October 14, 2024

hesta super

Bridging the gap for women and super

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Did you know that Australian women retire with around 25% less in super than men1? HESTA explains why this gap exists and what we can do about it, together.

The amount of super you retire with is largely determined by the salary you earn and the type of work you do over your working life. The more you earn, the more super you have.

Women’s lower super balances can be influenced by:

  • taking time out of the workforce to care for children and other family members, which interrupts super contributions.
  • the prevalence of casual or part-time work arrangements for women, which often results in lower super contributions.
  • the enduring gender pay gap, which sees women earn less than men for similar work, directly affecting their ability to accumulate super.

Around 80% of HESTA members are women, which is why the fund is committed to using its collective voice to address inequities impacting their members and others who may be falling behind.

Advocating for change

HESTA is calling on policy makers to:

  • change the Low-Income Super Tax Offset to reflect current tax and super settings, so that lower-paid workers, like many HESTA members, don’t pay more tax on their super contributions than their wages.
  • introduce a ‘Carer Credit’ to compensate parents for super lost due to unpaid parental leave. Even a small boost to a primary carer’s super could create huge potential long-term benefits at retirement.

These changes would help make a difference for the retirement savings of women and low-income earners across Australia.

A win for women and super

After 13 years of advocacy, HESTA was thrilled with the government’s recent announcement to finally begin paying super on the Commonwealth Paid Parental Leave Scheme from 1 July 2025. This move will give women’s retirement savings a much-needed boost, help close the gender super gap, and make Australia’s super system fairer. 

Little things you can do now

Do you want to make a positive impact on your super? Build your financial confidence with these tips from HESTA:

  • Manage your super: Keep track of your super performance, check your investments and update your details by registering for an online account and regularly checking up on your super.
  • Combine your super*: Your super is your money. Just like a savings account, the more that’s in it, the more it could earn. That’s why it’s important to consider keeping all your super together in the one place and avoid unnecessary fees and costs.
  • Consider contributing more if you can: Your employer must pay a minimum amount to your super, but these contributions alone may not be enough to save for the retirement you want. With the effect of compound interest – which is interest earned on interest – even a little extra now can go a long way tomorrow.
  • Attend an information session: Several super funds run free information sessions, both online and face-to-face at no extra cost. HESTA’s super specialists host a range of information sessions that discuss how to boost your balance, explore your retirement options, and share practical tips about tax and the Age Pension.
  • Explore online resources: Some super funds also offer tools and services so you can educate yourself. HESTA members can access free resources like online calculators, interactive videos, and guidance on retirement planning.
  • Speak with an adviser: If you’re a HESTA member, you can book a super health check with an expert. Get help to work out how much super you’re likely to have when you retire, how to boost your balance, or how to invest your super as your needs change.

 

Need support outside of super?

HESTA can connect members to Ask Izzy^, a free directory provided by its partner Infoxchange. Find and access local support services including financial assistance, mental health counselling, and more.

 

1Association of Superannuation Funds of Australia, ASFA Research Note: Policies to reduce the gender super gap, July 2023.
* Before combining your super, consider any fees or charges that may apply, and the effect this transfer may have on any benefits you have in your other fund, such as insurance cover.
^ Ask Izzy is owned and operated by Infoxchange ABN 74 457 506 140. Third-party services are provided by parties other than H.E.S.T. Australia Ltd and under the terms and conditions of those parties. H.E.S.T. Australia Ltd does not recommend, endorse or accept any responsibility for the products and services offered by third parties or any liability for loss or damage incurred as a result of services provided by third parties. You should exercise your own judgment about the products and services being offered.
Issued by H.E.S.T. Australia Ltd ABN 66 006 818 695 AFSL 235249, the Trustee of HESTA ABN 64 971 749 321. This information is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this. The target market determination for HESTA products can be found at hesta.com.au/tmd. Before making a decision about HESTA products you should read the relevant Product Disclosure Statement (call 1800 813 327 or visit hesta.com.au for a copy) and consider any relevant risks (visit hesta.com.au/understandingrisk).

