POWERED BY MOMENTUM MEDIA
Gender super gap starts in women’s 20s
Research from Monash Business School has proven that the gender pay gap begins from the first days of employment, making it little wonder that women end up with both significantly less superannuation and more reliance on the Aged Pension than men by retirement.
The effect of the wage gap amounted to more than $80,000 on average by retirement – presumably capable of being far more had a portion been invested in super – which was an unsurmountable deficit to recoup by retirement.
Monash’s research used administrative data from Mercer to show how the wage gap even early in careers had a cumulative effect on retirement savings, looking at super accumulation trends from 2002 – 2012.
“In 2002, comparing the retirement balance of men and women, the youngest cohort [early career at age 24 – 26] had an average gender gap of $1142 in 2002 while the oldest group had $21,889,” one of the researchers, Dr Carly Moulang, said.
“When measured again in 2011-12, this gap had widened to $18,608 and $81,769 respectively – figures that are most alarming. We found that the young cohorts experienced more gaps in their contributions as they are more likely to be establishing their family around this time, where the more stable 44 – 46 year olds did not have as many gaps.
“At 24-26, generally around the time of one’s first professional job, graduate employment rates are high for women but their salaries are lower. This has a significant long-term impact on women’s superannuation balances from which they cannot recover.”
Moulang cited possible solutions long-advocated by the superannuation industry to mitigate the impact of the wage gap on retirement savings, such as paying super contributions continuing during employment gaps such as maternity leave.
She also rejected suggestions that encouraging women to save more could solve the issue, labelling it “an inadequate response that will not bridge the gap revealed here”.
Super Review hosts a Women in Financial Services awards night each year, seeking to promote and reward women who have worked hard to help rectify some of these issues.
Recommended for you
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
Cbus Super has unveiled Advice Essentials Plus, a new service offering affordable financial advice to both members and their partners.
The fund has launched a new tool to help deliver personalised financial education and digital personal advice to eligible members.
The QAR lead reviewer has told a Senate committee that the government’s demands of super funds conflict with their original purpose.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
