The Association of Superannuation Funds of Australia (ASFA) welcomes the Federal Opposition’s announcement of a package of proposed reforms to improve retirement outcomes for women.
ASFA CEO Dr Martin Fahy said the package recognised important social policy issues that arise due to women’s lower super balances and that narrowing the gap would lead to better standards of living in retirement for women.
“Structural policy reform to protect and enhance the economic security of women in retirement is something that ASFA has long advocated for. It is of critical importance to ensure that women are not condemned to experiencing poverty, and even homelessness, in retirement.”
Dr Fahy said the reduction to zero of the $450 threshold will be especially beneficial to low income and casual employees, the majority of who are women, giving them an entitlement to super that higher paid employees have as a right.
Payment of super on parental leave payments addresses the issue of broken working patterns due to caring responsibilities and recognises that income replacement should incorporate super.
Amending the Sex Discrimination Act will allow employers to contribute more super for their female employees.
“This recognises that women, on average, live longer than men and also tend to bear the load of caring responsibilities, especially for young children, and as a consequence experience more broken working patterns.”
Dr Fahy said there have been some positive initiatives by Government in recent years, such as continuing the refunding of superannuation tax for low income earners and allowing the ability to carry forward unused concessional caps.
“Measures such as those announced today will continue a positive trajectory in the system towards closing the retirement savings gap for women.”
HILDA data prepared for ASFA indicates that in 2014 around 50 per cent of women aged 55 to 59 had a very low super balance (nil to $50,000) compared to 33 per cent of men. For women in that age group who are divorced or widowed the percentage with low balances is even higher.
However ABS statistics show that account balances have grown strongly in recent years, with the disparity between women and men decreasing in the two years to 2015-16.
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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. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.