Pay women more super to beat inequality

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She ended up in front of the human rights commission: the deputy CEO of a financial consulting firm fought hard to pay her female employees more to retire, in an effort to alleviate superannuation inequality.

Melissa Fuller of Rice Warner was sick of constantly seeing data during the firm’s research for the Financial Services Council (FSC) that highlighted the huge saving gap between women and men, so she decided to do something about it.

“I thought as a nation we need to address this issue, but maybe we could also do something as an employer,” she said.

Wealth Professional spoke to Fuller on the tail of International Womens’ Day, and in light of many in the financial services calling for better education and an end to superannuation inequality, which sees women retire with 40% less than men.

It’s been a bit less than a year since her package of superannuation incentives for female employees was launched, but Fuller said all the signs are positive.

“We’ve run a couple of education sessions and we’ve got a few [female] employees now making extra contributions,” she said. “Anecdotally we seem to have also been getting more female applicants for jobs. All the females that have started over the last few months have been impressed. More than anything, it’s about awareness.”

Fuller and Rice Warner’s journey to offer the incentives – which include women being paid 2% more super than men, and earning superannuation during the firm’s 18-week paid maternity leave – started in late 2012.

To be able to implement such gender-specific changes, the firm had to face the human rights commission (HRC) to seek an exemption under the sex discrimination act.

“There was a lot of to-ing and fro-ing. We had to spend a bit of time educating [the commission] about the issue, but they were supportive throughout the process,” Fuller said.

Finally, the HRC agreed that the exemption could be granted.

Since the package has been implemented, Fuller has been aware of criticism that the firm is being reverse gender-discriminative.

“It’s been talked about, but the way we viewed it, and the commission did too, is that we’re trying to address an existing inequality.”

She also points out that Rice Warner offers life insurance to all employees, and that the risk profile of men means they cost the firm more to insure than females – so it’s all a bit of give and take.

The superannuation package also has no relation to remuneration of employees, Fuller stresses.

Commenters on a Wealth Professional story last week questioned whether the superannuation gap was as big as statistics indicate because women who are in a partnership will actually share their super accounts, cash and other equities with their spouse.

“But what happens if they don’t stay married?” Fuller asks. “Women should be saving for themselves because in the event of a divorce they will lose 50%. There is a larger majority of females living in poverty than males once they retire.”

While she’s not advocating that all businesses go out and implement strategies like Rice Warner’s, Fuller said that there are small things that anyone can do that don’t have to cost much money, like a free hour of financial education.

And thanks to Rice Warner’s dedicated journey to implement the superannuation package for women, other businesses interested in similar ideas may now find it easier.

“From a risk perspective I think that any business would be better going through the [human rights] commission, but it will probably be a faster process because that precedent is there,” said Fuller.

SEE MORE:

Planner: families on the superannuation back-foot

Gender disaster: women retiring with 40% less

Gender disparity 'alarming', says planner