Super is failing millions: KPMG

Australia discriminates against the majority of its population, according to financial services giant KPMG.

The repercussions are severe, long lasting and costly for the government in the long run, it argues.

In its submission to the government’s review, KPMG says that just over half of the population is not adequately supported by one of the key retirement income pillars, superannuation.

Treasury received hundreds of submissions by last week’s deadline, including one from YourLifeChoices, and a big number criticised the adequacy of super for this group – women.

KPMG says women are victims and that there are “ significant disparities’ in the super system for men and women.

Rather than supporting women, KPMG says the system “does the opposite”.

Australian women on average, earn $26,000 a year less than men, according to KPMG figures.

And the divide becomes more substantial after leaving the workforce, with women currently retiring with around half the superannuation balance of males. Latest government figures show the median balance for men at or approaching retirement is $183,000 and for women, $119,000.

KPMG says the imbalance is due to several longstanding reasons:

  • less continuity in women’s careers and fewer hours worked
  • less pay for equal work and less likely than men to gain promotions
  • more time out of the workforce to have children
  • more responsibilities in caring for family.


KPMG executives Linda Elkins, partner and national sector leader, asset and wealth management; Grant Wardell-Johnson, partner of economics and tax centre, and Cecilia Storniolo, director, superannuation advisory wrote: “With a blank sheet of paper, one might expect a retirement income policy to redress the unequal contribution that women have made to society through care of the future generation.

“However, Australia’s current retirement income policy does precisely the opposite.

“Through superannuation concessions, for example, it takes the inequality in earnings that arise from the inequality in parental care responsibilities and amplifies them. That is, it exacerbates the issue by providing for a lifetime disadvantage for a current acceptance of a greater burden of parental responsibility.”

For older women, KPMG has suggested providing super contributions for those aged 50 to 59 who receive Commonwealth Rent Assistance.

“These individuals (largely women) would also benefit considerably from having their superannuation savings topped up directly, as they would have limited ability to supplement their own mandatory superannuation contributions,” KPMG says.

“This might ultimately save the Commonwealth money over the longer run if the superannuation fund performs well, and would deliver additional personal wellbeing benefits compared to greater reliance on the Age Pension.”

It has recommended a number of additional changes, including extra contributions for parents and carers, and the removal of the $450 per month wage threshold for entitlement to employer super contributions.

Kobi Maglen, director of strategy and advocacy for housing at not-for-profit group Social Ventures Australia (SVA), drives home the point that the retirement income system does not adequately support women. “There are more than 300,000 women between the ages of 45 and 65 who are at significant risk of homelessness when they retire, if not before,” she told The Age.

During the five-year period between the 2011 and 2016 censuses, there was a 31 per cent increase in the number of older women experiencing homelessness.

Do you believe the super system needs to be urgently overhauled to better cater for women? Are you confident this will be a priority for the government in the wake of the retirement income review?

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Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.

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