Alex

We acknowledge that we are recording this podcast from the lands of the Gadigal people of the Eora nation. We pay our respects to Elders past, present and emerging and celebrate the diversity of Aboriginal and Torres Strait Islander peoples and their ongoing connection to land and waters throughout Australia.

Ange

Welcome to super simple chats, Rest’s very first podcast. I’m Ange..

Alex

And I’m Alex

Ange

And we will be speaking to industry experts about all things super.

Matt

Wait, what the hell is contributions as well?

Ange

I didn’t realise until recently, that super is invested, I thought it was like a savings account.

Sarah

I’m not sure it’s helpful to talk about specific numbers, but it’s a lot less than a million dollars.

Person

This is actually really important to talk about, because I don’t want to miss out on those things.

Ange

Trying to make it understandable and relatable for every day Aussies.

Alex

After all, it’s one of the biggest assets you’ll ever have.

Ange

Now this wouldn’t be a financial podcast, if we didn’t start by mentioning that the information discussed is general only and doesn't take into account your own financial situation, needs or objectives. This information and the relevant products are issued by Retail Employees Superannuation Pty Ltd. Before deciding to join or stay, consider the relevant Product Disclosure Statement and Target Market Determination at rest.com.au/pds and whether it is appropriate for you. While we have endeavoured to ensure the accuracy and reliability of the information provided, there may be inadvertent errors or omissions. Before acting on any advice, we recommend you speak with a financial adviser.

Ange

Having a baby is meant to be one of the most exciting moments of your life. However, most people don't really want to sit there and think about their finances.

But taking time out of work can really take a significant toll on your super. Joining us today is Sarah from Rest, who's going to talk to us about all things women and super.

Sarah

Hi. Thanks for having me.

Ange

We hear a lot about the gender pay gap. And, you know, we hear about it in the media all the time. But one thing that I've noticed that we never really hear about is the gender super gap. Can you give us a little bit more information about what exactly that is?

Sarah

Yeah, thanks Ange.

It's this knotty problem, isn't it, that because superannuation is so highly connected to pay and work that not only do we have a gender pay gap, but that flows through to a gender super gap.

So you've got a difference fundamentally of about 28% between what women retire with and what men retire. That's a big difference. You're talking a lot of potential income in retirement in in a difference in between men and women.

Now the drivers of those, a whole range of things, including taking parental leave when you have a baby, but also the things that follow on from that. You've got general family caretaking, you've got a greater amount of unpaid work at home, generally by women. Once you have a baby. So those life changes have a flow on effect after that time as well. Greater amount of part time and casual work done by women, which generally, lower paid and more broken. So we've got an assumption that superannuation is built on that is that you work for 40 years full time, and for women that is just not the case.

Alex

Absolutely. Now this is a topic that's very near and dear to my heart. I'll do the baby reveal. Phil, if you want to throw in some sparkle emojis a little picture of Harry styles, like, could he be the father? Create some mystery.

Ange

Are you saying something?

Alex

Please start that rumour. When it comes to my situation and many peoples’ situation.

Because I work for a super fund. One of the first things I thought about when I got pregnant was how will this affect my super. And that's probably not everyone's first instinct, but we are pretty lucky that our super is paid on parental leave, and this is becoming more common, I'm pretty sure. So is that fear quite common with soon to be parents?

Sarah

Yeah, I think it's a really common feeling that as, particularly women approaching having a baby, they've had careers frequently or at least had work for a period of time, and that feeling of now you're about to enter a period of no or limited income is actually quite scary.

It's a shift, isn't it, from thinking of yourself as a working person to now it's much more about what is your household? What does it look like? Where is the money coming from? Who is doing what around all of those caring responsibilities and managing money. It's a really big step, not just becoming a parent, but actually thinking about your financial life in a different way.

Ange

And do you also find that that there's a shift, even after you sort of come back from parental leave and you go back into the workforce? Do you find that a lot of women see a bit of a difference in the trajectory of careers or sort of their everyday kind of managing of life and how that impacts them long term as well?

Sarah

Yeah, absolutely. So it's really interesting. This and research out there by Right Lane Consulting, they have a report called Forces at Work.

They last year looked at what is women's experience of superannuation.

And over a lifetime, what does that look like. At the at the age that sort of 25 to 34 is only a 4% difference in super. So that's manageable, you know, you would think that it would sort of project this same over your lifetime, it doesn't because of these patterns that stopped coming around broken work patterns, but also after parental leave, which is predominantly taken by women.

