We take a look at the recommendations published in the recent Super Ideas report by the John Curtin Research Centre and Vision Super, designed to improve the retirement outcomes of women.
Women are retiring with less super than men, and not just by a little bit. In 2016, the average super balance for women was $68,000 and $112,000 for men, according to the Association of Superannuation Funds of Australia (ASFA).The Super Ideas report found that at age 25, women have roughly the same superannuation balance as men, but by the ages of 35 to 44 their balances are 30% lower, and 45% lower at age 45 to 64.
So why is Australia’s world class super superannuation system failing women?
According to the report, the current super system is designed for people working in stable, full-time positions – but this doesn’t reflect how Australians work today, especially women.
Women are more likely to take time off or work part-time to care for children or elderly parents, and during this time, they’re missing out on valuable super contributions from their employer.
Even once female employees return to work for a few hours a week, employers are only obliged to pay superannuation to staff earning more than $450 before tax per month.
In an effort to improve the retirement outcomes for women, and all Australians, the Super Ideas report recommended several policy changes.
The recommendations include increasing the compulsory employer super contribution from 9.5% to 15% by the end of the next decade and incorporating financial literacy into the school curriculum to ensure more young people are empowered to take control of their finances early on.
Most importantly, to lessen the super gender gap, the report recommends the removal of the $450 threshold, so all workers receive super contributions from their employer. It also suggests that employers should pay workers (both male and female) super contributions for the first six months of paid parental leave.
Until policy changes, here are some steps you can take to improve your financial future.
- Visit Vision Super’s website for fact sheets, calculators and articles to help you understand your super and how to make the most of it.
- Contribute a little extra to your super if you can. There are numerous ways to contribute to your super, learn more here.
- Call our friendly Member Services team on 1300 300 820 to chat about your options.
The full Super Ideas report is available here.