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What about women’s super?

By Ruth Weaver

Close your eyes and imagine what your retirement might look like? Do you see a carefree retiree living it up after decades of working hard, mulling about whether to cruise on the Pacific Jewel or the Pacific Eden over a chilled Prosecco?

Well, if you're a woman, you might want to think again.

New research from the Workplace Gender Equality Agency suggests while progress has been made towards equality in recent years, the gender pay gap in Australia is alive and well and currently sitting at more than 15%. But, perhaps an even more concerning issue hiding behind this is the superannuation gender gap. The same research highlights that Australian women retire with just over half the amount of super as men, and one in three women retire with no super at all.

So why is the average super balance for women around $150,000 less than the average super balance for men at retirement? Naturally the pay gap between men and women is a factor. An employer’s compulsory superannuation contribution to employees’ accounts is based on a percentage of their salary. So technically, this magnifies the pay gap even further.

However, the fact that most women don’t accrue super during parental leave and often prefer to return to work part-time to accommodate caring for children is likely to cause greater damage to long term superannuation benefits than the pay gap itself. Research from ASIC’s Moneysmart suggests that 62% of employed women with a child under 5 years works part-time. It’s also common to see women take roles with less skill, responsibility and pay in order to get the flexibility they need during this time. I once heard of this being referred as the 'super baby debt’ and as a mum of three children I can personally relate to this.

But forewarned is forearmed!

I put some small and simple strategies in place very early in my career to try and prevent the damage that taking maternity leave and working part-time can cause. While I may still carry some super baby debt those small and simple steps that I took back then have softened the blow significantly. I now take great pride in educating women on the importance of engaging with and taking control of their own retirement savings. It might be very cliché but its stands true “A man is not a financial plan”!

There is some good news….We have seen some great initiatives recently, with employers adopting a position that most roles can be worked flexibly, as well as offering expanded parental leave schemes. Many employers are working hard now to create a positive culture where employees genuinely feel they can access parental leave or flexible working arrangements without stigma or holding back their career.

As a woman who has worked in the superannuation industry for 11 years now I am pleased to see things moving in the right direction. The gap is closing and will continue to close, but only if we all play our roles. Super funds needs to educate, women need to engage, government need to support and employers need to accommodate.

By Ruth Weaver, Education Specialist, Sunsuper

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