IT'S THE radical new HR policy that aims to put women on equal footing with men, and we’re not talking about equal pay.

Big companies are tipping extra cash into female staff members’ superannuation accounts, in a bid to address their lacklustre retirement savings.

But a push to force all bosses to do likewise has met with opposition, with industry groups warning that it would cripple small businesses and discourage employers from hiring women.

It’s the Catch-22 that leaves female staff with the prospect of retiring on half the amount of their male colleagues — even though they are likely to live longer — with lower earnings and time out to care for children cutting into their savings.

ANZ Bank is one of several major companies to pioneer a voluntary boost to female staff’s super accounts, contributing an extra $500 a year, as well as keeping up regular super contributions throughout both paid and unpaid maternity leave.

WHAT’S THE DIFFERENCE?

Announcing the policy in January, the bank outlined the case study of a 20-year-old employee, Sarah, on a $30,000 salary.

If she dropped down to three days a week at age 31 and returned to fulltime at 46, then retired at 65, the bank said, the extra $500 a year would create an extra $80,000 — with a total super balance of $635,000, almost as much as she’d have if she worked fulltime throughout her whole career.

Financial services firm Rice Warner gives female employees and extra two per cent super, no matter how much they are earning. The company had to seek dispensation from the Human Rights Commission to implement its policy as a “special measure” under anti-discrimination laws.

Deputy chief executive Melissa Fuller has spoken of the need to sell the policy to male employees, and convince them “that this was not about diminishing their superannuation”.

“It wasn’t a gender issue, it was a societal one,” Ms Fuller said.

“They all have a female friend, mother, sister or aunt who could be in a difficult position come retirement — the savings gap can and most likely will affect their lives at some point too. We all need to be part of the solution.”

In his submission to the Senate Inquiry, chief executive Michael Rice compared superannuation with insurance, which was more costly for male employees — and “nobody ever complains about that”.

“I actually think the engagement with our staff is more valuable, because many of them are now contributing voluntarily,” Mr Rice said.

‘UNINTENDED CONSEQUENCES’

While it’s reportedly worked well at Rice Warner, making extra female superannuation compulsory across the board is much more controversial.

A Senate Inquiry into women’s economic security in retirement considered the proposal late last year, hearing submissions from industry and union representatives.

The ACTU put forward the case for a mandatory two per cent boost to the superannuation rate for female employees, arguing that this was the only way to give women a fair and equal retirement in the face of a persistent gender pay gap.

“We recognise that there is an argument to say we should not really align things along gender lines, and I do understand those arguments,” Ms Kearney told the committee.

“But unfortunately the barriers for the pay inequity are so entrenched and so long term to overcome that this is something that could fill that gap.”

The proposal drew strong criticism, with accounting firm PwC arguing that it would have “unintended consequences”, particularly among the small business owners that provided the bulk of the nation’s jobs.

“If you make it more costly to employ females, we would be very scared about those unintended consequences of employers not employing them, or just reducing their cash salary to compensate,” PwC said.

“This is a broader issue about lower income people and people who are in and out of the traditional paid workforce. You need to fix the issue for them, not just focus on females.”

CLOSING THE GAP

In its report to the inquiry, the Senate Economics References Committee was wary of mandating a higher rate for women, instead focusing on structural changes to the superannuation system.

It recommended legislative efforts to close the gender pay gap, support for women to return to work after giving birth, expanding government-funded paid parental leave and increasing compulsory super contribution to 12 per cent for both men and women.

The committee also called for the low-income earners on less than $450 a month, who are currently exempt, to be paid super.

And it said law reform was needed to streamline the process employers must go through to get permission to voluntarily pay higher super to women, which involves navigating complex anti-discrimination laws.

REALITY CHECK

There’s one thing that affect more women’s retirements than anything else, and it’s called the aged pension.

In a few years, it will start costing taxpayers a whopping $50 billion a year, much of it for women.

While most young women today will be accumulating super for retirement — at least before they have children — things were different in previous generations. And many of these Baby Boomers are now in, or approaching retirement.

The Australian Education Union pointed out in its Senate submission that, in some states, many of its older members were excluded from teachers’ superannuation funds and relegated to “married women” schemes with inferior conditions. Those who worked part time often got no super at all.

“Before unpaid maternity leave was secured in the mid 1970s, many women had to resign in order to have children,” the AEU said.

“Many of these women took on primary care of children with the understanding that their husband’s superannuation would provide the family’s retirement income, but then lost access to this money due to marital breakdown.” It’s fitting that the Senate Committee report is titled A Husband is Not a Retirement Plan.

Thus, the committee said, the age pension remained “an integral component of Australia’s retirement incomes system”, and would remain so into the future — despite attempts to characterise it as a back-up or a compliment to retirement savings.

LESS TALK, MORE ACTION

Emeritus Professor Barbara Pocock from the University of South Australia said the discrepancy in women’s superannuation savings was “a straightforward shadow cast by the gender pay gap and the different nature of men’s and women’s participation in the labour market”.

The only way it could be solved, she said, was to fix these issues and safeguard a “liveable aged pension”.

Prof Pocock said that while initiatives like ANZ’s $500 super boost were positive, in the scheme of things their effect would be “insignificant”.

“I think it’s great that companies respond to the realities in their work forces by trying to remediate the gender gap in pay or retirement earnings,” she said.

“But they will not narrow it through the kind of measures that we’ve seen to date. So I’d be encouraging companies to top up superannuation leave for women when they have parental leave, any form of care leave — and to look at the actuarial tables, as some companies have done, and pay their women more, because their balances are low and they live longer.

“All of those measures are great positive interventions to be encouraged, but they are trivial in light of the fact that women’s average balances are just over half of men’s.”

She said more government action was needed to make sure that women were not punished for their role as primary caregivers.

“I think it’s really striking that there’s so much talk about super and retirement earnings in this election, but most of it is about that top end,” Prof Pocock said, referring to the debate over capping voluntary, top-up superannuation contributions, which enjoy a tax break.

“The fact is that 33 per cent of women have no superannuation at all, compared to 25 per cent of men. So we’ve got a big problem, with many people in small business employed at so-called contractors who are not accumulating any type of retirement earnings.”

Yellow Brick Road’s national manager of wealth management, Sharon Andrews, urged women to “take ownership of your super and not leave it forget about it”.

“One of the biggest challenges we see is people only worry about their super account when it’s too late,” Ms Andrews said.

dana.mccauley@news.com.au