There’s no better time than International Women's Day, 8 March to celebrate the vital contribution women, within all walks of life, make to society.

So what can you do to help?

Better financial literacy, superannuation reform and gender pay equality, will go a long way to closing the widening super gap between men and women.

There’s no better time than International Women's Day, 8 March to celebrate the vital contribution women, within all walks of life, make to society. However, the sad reality is that those contributions all too often aren’t reflected in how much women earn when compared with their male counterparts.

This is an issue the world over, and here in Australia there’s no starker reminder of the gender imbalance than the great ‘super pay divide’. Take the 18.8 per cent pay gap between men and women, add to it the time that women spend out of the workforce - raising children and in unpaid carers’ roles - and the financial imbalance between the genders is alarmingly wider at the end of women’s’ working lives.

Clearly, being in and out of the work force, while balancing family commitments, can and does take its toll on women’s super and as a superannuation provider, First State Super would like to make a difference.

Women dominate the ‘gig economy’

What also accentuates the great ‘super pay divide’ is that the current superannuation system, designed primarily for ‘nine-to-fivers’ is leaving a growing slice of the workforce behind. The problem is it doesn’t complement those working in less secure work - now referred to as Australia’s burgeoning ‘gig economy’.

One of the big issues is that those earning below the threshold of $450 a month paid by a single employer – most of which are women or those working as contractors - don’t accrue super.

Likewise, those who are paid to do domestic or private work of 30 hours or less per week, most of whom are women, also fall through the cracks.

Also contributing to a gender imbalance in the super pay-stakes is the get-out-of-jail free approach some employers have when it comes to making superannuation contributions for paid parental leave. For example, according to Dr Nick Dyrenfurth Executive Director of the John Curtin Research Centre, by taking between two and four years’ parental leave, a female employee can potentially miss out on up to 10 percent of accumulated monies over the course of a typical 40-year working life.

Nowhere are the results of this gender super divide more evident than in the recent Australian Bureau of Statistics (ABS) data (2013-14) which reveals that at retirement age, men’s average super balance is $322,000 compared with 45 percent less ($180,000) for women.

Fortunately, due to our efforts to educate and inform, the gap between First State Super’s male and female members isn’t quite this wide. However, with male members having an average $131,838 in super at age 55, compared with $107,036 for women, the gender imbalance remains an ongoing issue, and its one that we here at First State Super will continue to champion.

The world is changing

Alarming findings within the World Economic Forum’s Global Gender Gap Report 2017 suggest that gender-parity issues could be around for another 200 years. However, thanks to many gender equality initiatives globally, including International Women’s Day events - one of which is the global Pledge-For-Parity campaign - fewer women are likely to be casualties of this grim prognostication.

Here in Australia, we are witnessing numerous initiatives, at both the private company and Commonwealth and state governments’ level, to help address financial illiteracy that only perpetuates the super gap. For example, some employers have taken proactive measures, such as annual superannuation bonuses for female employees.

Given that it’s no longer the technology headache it once was, a recent report by the Senate Economics Reference Committee on super guarantee non-payments, recommended the $450 monthly threshold for super payments be removed. Then there are other suggestions that call to mandate a new pro-rata model for super guarantee payments, where employers would effectively make payments on earnings below $450 a month.

Equally encouraging, a growing number of leading employers in Australia, including BHP, Thales, CommBank, NAB, BOQ, MYOB, City of Melbourne, Aurecon, Holcim, Avanade Australia, First State Super and Schneider Electric, support paying superannuation on both the paid and unpaid portions of the parental leave.

Helping women close the super pay gap

Like many superannuation funds, First State Super is only too keen to continue playing a support role to ensure that when it comes to financial literacy - no member is left behind. However, having had our origins servicing the needs of public sector employees in Australia – especially within the health care and education sectors - it’s unsurprising that the vast majority of our 755,000 members are women.

That’s why we decided to establish our Women and Super initiative to help set them on a path to financial empowerment. On this website we share tips on how to get the basics right first. For example, a good way of prioritising your expenses is to follow a budget, committing to regular savings, and ensuring your super fund isn’t taxing you above 15 percent simply because you haven’t provided your tax file number.

We also recommend regularly checking your super balance to ensure fees, taxes and your employer compulsory contributions are in order. Similarly, the easier funds make accessing this information, the more likely members are to check how their super is travelling on a regular basis. 

Simple steps drive big outcomes

Taking control of your finances is as simple as attending one of the regular seminars First State Super hosts Australia-wide or contacting us by phone. Alternatively, you can ask for comprehensive advice face-to-face, or single advice over the phone at no additional cost to members.

We’ve brainstormed some ideas to help women - at all stages of their financial life - maximise every opportunity to improve their financial wellbeing, and bridge the superannuation pay gap.

  1. Maximise low income super options:

    If your assessable income is less than $37,697 annually, you may be eligible to receive the maximum government co-contribution of $500 if you make an after-tax contribution of at least $1,000 to your superannuation. It reduces systematically and cuts out when your income reaches $52,697.

  2. Spouse contributions on your behalf:

    In addition to giving your net wealth a boost, having a spouse contribute some of their own money to your super could mean that they receive a tax rebate if you earn less than $40,000. Spouse contributions aside, you could consider moving some other investments, such as term deposits, into your super account. Remember, once you reach age 60 (and you have met a condition of release), you’ll be able to draw on these funds tax-free.

  3. Find and consolidate:

    Check to see if there’s lost super from previous jobs that’s waiting to catch up with you. Similarly, by rolling over two or more super accounts into one, you could save in unnecessary annual fees, though you should consider tax implications, exit fees and insurance cover that you could lose.

  4. Accelerate your contributions:

    You can still contribute to super even if you’re no longer working, either through larger lump-sums or regular dollar cost averaging, but it’s important to understand the limits for both concessional and non-concessional contributions. Sacrificing more of your salary into super will help fast-track retirement savings, and there are also tax savings to be had. But in light of recent regulatory changes, anyone considering a transition-to-retirement strategy, while continuing to make super contributions, should seek financial and taxation advice first.

This is general advice only and does not consider your personal circumstances, financial situation or needs. Read the Product Disclosure Statement available at firststatesuper.com.au. FSS Trustee Corporation ABN 11 118 202 672, AFSL 293340, the trustee of the First State Superannuation Scheme ABN 53 226 460 365.

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Tags:
  • Financial wellbeing
  • Super contributions
  • Growing super