Reading time: 4 minutes
On this page
It’s still a man’s world when it comes to super, with women’s retirement savings lagging behind men. But there are encouraging signs that some super funds not only recognise the issue but are doing something about it.
More on that in a moment, but first some sobering statistics.
According to Women in Super:
- Women currently retire with 47% less super than men
- Women only receive 1/3 of government tax concessions on super (men get the rest)
- Women working full-time earn 18% less than men
- 43% of women work part-time, many with more than one part-time job
- An estimated 220,000 women have missed out on $125 million of super contributions because they didn’t meet the requirement to earn more than $450 a month (before tax) from one employer
- Women take five years out of the workforce on average, to care for children or a family member
- Women live five years longer than men on average, so their smaller super nest egg needs to support them for longer.
These disadvantages are cumulative, and can add up to a frugal retirement, especially for single women.
There is no quick fix to the inequality built into a super system designed around the work patterns of full-time male employees. The federal government announced several measures in its May 2021 Budget which are a step in the right direction.
Budget measures supporting women’s super
Importantly, the Budget reaffirmed the legislated increase in the Superannuation Guarantee (SG) from 9.5% to 10% from 1 July 2021. Further incremental increases in the SG to 12% by 2025 are also scheduled.
This measure will ensure better retirement outcomes for all workers, but especially young people and women who need to rebuild their super after withdrawing savings during the pandemic or taking time out of the workforce to raise their children.
Other Budget initiatives to boost women’s retirement savings and increase flexibility for all super members are not due to begin until 1 July 2022. These include:
- Removing the $450 per month earnings threshold for payment of the SG
- Removing the work test so retirees aged 67-74 can make super contributions
- Extending the downsizer scheme to those aged 60 and over (currently 65 and over)
- Allowing lump sum withdrawals from the Pension Loans Scheme (currently only regular income withdrawals are permitted).
The last two measures allow asset rich/cash poor retirees, many of them single women, to access some of the equity in their home.
While the government is taking steps to help close the gender super gap, some super funds have been quietly doing their bit too.
Super funds offer benefits for women and families
Superannuation ratings and comparison group, SuperRatings recently compiled a snapshot of key member benefits some funds are offering women and parents. The most common benefits are administration fee and insurance premium breaks to help young parents get over the ‘baby bump’.
SuperRatings executive director, Kirby Rappell says some funds have been providing these benefits for a while, but it tends to go under the radar.
As you can see from the table below, the funds offering benefits to parents tend to be start-up funds targeting younger members, often with an ethical bent, such as Future Super and Cruelty Free Super. Verve Super targets ethically minded women. Grow Super is a digital platform while Virgin Super is part of the Virgin Money group. Also represented are large industry funds which traditionally cater to a mostly female membership such as CareSuper, HESTA and Hostplus.
|CareSuper||Members on employer approved parental leave can request a waiver of their insurance fees for death, TPD and income protection insurance for up to 12 months. This means, if you’re eligible, your insurance cover can continue while you’re on parental leave at no cost to you.|
|Cruelty Free Super||Offers BabyBump – a refund of the weekly member fee for the time you’re on parental leave, up to a maximum of 12 months.|
|Future Super||Future Super supports those on parental leave through a program called Baby Bump. Baby Bump is a refund of all or part of the annual dollar-based administration fee for the time you’re on parental leave, up to a maximum of 12 months ($93.60).|
|Grow Super||GROW’s Fee Free Super removes fees for eligible new parents. Approved members who are primary carers will pay $0 superannuation fees for 6 months! Members can apply up to 12 months after the birth of their child.|
|HESTA||Every HESTA member can get up to a 12-month break from paying insurance fees while they’re on parental leave.|
|Hostplus||Hostplus members can enjoy Insurance cover without the cost for up to 12 months of parental leave.|
|Verve Super||Verve members who take parental leave after the arrival of a new child, whether by birth or adoption, can apply for a rebate of the annual fixed administration fee for up to 12 months. Verve can also contact your employer, or support you, to ask them to keep paying your super during your parental leave.|
|Virgin Super||Virgin Super Plus offers a Baby Break to members on maternity or paternity leave for up to 12 months. A Baby Break is a discounted asset-based administration fee for up 12 months for eligible members.|
While the sums on offer aren’t huge – for example, FutureSuper’s administration fee refund is capped at $93.60 – but every dollar saved for retirement helps. This is especially so for younger members who will potentially benefit from 30-plus years of compound interest.
Parental leave is not the only circumstance where funds are able to offer insurance benefits.
Additional insurance cover for life events
SuperRatings also found that 75% of funds offer members the opportunity to apply for additional insurance cover, without a medical examination, for certain life stages.
This provides convenience for members in obtaining a higher level of cover as their life changes. Typically, the events covered include marriage, birth of a child and first mortgage. However, just over a third of funds also offer additional insurance cover without a medical examination for a salary increase.
Rappell says it’s important to apply for any additional cover within the required time frame outlined by your super fund as these differ from fund to fund.
Following a life event, most funds require an application for additional insurance cover be made within either 60 or 90 days. A small portion of funds require an application within 30 days, while others offer an extended application period of 180 days or more.
Additional insurance cover and other benefits available for women, parents and younger members underline the importance of getting engaged with your super as early as possible so you don’t miss out on opportunities to boost your retirement savings.
Member benefits are also worth keeping in mind when choosing a fund.
“It’s important for funds to help members on their life journey, not just retirement,” says Rappell.