Finance Your Super More women in super fund management can deliver you $55,000 extra

More women in super fund management can deliver you $55,000 extra

Women and super
More women boardroom voices pays off. Photo: Getty
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Having more female representation on your superannuation fund boards and leadership teams is not only socially progressive, it means higher retirement balances for members, regardless of gender.

Research house Rainmaker has put a figure of $55,000 on the outperformance it discovered.

According to Rainmaker, funds with above-average levels of gender diversity in leadership achieved returns of 9.6 per cent annually and 8.0 per cent over one and three years respectively.

Funds that have lower than average female representation earned 8.7 per cent and 7.6 per cent respectively.

Alex Dunnin, the company’s research chief explains it this way:

“Funds with a high percentage of women in their leadership had a 71 per cent incidence of out-performance over the three years to June 2018. This compares with only a 47 per cent incidence of out-performance for funds with low female leadership representation.”

“While an extra 40 basis points to investment returns may seem small over a year, this could add an extra 11 per cent or $55,000 to the average working member’s retirement savings when compounded over a working life.”

Women in leadership in superannuation – the facts and figures

“Super funds with higher proportions of women in their senior leadership ranks consistently show themselves to be superior and this reminds us why board and management diversity matters. It highlights that businesses that kick these goals have more perspectives in their ranks to make better decisions,”  Mr Dunnin said.

“For members, the message is that the greater the gender diversity in your super fund’s leadership team, the more confident you can be that your fund is run well,” he said.

Women’s super still lags

However, despite the clear benefits from more gender diverse boards and management, the percentage of women in superannuation leadership positions has actually stalled at 30 per cent since 2016.

However, some funds are doing better.

Rainmaker found that CareSuper, Hesta, VicSuper, Energy Super and Tasplan achieved the highest score of women in leadership of the 39 funds analysed in its survey, well above the average.

Despite the outperformance of funds with more women leaders, at the other end of the spectrum women are retiring with less than men. The latest ABS data demonstrated women are retiring with around 47 per cent less superannuation than men, 30 years after the implementation of compulsory super.

Women are more likely to work part time and in low-paying sectors, and the gender pay gap, while improving, continues to fester.

The single biggest factor, however, is that women are more likely to take breaks throughout their careers to raise children and provide other types of unpaid care.

Industry Super Australia advocacy chief, Sarah Saunders, said narrowing the gap required policy interventions that better reflect women’s realities.

“Adding super to parental leave and scrapping the $450 (monthly wage) threshold which impacts part time workers, would make a big difference to women’s retirement savings,” said Ms Saunders.

Women in Super chief executive, Sandra Buckley, saw systemic problems with super.

“The current superannuation system from 1992 is outdated” and  “can easily be changed into a fairer system for women – in fact all Australian low-income earners.”

Ms Buckley called for a steady increase in the scheduled superannuation guarantee from 9.5 per cent to 12 per cent and additional annual government contribution for low income earners.

The New Daily is owned by Industry Super Holdings

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