Many women are stressed and anxious about the hit to their retirement savings from taking time out of the workforce to nurture children and want Government action to address this super inequity, new research from industry super fund HESTA reveals.
Around three in five HESTA members surveyed who had taken parental leave were concerned about the long-term impact this would have on their financial security as they aged.
A third of these respondents said they were very or extremely concerned.
Nine in 10 of the more than 2300 members surveyed agreed strongly that changes were needed in Australia’s super system to boost women’s financial security in retirement.
They strongly supported measures to close the gender pay gap, provide better job security and fairer pay for women-dominated industries like health and education, improve the accessibility and affordability of childcare and increase super savings for women who take time out of the workforce.
HESTA CEO Debby Blakey said members felt taking parental leave had put them at a fundamental disadvantage in preparing for retirement, causing them deep-seated concern and financial stress.
“Our members are telling us they’re worried and stressed about not having enough to retire on because they need to take time out of the workforce to raise children,” Blakey said.
“This is effectively a financial penalty women pay and it’s unacceptable and deeply unfair.
“It’s why we want to see gender equality measures in next week’s Federal Budget and why we’re calling for superannuation equity reform to be a priority in the next term of Government.
“Our super system has had a gender blind spot for far too long.”
Members expressed concerns about the financial stress from a relationship breakdown, being forced into casual, insecure employment after returning to work and needing to work longer to build their super.
Several members said it was unfair their super had suffered, particularly when compared to their partner’s retirement savings.
“Birth is a life stage that should be celebrated, not a crisis to worry about,” one 31-year-old woman, who works full-time in aged care, said.
The survey found the average total parental leave taken amounted to approximately 14.7 months, more than a year out of the workforce.
More than half of respondents who had taken parental leave had taken two or more periods of leave, with one in six having taken three or more.
Parental leave is the only commonly taken form of paid leave that does not include superannuation, sending a clear message that paid caring work is undervalued.
The Grattan Institute in 2012 found a 6 per cent improvement in women’s workforce participation could add up to $25 billion, approximately 1 per cent, to Australia’s Gross Domestic Product.
“Fixing gender inequities is a key focus for investors like HESTA because issues like women’s lower workforce participation and pay gap of 13.8 per cent are not only key reasons why women are retiring with around a third less super than men, it’s costing our economy billions of dollars,” Blakey said.
HESTA has long advocated to make women’s retirement outcomes a top priority, calling for three urgent policy reforms to improve equity in super:
- Paying super on Commonwealth Parental Leave Pay;
- Introducing a super carer’s credit for unpaid parental leave; and
- Providing universal access to affordable childcare.
“It’s clear achieving gender equality and equity in super outcomes is extremely important for our members and they’re expecting the next Government to make women’s financial security a top priority,” Blakey said.