Menopause estimated to cost women more than $17 billion
The Australian Institute of Superannuation Trustees (AIST) has estimated menopause costs women more than $17 billion in lost earnings and superannuation, and called on the Federal Government to investigate the role it plays in contributing to the superannuation gender gap.
AIST, the peak body for the $1.6 trillion profit-to-member super sector, said recent British studies indicated up to a quarter of menopausal women experienced debilitating symptoms leading to long-term absences from work or forcing them into early retirement.
This aligned with data in Australia showing 26.8% of working women retired under the age of 55.
“This leads to experienced middle-aged women leaving the workforce at a time when they are at the peak of their experience and earning potential,” AIST CEO Eva Scheerlinck said.
Women retire with 40% less super than men on average because they earn less and spend more time out of the workforce caring for children and other family members.
In a submission to the Government ahead of its first Budget on 25 October, AIST asked the Office for Women to measure and report on the impact of menopausal symptoms on women’s employment and retirement decisions, and how they affect their retirement incomes.
AIST said women aged 45 to 54 retired on average at 52.1, which was earlier than planned (59) and than men (59.5), with 44.9% of citing “own sickness, injury or disability” for leaving their last job.
This percentage drops to 23.7% among women aged 55 to 59 but the total number of female retirees in each age group is broadly similar.
AIST said a difference of 21.2% between otherwise identical cohorts pointed to a ‘health crisis’ in under 55-year-old women driving retirement well ahead of what was intended.
The average age of menopause is 51 and, with many women experiencing symptoms for five to 10 years, the impact needed to be quantified so that appropriate policy and public health interventions could be developed.
“What is unclear from this data is what role menopausal symptoms have on a woman’s decision to retire and specific research needs to be undertaken by government to assess this,” AIST said.
A woman retiring at the average age for a man would accrue an additional 7.4 years of income and superannuation which, based on average earnings of $70,626.40 a year, amounts to lost salary and wages of more than $522,635 and foregone superannuation of more than $54,880.
The collective loss of earnings and superannuation over 7.4 years was more than $17 billion, if a modest estimate of 10% of women (28,700) retiring early due to menopausal symptoms was used, but the economic loss was more than $35 billion if 21.2% difference (60,809) was used.
AIST also called on the Government to:
- legislate the objective of the super system, including legislated principles
- pay super on Commonwealth paid parental leave, and encourage employers who offer such leave to also pay super
- investigate if Commonwealth and employer paid parental leave provides sufficient support to parents; recommend potential reform options if it does not; and recommend how to boost the super of new mothers who may not be eligible for paid parental leave
- extend the Australian Prudential Regulation Authority performance test to Choice products
- rank performance results on the YourSuper tool by net returns before being ranked by fees
- extend the performance testing ‘lookback period’ to all available financial years
- extend eligibility for super to employees under 18 who work fewer than 30 hours per week, independent contractors, the self-employed, and those employed under the new remote jobs scheme that will replace the Community Development Program
- ensure children adopted under traditional Aboriginal and Torres Strait Islander kinship structures are treated like any other dependent child of a super fund member, and
- introduce a $5 million limit on the total amount that can be held by individuals across the accumulation and pension phases of their accounts.
Much of the analysis and recommendations in the AIST submission are based on these themes:
- fairness and equity
- adequacy, and
Media inquiries: Garry West, AIST Senior Manager, Media and Communications: firstname.lastname@example.org|+ 0428 892 155
AIST is the peak body for the $1.6 trillion profit-to-member superannuation sector, which includes industry, corporate and public-sector funds
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