As a result, the Association of Superannuation Funds of Australia (ASFA) has called for the government to directly address the systemic issues in superannuation that are responsible for the inequality in outcomes for women.
“It is not the rate of the superannuation guarantee (SG) that creates inequality in women’s super. What produces inequitable outcomes is that often women have broken working patterns, work part-time and tend to be lower-paid,” said ASFA chief executive Dr Martin Fahy.
“Structural issues such as the $450 per month threshold for SG, not receiving super during paid parental leave, practical difficulties with family law and super splitting, and no compulsory super for the self-employed, all serve to leave women worse off in retirement.”
Analysis undertaken by the Treasury estimates that around 240,000 women and 160,000 men are affected by the $450-a-month threshold.
Further, the Treasury has estimated that around 40 per cent of those affected are aged under 25 and two-thirds are aged under 35. Missing out on employer contributions also means that those affected lose out on the substantial compounding of investment earnings.
Dr Fahy said that it was important to tackle these structural issues directly to redress the imbalance between men and women in average retirement balances.
“ASFA has advocated for a number of changes to address these issues, including that the $450-a-month threshold for SG should be abolished, SG should apply whenever there is an entitlement to receive income replacement and that compulsory superannuation should be extended to the self-employed,” he said.