Closing the gender pay gap is not enough to close the superannuation gap, as workforce spells and lost compound returns will still leave women facing retirement with less, Industry Super Australia (ISA) has found.
ISA modelled the latest Australian Bureau of Statistics (ABS) data to plot both pay and superannuation gaps by age and salary, finding that differences in pay were far from the only factor leaving women out of pocket as they aged.
The modelling found that while the super gap emerges at 14.6 per cent at the age of 25-34, it peaks at retirement age, with men ages 55-64 having 47.4 per cent more saved than women.
The ISA said that the fact the super gap got larger from age 40, whereas the pay gap increases with age, possible reflect women’s re-entry into the workforce following time off. It also thought that the super gap peaking for women working fulltime near retirement may reflect the cumulative pay gap.
ISA head of consumer advocacy, Sarah Saunders, said the organisation’s findings showed that, even if women return from time off work to a good salary, they have little chance of making the super shortfall lost by her time out.
“That women today face thirty years in retirement with half as much super as men – because the system doesn’t put an economic value on unpaid care – is unacceptable,” she said.
Saunders called on businesses and the Government to adopt policies that better reflect how women transition in and out of paid employment.
She suggested familiar solutions such as flexible working hours, more accessible childcare, and super on parental leave and casual or part-time work.
In 2015, there were 2.7 million unpaid primary carers in Australia, over two-thirds of whom are women. The calculated replacement value of that unpaid labour was $60 billion.
Saunders said that the prospect of a continuing super shortfall showed the importance of ensuring the Age Pension safety net kept pace with living standards. To achieve this, it should be linked to wages rather than CPI.