Women's superannuation balances 'flatline' in their 40s: AIST
A study commissioned by the Australian Institute of Superannuation Trustees (AIST) has emphasised the damaging effect that taking a career break has on women's superannuation balances.
The Australian Centre for Financial Studies (ACFS) found women's balances 'flatlined' in 2010 between the age groups of 38-42 and 43-47.
The same trend was also observed in previous years, although the average balance for a 40-year-old woman was $60,000 in 2010 compared to $30,000 in 2002 - demonstrating the benefit of the superannuation guarantee reaching 9 per cent in 2002, according to the AIST.
The study also found that the average balance for men aged 58-62 was $210,000, compared to $95,000 for women.
"The super gender gap is still as large today as it was in 2002 because women are still spending five to six years out of paid work to raise children and they still earn, on average, nearly 20 per cent less than men," said AIST chief executive Fiona Reynolds.
Reynolds said the persistence of the 'career break' effect was proof the various policy measures aimed at closing the gender gap had failed.
"AIST has long argued that paid parental leave should include a superannuation component, and that a super 'baby bonus' or a return-to-work super bonus post-career could go some way to addressing the issue," she said.
The ACFS report also found three-quarters of Australian employees were not contributing anything extra to their superannuation fund.
With the increase in the superannuation guarantee to 12 per cent only fully coming into effect by 2019-20, the Government needs to provide Australians with incentives to contribute more to their superannuation now, said Reynolds.
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
