Retirement income policy amplifies women’s ‘lifetime disadvantage’: KPMG

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KPMG has urged the government to improve superannuation outcomes for women in its submission to the Retirement Income Review, stating the system “does the opposite” of protecting their interests.

Australian women comprise just over half of the population, but on average earn $26,000 a year less, according to figures from the financial services giant. 

The divide only becomes more substantial after departing the workforce however, with women currently retiring with around half the amount of superannuation payouts as men. Latest government figures showed the median balance for men at or approaching retirement was $183,000 and for women, $119,000. 


KPMG has pointed to the imbalance existing for longstanding reasons: less continuity in women’s careers and fewer hours worked, less pay for equal work and not being as likely to gain promotions as men, in addition to more time out of the workforce and bearing more responsibilities in caring for family. 

The company’s submission, included along with its proposal a letter from Linda Elkins, partner and national sector leader, asset and wealth management; Grant Wardell-Johnson, partner of economics and tax centre and Cecilia Storniolo, director, superannuation advisory.

“‘With a blank sheet of paper’ one might expect a retirement income policy to redress the unequal contribution that women have made to society through care of the future generation,” their joint letter said.

“However, Australia’s current retirement income policy does precisely the opposite.

“Through superannuation concessions, for example, it takes the inequality in earnings that arise from the inequality in parental care responsibilities and amplifies them. That is, it exacerbates the issue by providing for a lifetime disadvantage for a current acceptance of a greater burden of parental responsibility.”

To combat the inequality later in life, the finance giant has recommended a number of changes, including extra contributions for parents and carers, and the removal of the $450 per month wage threshold for entitlement to employer super contributions.

Like the Australian Superannuation Funds Association (ASFA) and Industry Super, KPMG has called for the super guarantee to be paid on parental leave and for it to also be applied to workers’ compensation payments. 

For the primary carers with a child of pre-school age, it has also pushed for changing the Commonwealth’s contributions to top-up payments, rather than co-contributions, into their super accounts.

“Women would make up the greater part of this cohort,” KPMG stated.

“Given the huge potential long-term benefits of even a small boost to a mother’s superannuation balance, KPMG believes the impacts of a $500, $1,000 and $2,000 annual top-up should be modelled by the Parliamentary Budget Office to enable the potential cost of this proposal to be estimated.

It has also said the concession caps for primary care and care-based work breaks should be amended and replaced with lifetime concessional contribution caps. 

“This would benefit Australians with breaks in their workforce participation and periods of part-time working – typically women,” KPMG stated.

“This would enable individuals who had taken time out of the workforce to undertake carer roles to ‘catch up’ over a period of time as their ability to make additional contributions increased.”

Further, it has asked the Sex Discrimination Act should be amended to ensure employers who pay additional amounts to women who have taken on the burdens of primary care are not in breach of the law – the policy should benefit women. 

For older women, KPMG has suggested providing super contributions for those aged 50 to 59 and receiving Commonwealth Rent Assistance.

“These individuals (largely women) would also benefit considerably from having their superannuation savings topped up directly, as they would have limited ability to supplement their own mandatory superannuation contributions,” KPMG stated.

“This might ultimately save the Commonwealth money over the longer run if the superannuation fund performs well, and would deliver additional personal wellbeing benefits compared to greater reliance on the age pension.”

Speaking on its proposed removal of the $450 threshold, KPMG commented low-income earners would save more consistently for retirement and it would eliminate the potential for employers to manipulate workers’ hours to keep their pay below the threshold.


Retirement income policy amplifies women’s ‘lifetime disadvantage’: KPMG
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].


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