By Wayne Davy
Chief executive officer
IN late 2018, Hydro Tasmania announced that it’ll start making super payments for employees on unpaid parental leave, in addition to 12 weeks of paid parental leave offered to primary carers.
It’s encouraging to see organisations stepping up to tackle the super gender gap issue and creating a fair working environment, because small changes like this can have a significant impact on women when they reach retirement.
A 30-year-old woman earning an annual salary of $50,000 for example, can lose up to $77,000 in retirement savings from having six years out of the workforce and with more than 70 per cent of childcare in Australia performed by women, it’s something almost all will experience.
Imagine how it would feel to reach retirement age only to discover you have half the super balance of your male counterparts and are expected to live out what you thought would be your best days on a shoestring budget.
The reality is, 40 per cent of retired women live in poverty.
By the Association of Superannuation Funds of Australia 2018 retirement standards, a single female needs $545,000 to retire comfortably, which is under $100,000 less than the $640,000 needed for a couple, leaving single women at a much greater risk of experiencing housing stress and homelessness in retirement.
The gap in retirement savings among women is the culmination of a lifetime of lower wages and the need for women to leave the paid workforce in order to have children and care for others.
While Government action is required to address the issue on a wider scale, I’d encourage businesses to take a progressive stance where they can.
National advocacy body Women in Super has recommended a five-step plan to help close the gender super gap.
Giving low income earners an annual contribution of $1000 from age 25 for those with super balances under $100,000.
Removing delays to increasing employer super contributions.
Removing the rule that those earning less than $450 each month don’t receive super.
Paying super on parental leave.
Measuring and publishing the super gap each year to inform legislative decisions.
While the trend looks set to continue without timely change at a federal level, these steps provide a positive framework for achieving gender equality in the workplace.
In the meantime, I’d encourage women to:
Check their super balance and take steps to ensure their super is working for them.
Review their account details and combine multiple super accounts into one.
Explore the possibility of making additional contributions, reviewing investment options and seeking financial advice.
We all have important women in our lives and I’m sure you’ll agree that we want to see them enjoy both equality in the workplace as well as a comfortable retirement.
So, it’s time we took the onus off women and put some pressure on our decision makers to make super fair for women.
*Wayne Davy is chief executive officer at Tasplan Super, a Tasmanian based profit-for-members super fund which has $8 billion under management and 138,000 members.