The head of Australia's peak superannuation body has warned the Government not to mess with the superannuation system.

Key points: The Federal Government is drawing up the terms of reference for an inquiry into super and pensions

The Federal Government is drawing up the terms of reference for an inquiry into super and pensions Some Coalition MPs have called for the super guarantee increase to be delayed or scrapped entirely

Some Coalition MPs have called for the super guarantee increase to be delayed or scrapped entirely Super funds have warned the Government not to tinker with superannuation rules

"If you start dismantling superannuation, you're essentially an anti-vaxxer," Martin Fahy told 7.30.

"You're pulling the system apart and leaving individuals exposed and losing the herd effect."

The Federal Government has announced a review into superannuation and some of its MPs have called for a delay, or entire scrapping, of the legislated increase to the compulsory super guarantee to 12 per cent.

"The irony of this is, this is coming from politicians who get 15 to 16 per cent contributions themselves," Dr Fahy said.

"We need to commit to going to 12 per cent.

"We need that herd effect so we can keep the age pension for those that need it.

"The group and pooling effects … the scale of superannuation is ultimately what protects us all."

'The case has not been made for ever bigger super'

In recent weeks the Federal Government has flagged a broader review of retirement incomes.

The Assistant Minister for Superannuation Jane Hume said that would also include a look at the pension system.

"The terms of reference for that review is still being decided but it will look at the interaction between the superannuation system and the pension system, and also the effect on national savings," she told 7.30.

In the meantime, a group of federal MPs have begun airing their own ideas about the superannuation system.

The most radical of those ideas came from New South Wales senator Andrew Bragg in his maiden speech to Parliament a fortnight ago.

Giving his maiden speech, Andrew Bragg calls for superannuation to be voluntary for people earning less than $50,000. ( ABC News: Ian Cutmore )

He said low-wage earners should be able to opt out of superannuation altogether.

"Certainly, the case has not been made for ever bigger super," he told 7.30.

"I would change direction. Super should be made voluntary for Australians earning under $50,000."

Another Coalition MP, Victorian senator James Paterson, said the current superannuation system was not working and called for the legislated increase in minimum mandatory contributions, set to increase to 12 per cent, to be delayed.

"In an environment where wages have been growing more slowly than we would like, or that certainly workers would like, is it a good idea to force them to put more of their income into superannuation at the expense of the take-home pay that they can spend today on their important financial priorities — whether that's saving for a first home deposit, whether that's paying for a mortgage or their school fees," he said.

Jane Hume says the terms of reference for the super review are still being drawn up. ( ABC News: Toby Hunt )

But Ms Hume said delaying the super guarantee increase was not up for debate.

"The Prime Minister and the Treasurer have been really clear on this issue; there are no changes to the increase in the superannuation guarantee," she said.

"It's legislated already, it's legislated to move to 10 per cent in 2021, and then move up to 12 per cent by 2025."

Duplicate accounts and underperformance costing billions

There have recently been a number of reports critical of Australia's superannuation system. ( Supplied: Pexels )

Australia's system of compulsory superannuation was introduced in 1992 — when the Keating government negotiated with the union movement to trade off a pay rise for compulsory superannuation contributions to be paid by employers.

The system has long been regarded as world-leading, but of late a different picture has begun to emerge.

One by one, a series of inquiries — including a royal commission — have found that Australia's super system is structurally flawed, poorly regulated, and wasting billions of dollars in retirement savings.

The banking royal commission recommended reducing default funds to just one for each member and implementing a limit on fees for basic advice.

Just months later, the Productivity Commission found duplicate accounts and underperforming funds were costing Australians billions of dollars.

This article contains content that is not yet available here.

It said a third of all super accounts were duplicates, adding $2.6 billion to annual fees.

For a typical full-time worker, that extra cost will leave them with about $51,000 less when they retire.

Add in underperforming super accounts and the outcome is even worse.

For a person at the start of their working life right now, it is estimated that the total cost of underperforming and duplicate superannuation accounts will reach $533,000 by the time they retire.

And a report by former head of the competition watchdog Graeme Samuel found one of the regulators of the superannuation sector, APRA, needed to exert greater oversight.

'Powerless' to access money

Steve Dodge has struggled to access money in his super account. ( ABC News )

Steve Dodge's experience with his superannuation fund has not been good.

The 59-year-old engineer said he had always trusted his super fund, but it would not help him when he needed it.

When his shifts doing aircraft maintenance at the local airport dried up, he decided to access a pension payment through his superannuation.

"I had quite a bit of stress, financial stress, I had to dip into my savings to save us, as a family, to pay the mortgage," he told 730.

But, despite 20 years as a member with Australian Super, he said he could not access his money after weeks of trying.

"I just found a brick wall," he said.

"I'm basically powerless to [access] something I'm entitled to.

"I'm 59, I could have accessed that money three years ago at 56 … and you believe while you're contributing money they're doing the right thing by you."

Australian Super said Mr Dodge never told the fund he needed his money urgently.

It told 7.30 there was a delay in processing a document, but Mr Dodge's money was still transferred to a pension account within one month.

Mr Dodge said he was never told about the transfer.

Now he is trying to move his money to a different superannuation fund.

"For the moment, the issue hasn't been resolved," he said.

"I have no pension scheme and I have no income."

'System working well'

Martin Fahy, CEO of the Association of Superannuation Funds of Australia, says the system will work better with less interference. ( ABC News )

The $1.9 trillion superannuation industry is on the defensive.

Dr Fahy said over the past 10 years there had been 25 reviews of the super system, which had altered the way it was administered and driven fees and costs higher.

"We need to allow the system to get on and deliver what it's been doing, we need to keep stop tinkering with the system because it's eroding consumer confidence," he said.

Bernie Dean from the peak body for industry funds, Industry Super, said the politicians wanting to freeze the level of compulsory super were opposed to the idea of a national retirement savings system.

"I don't see superannuation as a problem, but I'm hoping that it's not considered a political plaything over the next couple of years," he told 7.30.

"Super's spending a lot of time in the limelight, and I don't think it's a great surprise that people would take a look at the system, but it is working well."

He said Australians should be concerned by well-paid politicians "telling the rest of Australian workers that their retirement savings don't matter anymore".

"There are a number of people that are calling for another freeze in the superannuation guarantee and that's a bit of a worry for me," he said.

"These are people that have never and will never support the idea of a national savings system and they've always been there."

Mr Dean said one of the biggest problems facing the sector was actually employers failing to pay workers their super in the first place.

"One third of our national workforce is missing out on some or all of their superannuation contributions, because unfortunately some employers are holding that money back within their business," he said.