Motherhood is the most significant explanation for the superannuation gender gap, new research has found.
According to the latest figures women are retiring with around half as much superannuation, 53%, as men. Surveys conduced by the Australian Services Union (ASU) indicate that motherhood is a significant factor in this superannuation gender gap. Though the report of the findings, made in collaboration with the think tank Per Capita, ‘Not So Super, For Women: Superannuation and Women’s Retirement Outcomes’, notes that there is no single explanation.
“It is a wicked problem – amongst the many causes are the gender pay gap, the rise in casualised work, regressive tax treatments, unpaid care work and relationship breakdowns,” says the report.
“Similarly, there is no single solution. Instead of a silver bullet, we propose a range of recommendations. Central to these recommendations is the idea of an ‘accumulation pathway’, which maps the superannuation balance at any given age that a person should hold in order to expect a basic living standard in retirement based on a combination of superannuation and the age pension.”
A number of recommendations aimed at keeping people on the ‘accumulation pathway’ are made in the report. The recommendations to government include:
- A co-contribution ‘top-up’ of 2.5% of income for people more than 5% below the accumulation pathway
- Removing the 15% contributions tax for people more than 10% below the accumulation pathway
- A super contribution on top of the carer payment for all carers below the accumulation pathway
- Super Guarantee contributions for the government’s Paid Parental Leave scheme
- Increasing the Low Income Superannuation Tax Offset (LISTO) to $1,000
- Removing or reducing the $450 minimum monthly earnings threshold for Super Guarantee payments.
Some of the recommendations to super funds are:
- A fee discount for all fund members more than 10% below the accumulation pathway
- A fixed maximum fee for all fund members below the accumulation pathway
- A fee-free period of up to 12 months for members on parental leave
The report also makes recommendations to unions, employers and employees, one of which is for a super co-contribution of 1.5% under awards and Enterprise Bargaining Agreements for all staff more than 5% under the accumulation pathway.
However the superannuation gender gap is likely to remain, to some extent, even if all the recommendations were implemented.
“Even if each of these proposals were adopted, they would be unlikely to completely level the playing field for women in the foreseeable future. But, taken together, we believe that these interventions will go a considerable way towards closing the stark retirement income gap faced by women in Australia today,” says the report.