On 1 July the Government took an important step forward in supporting parents by increasing paid parental leave in New Zealand from 22 weeks to 26 weeks.
The financial impacts of this change will be felt by all Kiwis seeking to raise a family, but particularly women as the group most likely to take unpaid leave to look after members of their household.
But the economic penalties women face from taking unpaid leave extend beyond lost wages, they also miss out on employer contributions to KiwiSaver.
This contributes to women being 18 per cent worse off financially in retirement, despite higher rates of participation in KiwiSaver and needing to stretch out their retirement savings for longer.
Here at AMP Wealth Management, we believe employers have a vital role in contributing to their employees' wellbeing and encouraging them to save for retirement. All employees on paid parental leave already receive a 12 per cent employer superannuation contribution, but we’ve now extended that, so those contributions continue while our employees are on unpaid parental leave as well, for up to 38 weeks.
We don’t think New Zealanders should be penalised for raising a family and believe this new benefit will help to narrow the savings gender gap and improve retirement outcomes for more women.
Another reason for the disparity in retirement savings outcomes is that women are over represented in lower paid junior positions and underrepresented in leadership roles in New Zealand.
Which is why we’ve announced our intention to increase the proportion of women in senior leadership positions from 40 to 50 per cent by 2021.
There’s more info on how we’re supporting our employees, clients and communities in our latest Help Report.