Aware Super cites success of housing plan to bridge super gap
Aware Super has cited its unconventional investment methods as the key to bridging the gender superannuation gap, with a unique property investment strategy and contrarian approach to commodities.
Speaking on a podcast hosted by the University of New South Wales (UNSW) Business School, The Business Of, Aware Super’s Chief of Staff, Katrina McPhee, said the fund is working to improve financial equity for women, who currently retire with an average of 30 per cent less superannuation than men.
“Where we might have a 13 per cent pay gap, by the time you reach retirement, that’s a 30 to 40 per cent retirement gap,” McPhee said.
“Older females, retired females, are the fastest growing population within the homeless community because there’s been this baked-in inequality in the system.”
McPhee said a key contributor to the fund’s overarching goal of closing the gender super gap is adjusting focus from conventional and trendy investments, such as oil and gas currently, to plans and initiatives that have positive social benefits and deliver strong returns, such as its key worker affordable housing plan. The plan involves a build-to-rent program, in which large-scale housing is built and ownership retained by a sole entity for consumers to rent instead of buy.
“It’s one thing to have money to retire, but if we don’t have a wonderful world to live in, it feels counterintuitive. So climate change and energy transition are really important to us,” McPhee said.
“We started looking at the build-to-rent market. How might we become a landlord, essentially, as a superannuation fund? And how might we then offer up more affordable rent to essential workers? So that’s what we did.
“People often say, ‘Are you, by giving more affordable housing, giving up rent that would ultimately be returned for members? But what we found is by giving that to teachers, nurses and police officers, they generally stay in properties far longer, they do less damage to the properties. And the communities that they build have been extraordinary. So what we’re seeing is the profitability of those rental agreements over a long time.”
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