Retirement
How to fix gender inequalities in superannuation
Barriers to entry, lower hourly rates of pay, less hours worked and more unpaid labour are seeing Australian women retire with significantly less than men, with changes to the superannuation system needed to fix the super gender divide.
How to fix gender inequalities in superannuation
Barriers to entry, lower hourly rates of pay, less hours worked and more unpaid labour are seeing Australian women retire with significantly less than men, with changes to the superannuation system needed to fix the super gender divide.
A paper released by KPMG revealed that Australia has performed relatively poorly compared with other OECD countries in terms of female workforce participation and the proportion of unpaid work, leading to a growing gap between men and women.
According to the paper, most Northern European men do 75 per cent of the unpaid work that women do, whereas in Australia it’s a little over half. While the gap between male and female work participation rates is 10 per cent, with tax and childcare barriers often impacting women’s return to work.
This is leading to poorer outcomes in retirement for women, with the paper stating the median superannuation balance for men aged 60-64 years is $204,107, whereas for women in the same age group, it is $146,900, a gender superannuation gap of 28 per cent.
For the pre-retirement years of 55-59, the gender superannuation gap is 33 per cent, and in the peak earning years of 45-49, the gender superannuation gap is 35 per cent.
“The gender pay and super gaps stem from the fact that in Australia, our policy settings are still based on a model in which fathers do most of the paid work while mothers do part-time paid work but most of the unpaid work, said Alison Kitchen, KPMG Australia chairman.
“In effect, paid work, dominated by men, is valued more highly than unpaid work, which is mostly performed by women.”
Fixing the superannuation gap
According to KPMG, Australia’s superannuation system needs three major changes in order to fix the current superannuation gap.
They advocate for including superannuation guarantee (SG) contributions in the Commonwealth Paid Parental Leave scheme as the gap in work mostly impacts women.
Linda Elkins, KPMG national sector lead for asset and wealth management, noted that the paid parental leave scheme does not include SG contributions, which, given women take most of the parental leave, simply means the income and super gaps are exacerbated.
“While KPMG has recently proposed a major overhaul to the PPL scheme, the super guarantee issue still needs to be addressed even if the current system is maintained. There will be a significant cost, but this is a major impediment to equality,” she said.
The paper also found that allowing unused concessional contributions to be made for recipients of Commonwealth Paid Parental Leave without time limits is having a negative impact on women’s superannuation outcomes.
She also said, “Concessional contributions made by employers to employees can be used for up to five years, but this then runs out, which disadvantages women who have taken time out to raise children. There is no good policy reason why this cannot be changed.”
Finally, KPMG recommends amending the Sex Discrimination Act to ensure employers can make higher superannuation payments for their female employees if they wish to do so.
“Employers might wish to make higher contributions to attract and reward talented female employees who have taken time out, but this would be in contravention of the Sex Discrimination Act. The act could be amended at no cost, but with significant benefit,” Ms Elkins concluded.
About the author
About the author
Superannuation
How will the SG boost change your retirement?
Workers are set to benefit from a $20,000 boost to their retirement as a result of the upcoming super guarantee increase, new research has revealed. ...Read more
Superannuation
Some employees are being asked to fund the super rise – are you among them?
The upcoming superannuation rate increase is set to cost some employees a chunk of their take-home pay, with ASX-listed companies confirming they’ve informed their employees that their base pay is a...Read more
Superannuation
Your Future, Your Super passes, so what does it mean for you?
The Coalition’s controversial Your Future, Your Super reform has now been cleared, but how does the biggest shake-up of Australia’s $3 trillion retirement nest egg impact you? ...Read more
Superannuation
‘Stunning’ superannuation set sight on 24-year record
Superannuation funds are continuing their strong rebound from the COVID-19 downturn and are now setting their sights on a 24-year-old record. ...Read more
Superannuation
Government passes controversial superannuation reforms
The controversial Your Future, Your Super legislation has passed the Senate and will come into effect from 1 July 2021, with critics warning that members could be $230,000 worse off under the changes...Read more
Superannuation
1 in 3 Aussies considers a super fund merger positive
Following APRA’s admission that smaller super funds need to merge with larger firms to guarantee better member outcomes, new research has revealed that almost one in three Aussies considers a merg...Read more
Superannuation
Super terminology explained: Understanding the ICR
If you’re looking to optimise your retirement by finding the best super fund, you might come across something called the ICR. Here’s what you need to know about it. ...Read more
Superannuation
Pressure on for the Senate to block ‘member harm’ in YFYS reforms, body says
Critics of the Your Future, Your Super legislation have not been silenced by the bill’s passage through the lower house, with the AIST pleading with members of the Senate to ensure changes are made ...Read more
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Dissecting the budget and what it means for your equities, property and super
Listen now
Has the property market reached its peak; Biden’s climate summit and our sharemarket, and the upcoming budget
Listen now
Superannuation
How will the SG boost change your retirement?
Workers are set to benefit from a $20,000 boost to their retirement as a result of the upcoming super guarantee increase, new research has revealed. ...Read more
Superannuation
Some employees are being asked to fund the super rise – are you among them?
The upcoming superannuation rate increase is set to cost some employees a chunk of their take-home pay, with ASX-listed companies confirming they’ve informed their employees that their base pay is a...Read more
Superannuation
Your Future, Your Super passes, so what does it mean for you?
The Coalition’s controversial Your Future, Your Super reform has now been cleared, but how does the biggest shake-up of Australia’s $3 trillion retirement nest egg impact you? ...Read more
Superannuation
‘Stunning’ superannuation set sight on 24-year record
Superannuation funds are continuing their strong rebound from the COVID-19 downturn and are now setting their sights on a 24-year-old record. ...Read more
Superannuation
Government passes controversial superannuation reforms
The controversial Your Future, Your Super legislation has passed the Senate and will come into effect from 1 July 2021, with critics warning that members could be $230,000 worse off under the changes...Read more
Superannuation
1 in 3 Aussies considers a super fund merger positive
Following APRA’s admission that smaller super funds need to merge with larger firms to guarantee better member outcomes, new research has revealed that almost one in three Aussies considers a merg...Read more
Superannuation
Super terminology explained: Understanding the ICR
If you’re looking to optimise your retirement by finding the best super fund, you might come across something called the ICR. Here’s what you need to know about it. ...Read more
Superannuation
Pressure on for the Senate to block ‘member harm’ in YFYS reforms, body says
Critics of the Your Future, Your Super legislation have not been silenced by the bill’s passage through the lower house, with the AIST pleading with members of the Senate to ensure changes are made ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
