Imagine a superannuation fund that caters to the changing needs of women.
It empowers you with tools to effortlessly grow your super balance, it stops charging fees when you take a career break or parental leave, and it sets you up for a comfortable retirement.
It might sound too good to be true, but this fund exists and it’s called FairVine Super.
When establishing the superannuation fund FairVine Super’s executive chairwoman Sangeeta Venkatesan realised that women have very different cycles and journeys towards achieving financial independence than men.
After much research she discovered that most super funds took the one-size-fits-all approach – there has been little innovation and few attempts to tailor superannuation to a woman’s needs.
Thus, FairVine Super was born – the first fund optimised for women at all life stages, not just during full-time employment. This includes women who take parental leave, go on career breaks, and who are self-employed, work part-time, or become full-time carers.
“The current system is failing women tremendously, and it’s a blind spot that’s leaving women at far greater risk of poverty and homelessness when they retire,” Ms Venkatesan said.
“Women shouldn’t be penalised for having children or making unpaid contributions to their family. This is something we need to address now before the next cohort of women follow the current generation into serious financial hardship.”
Facing the facts
The fact is Australian women are retiring with about 37 per cent less superannuation than men. This means women who are retiring at the moment have about $130,000 less in their fund.
“Women over 55 who are single are more likely to retire into poverty than not, which is really terrifying,” said Rachel Hamlen, head of customer experience at FairVine Super.
She said when compulsory superannuation was introduced, there was a whole cohort of women who didn’t really know what super was – they didn’t engage with it, they didn’t have a job at the time because they were at home caring for children, and then they returned to the workforce and retired without any superannuation whatsoever.
“That equates to homelessness, it equates to reduced access to medical care, and inadequate housing,” Ms Hamlen.
“When you consider that the pension is $22,000 per year, if you don’t own your own home, there’s no way you’re paying for accommodation out of that.”
Ms Hamlen said the superannuation system is only designed for people to start saving when they get their first job at 18, making the compulsory 9.5 per cent contribution each year over an uninterrupted life cycle.
“Superannuation is designed to give you a return of around $545,000 at the end of your working life which means that you retire on $43,000 a year, plus your pension, and that is assuming you own your own home. That’s the way it is designed but that is not the reality for many women. In fact, it’s not the reality for most single women,” Ms Hamlen said.
“That’s why we started as a solutions-focused organisation. We are the only superannuation fund in Australia that offers a suite of tools to help women save more.”
Tips for optimising your superannuation
The Australian Securities and Investments Commission (ASIC) outlines three things women can do to improve their retirement outcome:
- Consolidate your super (only have one super account)
- Engage with your super – know what you’re being charged, and check that you’re not over or under insured
- Contribute more to your super fund.
The third part, Ms Hamlen said, is where FairVine Super makes it particularly easy from women to contribute to their super fund.
Women can make small but regular contributions to their super fund through TopUps, RoundUps and FairRewards features.
TopUps allow you to make one-off or scheduled contributions. RoundUps allow you to link your bank accounts and/or credit cards to automatically round-up your day-to-day spending, and put the difference straight into your FairVine Super account. FairRewards allows you to shop with more than 150 partner brands which will contribute 2 to 15 per cent of your purchase straight into your super.
Ms Hamlen said there are many women who aren’t contributing to their super at all because they’ve taken a career break, they’re doing casual work, they work part-time and fall under the threshold for their employer to contribute super, or they have started their own business and paying their super is not a priority.
Ms Hamlen said the key is to focus on paying yourself first. She also urges all women to start prioritising their super earlier in life to ensure they can set themselves up for success come retirement.
“The choice is this: you put in $2.50 a week extra at the age of 20, or you put in $250 a week extra at the age of 45. It’s a massive difference,” she said.
Lastly, Ms Hamlen recommends that women who take a career break to raise children should consider legal and tax-effective ways for their working partner to continue contributing to their super fund.
“It’s possible to split contributions where your partner pays 4.75 per cent to his super and 4.75 per cent to your super while you are on parental leave. Most people don’t know that you can do that,” she said.
Why should women engage with their super?
Superannuation might seem like one of those boring life admin tasks that often gets put to the side, but Ms Hamlen said it is crucial for women to prioritise their super.
“In a lot of cases, superannuation is the only personal asset that many women hold themselves. There is great power in that. If you do nothing else than engage in your own super, you’re doing something for yourself,” she said.
“Generally, women will buy a home with their partner, so it’s not 100 per cent theirs, but their super is 100 per cent theirs.”
“The sooner you get onto it and sort it and walk away, the less work you have to do later on.”