Australia markets close in 2 hours 41 minutes

    +42.90 (+0.57%)
  • ASX 200

    +44.10 (+0.60%)

    +0.0037 (+0.55%)
  • OIL

    +1.38 (+1.73%)
  • GOLD

    +9.90 (+0.55%)

    +252.20 (+1.01%)
  • CMC Crypto 200

    +7.34 (+1.83%)

    +0.0019 (+0.29%)

    +0.0043 (+0.40%)
  • NZX 50

    -6.13 (-0.05%)

    -47.64 (-0.40%)
  • FTSE

    -2.26 (-0.03%)
  • Dow Jones

    +34.88 (+0.10%)
  • DAX

    +39.09 (+0.27%)
  • Hang Seng

    +665.91 (+3.57%)
  • NIKKEI 225

    +33.36 (+0.12%)

EnergyAustralia’s super overhaul targets gender pay gap

Woman walking with pram and dog
EnergyAustralia is targeting the gender pay gap with a super overhaul. (Source: Reuters)

EnergyAustralia has announced it will overhaul its parental leave policy to help close the superannuation gap that sees women retire with far less superannuation than men.

The energy company plans to pay parents full-time super even if they decide to work part-time, eliminating the “double penalty” many women endure when they return to work part-time after having children and then end up with less super later in life.

Parents working part-time will be paid full-time super until their child turns five.

Energy Australia’s People and Culture executive, Jodie Haydon, said the change in policy was intended to address the superannuation disparity.

“We also know that women retire with significantly less super than men - about 40 percent less,” Haydon said.

“That’s due to the double penalty of time out of work while caring for children and then returning to work part-time.”

On average, men retire with 26 per cent more super than women, according to the Association of Superannuation Funds of Australia.

The primary cause of this is that women often earn less, and are more likely to take time out of the workforce to care for children or relatives.

Haydon said the company wanted to change the stereotype that ‘women care while men earn’.

The company also wants to stop women defaulting to the main carer role by offering 20 weeks’ paid parental leave that’s completely gender-equal.

“We don’t assume mothers are the main carers,” Haydon said.

“We’ve got rid of the primary and secondary carer labels, so that no matter what their gender or situation, every EnergyAustralia person expecting a baby is now entitled to a generous 20 weeks’ paid leave.”

Other companies are tackling the superannuation gap

EnergyAustralia joins Blackmores, KPMG, Stockland and some other organisations in providing superannuation payments to any employees taking parental leave, however this is still the exception and not the norm.

A recent report from Finder found the average woman would have to pay an extra $236 per month into her super, or work an extra 11 years to retire with the same super balance as men.

Finder’s Alison Banney said parenthood put workers taking leave - mostly women - at huge financial disadvantage.

She advised doing some planning before starting a family to help negate the financial hit.

She recommended asking employers to see if they would consider paying the super guarantee during parental leave, or seeking out an employer that did offer a better policy.

If those were not options, she recommended looking into partner contributions to supplement the time taken out of the workforce by the primary carer to help bolster their balance while they took time off to care for children.

She also recommended comparing super funds and switching before taking parental leave.

“Even if you just have one fund, it's worth comparing super funds now to make sure it's charging low fees and earning good returns,” Banney said.

“If it's not, it's better to switch now rather than wait until after you take time out of the workforce.”

- With Kate Browne.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.