Despite the rising participation rate of women in the workforce in recent decades, caregiver responsibilities have meant they have lower superannuation account balances compared to men, new research has found.
According to a three-year project funded by the federal government and led by the University of South Australia (UniSA), a gender gap has arisen in superannuation, with women “generally worse off”.
“Women are more likely to have fragmented work histories, earn less money than men, have fewer advancement opportunities, and retain primary unpaid work and caregiving responsibilities; all of which contribute to a reduced capacity to accumulate assets over their life-course,” the report said.
On top of their paid jobs, women had a larger level of care responsibilities than men, and an ageing population was likely to add to that load, the report continued.
“The gender pay gap, the high proportion of women who work part-time and their years spent out of paid work providing care, means that a new frontier of inequality has opened up in Australia: a gender gap in superannuation and other assets.”
UniSA’s Centre for Workplace Excellence researcher Justine Irving said findings showed women were disadvantaged financially as the onus of caregiver responsibilities mainly fell on them.
“The existing superannuation system is designed around men and assumes an average of 40 years spent in continuous full-time employment to accumulate sufficient retirement funds,” she said.
“It doesn’t take into account that many women spend long periods out of the workforce while raising children.
“In addition to facing sexist and ageist attitudes in the workplace, older workers’ health, caregiving responsibilities and the type of work they do has a significant impact on whether they are able to retire with sufficient funds.”
Speaking with InvestorDaily sister publication Nest Egg, Ms Irving said she was tired of the notion that women did not understand the superannuation system.
“It's the common expectation that women themselves resolve this and work this out, and that if there's something that they can do, then that will reduce the gap and then increase their superannuation balances.
“When in actual fact it's probably a bit unfair, because the issues are systemic and they're not necessarily due to any fault of the women themselves.”
It was ‘simple economics’, Ms Irving said.
“Obviously the less you earn the less you're able to contribute to your retirement,” she said.
“It's not the fault of a woman that she is unable to earn equal pay in some circumstances, or that she is more likely to engage in casual or part time work.
“She's not able to accumulate superannuation at all in some cases, so I guess it's hard for individual women themselves to fix it without broader support.”
Those in higher paid jobs (typically full-time and secure) also saw higher superannuation balances than those who had “‘poor’ quality jobs” (part-time and lower paid), the report found.
Given that self-employment and casual or contract jobs had risen in recent years, many in those forms of employment accumulated little to no superannuation compared with those who held more “traditional employment forms”.
“These inequities are not temporary consequences of the transition to a more mature occupational superannuation system,” the report said.
“Gaps in retirement accumulation are likely to persist as long as labour market returns, patterns of participation and the allocation of unpaid care remain gendered, and as long as different forms of employment and job quality shape retirement earnings.”