Women’s superannuation is getting a boost but what’s becoming clear is that not everyone is winning.
Since the start of this year, there’s been an increase in the number of big companies that are offering superannuation payments to employees taking both paid and unpaid parental leave.
This is great news for many women, as it creates an opportunity for them to boost their retirement savings by choosing to work for a more progressive company when it comes to employer benefits.
But we still have a system where too many Australian women are missing out.
Under existing federal legislation, employers are not required to make superannuation contributions for employees on paid parental leave (PPL). This over overwhelmingly affects women and it accentuates the gender savings gap in super, with women retiring with about 30 per cent less in savings than men.
Laura Wright, acting chief executive officer of NGS Super says more Australian companies are likely to offer superannuation payments during parental leave in the years ahead, even if the government doesn’t make it compulsory.
“If you are calling on governments and business to do more to help women narrow the superannuation savings gap then it’s good if you can also lead by example. We want to do that and we think it is something that employers will increasingly do.”
Industry super fund NGS Super, which has about 70 per cent women as members, has become the latest financial services company to approve superannuation payments on parental leave for both female and male employees, up to a period of 12 months.
“We see it as important way to attract and retain good staff. It’s just part of the employee benefits package,” she told Women’s Agenda.
Already a number of big Australian companies are paying their employees superannuation while on paid and unpaid parental leave.
Earlier this year HSBC Australia joined the likes of the big four banks, Commonwealth Bank of Australia, Australia and New Zealand Banking Group, National Australia Bank and Westpac which pay their employees super for a period of up to two years of parental leave.
The country’s biggest super fund, AustralianSuper also makes super payments at the full-time rate for up to a period of two years while a person is on unpaid parental leave.
And it’s not just financial services companies doing this.
The Workplace Gender Equality Agency (WGEA) recently commended energy company Viva Energy and property group Dexus for their commitments to pay superannuation contributions throughout parental leave periods.
Many of these companies, like NGS are paying more than the compulsory rate of Superannuation Guarantee (SG) contribution, which is currently 9.5 per cent.
“If a woman takes the company’s 12 weeks paid parental leave, we (NGS) will also pay 12 per cent super, but some companies are paying even more than that too.”
Based on revised laws, the SG rate will remain at 9.5 per cent for another 3 years until 30 June 2021, and will gradually increase to 12 per cent from July 2025.
According to the Financy Women’s Index, the superannuation savings gap between men and women has marginally improved in recent years.
The most recent data available from the Australian Bureau of Statistics (ABS) shows that the gender gap narrowed by 6 percentage points in 2016 financial year and means that the average woman has about 27 per cent less in her retirement savings than men.
It’s possible that as more companies try to help more women narrow their own super gap, that this will flow through to national statistics. But if it does, it could also be masking another problem of inequality.