And I will say here, it doesn't have to be. Parental leave is actually available to both parents. And they just one of the decisions that people should be looking at is what are your options around sharing that leave availability?

But then even once you come back from parental leave, it's not uncommon for women to go back part time or even look at other jobs that make it easier for them to be around home, which often might be casual or lower paid.

And you've also potentially got just lower contact with your workforce and less opportunity for networking, less opportunities to talk promotion. It's this shift in how you are at work that often plays out.

Alex

And you touched a little bit on both parents being able to take time out.

Now, I know personally my husband's dream, and I hope he doesn't mind me saying this would be to be a stay at home dad.

But there's a lot of stigma in the workplace around feeling like as a man, you can take parental leave or the full leave, not just say two weeks and then come back.

Sarah

It's important to remember that parental leave is available to both and can be just divided up amongst that whole 12 month period can be taken by either parent.

You can't take it generally at the same time, although some employment arrangements do allow for some of it to be taken at the same time, there is a real workplace feeling that it's not okay for men to do that at that younger age actually, the pay gap generally is lower, so it's not as simple as it used to be about, well, the husband gets paid more, so of course he should keep working. It's not necessarily the case anymore at that age. And so it's a different decision making process. And it does often involve that sort of cultural impact of are men taking this leave? I think it's actually really important for senior men in workplaces to take it to actually, set that example.

Alex

That's such a good point. So it flows on from the head, more people will take it from below. Yeah.

Ange

So this next question is a little closer to home for me, literally my home. So thinking about my own parents when I was growing up, my mum probably took about, I say 6 or 7 years off to have both me and my brother and pretty much raise us right up until the point of school, and then entered the workforce.

And I was having a conversation with my parents recently and found out that Mum’s Super is significant, lower than Dads. Now, working class family. They were both on pretty similar wages when they were working, but just taking that 6 to 7 year gap had a pretty significant impact on mum’s super.

My question is that when you're taking time off work, what are the long term implications for Aussies who are unpaid carers like my mum?

Sarah

Look, it's a sticky policy government kind of problem really, and I think we need to look at that whole experience not as an individual's problem to solve necessarily, but have we got the settings right across the board? When we look at the fact that there are significant numbers of people in our workforce who don't work the whole way through.

So I'm involved in an organisation called Women in Super. One of the remits that we have is to look at government policy and what are we what are we doing as a whole economy to make sure that the settings are right for women’s’ experiences in the workforce, and of superannuation.

You know, there's a number of things potentially within super, but it's a bigger problem than that, It's about the balance of unpaid work as a whole. And are we acknowledging that as an economy, carer's payments, even if you even if you do get a carer's allowance from the government, there's no superannuation paid on that. So it's still, as far as super is concerned, a gap. The fact is, superannuation is not your only income when you get to retirement. And this is why we have the age pension. The value of superannuation is still really significant when used against other available income.

You've got even the concessions and the benefits that you get from even having a part age pension are really financially important. You know, things like travel concessions and rebates on you, energy and water and all of those kinds of things.

There is actually retirement income system out there that is there to support balancing out what you need when you get to retirement.

Ange

We went and asked everyday Aussies what they thought about this.

Sinem

if you were to go on parental leave, would you split your super with your partner?

Woman 1

Probably. Probably.

Woman 2

No.

Sinem

You've never thought about it? You'd never do that?

Woman 2

No, no. He’s got his own super so I don't think we should split.

Man 1

Really? I don't know all these options.

Woman 3

So I've already actually finished having kids. But at the time, no, I didn't split the contributions.

Sinem

Do you worry about the gender super gap or the differences in men and women's super balances at retirement?

Woman 4

I know there is a difference. Well, that's my problem as well. I minded my children now I’m minding my grandchild. So yes, it shows in your in your balance.

Woman 3

Well, I know that my ex-husband has significantly more super than me. So I imagine that at retirement, it would be very similar circumstances. Yeah.

Woman 5

I would be devastated to know. Don't tell me, to know if the if my partner. I haven't actually even asked him if he earns, if he pockets more in his super.

Sinem

Back to you Ange.

Ange

I'd actually read somewhere that women over 55 of the largest growing cohort of homeless people in Australia. So can you kind of give us a little bit of insight into how this super gap and is actually starting to impact women later on in life, and some of the kind of more negative impacts that we're seeing, such as this statistic around homelessness.

