ANZ bank says it will keep contributing to the KiwiSaver accounts of staff members who go on parental leave in a bid to help what it says is an increasing gender gap for women's retirement savings.
New Zealand's largest bank, which is also the largest KiwiSaver provider, said from October it would continue to pay the employer contribution of KiwiSaver for both men and women while they take time off to have a family.
The announcement was made today after it revealed research which claims Kiwi women are likely to retire with $60,000 less than their male counterparts.
Under New Zealand law employees can apply to take up to a year off on parental leave each time they have a baby.
During that time people typically put their KiwiSaver contributions on hold meaning they are not eligible to receive their employer's contribution and may also miss out on the Government's $521 annual contribution if they don't top up the account themselves.
ANZ said it expected around 200 of its 9000 staff to benefit from the change at any one time.
Felicity Evans, ANZ General Manager human resources, said one reason for the lower savings was women taking time out of paid work for family.
"To help close this gap, we have decided to pay KiwiSaver employer contributions for staff taking parental leave. This applies to male and female staff."
We estimate that women on average are likely to retire with $144,000, compared to $203,000 for men - that's significantly less money, particularly when you consider it potentially needs to last longer as women were typically in retirement for 20 years versus 14 for men.*
The amount women were paid over their lifetime was also a factor.
Despite OECD research showing New Zealand's gender pay gap was just 6.2 per cent figures from Statistics New Zealand showed women earned $300 less per week than men on average in 2014.
"On this basis, New Zealand women would earn $608,400 less, on average, than men over their entire lifetime," Evans said.
"Clearly, this has implications on the amount of money women can save for their future retirements."
The bank said it had already noticed a gap in the average KiwiSaver balances for men and women who belonged to its scheme and the gap was growing.
ASB spokesman Christian May said anything which encouraged people to plan and save for their retirement was a positive initiative.
"Contributing to staff members' KiwiSaver while they are on parental leave is certainly one avenue we would consider exploring further."
Ana-Marie Lockyer, ANZ general manager wealth products and marketing said eight years into KiwiSaver, average balances for women members of the ANZ KiwiSaver Scheme were almost 28 per cent lower than men at $8,918 and $11,396, respectively.
"A year ago the gap between men and women's balances was 26.5 per cent."
Lockyer said there was little to suggest women would close that gap, instead it could widen as women took career breaks to raise a family.
"We estimate that women on average are likely to retire with $144,000, compared to $203,000 for men - that's significantly less money, particularly when you consider it potentially needs to last longer as women were typically in retirement for 20 years versus 14 for men."*
The bank has also launched a new online hub for women to access tips on money and investing as well as a series of seminars to help women close the gender gap in retirement savings.
Check it out here.
• Based on 25-year-olds, earning the average wage of $44,000 for men and $33,000 for women, each contributing 3% of their salaries, with their employers also contributing 3%.
• The woman takes a two-year break from contributing to KiwiSaver at the age of 30, while the man does not.
• The woman retires two years earlier at age 65 while the man retires at 67.