Did you know that women retire with 47% less superannuation than men?
Recent research by Per Capita in partnership with the Australian Services Union (ASU) surveyed 4,000 workers and used data from the Australian Bureau of Statistics (ABS) and the analysis of the Household, Income and Labour Dynamics in Australia (HILDA) Survey to consider superannuation and women’s retirement outcomes. The report ‘Not So Super, For Women’ paints a bleak picture for women who fall behind early in super and hit obstacles throughout their working lives to ensure that their comparable super savings never catch-up.
At the recent ACTU Congress ASU National Secretary David Smith along with Per Capita highlighted the reasons why super was failing for women, but also explored solutions arising from the research.
Recent data from the ABS indicates that the gender pay gap for women is currently 10% lower than men for equivalent work, with women’s pay across the workforce sitting at 31% lower. Women are much more likely to work in part-time or casual work. They contribute less to super and have less savings outside of super. Very significantly, they spend less time in the workforce than men, thereby reducing their super savings. The research showed that over 55% of women had experienced periods out of the workforce to care for children and other family members. Less than 12% of men had taken similar time off work.
Interestingly having children has a positive impact on men’s super balances. Statistically men with children are at the top of the income distribution hierarchy, childless men are next, closely followed by childless women, and women with children are at the bottom. This becomes a critical situation for many single mothers or in circumstances of marriage breakdown.
What can be done?
The ‘Change the Rules’ campaign is calling on Government to make super fair. This includes the immediate payment without further delay of 12% Super Guarantee (SG). Of particular relevance to women is the need to ensure super is paid for parental leave, including the government’s paid parental leave scheme. The campaign also calls on the Government to fund co-contribution top-ups for workers who are not on track for a decent retirement.
Super Funds
Proposals for super funds include fee discounts for those below the accumulation pathway; a fee-free period for up to 12 months for members on parental leave and free financial literacy education for low-balance account holders.
Industry Super Funds are beginning to take pro-active roles in addressing women in super issues. The Board of NGS Super recently approved the payment of super on paid and unpaid parental leave up to twelve months for all NGS staff.
Unions
There are opportunities for Unions to address super inequality through enterprise bargaining including provisions addressing financial literacy training, provisions around co-contributions for staff more than 5% below an acceptable accumulation pathway and provisions allowing for great workplace flexibility.
Of particular importance to women’s retirement outcomes, there is a need to achieve provisions through enterprise bargaining for employers to pay superannuation on all parental leave (unless super is met by the Government).
The IEU is committed to pursuing fairer super outcomes and will adopt appropriate strategies to achieve suitable changes in agreements in our schools and early learning centres.
G. Taylor, 2018., NewsMonth, IEU NSW/ACT, http://publications.ieu.asn.au/newsmonth-29/executive-reports/did-you-know-women-retire-47-less-superannuation/
