More needs to be done to improve the financial security of Australian women, and if that means more changes to the superannuation system, then so be it.
Three of the country’s most influential women in financial services have called for greater policy and workplace changes to better support women, particularly those who are struggling financially because of a lack of superannuation and homelessness.
“I think there are some fundamental things we need to do to make the superannuation system fairer for women,” said health sector industry fund HESTA CEO Debby Blakey.
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“So often women take on so much in unpaid caring roles and they end up with such low balances in super, and I think we need to fix that.
“We would call very strongly that that $450 a month threshold for superannuation to be paid by an employer to an employee, should not exist and more generally there needs to be an awareness of who is getting the lion’s share of tax concessions in super.
“It is all about creating a fairer superannuation system and being prepared to be bold and gusty and make the right decisions for all Australians,” Blakey said.
New changes, but nothing’s different
Australia’s superannuation system has undergone a number of structural changes over the past decade, most recently around new opt-in rules for insurance polices.
Despite this, there’s nothing in the pipeline to address the fact that the system works mostly better for men than women because it’s been designed to reward those working full-time more so than part-time or casual and those not taking career breaks to care for children.
As it stands, about 3.31 million women work full-time and 2.8 million are part-time, compared to men with 5.54 million working full-time and 1.3 million part-time, according to the ABS.
“I think over the past five years, there has been good progress; if you look at women’s workforce participation, gender pay gap and percentage of women in universities, all of those have improved,” said First State Super CEO Deanne Stewart.
“That said, what’s really alarming is that despite the promising participation rates, due to career breaks, less secure employment, the ongoing gender pay gap, and the fact that they are often in careers where they are paid less; women are retiring with much less than men.
“Even more alarming is that many women don’t have any super when they retire, which is contributing to women being among the fastest growing group of homelessness in Australia,” Stewart said.
“It is alarming that we don’t have the structural settings where they need to be.”
As the nation’s superannuation funds continue to grow in size with a growing workforce and contributions, so too is their expected influence over government policy and how it applies to helping women narrow the 28 per cent retirement savings gap with men, will eventually have an impact.
“Australia’s superannuation industry is coming of age when organisations are major voices and influences in Australia, so I think it is time for super funds to step up and influence the system,” said retail sector industry super fund REST CEO Vicki Doyle.
“To improve the system you need to removing the $450 a month threshold for a start.
“You have also got to encourage more women to contribute because in reality a 9.5 per cent employer contribution to super is only going to be a small amount of an average salary,” she said.
“I think employers and the government have to think radically different and if people, particularly many women can only work part time, then we need to look at what can be done to help increase income and increase savings towards super.”
Make your own change
Outside of seeing structural changes take shape, Doyle, Ms Blakey and Ms Stewart shared the following tips from their own personal experience to better help women with money management.
“One thing that my husband and I always did, was to do was pay a bit extra off our mortgage every month and I think that just helped us to get ahead a little bit,” said Blakey.
“There is a lot of great things you can do without spending a lot of money.
“For instance when our kids were small, and my husband was not working while doing his MBA, we had to stick to a budget and we became masters of having picnics everywhere and today our children often reflect on what a great time that was,” she said.
Stewart’s advice to women, particularly younger generations, is to start saving as much and as soon as you can.
“My parents had to make sure that every dollar worked for them and they instilled in me the power of hard work and saving as much as I could afford.
“So during university I always made sure a certain percentage of my savings went into a savings account and with mum and Dad, I later went into a property investment in Sydney,” said Stewart.
“What you are able to save in your 20s has seven times more impact than if you were to try and save it in your 50s.”
Just keep it simple
Ms Doyle’s advice to women on money matters is to keep her finances simple. “My view around money is that I don’t have complicated financial affairs,” she said.
“I have focused on saving as much as I can into my super and working in a job and career where I am happy, that way I can balance my family and pay for thinks like my kids schooling.
“I don’t have big fancy investments and I wouldn’t take risks around that,” said Doyle.
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