In response to questions about Superannuation and Covid 19 Withdrawals Nambawan Super CEO, Paul Sayer, has stated that Superannuation Schemes cannot be a substitute for social security.
“Superannuation is only for retirement or when you are no longer working – as specified in the Superannuation Laws,” Mr Sayer said.
“In PNG, where there is no pension or welfare, it is really important bread-winners who have supported their families for decades, have reasonable retirement savings to support them when their fortnightly income stops.”
Mr Sayer agreed members and worker had immediate needs during these unprecedented times, and that the superfunds are pitching in to help, but believes a different type of scheme is needed to address the short term and emergency needs for workers.
“Superannuation schemes and investments are structured for retirement, which has long term investment horizons,”
“There is an opportunity out of this experience for PNG to consider how all workers of PNG have savings, or the creation of a safety net of some kind, for an emergency like this.
“This could be an insurance scheme or a different savings scheme for all workers and not just those covered by Superannuation.
“Such a scheme would need to be supported by new legislation, and could be managed outside of the superannuation environment where appropriate investment structures can be used for shorter-term investment horizons.”
Superannuation Laws have changed little in the past 20 years. It has been proposed that a Superannuation Review be undertaken to consider reforms that may be needed.
Nambawan Super will be advocating for a range of reforms during the review, including superannuation to be extended to all workers, not just those working for organisations that have 15 or more employees.
Mr Sayer said the review may also be the right platform to discuss the creation of different short term or emergency saving mechanisms for the workers of PNG.
In the past 12-months, Nambawan Super has advocated for tax relief for super fund members.