Closing the Gender Pay Gap in Superannuation

Closing the gender pay gap in superannuation

According to the Association of Superannuation Funds of Australia (ASFA), the average superannuation balance for women in 2017 was $68,000 and for men, $112,000.

Women retire with comparatively less savings than men, resulting in relatively lower incomes in retirement and leaving them at a much greater risk of absolute poverty in retirement due to their smaller retirement savings, particularly when they do not own their own home.

Identifying the issues

• Women are more likely to have an interrupted work history as primary carers for family. For a woman who takes five years off work to raise a family, she is estimated to lose at least $100,000 in retirement savings.
• A majority of part-time and casual workers are women in lower paid positions (admin roles, healthcare, community services and sales) and earn $119 a week less than men in all comparable jobs. [1]

What are the solutions?

Government contribution to low-earning Australians

Women in Super chair, Cate Wood, believes a government contribution to low-earning Australians’ super balances and consideration of the gendered impact of every policy decision would go some way to addressing the inequity. Wood says, “A $1000 government contribution to low-income earners would boost women’s savings, which is now almost half that of men, on average, at retirement.”

Cultural Shift – flexible working arrangements

Sandra Buckley, Executive Officer of advocacy group Women In Super, believes greater employer flexibility is a necessity in addressing the gender gap in super and believes, “more affordable and accessible childcare; and requiring super to be paid during parental leave in line with other types of leave, are logical steps.”

Workplace Gender Equality Agency (WGE) Director Libby Lyons says that, “greater flexibility can be achieved through developing and implementing company-wide strategies and initiatives’, such as: flexible working arrangements, paid parental leave, and making additional contributions to superannuation.

Providing the superannuation guarantee for those on low incomes.

By removing the rule that those earning less than $450 a month – who are mostly women and don’t receive super, will be instrumental in addressing the gender super gap.

Boost to rent assistance

Single women who are retired and do not own their own home are the group most likely to rely almost solely on the age pension, and are at the greatest risk of poverty in retirement.

A $500-a-year boost to commonwealth rent assistance for age pensioners, costing $250 million a year, was a viable option to help vulnerable retirees.

Parental leave

Providing super to parents that are on paid parental leave and allowing concessional contribution caps for women to accumulate over a few years would account for earnings lost with time spent out of the workforce.

Viva Energy made history last year by becoming the first company in Australia to offer employees a full-time superannuation payment of 12% base salary for up to five years during unpaid parental leave and part-time work periods.

Combining your super

Finding and combining super into one account is a quick and simple way to enhance your retirement income. Rolling your super into one account will potentially reduce fees, reduce paperwork, and leave you paying only one set of insurance coverage.

Making extra contributions

The current 9.5 % employer contributions might not be enough to maintain your current lifestyle when you stop work. Adding as little as $20 a week towards your contribution can go a long way towards your retirement savings over a sustained period. Ask our Member and Employer Services Coordinators to explore your options with a contribution calculator.

*Employers who wish to find out more on strategies to help women build their super can arrange for a First Super presentation with one of our Member and Employer Services Coordinators.

[1] Source: ABS cat. no. 6333.0