Women in Super has welcomed the government’s proposed Council of Superannuation Custodians, to be established in association with a Charter of Superannuation Adequacy and Sustainability.
Announced as part of the swathe of changes the Gillard government ushered in this month, the council and charter are intended to assess future policy and provide reports to Parliament, including an annual report on Australia’s superannuation system.
Women in Super chair Cate Wood said both the charter and council would assist in addressing the “structural flaws in the retirement savings system” that cause inequitable outcomes for women.
Wood said such an important area of policy should have some “agreed basis” because the system should be sustainable and equitable.
“It should cater for the longevity projections that are there for the community. And we should understand the basis of it,” she told Investment Magazine online.
“If there can be principles agreed as part of a charter and if a council is a proper forum for consultation and agreement about the direction of the retirement income system, it could be a good thing. We’d be happy to be involved.”
Equity for women
A proper examination of the gender equity imbalance in the current system should be placed “squarely on the table”, Wood said, because savings are linked wholly to employment. Specifically, women end up with a lower level of savings because of disrupted or part-time careers.
“It gets really frustrating in these forums that the discussion is, ‘well, yes, that is a bit of a problem, but it’s just a given’. And we keep trying to push for a range of small policy measures that will help. But I think we need to do all of those things, like pay Super Guarantee on parental leave. And I strongly believe [we should] withdraw the 450 monthly earning threshold before you qualify for Super Guarantee payment.”
Wood further advocates an examination of the concept of carers, and ways to compensate them if they’re out of the workforce and not accumulating super.
Making it happen
The details of the council and charter’s operation are yet to be determined, with the government planning a consultation on the charter’s content and the council’s structure, including council membership. The government expects members will be drawn from the community, industry and regulators.
A secretariat, funded from existing departments, will support the council.
The charter will be developed in accordance with several principles, namely “certainty, adequacy, fairness and sustainability”. There will also be a clear adherence to the Australian superannuation system’s core objectives, values and principles.
To assist with industry consultation, it is proposed to establish a charter group in the coming weeks to help develop the charter and establish the council.