Should you be in a super fund for women?
Should you be in a super fund for women?
Women have never had more choice in superannuation funds and products. But with that comes added consideration and, frankly, not every woman will be into it.
After looking at a number of products that have recently hit the Australian market, four questions come to my mind that might be useful when talking to women on super funds and products.
1. Are you concerned about gender equality and the gender gap in retirement savings?
2. Does that concern, or lack thereof, affect the way you want to invest your money or the fund you want to be aligned with?
3. Are you likely to take parental leave any time soon? How prepared are you for what that may mean for your superannuation?
4. And would you change your shopping behaviors if it helped you to save more in superannuation?
Of course, comparing superannuation funds is a tricky game and one that’s often not easily solved by looking at fund performance. You also need to consider fees, accessibility and ethics.
For women, particularly those with below average retirement savings, the decision is getting either more complicated, or potentially easier, depending on how you look at it.
Verve Super, which is backed by Future Super, launched the first Australian fund that’s dedicated to helping women close the gender gap in super but also supporting gender diversity and the broader economic wellbeing of women.
In November last year, Guild Trustee Services, which runs pharmacy fund GuildSuper and ChildCareSuper, launched SUPERSUPER – a rewards scheme that allows members to top up their super savings if they shop at selected retailers.
“Women have been at a disadvantage for so long when it comes to saving for retirement,” GuildSuper general manager Greg Everett said.
“About 86% of our members are female and most of them, like the majority of Australian women, will not have enough money to retire without a radical new solution.”
Most of the big super funds – Industry Super, First State Super and Commonwealth Bank of Australia, to name a few – have dedicated website resources to better educating women around the need to engage with their super and some of the strategies that can help.
Balance Impact chief executive Emily Hollingum says her goal is to make responsible investing more attractive to everyone, particularly women: “We want to create a new generation of educated investors who know what it is to be investment ready, and who care about what industries they invest in.
“To do this we provide free, online education. This includes steps to take prior to investing and how to invest responsibly. In terms of our costs, we offer flat fees, (starting at $14 a month and minimum investment starts at $15,000).
“As a robo-adviser, the whole point is to be scalable. So each extra dollar doesn’t cost us more to manage and it shouldn’t cost you more either. We hope that this pricing model will encourage more investment, particularly from women who are under-represented at present.”
Women are slowly becoming more engaged with their superannuation because of the increased options available, but also due to the alarming statistics showing the gender gap in retirement savings.
The Financy Women’s Index shows that the average woman retires with 66% of the account balance of the average man, largely to due taking time out of full-time work to care for children.
That takes me back to Verve Super, which is hoping to appeal to women who feel under-serviced by their current super fund and they don’t know where to turn, and trust is a big part of that particularly given that has been eroded given the issues raised in the Royal Commission.
Initially, Verve Super will offer just one balanced fund option and Future Super Asset Management will manage the investments in this fund.
The investment fee in the super fund is 0.3% based on assets under management, plus $1.80 a week to cover administration. This means for a Verve Super member with a balance of $50,000, the total fees they can expect to pay are around $688 a year.
The fund is also offering a fee pause for members, regardless of gender, on parental leave.
“The reason why we are pausing fees is because when people take parental leave, fees can really erode the balance. The other thing we will be doing is supporting members who want to make spousal contributions, particularly when one parent is on leave,” Verve Super chief executive Christina Hobbs said.
SUPERSUPER has a focus on helping women top up their super by using cash rewards every time their shop with a participating retailer.
The fund is promoting a case study of a 34-year-old woman with a family, who earns $34,000 a year, who could potentially accumulate an extra $105,000 in super (approx. 75% more than what she’s currently predicted to retire on) by using the SUPERSUPER product.
In the case of GuildSuper, a MySuper life stage product using a ‘Growing’ option, which appears to be the closest to a typical balanced approach for GuildSuper, the investment fee is 0.67% based on assets under management plus $1.83 a week and 0.15% p.a to cover administration.”
If you’re looking to boost your superannuation savings or find an option that aligns with your beliefs, now is the time to be talking about what’s currently available and asking questions that will help you to figure out if you want a fund option that’s geared to women, or something else entirely.
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