That women retire with half the superannuation balance of men, on average, is a clear case of imbalance that should be addressed through extra super payments to female employees, argues ANZ.
Australian Bureau of Statistics research released by The Association of Superannuation Funds of Australia (ASFA) in 2014, show women retire with nearly half the super balance of men.
In its submission to the Australian Senate’s inquiry into women’s economic security at retirement (PDF), the bank says federal and/or state legislation should change so it is clear to employers they can legally pay extra super to women.
“There should be clarity and national consistency in Australia’s anti-discrimination legislation that expressly allows all employers to make higher superannuation contributions for women (but no more than is required to redress the gender imbalance in this area),” the bank states.
Last year, ANZ announced it would pay its female employees an extra $500 in super a year. This followed a similar step by financial services consultancy Rice Warner which began paying its female staff additional super of 2 per cent of salary in 2013.
“We project that for millennials this policy will result in an additional $61,600 over the course of their career, and for Gen Y, an increase of $26,100. A woman in Gen X can expect an increase of $14,800 by the time she retires,” states ANZ in its submission.
Impact of a $500 contribution for females
Source: ANZ's Submission to the Senate inquiry into economic security for women in retirement
Employers, associations want change
Rice Warner, which also submitted recommendations to the Senate inquiry (PDF), is in full agreement with ANZ’s position on the need to amend sex discrimination legislation “to ensure employers who voluntarily choose to pay their female employees more superannuation are not in breach of the legislation”.
ASFA also backs this view, citing women’s life expectancy. The association argues that even if women did have similar amounts of super as men, they would be at a disadvantage as that money has to go further given that on average they live a few years longer.
“To attain equivalent economic security in retirement necessitates a woman entering retirement having a higher superannuation balance than a man retiring at the same age,” states the ASFA in its submission to the inquiry (PDF). On this basis “there should be scope for employers who wish to contribute more superannuation for female employees to be able to do so, without being considered to have breached anti-discrimination legislation”.
Key to all of this, says ANZ and others, is the need for legislation to change to make it easy and comfortable for employers to pay extra super to women.
To sanction its extra super payments, ANZ used the “special measure” provision in most state anti-discrimination legislation to redress past imbalances. There is no such measure in New South Wales, so there the bank had to apply for a specific exemption.
ANZ recommends changes to national anti-discrimination legislation to “expressly allow” employers to pay higher amounts of super to women, or for employers to apply only once for exemption to anti-discrimination legislation, which would then be recognised nationally.
Note: All PDF links to submissions to the Senate inquiry into economic security for women in retirement link to the inquiry's submission webpage.