The super savings gender gap is showing no signs of closing. As funds advocate for policy reform, they also have a duty to help women members become more engaged.
Running errands at her local pharmacy recently, Helena Gibson came face-to-face with a reminder of why many ordinary Australians feel disillusioned with superannuation. Gibson, who is head of public policy and technical services at BT Financial Group, was compelled to step in and offer to help a stranger after overhearing her become frustrated on the phone to her super fund.
“She got off the phone visibly distressed,” Gibson recalls. “I asked what was wrong and she apologised for being upset and told me she thought her super fund was trying to rip her off by reducing the level of insurance cover without telling her.”
The woman was upset that the super fund customer service staff had said it was her responsibility to read all the information in the Product Disclosure Statement.
“She kept saying, ‘I’m not a lawyer, how do I know what I’m meant to read, or understand how this is going to affect me?’ ” Gibson recounts.
The incident rammed home to her just how far the industry has to go before average members understand how super works and feel engaged and empowered about their retirement savings.
Better engagement with female members is particularly critical, given the super savings gender gap. Women in Super figures indicate that, on average, Australian women retire with 47 per cent less super than men.
Structural disadvantage
In 2016, the final report from the Senate Inquiry into Economic Security for Women in Retirement concluded a persistent gender pay disparity was the main driver of the super gap. The measures to help make the super system fairer for low-income workers, reasoning that because women are over-represented among the lowly paid, such measures could help close the super gender gap without discriminating against men.
Changing taxation to a family or spousal level, introducing lifetime contribution caps rather than annual caps, legislating for the super guarantee to be paid on parental leave, and changing when and how super has to be paid to casual workers are just a few of the policy ideas Gibson believes could be helpful.
Sunsuper head of advice and distribution Anne Fuchs is another advocate for policy reforms to address the super gender gap.
“These are the things that need to be explored, because everyone at the moment is pussyfooting around the real issues,” Fuchs says. “Unless we do something quite dramatic and brave, the trajectory doesn’t change.”
In the meantime, Sunsuper and BT are committed to investing in advice and member engagement, with one eye to offerings designed to target women.
Power of advice
As major super funds become bigger employers of financial advisers, whether in-house or via a partnership model, they are learning from the retail advice sector.
Integra Financial Services founder and director Deborah Kent – a Sydney-based adviser who receives referrals via Sunsuper – says facilitating access to financial advice is a key way super funds can help all their members.
She notes that sometimes extra steps need to be taken to nudge women to become engaged with advice.
“Every client I see, I make sure I also talk to the wife, to make sure they understand it just as well as the husband,” especially, she says, if the wife is disinclined to step into what she views as the husband’s territory.
“We [also] need to encourage more women to be advisers because we see that women tend to go to other women for advice,” she says. “Women want someone who is really going to listen to them. Most women come to me, they’ve already been to see someone else and they say, ‘I didn’t actually understand what they were saying because they weren’t listening to what I needed.’ ”
Seeking advice can help clients understand their options with regards to a range of the more obscure super rules, such as spousal contributions, or how casual workers (many of whom are women) can make personal deductible contributions.
Committee for Sustainable Retirement Incomes executive director Patricia Pascuzzo notes that women are likely to live longer than men, and argues the push for funds to offer Comprehensive Income Products for Retirement is particularly important for women, given their greater need to manage longevity risk.
But as Gibson notes, there’s a long way to go before post-retirement products alone are the solution to the super gap.
“[Even with] the greatest products in the world, if we haven’t got that engagement and we haven’t got the recognition that this is important and it’s important today, then there will be no market,” she says.
Striking the right tone
In their mission to help women become more engaged with, and empowered about, their financial future, super funds must tread a fine line. Well-intentioned but imperfectly executed campaigns can be quickly and loudly lambasted with accusations of victim-blaming.
VicSuper’s five-week Super Woman Money Program, which has had 12,000 participants over the last three years, bore the brunt of a social media backlash late last year, after it was lampooned in a Melbourne Fringe Festival show by comedienne Elizabeth Davie.
At the time, Davie told national newspaper The Australian that the tips provided on the VicSuper website − which included re-using tea-bags, making use of happy hours and avoiding divorce − made her feel like it was her attitude that was stopping her from having a bigger super balance.
VicSuper executive manager of marketing, insights and experience, Sara Daymond, says that, despite the bad press, the fund has seen great results from its Super Woman Money Program.
She says the fund did “an enormous amount of work” to research how to help women feel more comfortable and in control of their super, with the five-week program developed in direct response.
“What we’ve found is that women in particular like communities, they like to feel supported and also learn from each other. So what’s been particularly successful is online forums where they can share information, or [having them come] in and talk with various financial experts that we bring in, and learning from each other,” Daymond says.
“There was an enormous sense of relief, we found, with women when they came in and recognised that they weren’t the only one who didn’t understand super.”
Better engagement
Cate Wood, who chairs both CareSuper and Women in Super, says she sees super funds working harder than ever to engage members, and women in particular. This includes initiatives to make communication with members more targeted and relevant to individuals’ circumstances, whether segmenting by gender, account balance, age, income or spending behaviour.
Wood says it is important to focus on the positive impact of small changes, and warns against tactics that may make low-income savers feel like closing their super savings gap is impossible.
“We’re constantly going back out saying, you don’t need a million dollars to make a big difference,” Wood says. “HESTA, in particular, has been very strong in those messages. Even by adding $70,000, you
can make a difference.”
A number of the experts quoted in this story will be among the speakers to address the 2018 Investment Magazine Post-Retirement Conference, to be held in Sydney March 20. For more details visit the event website.
