Active Super

Superannuation and gender pay gap research has found that typically working women across the board have lower super balances than men, with the gap starting to widen from the age of 30 onwards.

ASFA says that leading up to retirement age, the median super balance for women is around 25 percent lower than for men.

While progress is being made in narrowing the gender pay gap, the reality is women continue to have lower superannuation balances than men, and it’s not just salary differences that lead to this shortfall. Women are more likely to take breaks in their careers or work part time to take on caring roles such as having children or looking after ageing parents. These can all have a significant impact on superannuation contributions and retirement income.

At a policy level, there are calls for government to address this shortfall, for example, by paying super during parental leave. However, with the impact of inflation and the pandemic on finances, it is difficult to know if or when these changes will materialise. 

There are, however, some steps that super fund members can take to boost their superannuation balance and improve returns. It’s important to remember that eligibility criteria and contribution caps apply.

Personal contributions 

If you are in a position where you are earning a good salary and perhaps planning a break from full-time work, it may be worth considering contributing more to your super to make up for future lost earnings. An additional benefit of this approach is the benefit of compound interest.

Salary sacrifice

Salary sacrificing is one of the simplest and most effective super savings strategies. Essentially, it is an agreed arrangement that you have with your employer so that you can receive part of your gross salary as a benefit rather than as a salary. This means that your gross salary is reduced by the cost of the benefit before the income tax is calculated.

Spouse contributions

Your spouse can play a role in ensuring that your super balance is topped up while you’re not working. If your income is below $40,000, your partner can contribute up to $3,000 per year to your super fund and be eligible for a tax offset of up to $540 per year. 

Catch-up contributions

For women returning to the paid workforce after a career break who have not exceeded the annual concessional contribution cap of $27,500, there’s the option to make additional contributions if there are unused cap amounts from previous years (provided their total super balance is less than $500,000 as of 30 June the previous financial year.)

Maximise returns

Don’t treat super as something you only need to think about when you retire – by then it could be too late. The earlier you start taking control of your super, the more likely you’ll be better placed at retirement. With Active Super Choice, you get to select from a range of investment options, depending on how much risk (and potential growth) you want to be exposed to – and for how long. The decision will depend on your individual circumstances.

By actively managing retirement savings, women can work towards closing the gender gap in retirement income and achieve financial security and independence in their later years.

Seek advice

If you require advice on your retirement needs, please contact one of Active Super’s financial planners. Feel free to contact us on 1300 547 873 or make an appointment to see how we can help.* 

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^{^}Lisa Judge is the Head of Advice at Active Super. She has almost 25 years’ experience in the superannuation industry with 20 years specialising in financial planning. She holds a Bachelor of Commerce, a Graduate Diploma, a Masters in Financial Planning and is a Certified Financial Planner.

*Please note, should you choose to meet with one of our planners and decide not to obtain personal advice, no additional fee will be payable. However, fees may apply should you choose to proceed to personal advice. Your financial planner will discuss any fee payable when meeting with you and, if a fee is applicable, will advise you of the fee should you decide to proceed with obtaining the advice. Active Super has engaged Industry Fund Services Limited (ABN 54 007 016 195) (AFSL No 232514) (IFS) to facilitate the provision of financial advice to members of Active Super. Advice is provided by one of IFS’ financial planners who are Authorised Representatives of IFS. Fees may apply. Further information about the advice services that can be provided is set out in the relevant Financial Services Guide, a copy of which is available for download at www.activesuper.com.au or by calling 1300 547 873. IFS is responsible for any advice given to you by its Authorised Representatives.

Any advice in this article is general only and has been issued by LGSS Pty Limited (ABN 68 078 003 497) (AFSL 383558), as Trustee for Local Government Super (ABN 28 901 371 321) (‘Active Super’). The advice does not take into account your personal objectives, financial situation or needs. Before making a decision about any financial product, you should consider the appropriateness of the product having regard to these matters and the relevant PDS and TMD available at www.activesuper.com.au or by calling us on 1300 547 873. If you would like advice that takes into account your personal circumstances, please contact a financial adviser.