Although there has been increasing workforce participation by women there is still a significant disparity between the retirement incomes of men and women, according to a super body.
The Association of Superannuation Funds of Australia (ASFA) said at the Senate Inquiry for the economic security for women in retirement hearing there were six factors that contributed to this and any measures to lift super savings would increase retirement security.
ASFA chief executive, Pauline Vamos, said the first issue was broken working patterns and while it was not confined to women, it is more often than not performed by women.
“This results in both breaks in employment and frequent significant periods of part-time employment,” she said.
ASFA also pointed to longevity risk as women are expected to live three to four years longer than men.
“This means that, all things being equal, a woman and a man with an equivalent amount of superannuation savings at retirement will see the woman either receiving a lower income throughout her retirement, or running out of her super with a longer period left to live solely on the Age Pension, when compared with a man,” Vamos said.
Vamos noted the gender pay gap, increasing casualisation in the workforce, structural issues in the super system, and the adequacy of superannuation were also contributors to the issue.
“There is an argument that the current level of superannuation savings do not provide security in retirement for a proportion of the Australian population, so any measures which lift superannuation savings overall will serve to increase security in retirement for women and men alike,” she said.
ASFA’s recommendations to the hearing were:
- Removing the $450-a-month threshold for superannuation guarantee (SG);
- SG applies to all substantive income replacement payments — parental leave / salary continuance / worker’s compensation;
- Annual contribution caps be amended to enable people with broken working patterns, who often are women, to be able to “catch-up” their super contributions;
- Low Income Super Contribution scheme should be retained permanently;
- A review mechanism should be built into the inter-generational report so that the current rate of SG contributions is modelled to determine whether it will be sufficient. If the inter-generational report indicates the rate of SG may be insufficient then this should be referred to the Productivity Commission for review;
- Allowing employers to be able to contribute more to superannuation for women without being considered to have breached anti-discrimination legislation;
- Making superannuation compulsory for the self-employed; and
- Ensuring employers’ compliance with the SG regime is improved.
