Superannuation contribution caps unfair to women
Contribution caps help widen the gender gap in retirement savings as they do not allow women to catch up with their superannuation after career breaks such as maternity leave, according to the Self-Managed Super Fund Professionals' Association of Australia (SPAA).
SPAA has called for both the industry and the Government to help women plan for retirement and narrow the gender gap in superannuation.
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, according to SPAA chief executive officer, Andrea Slattery.
"However, the caps on their contributions in a period of their career when they can catch up on their retirement savings disadvantages them compared to those remaining in the workforce and reduces their superannuation balance when they retire," Slattery said.
"Restoring the superannuation contribution caps to their pre-2009 Budget levels will encourage greater retirement savings by those who can afford to make extra super contributions at certain times in their lifecycle," Slattery added.
SPAA pointed to figures released by the Australian Taxation Office, which show an average member balance of $439,000 for a female SMSF member.
However, women in other types of superannuation funds have an average member balance of $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," Slattery said.
AUTHOR
Staff Writer
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
