Why we need to improve super gender gap
The Australian Institute of Superannuation Trustees (AIST) has used the release of a new study of global pension systems to renew its call for the Federal government to take more action to improve the position of Australian women in retirement.
AIST CEO Eva Scheerlinck said Australia’s continued high ranking in the Mercer CFA Institute Global Pension Index 2022 (MCGPI) was welcome but there was room for the superannuation system to improve in providing women with the retirement they deserved.
Ms Scheerlinck said the MCGPI report rightfully acknowledged continuing reforms around the world to improve long-term outcomes from retirement systems, including introducing measures to reduce the gender pension gap, but more action on this issue was needed in Australia.
“Although Australia has a world-class retirement system, it is not delivering enough for Australian women, who retire with about 40% less superannuation than men on average because they earn less and take more time out of the workforce caring for children and other family members and retire earlier than men,” she said.
“This is an unacceptable situation given that we have had a compulsory and mandatory super system for 30 years, and it underlines the need for more action to be taken to help women.
“As the peak body for profit-to-members super funds, AIST continues to call on the Federal Government to pay the Superannuation Guarantee on Commonwealth paid parental leave and for other employers who offer such leave to pay super on it.
“The fact the parental leave is the only paid leave without super particularly disadvantages women, given they represent the overwhelming majority of people using the Government’s Parental Leave Pay and employer funded schemes.”
Paying super on Commonwealth Parental Leave Pay would cost about $200 million a year, according to the Retirement Income Review in 2020.
“We also call on the Government to undertake research to assess the impact of menopausal symptoms on women’s retirement age, with many women retiring many years earlier than intended. This leads to a loss of skilled women and a reduction their superannuation savings,” Ms Scheerlinck said.
AIST welcomed the fact that Australia had retained its sixth ranking among global pension systems and increased its index value from 75.0 to 76.8, but would like to see it progress in the rankings.
Australia shared a B+ grade with Israel, Finland and Norway and ranked below only Iceland, the Netherlands and Denmark, which received an A grade with total scores above 80.
“These results will not distract us from our mission to advocate for improvements to our super system to ensure it provides benefits to all Australians, regardless of their gender, culture, education or socio-economic background,” she said.
