Women face future poverty in retirement
New research has revealed the continued and growing inequity suffered by women workers who are increasingly facing poverty in retirement.
The study conducted by Monash University for AustralianSuper found mounting evidence surrounding the gender pay gap in superannuation.
Gender pay inequity and work/life factors such as women being more likely to take time out of the workforce or work part-time due to family or caring responsibilities, are likely to continue to contribute to the inconsistencies in superannuation savings for women, the study found.
The structure of the current superannuation system is flawed in that it favours higher income earners working full-time continuously and throughout their working lives as they have the capacity to accumulate savings and experience a comfortable retirement.
"This career model assumes, among other things, that there is little time out of the workforce, that time spent working is predominantly full-time and that there is a linear and upward trajectory associated with experience and age," the report states.
However, women's work trajectories deviate from the standard model that superannuation expectations and projections are based upon as many women’s working lives do not fit this picture.
The disproportionate allocation of domestic responsibilities places women in a difficult position to build up a super balance as they sacrifice their employment trajectory to support others.
Women retiring with less
The Human Rights Commission reports that, on average, women have only one third of the amount of retirement savings as men.
IEUA-QNT Assistant Secretary Rebecca Sisson said for many Australian women, superannuation will not be sufficient for their retirement without the aged pension.
“Our superannuation system is failing women. Working women have the same right to a dignified retirement as men.
“While it is one of the great achievements of the Australian union movement, super was designed many years ago and fails to take into account the needs of modern workers, especially women, who need to take time out of work for caring and parenting responsibilities,” Ms Sisson said.
Ms Sisson said changes need to be made to superannuation contributions to ensure that there is no gap in contributions while workers are on carers or parental leave.
“The federal Coalition government should pay super on paid parental leave. Modelling indicates that every dollar the government spends contributing to new mothers' superannuation today, would save at least $2 in aged pension costs over the coming decades.
“These changes won't be enough to close the gender super gap, but they are a good place to start to ensure women can appropriately plan for their future financial security."
The power of co-contribution
Superannuation co-contribution can make a huge difference to a worker’s superannuation balance upon retirement – particularly women workers who are already at a disadvantage due to the current system.
With full increases to the Superannuation Guarantee (SG) rate still years away, superannuation co-contribution schemes allow employees to access additional super from their employer and maximise retirement savings.
Superannuation co-contribution means employees access additional super, above the SG rate, from their employer on the basis of the employee also contributing a percentage of their earnings into super.
Due to the bargaining strength of IEUA-QNT members, the ability to access superannuation co-contribution exists for the majority of Queensland school staff — including those in the Catholic, Lutheran and Anglican sectors, as well as many independent schools.
Members are urged to consider the benefits of accessing superannuation co-contribution. Where the provision exists in your collective agreement, an employee simply needs to write to their employer requesting access to the scheme.
To review the superannuation provision in your agreement, visit www.qieu.asn.au/agreements or FREECALL 1800 177 938.
To find out more about superannuation co-contribution, download a copy of our flyer.