In August 2018, the gender pay gap in Australia dropped to 14.6 per cent, the lowest it has been in 20 years1. Despite this, women still earn on average $244.80 per week less than men — and it’s having an impact on their super.
The super gap
Currently, women in Australia retire with an average of 47 per cent — or $85,000 — less super than men. This isn’t simply because women are being paid less, it’s because they experience the workplace very differently from men.
Women are more likely to work in lower paid roles and lower-paid fields, to work part-time or casually, and to take breaks from paid employment to provide unpaid care for others.
As a result, women earn less over their lifetimes. This equals less super.
A lack of financial security
For women, the super gap can seriously diminish their ability to be financially secure and independent in retirement.
It is estimated that more than 40 per cent of older single women live in poverty — the fastest growing cohort of homeless people in the country.
Women are also much more dependent on the Age Pension and almost 8.5 per cent of women between 65 and 74 still have a mortgage.
Closing the gap
Gender pay reviews, flexible work policies, paid parental leave, and gender equality strategies are some initiatives businesses are embracing to address the gender pay and super gap issue.
In 2015, ANZ announced it would pay $500 a year to women employees with super balances less than $50,000, while also paying super contributions on parental leave for up to 24 months.
In 2013, consultancy firm Rice Warner introduced a new Valuing Females Policy “to improve the retirement savings outcomes of female employees.”
This saw them paying women employees an extra 2% super, regardless of their normal salary level.
While these initiatives help, they also highlight the complexities of the gender pay gap issue.
For example, making it mandatory for all businesses to pay extra into women’s super might seem like a viable solution to closing the gap. However, it could also have unintended results, such as making women less desirable to employers because of a perceived ‘additional cost’.
As a result, the gender pay gap can’t be fixed with a single measure — it requires change across the board from employers, industry, the Government, and the wider community.
Change from within
Within the super industry, the push for gender equality is being championed by the Women in Super network — a national advocacy group comprised of women working in super and financial services.
Women in Super advocate for a super system void of gender-based inequality and work with governments, unions, employer organisations, regulators, and super funds to drive real and structural change. And they seem to be making an impact.
Late last year, Labor announced that, if elected in 2019, they would introduce Superannuation Guarantee payments on the 18 weeks of Government Paid Parental Leave. They also said they would phase out the $450 monthly pay threshold for eligibility for super payments.
If implemented, these changes would improve retirement outcomes for thousands of women and would be an important step in bridging the super gender gap at retirement.
Of course, there is still plenty of work to be done, but every step forward is a step towards closing the gap forever.
Don't wait for the gap to close — act now.
Here are some steps women can take to improve retirement outcomes now:
1. Find and consolidate your super
Finding and consolidating your super accounts means you avoid paying multiple account fees and gives your super balance the best chance of growing over the long-term. Go to mtaasuper.com.au/consolidate
2. Understand your investment options
Knowing and understanding your investment options helps you choose an option that best suits your life stage, risk tolerance and retirement goals. This can help your super grow faster. Go to mtaasuper.com.au/investment-options
3. Make extra contributions
Contributing as little as an extra ten dollars per week into your super can make a big difference to your super balance. The sooner you start adding extra, the more time your super has to grow. Go to mtaasuper.com.au/extra-contributions
4. Learn about your super
We run regular education workshops throughout Australia to help you understand and get the most out of your super. In 2019 we introduced our new “Women and Super” workshop aimed at helping women maximise their retirement savings. Go to mtaasuper.com.au/workshops
5. Get advice
Getting advice from a financial adviser can help you develop a financial road plan to suit your personal circumstances and goals. It will also make sure you’re thinking long-term about your financial security. For details go to mtaasuper.com.au/advice