It was International Women’s Day (IWD) this week and my wife and I hosted a dinner over the long weekend. Although we’ve only known our guests for a few short years, the friendship we have built with them is exceptionally strong. The four women in this group have connected so well that it is clear to see that they look out for each other, step in when one of them needs a hand and provide support whenever required.
Now I’m starting to reflect, why is there still a need for a Women’s Day? After all, the first International Women’s Day was first held more than 100 years ago. My colleagues discuss forming a team for the Mother’s Day Classic (sponsored by Women in Super) and I commit to participating. I now need to persuade my family to get up early on the Sunday morning so we can walk/run together. *my fingers are crossed*
Unfortunately, despite all the progress we have made as a society, gender inequality persists, and so the need for IWD remains. I am naturally aware of the challenges women face regarding their superannuation account holdings given my job history however I decide that I should spend a few minutes to learn a little more about this inequality. Coincidentally one of IWD’s ten values is equality.
I read a research article stating that women retire with a super balance 42% less than men on average. Another report quotes 47%. Regardless of the actual figure, the difference is not right. I understand mathematically why this is the case. Proportionally more women work part-time and many of them are not in the workforce to care for family. However, my female friends, family and colleagues are also likely to retire with a lower super balance, often as much as $150,000 less.
What does equality mean though? It’s about ensuring everyone has the same opportunities, regardless of their gender, social-economic background or age. In my research I uncover an interesting publication by the World Economic Forum (WEF). Published annually since 2006, the Global Gender Gap Report reveals that the gap in equality is reducing. It is not only women who benefit from this progress. The entire world economy gains when the talents of all people are able to flourish. The impact this has on families should not be under-estimated.
As Australians we enjoy opportunities and freedoms people in other countries could only imagine. We aren’t world-beaters when it comes to gender equality though. The WEF report found that for eleven years in a row Iceland was the most gender equal country. Interestingly other Scandinavian countries (Norway, Finland and Sweden) round out the top 4. Rather than moving to Norway, what can be done here?
There is no single magical solution, otherwise this problem wouldn’t exist today. WEF’s research forecast that all things being equal, with current trends, the overall global gender gap can be closed in 99.5 years. If that is an appalling number, consider that the same report estimates that the economic gender gap will take 257 years to be eliminated.
Numerous suggestions are available online recommending ways for women to retire with more money (i.e. spousal contributions, contribution splitting, legislative changes – $450 cap, Low Income Superannuation Tax offset and concessional tax caps). Other suggestions are more generic in nature such as seeking financial advice, accessing online resources and tool, consolidating funds, checking for lost super with the ATO and confirm the right level of insurance within the super policy.
The real gains to be made though relate to bridging the wage gap and retaining women in the workforce. Fortunately, evidence indicates women are increasing their representation in management positions. Similarly, flexible working and access to childcare has resulted in approximately 20% more women return to work after paid parental leave.
Advances in equality are being made very slowly and a single day focusing on the prospects of women will not create a secure financial future for women in retirement. Perhaps the Retirement Income Review Final Report due in June will result in meaningful change. Time will tell.
Principal Consultant and Team Leader