'Generous' superannuations deals for rank-and-file public servants and military personnel are actually leaving diggers and bureaucrats worse-off than their private sector counterparts, according to a leading expert.
Daryl Dixon says most public servants' superannuation arrangements belong to the bygone era of a "job for life and silver plated retirement benefits" while the rest of the world has moved on.
With sweeping changes to the nation's superannuation system to take effect on July, Mr Dixon used his Fairfax column to argue for a new approach in the public sector.
Employer-funded public service and military super contributions, of 15.4 per cent and 16.4 per cent respectively, look generous and are often cited by critics who allege the public sector is overpaid.
But Mr Dixon says the higher level of employer contribution compensate for lower wages than those paid in the private sector.
"Their after-tax take home pay is significantly lower than their private sector colleagues able to limit their employer super to the compulsory 9.5 per cent requirement," Mr Dixon wrote.
"Their [public servants'] super is now tied up totally untouchable till at least age 60 even if made redundant."
He says that, except for members of the lucrative "defined benefits" super schemes which have been closed to new members since 2005, federal employees are being denied choices available to other workers.
Most private sector workers can arrange to salary-sacrifice super contributions, above the 9.5 per cent mandated minimum, whenever the time is right for them but public servants and ADF personnel are locked into the higher contribution rate.
Mr Dixon, who has advised thousands of public servants on managing their retirement nest-eggs, argues the current rules simply lock up workers' money where it cannot be used for decades after they really need it.
He says that lowering super contributions and raising salaries by the same amount could boost take-home pay by 3 to 4 per cent for government workers, at the time of their lives when they need it most, costing taxpayers' nothing.
"At current marginal tax rates, a 5.9 per cent salary increase would boost take-home pay by between 3 and 4 per cent of gross salary and markedly improve their ability to acquire and pay off a home," he wrote.
"With the increasing incidence of redundancy and a more mobile work force, having a lower mortgage places the employee in a superior financial position to having more in super."
The veteran investment advisor says the public service arrangements are increasingly behind-the-times.
"Almost all private sector employers generally allow their employees maximum flexibility to structure their remuneration packages to suit their personal needs," Mr Dixon wrote.
"In stark contrast, current public service practice is largely unchanged from the situation where employees had a job for life and silver plated retirement benefits."
Mr Dixon noted that the 15.4 per cent contribution level was a good deal when it was first introduced, particularly with new recruits locked out of the "defined benefits" funds.
"But since then, while the value of defined benefit super has continued to increase, tougher super regulations and housing affordability pressures have reduced the value to many employees of employer accumulation fund contributions," he wrote.
"Being able to substitute more pay for less super would help rectify this situation."