Super on paid parental leave: A game-changer in closing the gender retirement gap

08 Mar 2024 2 min read

NGS Super welcomes the federal government’s plan to pay superannuation on the Commonwealth Paid Parental Leave (PPL) scheme from 1 July 2025.

The reform is a big step towards closing the gender gap at retirement and when coupled with the work the government is doing to extend parental leave payments to 6 months by 2026 the opportunity for women to increase their super savings increases significantly.

This new commitment from the government is also a milestone in the broader goal of achieving gender equality in the workforce and in retirement, as it ensures women and men are not financially punished for taking time out of the workforce to care for children.

We know that women retire with around 25% less super than men. ASFA research has found the median superannuation balance in June 2021 for those aged 60 to 64 was around $212,000 for males, compared with just $159,000 for females.

The financial gap in retirement is quantifiable. It results from many factors including a reduction in the earning capacity for women if they take time out of the workforce to care for children. This policy change from the government will reduce this gap and we’re thrilled the commitment is being made.

The role of superannuation cannot be overstated in the goal towards achieving gender equality in retirement and improving female financial security and dignity in retirement. We believe in providing education and advice to all of our members at every stage of their lives – because it’s important to help them make them informed decisions about their financial futures. As a fund with a majority of female members we want to ensure that they feel empowered in decisions relating to their super and plans for tomorrow.

While the path to achieving gender equality is complex and multifaceted, there is no denying that the introduction of superannuation on government paid parental leave is a significant and positive milestone.

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