Women's super a 'disgrace'

THE retirement savings of women are a "national disgrace" and lifting the superannuation contribution to 12 per cent would result in the average 30-year-old woman retiring with an extra $108,000.

By InvestSMART · 27 Jul 2011

By InvestSMART ·
27 Jul 2011

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THE retirement savings of women are a "national disgrace" and lifting the superannuation contribution to 12 per cent would result in the average 30-year-old woman retiring with an extra $108,000.

ACTU president Ged Kearney, in a speech to a superannuation forum in Melbourne today, will also call on the federal opposition to support the Gillard government's proposal to lift the superannuation contribution from 9 per cent to 12 per cent.

"Women live much longer than men and yet their superannuation balances are, on average, 30 per cent lower than men's," Ms Kearney will say.

Ms Kearney's speech says it is a "national disgrace" that after a lifetime of work "women are forced to live on so much less than men".

Lifting the rate to 12 per cent would add an extra $3000 a year in retirement for women or $108,000 more superannuation.

Unions are also pushing for women to be paid superannuation while on parental leave.

But shadow assistant treasurer Mathias Cormann said yesterday the Coalition would not support the increase and said any rise "would hurt low and middle-income earners the most" and would be funded by a reduction in the take-home pay of workers. Women should be able to choose to use that extra income to pay off a mortgage or deal with the rising cost of living rather than see more of their income devoted to superannuation. "That's not in the best interests of either men or women."

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Frequently Asked Questions about this Article…

Why does the article call women's superannuation a "national disgrace"?

ACTU president Ged Kearney described it that way in a speech, saying women live longer than men yet have, on average, 30% lower superannuation balances — leaving many women forced to live on much less in retirement.

What is the proposal to lift the superannuation contribution from 9% to 12%?

The Gillard government has proposed increasing the compulsory superannuation contribution rate from 9% to 12%, a change Ged Kearney and unions are urging the federal opposition to support.

How much more super would the average 30-year-old woman have if contributions rose to 12%?

According to the article, lifting the rate to 12% would result in the average 30-year-old woman retiring with an extra $108,000 in superannuation.

What difference would a 12% super rate make to retirement income for women?

The article says an increase to 12% would add about $3,000 a year in retirement income for women.

Are unions asking for superannuation to be paid during parental leave?

Yes. The article notes unions are pushing for women to be paid superannuation while they are on parental leave.

Why does the Coalition oppose increasing the superannuation rate to 12%?

Shadow assistant treasurer Mathias Cormann said the Coalition would not support the increase because they believe it would hurt low- and middle-income earners most and would be funded by a reduction in workers' take-home pay.

How would a higher compulsory super rate affect workers' take-home pay?

The article reports the Coalition's view that raising the compulsory super rate would be funded by lower take-home pay for workers, meaning people might see less immediate disposable income.

What trade-offs should everyday investors consider about raising the superannuation rate?

Based on the article, everyday investors should weigh the long-term benefit of larger retirement balances for women (longer lives and currently lower balances) against short-term costs cited by opponents — such as reduced take-home pay and the preference some have to use extra income for mortgages or living expenses. Also note unions' push for super on parental leave as part of the broader policy discussion.