve advocated the use of ‘default’ super – whereby people’s contribution to superannuation would be increased each year unless they opt out of doing so. And there’s Plum getting into the action with a commercial product that does just that. Good old Plum – born to innovate. Strange that it’s taken so long for other providers to do likewise.
This entry was posted on Tuesday, September 11th, 2007 at 3:41 PM and filed under Economics and public policy.
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“Plum’s was awarded the Alchemist’s Award for Innovation in Communication and the Excellence Award for Member Marketing and Education Communication for the Escalator Program.”
Posted on 11-Sep-07 at 4:26 pm | PermalinkWow! I think?
In your plan, who opts out? The employee or the employer? If it is the employer, well… And if it is the employee, and they do opt out, does their take home pay increase? If they don’t opt out and the employer becomes liable to pay more, can they sack the worker if that worker’s marginal productivity is below their new total wage cost?
BBB
Posted on 12-Sep-07 at 6:46 pm | PermalinkBBB – it’s the employee’s money that is at stake. If they opt out, less of their money goes into super, the same amount more (less any tax issues) goes into their take home pay. Very simple. I’m not 100% sure that this is Plum’s model though I expect it is. But that’s what I’m talking about. Of course employers might get carried away with their social obligations and all that and offer to throw in a bit more – but that’s up to them and the employee. That’s what I’m talking about anyway.
Posted on 12-Sep-07 at 9:24 pm | Permalink