Valuing Females and Rewarding them in Retirement
- On 28/11/2012
Rice Warner releases report, Valuing Females and Rewarding them in Retirement, in conjunction with 2012 ASFA Conference which investigates a variety of possible solutions to low retirement incomes for females.
Over the last century, particularly the last 30 years, society has reduced the traditional discrimination against females. However, one important area receives less attention – females have much lower retirement incomes than males!
There are many unique challenges that females face in saving for retirement:
- The Australian superannuation system has been designed around the paid workforce and this disadvantages females. Average pay for females is lower and their contributions to superannuation are linked to wages.
- The majority of females become mothers, who typically move in and out of the workforce while they raise their children, and may then work part-time. This disadvantages them in terms of saving for their retirement.
- Females, on average, live longer than males and therefore require their retirement savings to last over a longer period.
- Females, on average, retire earlier than males. This means they have a shorter period over which to accumulate savings.
According to Melissa Fuller, Deputy Chief Executive Officer of Rice Warner, these challenges have resulted in our current cohort of females nearing retirement having superannuation balances that, on average, are 50% less than males.
Fuller notes that the government, employers, superannuation funds and individuals themselves all have a role to play in ensuring our future generations of females do not face a similar fate.
Rice Warner’s latest report, Valuing females and rewarding them in retirement, is being released at today’s Women In Super morning tea as part of the annual ASFA Conference. The report investigates a variety of possible solutions to this complex issue.
Cate Wood, National Chair of Women In Super (WIS) said “The case studies in the report shine a light on the impact of the gender pay gap on female retirement savings and then overlay the impacts of time out of the workforce and part time work. All common experiences for many women. When all factors are in play, the shortfall in a woman’s retirement savings are truly shocking.”
“As the report notes, there are a number of ways that individuals, employers and super funds can help women to save more for retirement. However, time out of the workforce is a critical factor and we need to rethink our policy response.” said Wood
In addition to the recommended government policy changes of abolishing the $450 threshold and paying superannuation contributions on the parental leave policy, Fuller says employers and superannuation funds have the opportunity to be innovative and really make a difference.
And Rice Warner is leading by example. The firm supports and values its female employees in several different ways, including paid parental leave with superannuation guarantee payments included, continuing to accrue long service leave during parental leave breaks, and providing flexible working conditions upon their return to work.
Superannuation funds should be targeting their younger female members and educating them on the unique challenges they face. Communication material must be tailored and must resonate with its audience – engaging younger people and getting them to take an interest in their superannuation from the outset is challenging, but not impossible, says Fuller.
Last, but certainly not least, are females themselves. Whilst the government, employers and superannuation funds can provide an environment that is conducive to improving female retirement savings, all females need engagement with super and a commitment to save.
We all have a role to play in improving female retirement savings and as a relatively wealthy country, we have a responsibility to ensure our future generations live with dignity throughout retirement. Improving longevity will result in future generations of females, particularly those that take time out of the workforce, spending the same amount of time (or more) in retirement as they do in the workforce – the challenge is funding the retirement years to allow us to live the lifestyle to which we have become accustomed.