How to reverse the retirement slide

Ninety per cent of women retire with inadequate savings – ANZ has seven steps to change that, writes Byron Smith.

The introduction of joint superannuation accounts and changes to the Sex Discrimination Act 1984 are among seven key recommendations from ANZ to start closing the financial gap between women and men at retirement.

In its Submission to the senate inquiry into economic security for women in retirement (PDF), ANZ argues for wholesale change to Australia’s superannuation system to address the gender gap at retirement, which amounts to $92,000 according to Australian Bureau of Statistics data released by The Association of Superannuation Funds of Australia.

“It is imperative that we focus on making the superannuation system more relevant to women’s lives if we are going to improve their financial security and reduce the number of years that future generations will rely solely on the age pension,” the bank states in its submission.

In July last year, ANZ outlined the financial inequality women face throughout their lives and particularly at retirement, with the release of ANZ Women’s Report: Barriers to achieving financial gender equity.

ANZ is among several respondents to the Senate inquiry, including academics, financial institutions, public bodies and consultancies. There is a lot of agreement between these groups on action that can be taken to improve women’s financial status at retirement. In its submission, ANZ recommends:

  • Introduce joint superannuation accounts, which would have a range of benefits, most notably for a more equitable financial outcome in divorce.
  • Extend the low income superannuation contribution past 2017, when it is now due to expire. This will clearly boost the retirement funds of Australians on low incomes.
  • Give all employees the right to sacrifice some of their salary into super: by contributing an additional 5 per cent of their salary the average 30-year-old woman can increase their balance by $178,100 at retirement.
  • Start paying super on salaries below $450 a month by removing the superannuation guarantee contributions threshold, which will have a positive impact on the account balances of very low income workers (mostly women).
  • Amend the Sex Discrimination Act to explicitly allow employers to pay additional super to female employees: this will lift the retirement balances of women, particularly those on lower incomes.
  • Pay super on paid parental leave schemes for government and large employers – this will make a big difference to the retirement savings of both mothers and fathers.
  • Boost standard super payments from the current 9.5 per cent to 12 per cent by 2020. ANZ states in its submission: “This would boost superannuation assets by extra $93.1 billion…”



Many of these recommendations are reinforced by other organisations in their submissions to the inquiry. For example, financial services consultancy Rice Warner, in its submission (PDF), backed the creation of joint super accounts, extension of the low-income contribution (or a flat tax rebate) and amendment of the Sex Discrimination Act.

It also supports abolishing the $450 superannuation guarantee income threshold. Rice Warner says that according to The Association of Superannuation Funds of Australia, “abolishing the threshold would benefit around 250,000 individuals, the majority female (PDF), and the cost to employers would be very modest”.

Overall, ANZ’s measures are targeted at 7.5 million working-age women and 1.3 million low-income earners, the majority of whom are women.

“Collectively, these recommendations would narrow the $92,000 superannuation gender gap by 18 per cent to about $75,000 by the time current workforce entrants retire,” ANZ states in its report.

ANZ’s full report to the Senate inquiry is available here (PDF).

February 2016


Note: All PDF links to submissions to the Senate inquiry into economic security for women in retirement link to the inquiry's submission webpage