International Women’s Day provides an ideal opportunity to focus on the inequities women face in superannuation, and should motivate government and industry to address the issues, says SMSF Association CEO/Managing Director Andrea Slattery.
“As the recent research report, ‘Women and SMSFs’, jointly undertaken by the SMSF Association and the Commonwealth Bank, conclusively showed, there are issues such as interrupted work patterns that have a negative impact on their superannuation balances.
“The reality is the superannuation system was designed around the earnings of the average male in full-time work – and this is what has to change.
“One of the report’s primary findings is that SMSF trustees (especially women) see flexibility as critical in the context of contributions to ensure that their investment portfolios are sufficient to support them in retirement.
“Not surprisingly, almost half of SMSF trustees would like more flexibility in the timing and amount of personal contributions they can make each year to allow them to catch up on their superannuation after taking a break from work to care for family.
“Remember, too, that among SMSF trustees who take parental leave, more women (61%) than men (27%) say they now have less super than they otherwise would have had if they hadn’t taken a break from work to care for family.”
Slattery says in the wake of this evidence and the impact it has on women SMSF trustees, the debate around lowering the general concessional contribution cap from $30,000 to $20,000 in this year’s Federal Budget is both misguided and short-term in its thinking.
“Reducing the cap will obviously impact critically on the ability of women to save for a self-reliant, secure and dignified retirement, particularly Generation X and Y women.
“It’s women who often have volatile incomes throughout their working lives, whether it be due to child raising responsibilities, broken work patterns, or because their businesses are captive to changing economic cycles.
“Quite clearly women need to be able maximise their contributions when the opportunity arises, and any move to lower caps will jeopardise this.”
Slattery says the negative impact of such a policy decision would come at a time when the report shows women are growing in confidence when it comes to managing their SMSF, particularly those that have faced a significant event, with 91% expressing confidence they could continue overseeing their fund after a death or divorce.
“Although the percentage of women confident in handling their fund is lower than men (62% versus 83%), I argue that this figure is much higher than our industry expected, and provides an excellent springboard for women to take greater control of their superannuation in order to achieve their own better retirement outcome.”