 

HESTA’s top cashflow tips

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With the cost of living continuing to challenge many of us, HESTA is sharing its top tips for making your dollars go further.

Take a closer look at your expenses

This doesn’t mean stop enjoying the things that make life fun. It might mean finding cheaper alternatives. Are you paying more than you need to for energy, internet, subscription TV or gym memberships you barely use? The first step is to work out what your current expenses are, and decide which ones are fixed or flexible. You can start crunching the numbers with these handy tools from Moneysmart:

Also, look out for free budgeting apps that can help you understand your spending habits and set savings goals.

Find your flex

Finding new ways to reduce any flexible expenses can help you manage your cashflow in the short term. Banks are often more flexible than you might think in helping customers facing a tough time. Utilities providers, including energy and water, could also offer flexible payment plans or ‘bill smoothing’ (where you can pay in smaller instalments).

 

Dip into cash savings

Are you an excellent saver when your budget permits? Congrats on thinking ahead. You might be facing one of those rainy days you’ve planned for, when your savings really need to be used. Keep track of how much you’re withdrawing so you can repay your savings when the cash starts flowing more freely.

 

Pick up extra/part-time work

Many industries across Australia are facing staff shortages. If you have the time, you could take advantage of the vacancies by picking up some extra shifts at your existing job, starting a new side hustle like pet-sitting, or setting up some freelance work if you have a specialised skill set.

 

Sell unwanted items

Has your great aunt’s dining room setting been sitting in your garage for years? Got some items in your wardrobe that haven’t been worn, but still have the tags attached? Your trash could be someone else’s treasure. You can sell items at little or no cost to you through online platforms.

 

Buy preloved or delay your spending

Equally, someone else’s preloved goods could be just what you’re looking for – and often at a fraction of the cost of buying new. Plus, there’s the environmental good karma of contributing to a greener planet. You could also think about holding off on a big purchase if you can get a little more life out of what you already have.

Look for freebies

Save on entertainment costs by taking advantage of free events near you. Check your local council website to see what’s coming up, or use social media to find exhibitions, tours, classes and more.

Still struggling?

Sometimes life is hard. Really hard. And it’s in these times that you need support the most. HESTA has partnered with Infoxchange, the not-for-profit social enterprise behind Ask Izzy*: a free directory that helps Australians find and access local support services. Learn more at hesta.com.au/askizzy.

*Ask Izzy is owned and operated by Infoxchange ABN 74 457 506 140. Third-party services are provided by parties other than H.E.S.T. Australia Ltd and under the terms and conditions of those parties. H.E.S.T. Australia Ltd does not recommend, endorse or accept any responsibility for the products and services offered by third parties or any liability for loss or damage incurred as a result of services provided by third parties. You should exercise your own judgment about the products and services being offered.
Issued by H.E.S.T. Australia Ltd ABN 66 006 818 895 AFSL 235249, the Trustee of HESTA ABN 64 971 749 321. This information is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this. The target market determination for HESTA products can be found at hesta.com.au/tmd and for HESTA for Mercy products at hestaformercy.com.au/tmd. Before making a decision about HESTA or HESTA for Mercy products you should read the relevant Product Disclosure Statement (for a copy HESTA – call 1800 813 327 or visit hesta.com.au/pds; HESTA for Mercy – call 1300 368 891 or visit hestaformercy.com.au) and consider any relevant risks (visit hesta.com.au/pds or hestaformercy.com.au/pds). © Copyright H.E.S.T. Australia Limited 2024.

This article was sponsored by HESTA. 

Aged care faces shortfall of 80,000 workers

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Research conducted by the industry super fund HESTA reveals a sector facing significant challenges to attract and retain workers.

The research found more than 23 per cent of aged care workers surveyed intend to leave the sector in one to five years.

