One solution could be removing the $450 minimum threshold for employers to pay the super guarantee as Mercer’s submission recommended, adding that although the causes of the difference in super balances were “primarily societal and not directly related to the superannuation industry” measures could be taken by super funds to address the issue.
Among the consulting firm’s recommendations was the introduction of couples’ super accounts, which would treat retirement finances from a household perspective rather than at an individual level.
The submission pointed out that 70 per cent of people retire with a partner. “Hence we recommend the panel consider permitting easier rollover of superannuation balances between members of a couple.”
RiceWarner has also suggested joint accounts as a way to reduce the number of super accounts, remove unnecessary costs and help “reduce the female retirement savings shortfall as couples would plan their retirement finances together”.
Self-managed super funds already allow couples to have joint super funds, but RiceWarner said that this change would allow couples to get the flexibility benefits of an SMSF but without the responsibility. However, the firm also acknowledged concerns from women’s advocacy groups that these accounts could be abused in some cases.
An alternative option suggested in some submissions is to link the individual accounts rather than combine them.
The SMSF Association, representing the self-managed super fund sector, also backs the proposal for joint accounts to be an option extended to all super funds, saying that as couples make decisions together – often involving one partner sacrificing to support the other – this should be how the system works.
This could be in the form of a “spousal rollover” for super balances where one partner can transfer some of their balance to their partner near retirement, the association said.
Rest Super’s contribution to the review pointed out Roy Morgan research of its members had found nearly 35 per cent of women over 50 were single, separated, divorced or widowed, and almost two-thirds were the primary income earner.
However, the National Council of Women Australia did not suggest joint super funds instead pointing to a swath of potential changes including an amendment to the sex discrimination laws to ensure companies can choose to make bigger super payments to women.
The Victorian government has also backed couples’ accounts, including for same-sex couples, and supports changes to the discrimination laws to allow higher super to be paid to women.
Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.