Rice Warner says despite industry efforts over many years, superannuation balances between men and women remain distinctly uneven.
New research from the actuary has examined the average balance of superannuation accounts owned by women relative to the account balances of their male counterparts as at 30 June 2017. The clear theme is that women have consistently lower average account balances than men at all ages with a clear decline when women start their families.
The data shows that the gap widens between the ages of 35 and 55, with superannuation balances averaging between 69 and 77 per cent of male balances.
The superannuation gap derives from many factors – lower salaries, as well as lengthy career breaks and periods of part time work.
“Unfortunately, this trend is exacerbated as statistics show that women retire earlier than men and live nearly three years longer giving them a longer period in in retirement over which to spend their savings,” the report says
“While there are many potential reasons for this, one leading reason may lie in the tendency of women to take career breaks to raise children during a period when they would otherwise have received promotional opportunities.”
Analysis of behavioural finance suggests that men invest more aggressively than women. If true, Rice Warner argues that holding extra exposure to growth assets would lead men to have higher average retirement balances due to higher longer term returns.
That said, Rice Warner’s data does confirm that males who elect an investment choice do invest slightly more in aggressive assets than females. But the difference is minor and negligible in the context of the higher proportion of superannuants invested in the default investment, according to the actuary.
While grim, the news could be worse.
The research data reveals that women are making a conscious effort to close the gender gap through making more voluntary contributions to their super.
The average voluntary contribution by females is typically higher than that of men in a similar age cohort and markedly so closer to retirement.
Initiatives like leveraging government co-contribution, exploiting of low income superannuation tax offsets, encouraging higher employer superannuation guarantee contributions to females and maternity leave payments are unlikely to shift the dial, according to the actuary.
Rice Warner concludes that closing the gender gap is likely to be an issue that will continue to require structural change and community action.