TAKING seven years out of the workforce costs women an average of $70,000 in lost retirement savings, says the Australian Institute of Superannuation Trustees.
But if the government delivers on its promise to increase compulsory employer super contributions from 9 to 12 per cent, future retirees could pocket an extra $100,000.
The super industry is targeting the rough deal many women get from super as part of an online public campaign to gather support for the compulsory super rise. While it says all workers need higher super contributions, it is women who are particularly short-changed in retirement because they live longer and are more likely to have interrupted working lives.
Research made public by the institute at the Conference of Major Superannuation Funds on the Gold Coast yesterday found more than 60 per cent of retired women surveyed had left the workforce before they turned 60. Four in five had taken a career break lasting an average of 12 years and the average super account balance at retirement for those who had super savings was just $31,000.
It found three-quarters of the women relied on some form of government pension or allowance and one-third had not received any super at all. More than half the women surveyed had an income of less than $30,000 and almost two-thirds of women without partners lived in a household earning less than $25,000. Those most likely to be “super poor” included single, divorced and widowed women. Just 7 per cent had received super payouts of more than $500,000.
“Without change, women will continue to come up second best in retirement,” the institute’s chief executive, Fiona Reynolds, said. “It’s time to get creative with policies that recognise most women will take career breaks to have children and care for other family members.”
The federal Financial Services Minister, Bill Shorten, told conference delegates that while improving retirement incomes was good policy, there was no guarantee that legislation would be passed by Parliament.
He said the government was finding it harder than it hoped to argue the case for higher compulsory super contributions paid for by a mining rent resource tax, and it would not win through parliamentary argument alone.
Mr Shorten said the Opposition had set itself against 12 per cent contributions, even though MPs were on a generous defined benefit scheme, or received contributions of 15 per cent themselves.