In the lead up to International Women’s Day, it is timely to review the barriers to superannuation equality for women and to look at what can be done to boost super for women.
International Women’s Day (IWD) is held on 8 March each year and the theme for 2022 is #BreakTheBias.
In support of the day and this year’s theme, on 8 March we are all encouraged to “Imagine a gender equal world. A world free of bias, stereotypes and discrimination. A world that’s diverse, equitable, and inclusive. A world where difference is valued and celebrated. Together, we can forge women’s equality. Collectively we can all #BreakTheBias.”
legalsuper supports IWD and the achievement of its aims, not only on 8 March each year, but at all times.
One of the ways we demonstrate this support is by being a proud and active member of Women in Super, a not-for-profit organisation that works to improve women’s retirement outcomes, by advocating for a super system void of gender-based inequality.
Through Women in Super, we continue to advocate for changes to make superannuation more equal for women, including via workplace gender equality; superannuation and paid parental leave; and more women on superannuation fund boards.
THE SUPERANNUATION GENDER GAP
On average, when women and men retire, women usually have around 30 per cent less in super than men. In dollar terms, this equates to a $67,000.00 disparity.
Add in the fact that your super balance will continue to earn compound interest in retirement, the actual gap, over time, is even bigger.
WHY WOMEN ACCUMULATE LESS SUPER
There are a number of historical, structural and cultural reasons why women continue to be unfairly disadvantaged when it comes to accumulating super and saving for retirement.
Gender pay gap
The gender pay gap is a significant contributor to the gender super gap.
According to data from the Federal Government’s Workplace Gender Equality Agency (WEGA), the current full-time total earnings gender pay gap (which includes overtime payments) is 16.8 per cent. This means women’s average weekly total full-time earnings are $323.30 less per week compared to men.
WEGA also calculates that the full-time total remuneration gender pay gap is 20.1 per cent, meaning men working full-time earn nearly $25,534 a year more than women working full-time.
In relation to the legal profession, WEGA notes that in a group of professions called Professional, Scientific and Technical Services, and which includes lawyers, accountants and others, the gender pay gap for average weekly full-time earnings is 25.3 per cent.
The caregiving burden
Women are more likely to be primary carers. Women account for more than 70 per cent of primary caregiving, on average, taking five years out of the workforce to act as a carer.
Return to workforce barriers
Women often face barriers to returning to work after taking time out as a carer. Whether due to limited opportunities or necessity, they may accept employment in roles below their skill level to balance caring and earning responsibilities.
Women are more likely to work part-time or casually than men, contributed to by a lack of workplace flexibility to accommodate care responsibilities. This not only affects the amount women earn but career and wage progression.
Historical and ongoing discrimination and bias in hiring, pay decisions, promotions, and the undervaluation of ‘female’ jobs/dominated industries.
Males are eligible for a disproportionate number of tax concessions within super. Women receive one third of government tax concessions on super, while men receive the other two thirds.
A lifetime of earning widens the gap, and compounding interest deepens this divide further. Males are earning compound interest on their larger savings, which means more interest in the long term.
WAYS TO GROW YOUR SUPER
While there are a number of unarguable unfair systemic and cultural barriers placed in the way of women seeking to save for the retirement they want and deserve, there are strategies which might help some women at different stages of their careers and lives.
Ways to contribute to your super
In addition to the superannuation paid into your account by your employer under the Superannuation Guarantee, you can also consider growing your super via salary sacrifice; personal voluntary contributions; spousal contributions; contribution splitting; and by checking to see if you are eligible for government contributions. More information on these and other strategies can be found on the legalsuper website at legalsuper.com.au/growing-your-super or on the Australian Tax Office website at ato.gov.au/individuals/super/growing-your-super/.
Contribute sooner rather than later
Compounding interest means the longer your money is invested – the more interest you make. Boosting your super, or your spouse’s super, is a way to help close the super gap.
WE’RE HERE TO HELP
Too often we can put the needs of others before our own, to our own detriment, and this includes not prioritising our long-term financial future.
legalsuper is here to empower all members to make choices leading to better outcomes in retirement. For women, we are working to close the super gap and increase the long-term financial security of our members, so that generations of women which follow us can achieve the same.
If you’d like to meet with us to discuss any aspect of your super – whether it be in relation to contributions, your investment options, insurance and fees or consolidating multiple super accounts into one account – our team is available for 1-to-1 consultations, offering tailored information and support. Contact us via firstname.lastname@example.org or on 1800 060 312, 8am-8pm (AEST), Monday to Friday to book an appointment.
Legal Super Pty Ltd ABN 37 004 455 789 is the Trustee of legalsuper ABN 60 346 078 879, AFSL 246315. This is general information and does not take into account your personal needs. You should read the legalsuper Product Disclosure Statement and Target Market Determination available at legalsuper.com.au. Past performance is not a guide to future performance.