OCT 31: BEST FROM THE BLOGOSPHERE

October 31, 2022

Canadian women receive 18 per cent less retirement income: analysis

Women in this country receive, on average, 18 per cent less retirement income than men, reports Wealth Professional.

The publication cites an analysis of Statistics Canada data recently carried out by Ontario’s Pay Equity Office (PEO). Another alarming finding, Wealth Professional adds, is that the gap of 18 per cent in 2020 is worse than the 15 per cent gap women experienced in 1976.

This gap, known as the Gender Pension Gap (GPG), has long been a problem, the article continues.

“Among the 34 members of the Organization for Economic Cooperation and Development (OECD), the average GPG was 25.6 per cent as of 2021,” the article adds, again citing PEO analysis.

Across the country, the widest GPG is over in Alberta, where women’s retirement income is, on average, 23 per cent less than that of men. The province with the lowest gap – 13 per cent – is Prince Edward Island, the article notes.

“We see that the Gender Wage Gap (GWG) has narrowed with time. Meaning, women’s wages in Canada have steadily increased with time to be closer to that of men’s, although the gap has not closed completely,” states the PEO’s Kadie Ward in the article. “A natural assumption would be that with increased wages, the pension gap would also begin to close with time, but this does not appear to be the case,” she states.

There are several reasons why, the article continues.

“After having children, women are more likely than men to leave the workforce (temporarily or permanently), work fewer years over the course of their careers, work part-time to balance caregiving responsibilities, and make less money overall than men (due to the GWG),” the article explains.

“The impacts of the GPG should not be dismissed. Aging in poverty is linked to food insecurity, housing insecurity, and overall poor health outcomes, including higher rates of mortality,” Ward tells Wealth Professional.

“[T]here is no better time to call attention to not only the contributions of women around the world but the need for equal pay, better social protections, and shared domestic work between men and women,” she tells the publication.

There’s another factor to consider that this article doesn’t touch on, and that is the reality that women live longer than men. So, as the article notes, if the average woman has 18 per cent less retirement income than a man, she is also very likely to live (and thus, need retirement income) longer. That smaller pension pot will most likely need to sustain her for a longer time.

Women who do have a pension plan or retirement arrangement through work should make sure they are contributing to the max. Some types of plans allow you to contribute while you are away on a maternity leave (or afterwards, on your return to work). Your retired you will be glad if you look into this when you are younger.

If you don’t have any sort of retirement arrangement at work – or want to top up what you have – the Saskatchewan Pension Plan may be a very helpful resource. Set up originally to benefit women without any pension benefits, SPP is open to people with registered retirement savings plan room. SPP will take your contributions, grow them through prudent investing, and will help you turn them into retirement income down the road. Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Gender Pension Gap, Gender Wage Gap, GPG, GWG, OECD, Ontario’s Pay Equity Office, Organization for Economic Cooperation and Development, PEO, Wealth Professional

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