What the government can do to close the super gender gap
The final report of the Retirement Income Review, released late last year, found that differences in retirement savings between men and women reflect the accumulated economic disadvantages women face throughout their working lives.
“On average, compared to men, women have lower wages, are more likely to work part-time, take more career breaks and suffer worse financial impacts in the event of divorce. These factors contribute to the gender gap in retirement pension balances, ”the report says.
The report also cites figures presented by the Agency for Gender Equality in the Workplace that 93.5 percent of all primary caregiver leave is taken by women.
In 2018-2019, among parents of children aged five and under, 64.2% of women were in the labor force, compared to 94.6% of men.
Other research cited by the journal showed that women with a child aged two or younger in 2001 experienced an average 77.5% reduction in income over the next 15 years, compared to those without children. . Men with young children face no significant wage penalties.
Paying a government-funded caregiver would recognize voluntary care as a contribution to society, says Mercer senior associate David Knox, who wrote the paper presented to the Actuaries Institute with Michael Rice and Richard Dunn of Actuaries Rice Warner.
The authors claim that caregiver payments are already made abroad, including in countries like France, Sweden and Germany. The length of time the payment would be made is “subject to debate,” they say.
They also call for compulsory super contributions to be made compulsory during paid parental leave. There is currently no obligation for employers to pay the contribution.
They also want to see the removal of the threshold of $ 450 per month below which employers do not have to pay the super mandatory. “We know that more women than men have casual or part-time jobs. As a result, more women than men miss out on super, ”says Dr Knox.
Measures to pay the super on paid parental leave and a removal of the $ 450 per month threshold could be included in next week’s budget.
The paper also examines how annuities are priced and structured.
The way annuities work is that retirees use part of their retirement savings to purchase the annuity and, in return, they receive guaranteed income for life.
In Australia, annuities provide smaller payments to women than to men because women live longer. The authors say that life annuities should be based on unisex rates, as demanded by Europe.