Gig Economy Creates Ripples In Australia’s A$2.1 Trillion Pension Pool

One America News Network | 3/31/2017 | Staff
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SYDNEY (Reuters) – When ride-hailing company Uber started in 2014, Sydney resident Rosalina Kariotakis was among the first drivers to sign up, becoming part of the “gig economy” where freelance work is transforming the traditional job market in step with advances in technology.

Mobile or online platforms are at the forefront of a boon in casual work for individuals who are seeking greater flexibility for less security – many of them are giving up benefits such as sick leave, life insurance and pension fund savings.

Australia - Sea - Change - Strain - Country

In Australia, this sea change is putting a strain on the country’s much-admired A$2.1 trillion ($1.60 trillion) system of retirement savings – the world’s fourth largest – which relies on mandated contributions by employers.

“Our research shows that contingent and part-time workers are missing out on A$150 million a year in super payments,” said Damian Hill, chief executive of REST Super, a superannuation fund with A$39 billion in assets.

Australia - Countries - Retirement - System - Superannuations

Australia is one of the few countries to have a mandatory retirement system, also known as superannuations or supers, whereby employers pay a contribution of 9.5 percent on top of the employees’ wages.

But digital companies including Uber, Deliveroo, Airtasker and Foodora, which employ independent contractors are not obliged to contribute to superannuations as the workers are seen as self employed.

Kariotakis - General - Motors - Employee - Mid-40s

Even Kariotakis, a former General Motors employee now in her mid-40s, is nervous about the absence of retirement savings.

“It’s a big problem,” Kariotakis said, in response to how she envisages her finances when she retires. “At the moment, we can’t afford to put money aside.”

Economy - Grows - Trend - Retirement - Savings

So as the gig economy grows, it signals a problematic trend for the retirement savings...
(Excerpt) Read more at: One America News Network
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