Bringing women's super back into balance

In the ongoing struggle for equality for women, super remains one area where there is still a lot of catching up to do. Why is this the case and what can be done? 

It seems hard to imagine now, but up until 1972 it was considered perfectly acceptable to pay a female less for doing exactly the same job as a male. In that year the Arbitration Commission ruled that women who were performing the same work as men should get the same award rate of pay. While significant gains have been made since those revolutionary times, the struggle for equality in the workplace still has a way to go.

One area where the disparity still looms large is in super. Being able to provide for a reasonable retirement income is fundamental to women achieving genuine financial independence, but the reality is that the levels of super held by women generally falls well short of men.

Until 1972 it was considered acceptable to pay a female less for doing the same job as a man

How big is the problem?
In their 2014 report on the level and distribution of retirement savings, the Association of Superannuation Funds of Australia (ASFA) tell us that the average super balances at the time of retirement in 2011-12 was around $197,000 for men and only $105,000 for women. While the situation is gradually improving due to factors such as the compulsory super system, there is obviously a lot of catching up to do.

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In general women still tend to have far less super than men 

These low levels of retirement saving are even more alarming when put in the context of how much capital is needed to produce a reasonable standard of living in retirement. ASFA’s own modelling, based on analysis of retirement living expenses, suggests that a couple needs an income of $34,226 per year to achieve a ‘modest’ lifestyle and $59,236 per year to achieve a ‘comfortable’ lifestyle1. The $105,000 average super balance held by women at retirement is only a fraction of the capital needed to produce these sorts of annual incomes.

Compounding the problem for women is the longer life expectancy that they enjoy, compared to men. On average, a woman who reaches age 65 today can expect to live another 21.62 years, while a man will on average only survive for another 18.54 years2.

On average, women have a longer life expectancy, compared to men

Pinpointing the causes
The discrepancy between men’s and women’s super can largely be attributed to the different expectations and challenges that women face over the term of their working lives. Even the most career-minded woman may choose at some stage to cease work and have children, which interrupts their income earning and super accumulation for at least a number of months and possibly years, if they decide to take on the role of full-time care for the children.

Women are also more likely to be employed casually compared to men and if they are earning $450 or less per month from casual work then their employer is not obligated to make compulsory superannuation contributions.

Divorce is another major contributing factor to the imbalance, especially if a woman has been caring for children and has not been earning income during married life. It has only been in recent times that women have been granted the right to an equal share of their husband’s superannuation as part of their divorce settlement.

Many women choose to remain single, leaving them with sole responsibility for their retirement savings. Of course, some of these women have the added financial burden of being single parents and will find it more difficult to contribute enough to their super.

Women must also take the initiative to seek out opportunities to grow their own retirement independence

Time to make a difference
The time for women to take control of their retirement future has well and truly arrived. Society at large needs to recognise the particular impediments that women face in saving enough for their retirement. Women must also take the initiative to seek out opportunities to grow their retirement independence.

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Be proactive with your retirement planning

Take advantage of tax benefits
One way that change can be accelerated is for women to take full advantage of the superannuation tax incentives available to them. Those on lower incomes may be able to use the Low Income Super Contribution scheme in which the Government will pay up to $500 into your super.

Women should investigate the superannuation tax incentives available to them

For those women who are perhaps caring for children and are not working or only earning small amounts from casual work, a bread-winning partner can contribute to super in their wife’s name and receive up to a $540 tax offset. Other tax incentives to advance their retirement cause can be found in salary sacrificing or concessional personal contributions.

Women can get closer to achieving financial independence by accessing the knowledge of a qualified financial planner. A financial planner can help to calculate realistic retirement savings targets, capture potential tax advantages and formulate investment strategies that will help women build their super.


1ASFA Retirement Standard.
2Compiled from Australian Life Tables, 2005- 2007, Australian Government Actuary released 27 November 2009.

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