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SG rise no real benefit to women: Review

While not making explicit recommendations, the Retirement Income Review has warned against increasing inequities already in the system, citing that a rise in the super guarantee would benefit men more than women.

The review has stated that consideration should be given to whether the retirement income system is exacerbating or compensating for inequities people experience in their working lives when comparing those with low or lower retirement incomes, such as women, to others.

The review concluded that the gap in retirement savings and retirement incomes for women is the accumulated result of the economic disadvantages they face while working. These include lower wages than men, more career breaks, and more part-time work.

Breaking down the suggestions of stakeholders in improving system equity, the review states that increasing the SG would not reduce the super gap as it would benefit men more than women.

The higher life expectancy of women means their super balances at retirement need to go further and, while the gap will narrow in the years to come, it will not close so long as gaps remain in earnings and workforce participation, the report states.

But not everyone agrees.

The Australian Institute for Superannuation Trustees said halting the increase to SG will see women, and low-income earners generally, suffer.

"Low and many middle-income earners, don't have savings or home equity to fall back on if their super isn't adequate. This is particularly true for women, and those who have had to drain their super accounts to get through the COVID lockdown. The increase to 12% super is critical for them to have financial security in retirement," AIST chief executive Eva Scheerlinck said.

It was also suggested that super tax concessions be reduced for higher-income earners. The review states that while this would reduce the gender super gap it would only be to the degree that gender gaps in working-life incomes translate into super balances.

Inequity in the system should be dealt with directly, through addressing the distribution of tax concessions, rather than leaving women with a shortfall by delaying or freezing the super increase, causing even more women to retire in poverty," Scheerlinck said.

"We should be trying to lift those falling through the cracks to the adequate levels enjoyed by others in the system."

Other suggestions put forward by stakeholders included: removing the $450-a-month threshold; paying super on both employer parental leave and government parental leave pay; disclosing super balances in retirement and increased support for lower-income retirees that rent, with more women renting in retirement than men.

"It is not the rate of the SG that creates inequality in women's super. What produces inequitable outcomes is that often women have broken working patterns, work part-time and tend to be lower paid," Association of Superannuation Funds of Australia chief executive Martin Fahy said.

"Structural issues such as the $450 per month threshold for SG, not receiving super during paid parental leave, practical difficulties with family law and super splitting and no compulsory super for the self-employed, all serve to leave women worse off in retirement."

Read more: Retirement Income ReviewEva ScheerlinckAISTAssociation of Superannuation Funds of AustraliaAustralian Institute for Superannuation TrusteesMartin Fahy
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