Sarah

It's really concerning. And it's predominantly single women over 55 who have either widowed or more frequently divorced, later in life, has taken a lot of time out of the workforce to raise children or to look after elderly parents or other family members, and they get to that later in life period. They don't own a home. They have very little superannuation because of broken work patterns and caring responsibilities, and that puts them in a really vulnerable spot.

Some of the work that we're doing in Women in Super is looking at, let's actually do work to make sure that women retire into safety, and that includes housing.

And the availability of social and affordable housing in Australia is just so significant that we you know, I cannot overstate how much that is something that needs to be addressed, because that is as important to retirement as all of the other factors as well.

You need somewhere safe to live.

Alex

Well, the super scheme didn't actually start in Australia till, what, 1992? Please correct me if I'm wrong, which means there is an entire generation of women who never had that, if they did work, as a compulsory part of their pay.

Sarah

So yeah, absolutely. Yeah. As a compulsory scheme 1992. So there are a lot of women who only had it available for part of their lives. Now we're not even seeing people who are retiring now, we've only had it for a small portion. We're not going to see people retiring that have had super for their whole lives for at least another ten years.

Alex

As a soon to be parent, a lot to take in, and I want to lessen the fears that myself and many may have.

So what actual steps can I take today, or could my partner take that might lessen that impact on my super? When I take time off?

Sarah

Look, there are several things that you can look at individually. It's just been, put into a bill that's in Parliament right now that will give superannuation to be paid on the Commonwealth paid parental leave scheme.

Massive when lots of lots of work has gone into advocating really strongly for that. So that's a really good bit of news coming up. And the dollar value of that over a lifetime is significant because of the power of compounding interest. And you're looking at money going into super at a relatively young age. And the power of that building up over the rest of your life up until retirement is, is significant. It's not marginal. It's actually a really significant difference.

Other options, I mentioned before this need to look at now your household more than you were before because of that balance of income. So involve your partner.

There are options around splitting contributions. So if somebody is still working full time, you can actually split according. You know, you need to seek advice to see whether that is going to work for you. Look at the potential of using if you've, you know, had the ability to build up a bit of savings in advance, could some of that go into super to sort of fill that gap.

Ange

So, Sarah you just touched on the Commonwealth pay parental leave finally adding super. Now I'm really intrigued to understand what is the actual impact of this long term. Like what are the tangible things that we're going to see for women by having super on paid parental leave?

Sarah

This is a really sort of firm dollar impact, because money paid early in super has a compounding effect over your working life. The modelling that we've got says that for a Rest member, a mother of two who gets paid superannuation on the Commonwealth Scheme for both children at retirement, will be better off by 14,500 dollars.

Alex + Ange

Wow. That's incredible. It's amazing.

Sarah

I'm going to plug a couple of, I'm going to plug a couple of books around this because this is this is a topic very close to my heart.

Ange

Please do!

Sarah

There is a book out there. It's a bit old now that's called the Post Baby Conversation.

It is still available as an e-book, so I highly recommend that one. The other one that I have is this Fair Play.

This is an amazing resource to work through. How does your household work? Who does what and why? There is a card activity, card game that comes with it where you can, as a couple, look at how we’re dividing this work, is done in the right way, so highly recommend.

Ange

I need to get one of those, not saying anything about my husband.

Sarah

But it’s often when babies come we revert to gender roles. It's so multi-generational. That's where we end up frequently. And so unless you actually consciously challenge it, it's potentially not going to happen.

Ange

So what I'm really hearing from you is it's not so much about just solving the problem for women, but it's equally solving the problem for men and how we start to elevate them in the experience and really pushing them into some of those non-traditional roles as well.

Sarah

Yeah. Yeah, absolutely. The other things are around flexible workplace arrangements.

Ange

Oh that's a big one, especially these days.

Sarah

It really is. It's so front of mind now. It's almost not thought about like, you know, there is an expectation that where possible you have work from home arrangements, noting that we have in Rest membership really significant numbers of people for whom it is not an option.

So working from home for a retail worker is frequently, if you're on front desk, you can't do that. There are quite large numbers for working from home’s not an option, but things like working around pick up and drop off times and making shifts available to women when they don't have direct, caring responsibilities and being able to plan in advance.

One of the problems that casual workers often have in working around their responsibilities as parents is they only find out a few days in advance when they're going to be working and organising childcare. In that time, it's really hard. If it's not regular, I think there's some workplace change still to happen around that. And accessible and affordable childcare.

