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The forgotten women: How superannuation is failing Australia’s mums

Images: Supplied, Getty

Susan Wreathall is 61 and in her words, “can’t even conceive of retiring”. She has less than $100,000 in superannuation after a career which included 12 years out of the paid workforce to raise her children, and 16 years where superannuation wasn’t compulsory.

Now, recently divorced, she’s back in the job market, attending interviews where she feels out of touch, and working odd jobs in hospitality and education.

In some of these roles she’s not earning super, as she’s earning less than the $450 threshold for mandatory contributions.

Wreathall’s story is far from unusual.

What’s the problem with superannuation?

According to Women in Super, 40 per cent of older single retired women live in poverty.

And, the average Australian woman will retire with 47 per cent less than their male counterparts, due to a cocktail of lower wages, time spent caring for children and time spent caring for elderly relatives.

It’s something Sangeeta Venkatesan, the executive chairwoman of new super fund, FairVine, understands.

“As a veteran of the financial services sector with nearly 25 years of experience working at some of the top banks across the globe (including as CEO of an investment banking firm), I witnessed first-hand that women are not particularly well catered for by traditional financial products,” she said.

Venkatesan said that as a woman in a predominantly male industry, she saw a gap in the superannuation market, and the opportunity to make a “substantial difference” to women’s lives in retirement.

Sangeeta Venkatesan. Image: Supplied

“Statistically, women are far worse off than men when it comes to super. It comes down to the fact that women aren't earning enough and/or working enough to retire comfortably on their superannuation savings.

“It's also a reflection on the complexity of superannuation – trying to figure out how the various contribution options and tax incentives work can be challenging for the financially savvy, let alone everyday Australians.”

Women are also significantly more likely to take time out of the paid workforce to care for children and elderly relatives.

New ways to boost super

The super fund launched on Wednesday with a goal of reducing retirement inequality by finding new ways to help women contribute.

According to FairVine Super, if women were assisted to put an extra $5 into super every day from the age of 30, they’d be an extra $123,000 better-off at retirement.

It hopes to help women achieve this through voluntary super contribution schemes which reward women for shopping at major retailers by issuing rebates of up to 15 per cent per purchase into their super and rounding up everyday purchases to the nearest dollar, with the loose change going towards superannuation.

Retailers involved include The Iconic, Menulog, Etihad, Microsoft, GlamCorner and Travel Insurance Direct.

The fund also has programs like ‘FairShare’ which aims to streamline the splitting of super contributions between spouses in paid and unpaid work.

“One of the big imbalances typically occur when a couple has a baby. This often means switching to a single-income household, but the superannuation usually stays with the working partner,” Venkatesan said.

“This sets the non-working partner – who is usually a woman – up for failure when it comes to retirement, particularly if

she takes an extended amount of leave and/or has multiple kids.”

The fund will also impose no fees for members who are on parental leave, or who have a superannuation balance below $5,000.

“Women shouldn’t be penalised for having children or making unpaid contributions to their family. This is something we need to address now before the next cohort of women follow the current generation into serious financial hardship.”

Is this enough to bridge the superannuation gender gap?

These solutions help women make up the difference in superannuation by simplifying the extra steps required to save and invest.

And while Wreathall agrees these steps are helpful, voluntary contributions from women aren’t always enough.

“The superannuation system is definitely set up to favour the lifecycle of men rather than women. It rewards the high earners who work consistently throughout their lives, but being a productive member of society isn’t just about what you contribute in the workplace,” she said.

“Kids don’t raise themselves, and not all families have the luxury of being able to afford childcare so that both parents can work.

“It would be great if the superannuation system didn’t penalise the caregivers of society. The ones who give up their career to look after their family because there aren’t any other options shouldn’t be left to retire into poverty.”

Wreathall believes she should have been paid superannuation for her small jobs that paid less than $450, noting that people like her may be working at several businesses but earning no super.

“There also needs to be more help with super. Right now, you kind of have to just figure it all out on your own, and it’s really difficult to understand.”

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