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Women are bridging the superannuation divide, according to new figures

Women are starting to bridge the gender superannuation gap.

Women are starting to bridge the gender superannuation gap. Photo: Getty

Women are starting to bridge the superannuation divide that leaves them with far lower average balances than men, according to new figures.

The research, released by the Association of Superannuation Funds of Australia, found that average super balances in June 2016 for men totalled $111,853 compared to $68,499 for women.

While that is a significant difference, men’s balances had risen 13.5 per cent from $98,535 in June 2014, while balances for women were up 24.6 per cent from $54,916.

However, 33 per cent of women have no super at all compared to 25 per cent of men, and younger women have lower balances than younger men.

Among younger people aged 30 to 34, women also did better with average funds up 32 per cent to $33,750 while men’s balances rose nearly 20 per cent to $43,580.

The median age for women bearing their first child in Australia is now 29.3. ASFA research chief Ross Clare, who authored the report, said both time out of the workforce for child rearing and the concentration of women in lower-paid jobs and professions both contributed to the gender balance difference.

Overall, men held 61.2 per cent of total account balances in 2015-16 compared to around 38.7 per cent for women. While that is a substantial gap, the share held by women increased by a significant two percentage points from two years earlier.

In the run-up to retirement men also still dramatically outdo women on total balances. Average superannuation balances at the time of retirement (assumed to be age 60 to 64) in 2015-16 were $270,710 for men and $157,050 for women.

In 2013-14 average balances for this age group were $292,510 for men and $138,154 for women, the report found. Interestingly the balances for men at retirement have actually fallen while those for women have risen 13.7 per cent.

Mr Clare said the falls in male balances were a result of the reductions in allowable contributions over recent years which had seen high-income earners able to contribute less, a phenomenon that would continue following the introduction of the new superannuation system from July 1.

However median figures provided by ASFA demonstrate the degree to which average figures are distorted by the influence of high-income earners and how stark the gender divide in super remains for most people.

In 2015-16 the median figure (where 50 per cent have more than the figure and 50 per cent have less) for men aged 60 to 64 was $110,000 while for women it was only $36,000. For households, the equivalent figures were $200,000 for households where the reference person is a man, and $95,000 where the reference person is a woman.

ASFA’s research concluded that “it will be another 30 years or more before most individuals will have the full benefit of a mature SG system”.

“Even then, a small but significant minority of retirees, principally those who have had little or no paid labour force experience since 1992 or who have cashed out their super benefit, will have no superannuation at all.”

Currently around 42 per cent of retirees receive the full Age Pension, a figure ASFA expects to fall to below 30 per cent by 2050.

“While women can look forward to retiring with more superannuation than their mothers and grandmothers, the ongoing issue of broken employment patterns and a troubling persistent gender pay gap means we cannot afford to be complacent,” said ASFA CEO Martin Fahy.

Dr Fahy said a number of policy changes should be implemented to address the gender divide in superannuation:

  • Abolition of the $450 a month wage threshold for payment of Superannuation Guarantee contributions.
  • Payment of superannuation contributions linked to paid parental leave.
  • Providing an ability for individuals to make catch-up contributions when their account balance is low.
  • Increasing the rate of the Superannuation Guarantee to 12 per cent as soon as possible.
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