New research has identified Western Australia and Queensland as being the states where the superannuation savings gender gap is at its worst.
The research – commissioned by Women in Super - found that WA and QLD have the biggest gap between men and women’s superannuation balances, with females in the two states with an average super balance that is between 34-39 per cent less superannuation than their male counterparts.
The research – based on an analysis of the account balances of 4 million members of five large industry superannuation funds by Rice Warner - found that in WA the average super balance for a female aged between 30-59 is $51,000, compared to $83,000 for a male in the same age bracket – giving WA the highest gender savings gap of 39 per cent.
The gender gap in superannuation savings is caused by a number of factors including women being paid less than men, and women taking more time out of work to raise children and care for family members. These income differences are amplified by superannuation tax settings which penalise low income earners, and they compound over a lifetime.
Women in Super national chair, Cate Wood, said it was unfortunate to see the super gender gap was so high across all states.
“Better policy is needed if we are to make a difference to the retirement outcomes of all Australian
women,” Ms Wood said.
“We have tinkered around the edges for too long” said Ms Wood. “It is time to implement structural changes that deliver real improvements for women.”
AIST CEO Eva Scheerlinck said that with an estimated 40 per cent of single women retiring in poverty, there was an urgent need for real change.
“The gender savings gap has been sitting around these levels for a long time. We need brave and substantial, systemic reform that redresses this imbalance once and for all,” Ms Scheerlinck said.
Key measures that AIST and WIS agree will have the biggest effect on addressing the super gap and improving retirement outcomes for women include:
- Abolition of the $450 monthly income threshold for compulsory super payments
- Paying super on paid parental leave – this is the only form of leave that doesn’t attract super
- Providing low income earners, most of whom are women, with an additional super contribution.
- A firm commitment to move to 12% compulsory super in accordance with the legislated timetable.