Engagement in superannuation- is there really a gender gap?

Dr Laura de Zwaan

Assoc Prof Mark Brimble

Prof Jenny Stewart

Women and Superannuation

• Women are systematically disadvantaged under the current system– Earnings-based – Less time in the workforce– More conservative– Longer life expectancy

Gender and Engagement

• Super Attitudes Survey, 2012• Only 19% of women are engaged with

their superannuation • Less engagement means

– Default investment options and funds– Minimum contributions– Lower retirement savings outcomes

What is Engagement?

• Cooper Review, 2010• Chetty et al., 2012

• Super Attitudes Survey, 2012• Financial Services Council, 2013

Model – Dependent Variables

• I have changed my investments in the past• I have contacted a financial planner for help with superannuation• I read my member statement every year• I have called my superannuation fund within the last year• I have accessed my super details online within the last year• I know how my fund has performed compared to others• I know how much superannuation I have• I have read the annual report from my superannuation fund• I have read the PDS issued to me by my superannuation fund• I know how much in fees my superannuation fund charges

Model – Explanatory and Controls

• Gender is the explanatory variable• Control variables:

• Age• Household income• Value of superannuation• Financial literacy (self-rated)

• Potential Interactions:• Gender/Value of super• Gender/Income• Income/value of super

Sample

• Respondents sourced from general public and staff (general and academic) of a large university

• Received 551 responses• Women 58.8%; Men 41.2%• Even spread over groups for demographics

– exception is postgraduate degree holders (39.8%)

Findings

• Gender was found to be significant for whether a respondent had changed their investments in the past

• Men are 5.564 times more likely to have changed their investments in the past. (p = 0.041).

• The overall model is significant (p = 0.000). Predicts 69.8% of the responses correctly and has a Nagelkerke R Square of 0.287.

• Also a significant interaction for gender and value of super (p = 0.046). Males with super balances of between $250,000 and $500,000 are 11.254 times more likely to have changed their investments in the past.

Findings

• An interaction between gender and value of super is significant for whether a respondent reads their member statement (p = 0.017, R = 0.376)

• Interaction between gender and income for whether respondents know how their fund performed compared to others (p = 0.021, R = 0.400)

• There were no other significant findings for gender.

Findings

Measure of Engagement Significant variables

Changed investments Gender, financial literacy, gender*value

Financial planner Age

Member statement Financial literacy, gender*value

Called super fund Age

Accessed details online Age, financial literacy

Know how fund performed Financial literacy, gender*income

Know value Financial literacy

Read annual report Age, financial literacy

Read PDS Age, financial literacy

Know fees Age, financial literacy

Findings

• Gender is not a predictor of engagement for a range of engagement measures– It is significant for whether the respondent had

changed investment options– Could indicate risk aversion

• To target engagement, financial literacy is a better approach

• However, as the Cooper Review pointed out, the system should work regardless of the level of engagement

Limitations and Future Research

• Self selection bias• Measure of financial literacy• Relationship status (Gerrans and Clark-Murphy, 2004)• Household role• Level of risk aversion• Family tax benefit payments subject to super guarantee