Georgina Williams is AustralianSuper Group Executive Engagement, Advocacy and Brand

Australia’s superannuation system is viewed globally as a success and means that millions of people in this country face a future they can be more confident of. It’s what the system was built for.

It’s also not as complicated as we all make out. In reality how much you save for retirement relies heavily on three things: how much you earn, how long you stay in the paid workforce, and what percentage of your wage you save.

And in the first two of those categories, women generally lose.

Starting with average salary, the Australian Bureau of Statistics shows men making $83,050 and women $68,220 a year. We also know that women in our society perform the vast majority of unpaid work – primarily as caregivers to family, which takes them out of the paid workforce. No real surprise, then, that there is a gender gap.

What is a surprise is that we aren’t acting to fix structural inequities in our system. Instead we are acting in
ways that will compound the gap, leaving millions of Australians less confident of their future, and less comfortable in retirement.

That isn’t a women’s problem, it’s a problem for all of us.

The latest official data around the gap between male and female retirement incomes is disappointing. In the key category of 55- to 64-yearolds the gender gap in superannuation has become worse, with the median balance
for women in the 55-64 age group at $80,000 compared to $150,000 for men. This is a staggering 47 per cent gap, up from 39 per cent in 2011-12 when women’s balances were $64,900 and men’s $107,000.*

So what can we do? We can address those simple three factors:

  • Making sure people on lower wages can participate fully in the retirement savings system;
  • Encouraging people who take time out of the workforce to continue contributing to super;
  • Encouraging women and giving them the opportunity to save enthusiastically and save early.

Having a career, being a mum, a wife, a sister and daughter have a big price in terms of time and a
hefty price tag to society and government if not done well. So why do we allow these activities to be a disadvantage in our current system?

A society underpinned by a strong nurturing culture is likely to lead to a stronger and more prosperous future for our nation, something from which we all derive benefit. In the past we have placed a dollar value of zero on these activities and we are only partly beginning to address this through paid maternal and paternal leave systems,
and carers’ leave.

However, most of those systems have no superannuation component. It is vital that we appreciate that no matter what role you perform in our society, we understand that contribution is valuable, and at the same time ensure that all of our citizens have the right to save for a comfortable retirement.

Finally, we need to have a much stronger voice in encouraging our young people to save early and save hard.

The effect of compound interest rates means that saving $20 in your 20s has a similar effect on your retirement savings as saving $50 in your 50s.

Association of Superannuation Funds Australia (ASFA) media release, 20 October 2015

*ABS 4125.0 Gender indicators, Australia, August 2015. Superannuation balance at, or approaching, preservation age (55-64 years). Note: excludes people with zero super balance.

The views expressed in this article are those of the author based on their particular expertise and experience and not necessarily AustralianSuper. Readers should rely on their own advice and enquiries in making decisions affecting their own finances or interests. Any statements or views expressed by the author have been reproduced with their continuing consent.