Self-managed superannuation funds (SMSFs) are proving effective in bridging the traditional gender imbalances in retirement savings with financial advisers increasingly called on to advise woman on retirement planning.
The Self-Managed Super Fund Professionals’ Association of Australia (SPAA) says the rising number of female SMSF trustees is having a positive impact on narrowing the gender gap in retirement savings, but has called for a greater focus from both industry and government to help women plan for retirement.
Traditionally there has been a gap in retirement savings between the genders, partially as a result of broken work patterns for women who take time off to have children and who are less likely to return to work after a break in their career.
Women are also more likely to take up part-time work and miss out on superannuation payments altogether.
Recent Australian Tax Office (ATO) figures show that 46 per cent of SMSF members are female with an average member balance of $439,000 as opposed to APRA-regulated funds, where superannuation accounts held by women account for 34 per cent of the total- with an average member balance of approximately $22,000.
“The gap in superannuation balances between men and women tends to be narrower within SMSFs as women are more engaged with their finances, the fees for SMSFs are a lot lower and there is a growing number of women wanting to make their own decisions when it comes to retirement savings,” says SPAA CEO Andrea Slattery.
“We are seeing an increased interest among women to be more involved in the management of their finances when it comes to retirement planning which means there needs to be a greater focus among advisers on educating women in planning for their retirement.”
According to the ATO figures, female SMSF members tend to be younger than male members, with the majority of women in the accumulation phase, making female trustees an important growth segment for SMSF Professionals.
The figures also suggest the disparity in SMSFs between the genders will continue to narrow in the future.
“One way of addressing the gender imbalance in retirement savings is to introduce opportunities for both compulsory and voluntary contribution catch ups for women when they take maternity leave to ensure they do not miss out,” says Slattery.
“Lifting the superannuation guarantee to 12 per cent will also help to grow the retirement pot for women.
“This extra income is extremely important when you take into account that, on average, women have a longer life expectancy than men and also that women tend to retire earlier.”
The SPAA 2012 National Conference, to be held from 15 -17 February, will provide a forum for in-depth discussion on the gender gap issue, including how financial advisers can provide genuine specialist advice and strategies for female clients.
