Survey illustrates the plight of women in retirement system

The lopsided nature of superannuation, where men will benefit to a far greater extent than women, has been highlighted by the latest Newspoll survey on community attitudes to retirement and superannuation.

The results of the survey, sponsored by member administrator Superpartners, were published yesterday. The main findings included: • women are half as likely as men to expect superannuation to provide all or most of their retirement income (6 per cent versus 12 per cent); • the incidence of women expecting investments to be the main source of their retirement income is one-third of men (16 per cent versus 24 per cent); • 60 per cent more women expect to rely on the Aged Pension as their main source of retirement income (15 per cent versus 9 per cent). The underlying cause of the problem is, of course, the fact that over their lifetime, women will earn less than men. The question of equal pay for equal work has been addressed, although probably with some room for improvement. But the problem of women leaving the workforce to have children has not. The Government has in recent years attempted to provide some compensation for this, such as with the $3,000 ‘birth payment’, but these have only marginal impact on the gap between men and women in retirement savings. Frank Gullone, the chief executive of Superpartners, has suggested a new approach through the Superannuation Guarantee system. He suggested yesterday that the Government consider abolishing the 15 per cent super contributions tax for women. He said: “Today’s Newspoll survey has revealed the plight of women in the workforce who earn on average of 84 per cent of the male wage for the same job and who were, for the most part, denied employer superannuation contributions in the early years of their working life and during childbearing years. “Of course, as an industry-fund dedicated super administrator Superpartners would prefer the Federal Government remove the 15 per cent contributions tax from all superannuation, not just that of women. “The Federal Treasurer (Peter Costello) has made it completely clear that he has no intention of removing the 15 per cent contributions tax on all super contributions. Australia is still the only country that taxes retirement savings on the way into a fund, taxes the earnings of the fund, and then taxes the money on the way out again. “We are asking him to consider removing the super contribution tax for women. This will have less of an impact on Treasury and will redress the current imbalance in women’s retirement savings,” he said. As Gullone said, the current superannuation regime does not offer women the same level of security as it does men, which has implications for women’s standards of living in retirement by comparison to men. He said recent measures such as ‘spouse-splitting’, which only seemed to benefit high-income families and were not applicable to unmarried women, did not address this gender inequality. Gullone believes that any other method of attempting to redress the imbalance, such as lowering the salary threshold on the Federal Government Co-Contribution Scheme or increasing women’s Aged Pension entitlements, would be unnecessarily complex.