KiwiSaver gender gap concerns

Concern is building about a “gender gap” in superannuation but smaller balances are only one of the issues advisers need to consider when working with female clients, an industry leader says.

Tuesday, February 12th 2013, 8:00AM 8 Comments

by Niko Kloeten

The gender difference was highlighted recently when Westpac revealed female members of its KiwiSaver scheme had smaller balances on average than men of the same age, with a discrepancy of 25%-30% between mid-30s and mid-40s.

Westpac said the difference was probably due to three factors: Women choosing lower contribution rates than men; lower average wages for women; and/or career breaks for women who took time off for maternity leave.

The Financial Services Council has called for a taxpayer-funded top-up for KiwiSaver members who don’t have enough to buy a pension equivalent to NZ Super from age 65.

“This not only helps women who may have spent time outside of the workforce, it will also help anyone who has had very low earnings over their adult lives,” FSC chief executive Peter Neilson said.

“It will also help anyone who has had poor returns on their investments close to retirement, which would have taken their retirement pot below the level needed to fund a fixed-term pension equivalent to NZ Super at 65.”

Institute of Financial Advisers president Nigel Tate said the difference in longevity between men and women was as big an issue as the savings gap when it came to retirement planning.

“Women live four years longer on average than men and I wonder whether retirement plans being done are taking that into account.”

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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Comments from our readers

On 12 February 2013 at 10:17 am equalpay said:

Equal pay for woman should be addressed. This would hugely influence the first two factors.

On 12 February 2013 at 2:16 pm Johnny said:

I thought it was illegal to pay a woman less than a man for doing the same job, equalpay?

On 13 February 2013 at 1:11 pm waterfall said:

Gender pay comparisons can be confusing as they often don't compare a male and female doing exactly the same job. They can compare pay in a female dominated role (i.e. nursing, kindergarten teaching) with pay rates in an entirely different male dominated industry which the researcher believes should be paid the same..... It is a very subjective comparison, but I expect that's the most powerful way of making a point... I would be genuinely interested in seeing like-for-like gender pay comparisons.

On 13 February 2013 at 4:54 pm Mac said:

Is the FSC chief executive Peter Neilson under the impression that the government will be substituting the universal NZ Super for KiwiSaver?

On 14 February 2013 at 11:54 am equalpay said:

The New Zealand Institute of Chartered Accountants (NZICA): Annual survey 2012.
- Women CAs with less than five years experience are paid on average 9% less than male CAs with the same experience.

On 14 February 2013 at 5:01 pm waterfall said:

Equalpay - it is a shame the NZICA survey doesn't drill down further into the gender numbers to explain the difference. If a female CA with 2 years experience at PWC or KPMG is paid 9% less than a 2 year qualified male CA at teh same firm doing the same job then I agree it is a disgrace. But I suspect the difference in genders may be explained by another finding in the NZICA report - that accountants in the financial services industry earn on average $74,533 p.a. more than accountants in mid size public practice firms (that is a massive difference....). My guess is that there are more males than females in financial services accounting which then distorts the gender earnings comparison. It makes it look like a gender gap but really it is a gap between career choices for accountants. It is disappointing that on the "insights on gender" page the NZICA chose not to provide any insights into the apparent pay gap (they clearly have the data than can explain it - may be the explanation undermines the impact of the 9% headline...).

On 15 February 2013 at 3:38 pm Johnny said:

That's the problem with drawing conclusions purely from assessing a set of statistics, Waterfall. Is it also that women are poorer as negotiating?

On 20 February 2013 at 9:36 am equalpay said:

Logan Mudge From NZICA says
“Our figures show that women are still paid less even when experience is taken into account. In fact, the pay gap is wider for those with more experience than for those with less. Women with less than five years’ experience are paid on average 9% less but those with over 21 years’ experience are paid 23% less on average.”

“We are publishing the results to raise awareness of the gender pay gap. NZICA will be working with its members to look at ways to tackle the gap.

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