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.


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  • SB on 14/03/2014 12:35:54 PM

    Hey Liam I'm actually with you which is why I raised the point that there are a number of reasons that contribute to the gap. It's part education and partly due to the fact that women are just hardwired differently. I haven't said that this is the employers duty to then compensate them for their investment choices. Infact I made a comment previously about lifestyle choices and sacrifices. As a parent you either make the decision to stay at home longer with the kids and sacrifice your super or return to work and sacrifice some time with the kids, it would just be nice to be able to play catch up and not be unfairly disadvantaged by the contributions caps later in life. I would love it if we got to the stage where there were more stay at home / part time working fathers but I am a Gen X working mum and know of only 1 father who took 6 months without pay. So back to my original comment, if there was equal pay, equal opportunity and men who are willing (and encouraged) to support their partners career and take a bigger role in parenting then the gap wouldn't be as big an issue.

  • Coastie on 13/03/2014 4:10:18 PM

    Seems like u must be working at Rice Warner SB. Got a deflecting comment for everyone questioning the approach.

  • Mark Thompson on 13/03/2014 3:25:00 PM

    Hi SB, you make a good point, but let's assume that 100% of female employees are married/partnered and they share the pot at home, but a male employee doesn't get to share an extra 2% of super with his spouse/partner. The spouse of the male employee is now disadvantaged by unequal super contributions. I think this is how the Soviet Union went belly up.

  • Liam on 13/03/2014 3:08:31 PM

    SB, you said that women may be more conservative and pay down their mortgage and not salary sacrifice to super. So if men are retiring with higher mortgages, who is going fixed that gender imbalance? That is a personal financial decision and probably something that may be true, but you probably you just made up whilst writing your reply. If people make the wrong financial decision, it is of their own making.

    Not saying that women don't retire with less super, they clearly do. There would be a number of reasons for it, being paid less would definitely feature in many cases. However, there are also generational differences which need to be considered in these stats. I.e. the super imbalance for today's retirees started early in their working careers.

    In younger generations, of which I am one, I know many male friends that have remained at home, or reduced hours so the wife can return to work after children, as the wife earns more.

    Would Rice Warner pay these men 2.0% upon return from work?

    What about 22 yearold graduates. The men are getting paid less then their female colleagues because they are men. Most women I know of my age earn the same rate as I do.

    You said women are less likely to ask for a raise. Well what about men with low self-esteem who do not ask for a raise, will Rice Warner give them 2.0% more super.

    I understand what Rice Warner is trying to do, but I think it is the wrong way of going about it. It is gender discrimination.

    SB, you lament the differences in pay and super of men vs women, and then provide two reasons that are personal issues, paying down the loan instead of salary sacrifice, and hesitating to ask for a raise. Neither of those are responsibilities of an employer or colleagues. I struggle to see your gripe with the other respondents?

  • SB on 13/03/2014 1:57:07 PM

    Its interesting to note that when the initial topic was raised about women retiring with 40% less super everyone was quick to point out that its not an issue as the woman could share her spouses super. Rice Warner are now trying to bridge that gap and rather than seeing that as increasing the overall wealth of the couple with a win for everyone, there appears to be moral outrage. Why is that??

  • Graham on 13/03/2014 1:20:18 PM

    Last time I checked Actuaries get paid quite well. If an actuary doesn't have enough super for retirement then there is an another issue going on here. Don't see why Rice Warner, an employer of actuaries, finds the need to provide more superannuation contributions.

  • Noel H Bamford on 13/03/2014 12:23:01 PM

    I'm sorry but Melissa Fuller of Rice Warner is talking total nonsence!
    The last two times I placed an ad I was flooded with applications: 150+ & 200+. I didn't offer extra super but whatever I offered it definitely appealed to the applicants (unlike Melissa Fuller & Rice Warner we do NOT seem to have trouble here) as we do not offer extra super we must be offering something else that appeals.
    Discriminating to solve a so-called discriminatory issue is, obviously, not the correct approach to things -- these people are certainly lacking in imagination.

