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Women and pensions in Australia. Jenny Holdcroft IMF. Australia’s retirement income system . 3 main components: Superannuation mandatory employer contribution of 9% of earnings Employer contribution increased through collective bargaining

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australia s retirement income system
Australia’s retirement income system

3 main components:

  • Superannuation
    • mandatory employer contribution of 9% of earnings
    • Employer contribution increasedthrough collective bargaining
  • Government pension (set at 25% of average male weeklyearnings)
    • 58.3% of people solely reliant on the age pension are women
  • Privatesavings and investments

Is particulary important for women as itenforcessavingswhenwomen are more likely to sacrifice theirownfinancialsecurity to meet the needs of theirfamilies


Women are significantlydisadvantaged in superannuation relative to men


impact of women s work patterns
Impact of women’s work patterns
  • Average time spent in the workforce
    • Men 39 years
    • Women 17 years
  • Example: 30 year old woman on $50,000 per year
  • The model on which superannuation is based reflects men’s work patterns, not women’s
impact of the wages gap
Impact of the wages gap
  • Averageweeklyearnings
    • Men $1,146.50
    • Women $762.30
  • Superannuationisbased on wages: a lowerwagemeanslower employer contributions
  • Compulsorysuperannuationdoes not apply to workerswhoearnlessthan $450 per monthfrom a single employer, disqualifyingmanywomen part-time workers
    • If a womanearns more than $450 but has several jobs and earns no more than $450 fromeach employer, shewill not becovered by superannuation
  • The lowestpaidsectors of the economy (wherewomen are concentrated) are the highestrisk for non-compliance by employers to superannuation contributions
more disadvantage
More disadvantage
  • Womenwhotry to top-uptheirsuperannuationlater in life to make up for years of no contributions are taxedat a higher rate thanthosewhocontributed on a regular basis throughouttheirworkinglives
  • Women are likely to live longer than men sotheyneed to finance a longer period of retirement
    • Men 79.2 years
    • Women 83.7 years
gap in retirement savings
Gap in retirement savings
  • Australianwomen have significantlylesssuperannuationssavingsthan men
  • Averageaccount balance in 2007
    • Men $87,600
    • Women $52,300
  • It isestimatedthat by 2019, womenwill have on averagehalf the amount of superannuationthat men will have
  • Women are two and a half times more likelythan men to live in poverty in retirement
positive moves for women
Positive moves for women
  • Since 2002 superannuationsavings have been considered an asset in divorce proceedings
    • But higher divorce rates mean more womenneed to fundtheirown retirement
  • The introduction of paidmaternityleaveallowswomen to accumulatesuperannuationduringthisperiod
  • The government has introduced a co-contribution scheme for people on lowincomes
key issues for australian unions
Key issues for Australian unions
  • Promoting family-friendly provisions to enable women to remain in the paid workforce
    • more paid leave for parenting and caring responsibilities should be sought in collective agreements
  • Tackling equal pay for work of equal value
  • Increasing women’s economic literacy and capacity to plan for their own retirement