Gender gap in nest egg

Call for super change as women left worse off in retirement

WOMEN retire with about $29,000 less than men in Tasmania, new modelling shows as calls mount for superannuation changes to help bridge the gap.

Paying superannuation on parental leave is one measure to close the gap which should be included in the federal budget on May 11, Industry Super Australia says.

The industry group is also calling on the federal government to axe the $450 minimum threshold superannuation starts paid on income.

A snapshot of median super balances in Tasmania compiled by ISA shows men aged 60-64 had a nest egg of about $171,200 compared to $142,000 for women.

The gender super gap was widest for the 50-54 age bracket when women had a whopping 37 per cent less, or $92,800 in their retirement savings compared with $148,300 for men. The gap narrowed to about 17 per cent as where to be

Tasmanians approached retirement age, according to the analysis of the 2017-18 data.

Men had higher superannuation than women in every age bracket from age 20 to 64 in Tasmania, the data shows.

ISA spokeswoman Georgia Brumby said structural changes like paying superannuation on parental leave would minimise the hit to women’s retirement savings when they had time out of the workforce to have children.

Scrapping the $450 threshold, so superannuation was paid on every dollar earned, would also primarily help women, who often worked part time as they re-entered the workforce after children.

“It might seem like it’s just a little bit of super, but with the power of compound interest and over your lifetime, it will add up to quite a bit,” Ms Brumby said.

The legislated rise in the superannuation guarantee from 9.5 per cent to 12 per cent is now expected to go ahead, after the super industry waged a campaign against internal

Coalition calls to halt the increase due to the pandemic.

Bianca Hartge-Hazelman, founder of the Financy Women’s Index which shows it will take 101 years to reach gender financial equality in Australia, backed the measures to close the gender super gap.

Paying superannuation on parental leave in particular was a “no-brainer” to help women’s retirement savings, she said.

Tax incentives to encourage women to get back into the workforce after children should also be considered in the budget, Ms Hartge-Hazelman said.

Superannuation and Women’s Economic Security Minister Jane Hume said the government’s focus was on improving superannuation performance and lowering fees.

She would not comment on the upcoming Budget but said the recent retirement income review found the gender pay gap, rather than superannuation settings, was the main driver in women having lower super balances than men at retirement.