Women retire with 40% less: 'It must be addressed'

The differences in superannuation between men and women at retirement are stark and need to be addressed in the short term, experts say.

The differences in superannuation between men and women at retirement are stark and need to be addressed in the short term, experts say.

Women are retiring with 40% less super than men on average and experts say changes to the $3.3 trillion superannuation system need to happen quickly. 

Super Fierce co-founder and chief Trenna Probert told The Australian that paying super on paid parental leave should be actioned by the Government as soon as the October federal budget.

She said the budget was an opportunity for the Albanese government to narrow the superannuation gap between men and women, before focusing on any bigger reforms.

Probert said on average women were retiring with 40 to 47 % less super than men.

On average, at 60 to 64, men have $358,000 in super while women have $288,000.

Experts say this super gap can be attributed largely to the gender pay gap, taking time out of work to have children, and greater incidence of part-time work for women. After 35, women are more than twice as likely to be working part-time and casually than men, according to the Workplace Gender Equality Agency.

Also, one in four women take 10 months or longer off work after having a child, based on ABS data.

"It’s tremendously important and not just from an economic perspective," Probert said. "There are very small things that can be done that will make an impact on how women feel as valued members of society, and then we can start to work on the bigger things … We just need them to act."

As well as paying super on paid parental leave, men and partners could also consider diverting their super payments to a spouse on maternity leave to help narrow the retirement gap.

Super Fierce is a wealth advice platform that compares more than 359 super funds and helps clients to switch funds based on better returns or lower-fee funds.

Industry Super Chief Executive Bernie Dean said paying super on paid parental leave was the "next logical step" in improving women's retirement savings.

He said he wanted to see it happen "as soon as possible".

"It's not immediately going to resolve all inequities and disadvantages that women experience when saving for retirement. But it's a concrete and important step."

"We do know not getting super on parental leave can cost a woman about $14,000 in retirement savings, based on having two kids and spending time out of the workforce," he said.

Dean said another big issue affecting women was the underpayment of super by employers, which could possibly have a "larger impact" on retirement savings than paid parental leave.

In an roundtable hosted by the AFR last week, Treasurer Jim Chalmers said: "We will fund the super guarantee on paid parental leave when the budget circumstance permit that".

The Association of Superannuation Funds of Australia CEO Martin Fahy said, as a young person, "you don't want your grandmother’s retirement". He said historically, retirement has been a lonely, solitary, housebound phase with poor access to aged care, health care, and activities.

ASFA also suggested the government introduce a $5000 baby bonus to address the superannuation gap.

Read more: Gen Z have an overworked but well-paid career ahead