This is equivalent to 84,000 employees within the aged care workforce which currently stands at approximately 366,000.

The report found only 4,000 workers are expected to enter the sector from other areas of health and community services (HACS), meaning aged care faces a potential net outflow of 80,000 employees in the next five years.

The Productivity Commission forecasts that Australia may need almost one million aged care workers by 2050, if it’s to meet the forecast demand from ageing baby boomers.

“Our research identifies a worrying potential outflow of workers from aged care in the next five years, right as we need to be attracting significantly more people to work in the sector,” said HESTA CEO, Debby Blakey.

On a positive note the study revealed the strong personal and professional commitment of those working in aged care. Among aged care employees, 77 per cent of those surveyed intend working in the sector for the long-term.

“Aged care employees spoke of how rewarding they found caring for Australia’s elderly — of special moments shared, of wanting to make a difference, or simply the power of being there to listen,” said Debby Blakey.

“It’s this human connection that lies at the heart of retaining valuable, experienced employees and attracting the new entrants to the industry.”

Industry Super performs best

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The federal government’s efforts to give the banks a greater share of workers’ superannuation has suffered a setback.

The Productivity Commission has confirmed what unions have long maintained:  industry superannuation funds are the best performing vehicles for workers’ retirement savings.

A draft report by the commission says bank-owned retail super funds charge twice the fees and produce 
28 per cent lower returns than industry funds.

Members of industry funds such as the health care industry’s HESTA are, on average, much better off when they retire.

A retail fund member who saves 9.5 per cent of current average weekly earnings for 40 years, will earn an average annual return of 4.9 per cent and retire with $996,000.

That is a whopping $666,000 less than the $1,662,000 nest egg an industry fund member will earn with average annual earnings of 6.8 per cent.

The comparison comes from leading financial journalist Alan Kohler, who said it ought to put an end to the government’s “dishonest attacks on industry funds”.

“The fact that the government has not denounced this and given the banks a deadline for fixing the problem can only be explained by 
the Coalition’s absurd bias against industry funds because union officials sit on their boards,” wrote Kohler in The Australian.

Industry funds are managed jointly by union and employer representatives.

The government has campaigned to undermine industry funds and ensure that “more of the spoils go to the private sector retail funds” despite their “exorbitant” fees, wrote Sydney Morning Herald political 
editor, Peter Hartcher.

Prime Minister Turnbull, a former Goldman Sachs investment banker, and Financial Services Minister Kelly O’Dwyer, a former executive of National Australia Bank, refused to comment on the Productivity Commission’s damning findings against retail funds.

Super is an industrial right

Bernard Keane, politics editor for crikey.com.au, described the Productivity Commission report as “a ferocious blow for the government and the retail super sector. Not even Kelly O’Dwyer’s pre-emptive – and pathetic – attacks on industry funds can distract from it”.

The ACTU said the commission report made a “sound case” for 
the need to reform super to elim-
inate multiple accounts and unnecessary insurance.

However, the peak union body criticised the commission’s recommendation to break the link between super and industry awards.

“Superannuation is an industrial right and comes from workers’ deferred wages,” said ACTU Assistant Secretary, Scott Connolly.

“The link between employers, unions, workers and their funds has been a key reason why industry super funds have systemically out-performed bank-owned super funds, and a pillar of the success of our retirement system.”

Connolly said the commission had “ignored the need to lift the Abbott/Turnbull government’s freeze on superannuation contributions, which should be urgently raised to 12 per cent”.

Compulsory superannuation started in 1992 as a result of a union initiative supported by Labor governments.

Under the system, the employer compulsory contribution rate rose to 9.5 per cent in 2014.

It was supposed to gradually increase to 12 per cent by 2022 but the Abbott and Turnbull governments blocked its progression.

Under the Coalition, the 9.5 per cent rate will remain until 2021 and will not reach 12 per cent until 2025.

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