By Nick
Hedley
Australia’s
superannuation industry has started to make progress when it comes to
addressing the unique financial needs of women, but much more needs to be done,
says Sangeeta Venkatesan, co-founder of FairVine Super and president
of Women in Banking and Finance (WiBF).
“Superannuation
is a product designed for people who have linear career trajectories,” Venkatesan
tells Markets Group. “It doesn’t account for people who take time off to start
families, and then come back to work part time, or as a contractor or gig worker.”
Women tend
to live longer, meaning they require additional savings for retirement – yet
they tend to fall behind in the accumulation of savings as they are more likely
to take breaks in their careers to focus on starting families.
“The industry
needs to move away from the one-size-fits-all model and redesign products for
women, who have different career journeys than men,” says Venkatesan, who has
held prominent roles at Goldman Sachs, Morgan Stanley, Lehman
Brothers, Nomura, and Commonwealth Bank of Australia, among others.
In 2018,
Venkatesan co-founded FairVine Super with the aim of addressing “the
superannuation gender gap.”
FairVine –
which has since been absorbed by another, undisclosed super fund – offered a
savings “toolkit,” which includes a rewards program that allows members to earn
up to 20% cashback – directly into their super accounts – when shopping at
FairVine’s merchant partners across the country. Since women tend to do the
majority of a household’s shopping, this helped to narrow the savings gap.
FairVine also
allowed members to round up all card purchases to the nearest dollar, with the
difference deposited into their super accounts, among other tools. To promote
financial independence, the fund focused heavily on financial education and the
simplicity of its offerings, Venkatesan says.
FairVine
was well received by the market, having picked up a number of industry awards
along the way.
Other
established super funds are following suit, Venkatesan says. Some have launched
financial education programs focused specifically on women, and many are
introducing their own rewards schemes.
“I have greater
confidence that larger super funds want to do more to bridge the gender gap, although
we still have a long way to go,” she said.
Regulators
are starting to introduce important reforms as well, having abolished the
minimum requirements to qualify for superannuation contributions.
A 2021
report by KPMG recommended additional reforms, such amending Australia’s
paid parental leave scheme.
Linda
Elkins, KPMG’s national
sector lead for asset and wealth management, said at the time: “The paid
parental leave scheme does not include super guarantee contributions, which,
given women take most of the parental leave, simply means the income and super
gaps are exacerbated… There will be a significant cost but this is a major
impediment to equality.”
Regulators
should also allow unused concessional contributions to be made for recipients
of the scheme – without time limits.
“Concessional
contributions made by employers to employees can be used for up to five years,
but this then runs out, which disadvantages women who have taken time out to
raise children,” Elkins says. “There is no good policy reason why this cannot
be changed.”
KPMG also
recommended amending the Sex Discrimination Act to ensure that employers can
make higher superannuation payments for their female employees if they wish to
do so.
“Employers
might wish to make higher contributions to attract and reward talented female
employees who have taken time out, but this would be in contravention of the
Sex Discrimination Act,” Elkins says, adding that amending the Act would deliver
significant benefits at no cost.
Meanwhile, in
her role as president of WiBF, Venkatesan is working to boost diversity and
inclusion across the broader financial services industry.
WiBF is a
non-profit association aimed at increasing the representation of female leaders
in the banking and finance sector. Its member organizations employ more than
200,000 individuals.
The
association provides mentoring and coaching sessions as well as educational
seminars for aspiring women leaders, and works with member organizations on
leadership development programs.
Encouragingly,
Venkatesan says corporates in Australia have “shifted from talk to action” when
it comes to diversity.
“Banks are
trying to hire more female leaders and are focusing on policies specifically for
women, especially working mothers. There’s more focus on flexible working
arrangements – thanks partly to COVID – as well as career development programs
for women, the gender pay gap, and better representation on panels at events.”
Financial
services groups including ANZ and Commonwealth Bank of Australia
have launched return-to-work programs aimed at attracting women back into the
industry after they have taken career breaks to focus on their families.
By improving
diversity and inclusion, corporates will be better placed to attract and retain
talent.
“People
want to see action – words are not enough,” Venkatesan says.
Having
moved on from the world of global banking giants, Venkatesan has taken on roles
at a number of smaller firms.
She is investment director at EGX, the investing arm of EG Funds Management, a property funds manager with AU$5.1 billion (US$3.5 billion) under management, and she serves on the boards of RSL LifeCare – a retirement village and aged-care home group – as well as CancerAid, a digital healthcare company that supports cancer patients and their families.
“My work in superannuation through FairVine Super got me excited about health and age-care due to the link between wealth accumulation, decumulation or retirement, and health. The sector is ripe for disruption.”
Venkatesan will be speaking at Markets Group's Private Wealth Australia Forum in Sydney on August 4.
