22 Jun 2022

Pay equity among ways to improve women's retirement savings - report

5:50 am on 22 June 2022

Women's Kiwisaver balances could be more than $300,000 lower than men's men when they reach retirement age, a report says.

Pile of New Zealand currency laying flat on table

Photo: 123RF

The report, commissioned by KiwiSaver provider Kiwi Wealth, sets out the disadvantages facing women for retirement.

The savings setback attributed to motherhood and the gender pay gap could be as much as $318,000 by the age of 65, according to the NZ Institute of Economic Research (NZIER) report.

Kiwi Wealth chief executive Rhiannon McKinnon said the average balance for women was 20 percent lower than the average balance for men across all age groups.

"I don't want to put all the onus on women," McKinnon said.

"We can all be doing more.

"The report talks about actions the government can think of and employers can think of, and I think we can all play our part."

Proposed solutions include the continuation of payments during maternity and parental leave, pay equity and improving financial confidence so women can choose funds with better long-term returns.

"I think it does matter," McKinnon said.

"We should all be striving for more equitable outcomes for men and women.

"For women to end up with 20 percent less for their retirement financially leaves them in a much worse position for day-to-day living."

The savings disadvantage is exacerbated because women take time out of the workforce due to motherhood but also have a longer lifespan so need to fund a longer retirement.

"When NZIER found the effect of motherhood could be up to $318,000 on your KiwiSaver balance by the time you reach 65 was quite shocking to me."

Kiwi Wealth is taking the solutions presented in the report and applying them to their business.

"We have updated our parental leave policy so employees can continue their KiwiSaver contribution while on leave.

"We have identified the gender gap in our business and will work to eliminate this just as we have our pay parity gap."

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