It so often comes back to can you get childcare and is it affordable? The big decisions it's a big cost. But also are you happy with the childcare? Is it in the right place? It does it work in with your work.

Ange

I'm about to take this conversation in a completely different direction, but I recently read somewhere that there's a bit of a bias towards “blue” jobs versus “pink” jobs. Have you ever heard about this? So it's like the government is more likely to go and fund male dominated industries as opposed to female dominated industries, and that also has a big impact on the pay gap. And then subsequently the super gap. What do you think that we need to start advocating for outside of just super to really kind of shift the social dynamic?

Sarah

Australia has one of the highest gender divided workforces in the world, and it is true that frequently male dominated jobs are higher paid and female dominated jobs are lower paid. Look at caring, nursing, childcare, aged care, teaching…

Ange

…versus construction.

Sarah

Exactly. For some reason, we've ended up in Australia with the divide between that pink and blue divide being more significant than anywhere else. It's astonishing. And that does sort of have this compounding effect on the pay gap, which leads to the super gap.

Availability of education for women into the industries that get higher paid. The argument is often made that, you know, all women aren't in those areas because they don't want to be. It's often also not encouraged, and they are workplaces that often aren't family friendly.

It's built in that there will be a difference. So I think there is a need to look at, you know, what are our government schemes around education and training funding and where does that go?

That said, there is a huge demand for at the moment for construction. One of our housing problems is that houses aren't being built, fast enough to keep up with the demand.

So yes, there does need to be education and training leading into those industries that are in high demand. But is that being done in a way that encourages women to be involved as well and access those opportunities?

Ange

I'd also read somewhere that if more money was spent in the caring industries, so childcare, aged care, etc., that does also then allow women to go back to work full time, which frees up a whole kind of sector of individuals who are able to then do the work, and then that boosts the economy. So it actually can become quite a cyclical thing. And really like it's as simple as just putting some money where we need it, guys.

Sarah

Absolutely. There is a really strong compounding effect of investment in childcare and early education generally, not just childcare that frees up women's time, but actually invest in early education for young children as well has a compounding effect in the economy.

Alex

I feel like this is a lot of information, but I'm feeling a bit more positive about everything. Like there is a lot of scary statistics, but there's a lot of good in here and actions you can tangibly take. Is there anything else you would want parents to be like me to know?

Sarah

I think just reflecting back on some of the things, have the conversation with your partner.

It's so easy to just step in. We get lots of talk about prenatal classes and having a baby, and what it's like to have a baby, and we don't actually extend that out too, well, what does what does our life look like with this new person involved in it? How will those responsibilities work? I think there is, you know, some work around workplaces, being friendly to young families and actually encouraging women back to work.

We should have workplaces that are breastfed friendly. There is actually accreditation that you can get to be a breastfeeding friendly workplace. There's all of those sort of supports that are available. I think we just need to sort of pull it all together a bit.

Ange

Probably just normalise it a little bit more. I think that it's a systemic issue, but we need to normalise that as well in our every day.

Sarah

Yeah, yeah. And the other thing I would say is, you know, we have we have this vision of, of working mothers being able to do and have it all. And I don't think that's fair as a pressure on particularly young women. But you can have bits of it, but it takes a team.

And I think that's probably the biggest sort of message out of this is to look at this as a team.

Alex

Absolutely. And even if you don't have a partner with you, maybe that team is family. Maybe that's an amazing network of friends, but trying to not go it as an island, if you can.

Sarah

Absolutely.

Ange

And I probably say just one more thing, is that consideration of super when you are looking at your finances and budgeting, when you are having a family.

And so I think that's one thing that always gets overlooked, right? You don't think about your super, you sort of go, oh, what are the immediate spending things I need to think about? And you kind of go, oh, what about the long term? What's the long term impact? And kind of having that front of mind when you're doing that, going through that process as well I think is important.

Sarah

Absolutely.

Alex

Nappies, crib, superannuation.

Oh well thank you so much for joining us today Sarah.

Sarah

That's my pleasure. It was really good fun, thanks.

Alex

Yeah. No problem. I really hope that this helped. Not just me, but some other parents-to-be out there.

Ange

So please make sure to like, follow and subscribe

Alex

For any more information on the things we spoke about today there’ll be some links in the description below.

Ange

And that is..

Ange&Alex

Super Simple!