The Federal Government has been urged by superannuation bodies to commence implementation of some measures recommended in the Senate Economics References Committee report on women in retirement in next week’s federal Budget.
The recommendations the bodies said were priority to implement immediately were the retention of the Low Income Super Contribution, the Super Guarantee (SG) on parental leave, and the redistribution of super tax concessions to low income earners.
Women in Super (WIS) chair, Cate Wood, said the recommendations highlighted the structural unfairness of the current super system that had failed women as they were retiring with just over half the super savings of men.
“We have tinkered around the edges for too long. It is time to break with the past and take the fair and rightful step forward by implementing structural changes,” Wood said.
Australian Institute of Superannuation Trustees (AIST) senior policy adviser, Karen Volpato, said “we are pleased to see the report has made several recommendations around wages and workforce participation”.
Wood said the Age Pension in particular should be an area of focus for the government, as for many women, it is their main source of retirement income.
“There is no silver bullet but immediately moving to implement recommendations such as the retention of the Low Income Super Contribution, inclusion of super in Paid Parental Leave, and a redistribution of super tax concession to low income earners are all great starting points,” Wood said.
The Association of Superannuation Funds of Australia (ASFA) chief executive, Pauline Vamos, urged the Federal Government to commence implementation of at least some of the measures as part of the 2016/17 Budget along with allowing greater flexibility in the system for those with broken work patterns to catch up.
“The report acknowledges issues outside of super including pay rates and workforce participation rates, which we believe are also important in addressing this disparity between women and men in retirement,” Vamos said.
Agreeing, Industry Super Australia (ISA) deputy chief executive, Robbie Campo, said as a priority for the Budget, the LISC should be retained and increased to ensure millions of women are getting the help they need to save for retirement.
“Generous tax concessions benefiting a small cohort of high income earners should also be re-directed to fund the LISC. This will restore some fairness to the system and go some way to closing the 45 per cent super gap between men and women on retirement,” Campo said.