  • SB on 13/03/2014 11:04:00 AM

    The fact of the matter is that statistically speaking women DO earn less than men in the same occupation (mostly relating to professional areas where pay is negotiated.) I think this is largely due to women not being as forward in asking for rises or higher pay as they are conditioned to think this is rude or aggressive behaviour. If an employer isn't challenged to paying higher they will take advantage of that. Women are also more likely to be more conservative in their strategy for eg paying down debt rather than contribute to super and when they do invest, are more likely to invest more conservatively. To pretend that the pay and super gap dont exist is naive but there are many reasons, not just family that contribute to this.

  • Innocent Observer on 13/03/2014 10:23:53 AM

    The more we draw a distinction based on gender, ethnicity or colour of someone's hair, the greater the imbalance will become.

    I, for one, am all for equality. And for that reason I think this is a somewhat ridiculous proposition (and, quite frankly, brings into question the depth of Rice Warner's interpretation of what "the issue" actually is).

    How about this: pay people based on productivity and/or contribution to the business. There are some things that women (generally) do better than men, and there are also some things that men (generally) do better than women. Don't shoot the messenger.

    Part of the pay imbalance (if we look at the nation as a whole) comes down the level of pay for these different tasks. Take accountants and nurse for example. Which do you think has better career-long earnings? And which do you think has a higher proportion of women, and which has a higher proportion of men? Does an accountant contribute more to society (or is otherwise more useful) than a nurse? Crying foul on a pay imbalance without considering occupational factors is not helpful. Trying to fix the imbalance by upping the pay of those in the professional sectors does more harm than good; it takes the focus away from the real issue.

    I'm not sure how or why the HRC decided to allow an exemption to the sex discrimination act, but presumably it was in good faith. But imagine the outrage if "XYZ Ltd" explicitly paid men more super because they were less likely to take 6 - 12 months off on maternity/paternity leave? Now there's a test case I'm sure that not even the ambulance-chasers would be willing to touch

  • SB on 13/03/2014 10:11:04 AM

    Pat, I think the real question is how many men at Rice Warner have even taken extended unpaid paternity leave. Not many I imagine, that's the issue.

  • Pat on 13/03/2014 8:43:39 AM

    If the financial position of a married couple is not equally split, then, in the event of divorce, she is not "losing 50%", she is gaining a lot more.

    How does Rice Warner benefit men who take paternity leave?

  • SB on 12/03/2014 3:37:21 PM

    Mark, your last paragraph started off so well but still finished with the assumption that it is women who will have to sacrifice. How about equal pay, equal opportunity and fathers who are willing to take a step back for their partners career or at least help equally in the required drop off, pick up and sick days?
    Women may be more likely to "put in the hours" if the child was left with a parent rather than creche.

  • Mark Thompson on 12/03/2014 2:36:47 PM

    “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......” Hey, you could have knocked me over with a feather when I read that. I don't know if Melissa is an actuary, but the last time I looked at the maths for splitting all asset 50-50, is that everyone comes away even, if not poorer. Another actuarial calc that seems amiss is that 'it all works out evenly with men being more expensive to insure' (maybe true for death only); an extra 2% on a salary of $50,000 is $1,000. That amount will purchase a hell of a lot of death cover (around $1.5M for a 40 year old male, non-smoker). My question is why is it still legal to pay women less for doing the same work as a male. That's the big issue that should be tackled. Until we have crèches at the workplace many women will not be able to put the hours in that equal pay requires.

  • Daniel on 12/03/2014 10:47:19 AM

    This is gender discrimination in its purest form: giving someone a different benefit purely because of their gender.
    It also assumes female employees will have children. Some will not, some cannot.
    I understand the logic behind this, but let's face it, with proper planning (eg. spouse contributions, contribution splitting, etc) there is no gender retirement savings gap.

    On a side note, I'm assuming that if the risk profile for group insurance means men cost more than women, that income protection isn't a significant part of the employee protection package? That, or on average older males are hired than females, or earn more on average than their female counterparts?

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