The superannuation system was designed to be conducive to traditional, full-time employment, and therefore automatically discriminates against women, the Financial Services Council (FSC) said.
In her address to Women in Super, FSC chief executive, Sally Loane, quoted last year’s research from ANZ Global Wealth, which said the pay gap for women jumps to almost 20 per cent by the time they reach retirement, and that women earn $700,000 less than men over the course of a career.
The FSC said it had recommended various policy options to the Economic Security for Women in Retirement, a Senate Inquiry into retirement adequacy for women.
The FSC recommended employers should pay super contributions on the existing Commonwealth Paid Parental Leave scheme, which would be 18 weeks’ pay at the minimum wage, and extend contributions over time to the super contributions a carer would have received if they had continued their employment.
It said the cost of this would be around $150 million per annum.
It also would like the removal of barriers in the Sex Discrimination Act 1984, and allowance of lawful discrimination in situations where employers could make higher super contributions to female staff to close the retirement savings gaps.
Finally, the FSC would like the Government to consider allowing employers to pay super contributions to those who earn below the threshold of $450 a month, saying this equates to $112.50 a week, or around seven hours of work at minimum wage.
“The threshold is little changed from the advent of the compulsory superannuation system. The threshold is arbitrarily set and has little relevance to current work patterns,” Loane said.
“Introducing flexibility around the threshold would also interact with the retention of the Low Income Superannuation Contribution, to ensure there is a tax benefit arising for low income employees from participating in the superannuation system.”
