Women's Superannuation: Bridging the gap

Today the national advocacy group Women in Super is launching its latest policy campaign, entitled Make Super Fair.

The timing is perfect for the beginning of our own SuperAdvice article and video series on what is arguably one of the biggest unresolved issues blighting Australia's retirement landscape – the enormous and growing gap in retirement savings between men and women.

Over coming weeks, we'll be speaking with a range of experts, from politicians to superannuation organisations, researchers and financial experts, to discuss what needs to be done to get serious traction in this area, including changes to legislation, and what can be done outside of the political arena.

But actions always speak louder than words. Rather than just talking the talk, our objective is to provide actionable solutions to members. So our panel of licensed financial advisers and superannuation experts also will detail various steps that individuals and couples can take to improve their retirement position over time.

Few would disagree the superannuation savings gender gap is a major economic and social problem. On average, women are retiring with well less than half the amount of superannuation than men.

According to the Melbourne Institute's recently released Household, Income and Labour Dynamics in Australia (HILDA) survey, which is Federal Government funded, the median superannuation balance at the time of retirement for men is currently $325,200 versus $110,952 for women.

Peak body, the Association of Superannuation Funds of Australia (ASFA), estimates that close to 75 per cent of women within the 60 to 64 age group have superannuation balances of less than $100,000, with nearly 60 per cent of women having less than $40,000, including some with nil.

Other government data shows 40 per cent of single women are retiring below the poverty line and represent the fastest growing cohort of homeless people.

Some of the reasons for this have been well documented, including the fact that many women leave the full-time workforce for prolonged periods to have and raise children. A recent report on superannuation and women's retirement outcomes by independent think tank Per Capita entitled Not So Super, For Women, also pointed to the gender pay gap, the rise in casualised work, regressive tax treatments, and relationship breakdowns as other key causes.

Yes, there are plenty of men who retire with little or no superannuation. But there's no question that there are many more women in this boat.

I have been writing about this issue for years but, to date, little has been done at the policy level to improve the situation. Some recent changes, such as the introduction of concessional contribution catch-ups and the easing of bureaucracy around salary sacrificing, go part of the way. Yet, these measures mainly apply to individuals who have the capacity to “catch up” or contribute more.

In 2015 the Federal Senate's Standing Committee on Economics began an official inquiry into Economic Security for Women in Retirement. After receiving hundreds of submissions and conducting hundreds of interviews, the committee released a detailed report last year under the title, A husband is not a retirement plan.

The report contained 19 recommendations, with the majority calling for changes to legislation to broaden the superannuation safety net for women. But when I spoke last week with Senator Jenny McAllister, the Chair of the inquiry, she conceded not much has happened since then.

Multiple changes to existing legislation are ultimately required to help bridge the retirement gap, while more also needs to be done in terms of improving financial literacy levels from a young age so those close to entering the full-time workforce, regardless of gender, are better informed and prepared.

Financial education is being delivered in some schools, but parents and grandparents also should be taking an active lead in the process. So should husbands and partners. At one level there's a degree of individual responsibility involved, but there's also a level of collective responsibility too.

That's where you can play an active role, through having open financial discussions within your own family and wider social circle.

In our first round of video interviews, Women in Superannuation Executive Officer Sandra Buckley (click here) gives her insights to Laura Daquino into what changes should be made to help level the superannuation playing field.

I also talk to Sally Loane (click here), the Chief Executive of the Financial Services Council, who outlines her thoughts and own experiences in an exclusive video interview.

We hope you embrace this important campaign and, as always, welcome your feedback. I would be happy to hear from you.

Tony Kaye
Editor