To celebrate International Women’s Day, the Association of Super Funds of Australia is encouraging women to take one hour out of their day to sort out their superannuation.
The initiative, called Super Sorter Power Hour, aims to promote awareness about the gender gap in superannuation balances and to help close the gap by empowering women to take control of their super.
The ASFA, a peak research and advocacy body for superannuation in Australia, wants to use International Women’s Day to educate as many women as possible about steps they can take to improve their super so they are better prepared for retirement.
“Three years ago I thought to myself, what’s the biggest barrier to women boosting their own super? It’s time. Women just don’t have the time,” ASFA CEO Pauline Vamos told Women’s Agenda.
“So we decided we needed to create an initiative to empower women to make time for their super. We are asking them to take one hour out of the week between now and International Women’s Day to sort out their super, and then to repeat that hour every few months.”
“If women start to do this, they will be so surprised at how much their balances improve.”
Another goal of the ASFA’s Super Sorter Power Hour is to illustrate to women that sorting out super is easier than it has ever been, and that just one hour every few months is enough to stay on top of it.
“It is much easier to get help sorting out super than ever – we have free advice services, super calculators and fact sheets freely available. Technology has also meant that actively sorting out super is much easier, too,” Vamos said.
“Boosting your super is easier and quicker than it has ever been.”
So why is it so important to help women improve their super balances?
The gender gap in superannuation is currently approaching $100,000. On average, Australian women retire with $92,000 less in savings than their male colleagues.
With women earning $105,000 in super on average and men earning $197,000 on average, this gap means women are earning just over half the amount of super that their male counterparts are.
For 90% of Australian women, this gap means that their retirement savings are not enough to fund a comfortable lifestyle.
But for one in three women, the picture is considerably bleaker – these women retire with no super at all.
While the gender super gap is a product of a series of compounding structural problems for women at work, there are steps individual women can take to ensure they retire with as many savings as possible. ASFA aims to draw attention to these steps women can take with its Power Hour initiative.
The ASFA has recently found that one in five women cite lack of time as the main reason they haven’t addressed problems with their super. So, ASFA is encouraging women to consciously take one hour out of each day to do so.
The steps the ASFA recommends women take during this hour are:
1. Check your super savings: Get into the habit of checking your balance regularly and make sure the investment and insurance options on your account are maximising your savings.
“If people understand how much they’ve got in savings, they’ll look after their super better,” Vamos explained.
“You need to get into the habit of checking your balance, making sure your employer is paying you enough super and making sure you aren’t losing any super when you change jobs or circumstances. Some employers pay super late, or they underpay, or they don’t pay at all – it’s up to you to check.”
2. Roll your super accounts into one: To avoid losing super through unnecessary administration fees, combine all of your super accounts into one account with a single fund.
“If you have two super accounts, you are paying two lots of the minimum fee required to keep the account open. If you consolidate your accounts, you halve that fee,” Vamos said.
“Rolling your super accounts into one has a big impact on return.”
3. Plan to save more: Making additional voluntary contributions to your super can help you save in the long run.
“If women put an extra ten dollars every month into their super, they will save thousands in the long run,” Vamos said.
While these steps will certainly help individual women improve their savings, there are also a series of changes that need to occur at a policy and legislative level before we can begin to work towards gender equality in super, according to the ASFA.
Improving retirement for Australian women overall requires the following three steps:
1. Remove the $450 per month threshold for the Superannuation Guarantee: Women are disproportionately affected by the $450 threshold because they are more likely to work in casual or part time jobs, and more likely to hold more than one job at any one time. Removing this threshold would mean women in this position would stop missing out on vital super contributions from employers.
2. Apply the SG to all income replacement payments: Another major factor in women’s diminished super balances is the fact that women miss out on large amounts of super during parental leave. If the SG were to be applied to parental leave payments and other income replacement payments, women could add an extra $10,000 to their overall retirement savings.
3. Allow employers to contribute more to the superannuation accounts of women: Currently, contributing higher amounts of super to women than men in order to close the gap constitutes a breach of Australian anti-discrimination legislation. The ASFA feels the Anti-Discrimination Actshould be amended in order to allow companies to do this and therefore to help close the super gap.