New Delhi: The gender pension gap in Europe and the US stands around 35-40 per cent, and government and employers need to help even the playing field, says a report.
Gender pension gap is expected to balloon to $400 trillion by 2050 in the world’s eight largest pensions systems, including India, China, Canada and the UK, according to the WEF white paper.
Women are at a “savings disadvantage” in making up for the gender pensions gap, largely owing to their lower salaries, fewer working years (on average), and their more conservative investment attitudes”.
“The resulting difference in retirement balance for women is estimated to be 30-40 per cent in Europe and a similar percentage in the US, compared to a gender pay gap that currently stands at around 15-20 per cent across high-income countries,” the report added.
According to the report, governments and employers should work together to address the underlying structural causes of the gap, or the gains in reducing the gender pay gap will reappear upon retirement.
“Women have the pension odds stacked against them, so we need government and employers to help even the playing field, said Han Yik, Head of Institutional Investors Industry at the WEF.
“If women follow the same retirement plan as men, they fall short because on average they earn less and work fewer years. If they follow a more aggressive savings plan, they further lower their take-home pay, increasing the net pay gap,” Yik added.
Gender pension gap is expected to balloon to $400 trillion by 2050 in the world’s eight largest pensions systems (Australia, Canada, India, Japan, The Netherlands, China, UK and US).
Some of the measures to increase savings could include, expansion of coverage to more individuals, with a particular focus on low-income populations, women and employer-facilitated plans.
Moreover, leveraging technology to increase levels of savings, including automatic design features to help improve retirement outcomes and structuring of pension systems to provide further incentives to improve participation could help.
