Retirement Savings and Gender: An Australasian Comparison

Abstract

The issues associated with low levels of retirement savings for women are well established. This study quantifies the extent of the problem in Australia and New Zealand and investigates the primary causes of the issue. It subsequently canvases approaches adopted or proposed internationally to assess the likelihood that the issue may be ameliorated with an amended policy approach. We suggest that a combination of policy tools may be adopted in each country to help address the issue. In New Zealand, a combination of carer credits or changes to the co-contribution model, plus introduction of superannuation splitting and lifetime contribution caps is likely to improve levels of retirement savings for women, along with lower income earners in general. In Australia the existing tools used to assist low income earners could be extended to be available to carers while they are unable to participate in the workforce. Adoption of these approaches would ensure that New Zealand, with a retirement savings gender gap of 25 per cent, which is significantly less than Australia’s gap of 77 per cent, can learn from Australian experience and introduce policies earlier to ensure that the problem does not become as large as in Australia.