Australia continues to suffer from a significant superannuation gender gap, according to new analysis released by Morningstar, with a difference of as much as 32 per cent between the average balances of men and women depending on age group.
Morningstar’s analysis is based on annual fund-level super statistics released by the Australian Prudential Regulation Authority (APRA) last December which contained information on member super balances by age and gender.
“The average female account balance per age bracket compared to the average male is disheartening,” said Morningstar director of manager research ratings, Annika Bradley.
“There’s still a significant gap in the account balances between women and men, particularly in the 45–60 years age brackets, which is really when the full effect of child-rearing responsibilities and the compounded lifetime impact of lower paid work shows up.”
By percentage, the super gender gap was largest in the 50 to 54 age bracket with a difference of 32 per cent or $37,600. The 45 to 49 age group was next with a difference of 31 per cent or $29,200, followed by the 55 to 59 bracket with a difference of 30 per cent or $44,200.
“Lower overall balances for women, who have a longer life expectancy, is not a good news story,” Ms Bradley said.
“And don’t get too excited that the gap reduces markedly from 65 years onwards; this is likely attributable to women outliving men and subsequent account balance transfers to female widows.”
The gender super gap was 23 per cent ($41,200) for ages 60 to 64, 11 per cent ($23,400) for ages 65 to 69, 15 per cent ($31,100) for ages 70 to 74, 17 per cent ($32,300) for ages 75 to 84 and 14 per cent ($16,100) for ages 85 and above.
Elsewhere, a gap of 29 per cent ($18,800) was observed for the 35 to 44 age group, 20 per cent ($5,500) for those aged 25 to 34 and 11 per cent ($600) for those aged under 25.
“Women also aren’t featuring as prominently as we’d like at the higher end of the account balance spectrum, with almost half the number of female accounts at $500,000 or more compared to male counterparts,” added Ms Bradley.
“And again, you’d expect that gap to be wider if you controlled for women who have inherited at least part of that account balance.”
There were only 240,000 female super accounts with a balance of between $500,000 to $999,999 compared to 410,000 male accounts. Additionally, there were 50,000 female accounts with a balance of $1 million or more versus 100,000 male accounts.
Despite the ongoing gender super gap, Ms Bradley noted that gender diversity on the trustee boards of super funds appears to be heading in the right direction, with a “noticeable improvement” in the representation of women over the past five years.
“Granted, there are still eight funds with 15 per cent or less of their board composed of women, but there are 44 funds with women representing more than 30 per cent of board seats. These 44 funds account for almost two thirds of all funds represented in the data,” she said.
“So how does this compare with five years ago? Just less than half of all funds had more than 30 per cent of women on their board. That’s progress! Success would obviously be 100 per cent of funds with more than 30 per cent of women on their board, and perhaps in the next few years we will get there.”
In conclusion, Ms Bradley stated that the super system should be focused on providing adequate income for all Australians, including women.
“The superannuation industry obviously cannot solve this issue in isolation. We need all Australians, including the government, to lean in and tackle this ongoing and complex societal issue,” she said.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.