February 19, 2019 | 02:30 AM

13.06.2008Young 'miss out' on super scheme

Young workers are missing out on the federal government's co-contribution superannuation scheme that tops up their retirement savings, a leading super fund says.

HESTA superannuation fund estimated that fewer than 20 per cent of their members who benefited from the government's scheme were aged 40 years or younger.

HESTA chief executive Anne-Marie Corboy said young people were more likely to qualify for the scheme and gain the greatest benefit from making an after-tax contribution to their super fund.

"Among our members, more than half of the people who have received co-contributions since the scheme was introduced were aged over 51."

"While less than five per cent of recipients were aged 25 and under."

People who earned up to $28,980 this financial year could receive the maximum co-contribution of $1.50 for every dollar voluntarily contributed, up to $1,000, from their taxable income into their super fund.

Workers who earned up to $58,980 a year would qualify for co-contributions, but the amount is reduced by five cents for each dollar contributed if their annual income is above $28,980.

Ms Corboy said a different mindset had to be encouraged for people to consider superannuation as investing for retirement.

"We want young members to understand they can reap big rewards from small investments they make today because their money will work for them for a longer period of time," she said.

Workers eligible for the scheme should invest as much as they can, even minimal amounts, Ms Corboy said.

"It is money for nothing and every eligible worker with the capacity to invest should jump at this opportunity," she said.

"An eligible worker earning $27,000 who invests $100 into their super today would attract a co-contribution of $150.

"That will be worth $3,883 in 10 years' time, based on an interest rate of 6.25 per cent."

HESTA is a national industry fund that covers the health and community services sectors, with women comprising about 85 per cent of its members.

Ms Corboy said more women should take advantage of the scheme.

"Women typically have half the super savings of men, and time out of the workforce to raise children is a key culprit in that gender gap," Ms Corboy said.

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