The law should be changed to allow employers to contribute more to the superannuation accounts of their female workers, without breaching anti-discrimination legislation, according to a new policy framework released by the Association of Superannuation Funds of Australia (ASFA) today.
The Superannuation Guarantee (SG) should also be applied to paid parental leave schemes and the $450-a-month threshold for the SG removed in order to urgently address the significant gender gap females suffer when it comes to their superannuation.
ASFA CEO Ms Pauline Vamos says, at present, women retire with around half as much as men in their superannuation account, leaving them drastically short of the savings required to live a comfortable retirement.
"Even more disturbing is the fact that almost one in three women have no superannuation at all. Policymakers need to urgently address the issues women have when it comes to their super, otherwise, we will have a growing number of women living in poverty when they retire.
"Many women face challenges when it comes to accumulating adequate retirement savings. They are often in lower-paid jobs, or work casually or part-time, and they often take more time out of the workforce than men to look after children or family members. This makes it hard for them to build up the savings required to live with comfort and dignity in retirement."
The solutions listed below are contained in a comprehensive paper outlining a new framework for a better system released by ASFA today, which also makes recommendations on how to improve outcomes for retirees, Indigenous Australians and the self-employed.
"We have a very good superannuation system in Australia, but there are gaps that need to be addressed. Better catering for the unique circumstances that these groups often find themselves in will ensure the system delivers across our community more broadly," Ms Vamos concluded.
Three steps to better retirements for women
- Remove the $450 a month threshold for the SG
Currently around 250,000 Australians miss out on around $75 million worth of superannuation due to this threshold, particularly women who tend to work in casual or part-time jobs, often for more than one employer at a time. Removing it would provide a great boost to their retirement savings.
- Apply the SG to all substantive income replacement payments
Including SG in paid parental leave in particular, has the potential to add thousands of dollars. Even just six months of SG applied to the paid parental leave of a 35-year-old woman earning $50,000 could add an extra $10,000 to her final super balance.
- Allow employers to contribute more to the superannuation accounts of women without breaching anti-discrimination
The Anti-Discrimination Act should be amended to ensure employers can pay their female employees more superannuation, without being in breach of the Act.
For a copy of the full report, click here.
To access the speech in which the paper was launched, click here.
For further information, please contact:
Lisa Chikarovski: Manager – Consumer Strategy, Media and Public Affairs, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation, which aims to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.