HESTA: Super's 'gender blind-spot' needs fixing

Many women feel stressed by the "financial penalty" caused by taking parental leave, according to a new survey byindustry super fund HESTA.

Parental leave is the only commonly-taken form of paid break from employment that does not include superannuation, which hits the retirement savings of those who take time out of the workforce to nurture children.

Around three-in-five HESTA members surveyed who had taken parental leave were concerned about the long-term impact this would have on their financial security in later years, while a third of these respondents said they were very or extremely concerned.

"Our members are telling us they're worried and stressed about not having enough to retire on because they need to take time out of the workforce to raise children," HESTA CEO Debby Blakey said.

"This is effectively a financial penalty women pay and it's unacceptable and deeply unfair. It's why we want to see gender equality measures in the Federal Budget and why we're calling for superannuation equity reform to be a priority in the next term of Government.

"Our super system has had a gender blind-spot for far too long."

Nine-in-10 of the 2,300-plus HESTA members surveyed agreed strongly that changes were needed in Australia's super system to boost women's financial security in retirement.

They strongly supported measures to close the gender pay gap, provide better job security and fairer pay for female-dominated industries like health and education, improve the accessibility and affordability of childcare and increase super savings for women who take time out of the workforce.

The survey found the average total parental leave taken amounted to about 14.7 months. More than half of respondents who had taken parental leave had taken two or more periods of leave, with one-in-six having taken three or more.

Members expressed concerns about the financial stress from a relationship breakdown, being forced into casual, insecure employment after returning to work and needing to work longer to build their super.

Several members said it was unfair their super had suffered, particularly when compared to their partner's retirement savings.

"Birth is a life stage that should be celebrated, not a crisis to worry about," said one woman, 31, who worked full-time in aged care.

HESTA has more than 900,000 members, more than 80 percent of whom are female.

Ahead of the 2022-23 Federal Budget announcement on Tuesday 29 March 2022, the super fund has called for three urgent policy reforms to improve equity in super:

• Paying super on Commonwealth Parental Leave Pay
• Introducing a super carer's credit for unpaid parental leave
• Providing universal access to affordable childcare.

"It's clear achieving gender equality and equity in super outcomes is extremely important for our members and they're expecting the next Government to make women's financial security a top priority," Ms Blakey said.

Increasing female workforce participation by six percent would add $25 billion to the national gross domestic product (GDP), according to a 2012 report by the Grattan Institute.

"Fixing gender inequities is a key focus for investors like HESTA because issues like women's lower workforce participation and pay gap of 13.8 percent are not only key reasons why women are retiring with around a third less super than men, it's costing our economy billions of dollars," Ms Blakey said.

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