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ASFA recommends actions to close retirement income gender gap
Research from the Association of Superannuation Funds of Australia (ASFA) has reconfirmed that despite increasing workforce participation by women, there is still a “significant disparity” between retirement incomes for men and women.
ASFA found that men are both more likely to have superannuation and to have higher account balances than women. In 2015-16, for example, men held around 61.2 per cent of total account balances compared to around 38.7 per cent for women.
The key factors for women’s greater insecurity in retirement were:
- broken working patterns;
- the gender pay gap;
- increasing casualisation of the workforce;
- longevity risk;
- structural issues in the superannuation system;
- adequacy of superannuation overall;
- domestic violence; and
- practical issues with family law and superannuation splitting.
ASFA recommended that the superannuation guarantee (SG) should apply in all circumstances where income is replaced as a result of a workplace or legislative entitlement to receive a salary or a wage, such as paid parental leave, to help overcome some of these factors.
The Association also repeated its frequent cry to remove the $450 monthly SG threshold and to increase the SG to 12 per cent.
It further suggested that the above factors could also be mitigated by compulsory super being extended to the self-employed, and that unpaid SG entitlements be included in the definition of unpaid employment entitlements for the purpose of the Fair Entitlements Guarantee.
The Association welcomed the introduction of the unused concessional cap carry forward measure as having the potential to improve women’s retirement security, as well as the role played by the Low Income Superannuation Tax Offset in refunding the lack of super contributions made by those on low incomes.
It similarly supported the inclusion of domestic violence in the provisions for the early release of super.
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