The current Retirement Income Review has received more than 280 submission, with the actuarial firm noting many have showed similar recommendations to those pitched by the Economic Security for Women in Retirement report.
Women tend to retire with lower superannuation than men due to a number of factors, including life cycle events (caring for children or supporting aged relatives), barriers such as the pay gap and higher longevity and attitudes, including a lack of senior roles in the workforce, partly caused by promotions missed on maternity leave.
Rice Warner has pointed to two key factors giving a better change of a comfortable retirement: marriage and home ownership.
At present, about 70 per cent of retirees are married and 80 per cent are home owners. However, it is expected with high divorce rates and rising property prices, the percentages will fall.
According to Mission Australia, retired home owners have the same rate of poverty as the general population (about 12 per cent), but the rate for renters is 43 per cent.
Women in Super noted in its submission that one in three women has no superannuation, 40 per cent of older single women live in poverty, the fastest growing cohort of the homeless is single older women and women have been retiring with far less super than men.
A report by Fidelity last year found Australian women retire with around half the amount of super as their male counterparts.
“Those who retire with lower balances are at a much higher risk of encountering poverty during their retirement, and one key objective of the superannuation system should be to address and reduce the number of retired impoverished people,” Rice Warner said.
The firm said many of its suggestions it made in its response to the Senate review in 2015 still apply, having called for action from government, but also super funds, employers and society.
It has urged the government to review conditions for single aged pensioners, particularly those who rent – with solutions including raising the rental assistance, reviewing means-testing and providing more public housing.
It has called for other changes such as superannuation tax concessions to be changed to become more equitable, for the $450 threshold for super guarantee payments to be removed, for financial planning provided through super to be tax deductible and for joint accounts for married couples to be allowed.
Sex discrimination legislation should also be amended and to allow employers to make additional super contributions for female staff without it needing to be approved, it added, as well as access to 15 hours a week free child care for three and four-year-old children.
From super funds, Rice Warner has recommended the expansion of education and advice services to members, as well as improving investment strategies for retirees. Super funds should also seek to invest in areas of growth caused by the ageing demographic – for example, public housing, retirement villages and aged care facilities.
Employers have been encouraged to pay extra contributions for female staff as well as the super guarantee to staff on parental leave, provide paid parental leave and give incentives to return to work after maternity leave, such as flexible working conditions and child care facilities. They should also support men who want to share child care duties.
Further, bosses have been advised to mentor and support women into management roles and consider opportunities for women over 55 to remain in the workforce, perhaps on a part-time basis.
Rice Warner noted society needs to value occupations such as nursing and teaching, which are female centric, with better pay. It has also called for an attitudinal shift regarding the sharing of child care and domestic duties between partners.
“Closing the superannuation gender gap is likely an issue that will require structural change and community action. Any major solutions will take many years to have an impact, but incremental changes can have a material impact on the retirement prospects of women across Australia,” Rice Warner noted.
“Following the adoption of our Valuing Female Package in 2014, one-third of our female staff now make voluntary contributions to their superannuation.
“For those who do nothing, women will continue to be an untapped resource.”
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].
