Three reforms would substantially narrow the super gender gap

Reforms to the paid parental leave scheme, concessional contributions, and the Sex Discrimination Act would contribute to substantially improving the gender gap in superannuation, according to KPMG.

KPMG’s latest gender gap report said, based on the rate reduction over the four years before the COVID-19 pandemic, it would take until 2046 for the gender pay gap to be eliminated.

It said the combination of lower hourly rates of pay for women compared to men and less time inn the paid workforce during their working years resulted in a pronounced gender super gap.

KPMG recommended that:

  • The Commonwealth add superannuation guarantee (SG) contributions to its paid parental leave scheme;
  • Unused concessional super contributions during periods of paid parental leave be allowed to be used in subsequent years without a time limit; and
  • Inserting an exemption into the Sex Discrimination Act that allowed employers to make higher super contributions for female employees.

On paid parental leave, it said given the Commonwealth paid parental leave to eligible workers, and compulsory super contributions formed part of remunerations, it was logical that the Commonwealth should make SG contributions under its paid parent leave scheme.

As primary carers, usually mothers, might be out of the workforce or working part time for extended periods of time the expiry after five years of unused concessional super contributions during periods of parent leave disadvantaged primary carers for “no obvious policy reason”.

Employers who wished to make higher super contributions to female employers contravened the Sex Discrimination Act, and KPMG said this was usually to attract and retain female employees in recognition of the greater time they typically spent out of the workforce caring for children.

“Some employers have applied for and obtained an exemption from the Sex Discrimination Act to enable them to make higher contributions for female employees,” it said.

“The multi-party Senate Economics References Committee recommended that the Australian government amend the Sex Discrimination Act 1984 to ensure companies are able to make higher superannuation payments for their female employees when they wish to do so.

The Victorian Government included in its submission to the federal review of Australia’s retirement system that all employers should be allowed to make higher super contributions for their female employees.”

KPMG noted the Retirement Income Review did not appear to have covered this issue.

 




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