Super reform won’t fix gender gap, government told
Changes in the super system will not be sufficient to close the retirement savings gap for women since the main contributing factors relate to pay inequality, according to the Australian Institute of Superannuation Trustees (AIST).
In its submission to the Senate Inquiry into the Economic Security for Women in Retirement, AIST said while reforms such as extending the low-income super contributions scheme and removing the $450 monthly contribution limit are important, there are external issues to super that can have a much greater impact on the gender gap.
AIST chief executive Tom Garcia said improving women’s retirement outcomes is “not just a matter of pulling levers inside the super system”.
“If we are going to close the gap, we need a holistic approach, which includes a full examination of relevant policies outside of super,” said Mr Garcia.
The AIST submission argued that any defined objectives for the super system as well as workplace policies need to be examined through a gender lens to address the specific needs of women.
“Women live longer in retirement but they retire with significantly less savings. Without fresh policies, we cannot expect to see any improvement,” he said.
Mr Garcia said many European countries had introduced objectives and key performance indicators for their pension systems that took into account the specific needs of women.
AIST has called on the government to convene a broad-based summit on the objectives of the retirement incomes system, followed by a technical review addressing structural issues.
“Legislating objectives for superannuation will hopefully put an end to ad hoc policy tinkering and provide a robust framework with which to assess any future policy proposals,” Mr Garcia said.
“After 25 years of compulsory super, this is a long-overdue measure that will be particularly valuable both in tackling the gender savings gap and assisting the current Tax Inquiry.”