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The Case for Gender‐Sensitive Superannuation Plan Design

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  • Anup K. Basu
  • Michael E. Drew

Abstract

A key feature of superannuation plan design is the assumption that members have long and continuous periods of employment over which contributions are made. This heroic design feature has led to debate on the adequacy of superannuation plans for those with interrupted employment, particularly the adverse impacts this has on the retirement income prospects of women. This paper employs non‐parametric stochastic simulation to investigate two possible solutions to gender inequality in superannuation, higher contribution rates and more aggressive asset allocation. Our results suggest that while both these strategies in isolation are effective in reducing the current gender disparity in superannuation outcomes, they demand significant changes to current arrangements when employed individually to address the problem. A combined approach is found to be more powerful in ensuring a more equitable superannuation outcome for women, as it nullifies the relative disadvantage of interrupted employment with only modest changes to contribution rates and asset allocation.

Suggested Citation

  • Anup K. Basu & Michael E. Drew, 2009. "The Case for Gender‐Sensitive Superannuation Plan Design," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(2), pages 177-189, June.
    • Handle: RePEc:bla:ausecr:v:42:y:2009:i:2:p:177-189
    DOI: 10.1111/j.1467-8462.2009.00534.x
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    Cited by:

    1. Laundon Melinda & Williams Penny, 2018. "Flexible Work: Barrier to Benefits?," Financial Planning Research Journal, Sciendo, vol. 4(2), pages 51-68.
    2. Wei-Ting Pan, 2016. "The Impact of Mandatory Savings on Life Cycle Consumption and Portfolio Choice," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 32, July-Dece.
    3. Bianchi Robert J. & Drew Michael E. & Walk Adam N., 2016. "The Time Diversification Puzzle: A Survey," Financial Planning Research Journal, Sciendo, vol. 2(2), pages 12-48.
    4. Robert J. Bianchi & Michael E. Drew & Adam N. Walk & Osei K. Wiafe, 2016. "Retirement Adequacy of Indigenous Australians: A Baseline Study," Economic Papers, The Economic Society of Australia, vol. 35(4), pages 359-374, December.
    5. Rohan Best & Noura Saba, 2021. "Quantifying Australia’s Gender Superannuation Gap," The Economic Record, The Economic Society of Australia, vol. 97(318), pages 410-423, September.
    6. Wei-Ting Pan, 2016. "The Impact of Mandatory Savings on Life Cycle Consumption and Portfolio Choice," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 2-2016, January-A.

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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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