Taxing superannuation at marginal rates then offering a rebate would be an administrative nightmare and leave too many people worse off, the peak body for super funds says.

The Association of Superannuation Funds of Australia (ASFA) on Thursday joined the Financial Services Council in warning the government not to raid super to fund changes elsewhere in the tax system.

The groups, which represent super funds, said taxing contributions at marginal rates less a 15 per cent rebate would diminish retirement savings and increase reliance on the age pension for 80 per cent of Australians. ASFA chief executive Pauline Vamos said such a system would require either the ATO to administer rebates or employers to calculate extra withholding tax and remit that to the ATO.

"The administration costs of putting this in place are going to be significant, both on the tax office and on superannuation funds," she said.

"There could also be unintended consequences for members. For example, you could be waiting months to get your rebate, which means you have less in your account and therefore a lot less benefit through compound interest."

"Once you start applying marginal tax you move away from the fundamentals of what the system is about," Ms Vamos said.

"It's about encouraging people to save; you're going without wages today to save for the future. [The FSC] are trying to dissuade the government from going down this path and we agree."

Because their members' businesses depend on it, both the FSC and ASFA want the government to compel workers to put more money into super, not take extra out in tax.

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This article was originally sourced from The Australian Financial Review here and was written by Joanna Mather.