Superannuation and Entitlement Reform
Rethinking How We Value Work, Leave, and Security
Superannuation is one of Australia’s great social innovations — a national retirement fund designed to ensure that workers can enjoy financial security after decades of contribution. But as the world of work evolves, the boundaries between employment, flexibility, and personal responsibility are blurring. It’s time to rethink superannuation not just as a retirement vehicle, but as the foundation of a modern, portable entitlement system that rewards continuity, autonomy, and accountability.
At present, Australian employees accumulate a range of entitlements: annual leave, personal (sick) leave, and, for those who stay long enough, long service leave. While these entitlements are designed to provide rest, recovery, and recognition for loyalty, they also create inefficiencies. Companies carry these entitlements as liabilities on their balance sheets — liabilities that can balloon into significant financial burdens. Meanwhile, employees often hoard leave (Annual) or feel pressured to use it before it “disappears” (Sick Leave). This creates friction in workforce planning and cash flow.
A reform opportunity lies in merging these traditional entitlements into a Mutual Entitlements Fund — an integrated account sitting alongside each employee’s superannuation. Instead of companies holding leave balances internally, they would make ongoing contributions to this fund: the employee’s super, plus the value of their leave entitlements. The money would belong to the worker and would travel with them from one employer to the next, much like superannuation already does.
Here’s how it would work in practice:
When an employee wants to take annual leave or needs time off for illness, they would still apply for leave through their employer. The employer would approve the absence as unpaid leave, while the employee draws their regular income from their own Mutual Entitlement Fund. This maintains workforce flexibility while removing the financial liability from the company’s books. More importantly, it allows the employee’s leave and benefit funds to continue accruing investment returns, growing as part of their overall wealth portfolio.
This model reframes entitlements from passive, short-term perks into active, long-term assets. It encourages financial literacy, promotes true portability between jobs, and aligns incentives between employer and employee. No more lost sick leave when changing employers. No more long service leave that evaporates when career paths shift. Instead, each worker carries their own “war chest” — a growing fund that reflects their total contribution to the economy, both present and future.
For employers, this approach simplifies compliance and reduces liability exposure. For employees, it delivers empowerment and continuity. For the nation, it strengthens our savings base and helps superannuation evolve from a retirement mechanism into a comprehensive lifetime entitlements system.
Australia pioneered compulsory superannuation three decades ago. Now, it’s time for the next leap — one that recognises that financial security isn’t built only at the end of a career, but every day we work. A Mutual Entitlements Fund would turn every hour of labour into a genuine, portable investment in one’s future — a fairer, smarter system for a modern economy.