Women’s super slowly rising

AUSTRALIANS’ superannuation balances are fattening and women are slowly getting a bigger slice of the retirement pie but they still remain well behind their male counterparts.

New figures show a significant increase to female super balances driven by women working more, earning more and being in the super system for longer, but despite this many retirees now are still heavily reliant on the age pension once they stop work.

New data released by the Association of Superannuation Funds of Australia, found from the 2015-16 financial year women now have a larger chunk of retirement savings — average balances for men are $111,853 (up by 14 per cent) compared to women at $68,499 (up by 25 per cent.)

This is up from 2013-14 when men had $98,535 and women had $54,916.

In percentage terms women have about 39 per cent of total superannuation savings.

ASFA’s chief executive Dr Martin Fahy said it remained a “worry” that female super balances were still lagging well behind their male counterparts.

“The worry is that do we have to go through a generation of impoverished female retirees on the poverty line be- fore we actually do something about this,’’ he said.

“If we want to reduce the burden of the aged pension and keep it for those who are in most need of it for a safety net then actuarially global evidence shows we have to get to (compulsory contributions of) 12 per cent, the sooner we get there the better.”

In Australia the superannuation guarantee — compulsory super payments by employers — is now at a rate of 9.5 per cent and is legislated to increase to 12 per cent by July 2025.

The $450 per month threshold at which superannuation needs to be paid has remained a long-term issue for the industry, with arguments that many women who work few hours a week or have multiple jobs never reach this amount and thus fail to accumulate super.

Paul Schroder, group executive of one of the biggest super funds, AustralianSuper, said despite the narrowing of the super balances gender gap it “remained a big problem”.

“The area people should be worrying about includes women who are increasingly finding it difficult to own their own home,’’ he said.

“If people can save a bit more it would make a big difference, if a 35-year-old could save $50 a month extra they would have $79,000 more at retirement.”