Women and super

Sally Loane

By

11/04/2016

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A prime case of inequality is gender and superannuation, a subject that even recently struggled to stay in the headlines despite the current and ongoing debate over mooted changes to our superannuation system.

Women simply don’t have enough super. The compulsory superannuation system, designed 24 years ago, reflects traditional patterns of work – continuous full-time employment – which inherently discriminates against women.

Women are not paid at the same rate as men. Our full time earnings are 17.3 per cent lower.

Women are more commonly employed in part-time or casual jobs. February’s Australian Bureau of Statistics figures on gender and the workplace show that women comprise 46 per cent of all employees, yet just 35.7 per cent of the full-time workforce. Far more of us work in part-time and casual work – 69.1 per cent and 54 per cent respectively.

Women take time out of the workforce to raise children and care for elderly parents.

Women live longer.

Women retire with significantly less savings than men.

Data from Rice Warner Actuaries has found that every generation of women, from baby boomers to Millennials, is facing a significant shortfall in retirement savings.

Average super balances for women at retirement are less than half that of men.

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    ANZ Global Wealth recently worked out the impact of wage inequality over a lifetime in cold hard cash. They found women who work full-time start on wages four per cent lower than men after graduation, even when they have the same qualifications. Over a lifetime the pay gap increases to almost 20 per cent.

    On average, full-time working women earn $295 per week less than full-time working men, which is $15,000 less over a year and a staggering $700,000 less over the course of their careers.

    This gap means that 90 per cent don’t have enough super to live on comfortably when they retire, and 15 per cent will experience poverty in retirement.

    A system that allows women to experience these levels of inequality is not sustainable, and certainly not a fair go. Some FSC members are undertaking initiatives designed to close the gender gap. ANZ, for example, is making an extra $500 annual super contribution to all 12,700 of its female employees in Australia and offering free superannuation advice to Australians with less than $50,000 accumulated in their super.

    The FSC has proposed some policy options to a current Senate Inquiry which is examining adequacy for women in retirement. These include paying super contributions on the existing Commonwealth Paid Parental Leave scheme and extending them over time to the super contributions that a carer would have received had they continued in employment.

    Also, barriers in the Sex Discrimination Act need to be removed so employers can initiate ideas to improve the retirement outcomes of women, such as paying higher superannuation guarantee rates to female staff. At the moment, anti-discrimination laws in some States make that very difficult to achieve.

    We need to pull out all the stops to address the adequacy gap for women. In the name of a fair go for all Australians, women need to be allowed to secure and grow their retirement savings, and close the gap.

    Sally Loane is chief executive of the Financial Services Council