Key Takeaways

  • Canadian women are more stressed and less financially prepared for retirement than men.
  • The gender pension gap is driven by a combination of factors, including career interruptions, part-time work, and societal expectations, and contributes to higher rates of financial insecurity among women in retirement.
  • Pension design considerations, such as removing eligibility restrictions for part-time workers, allowing members to buy back past service, and providing reliable inflation protection, can help close the gender pension gap and make pensions more equitable.

Watch the webinar recording here.

Summary

HOOPP and the Canadian Retirement Survey. The Healthcare of Ontario Pension Plan (HOOPP) provides defined benefit pensions to healthcare workers, serving 475,000 members and paying $3.6 billion in pension benefits to retirees each year. HOOPP is unique in that 82% of its members are female and 32% are part-time workers. In addition to pension management, HOOPP and its partners conduct research related to retirement and the impact of pensions on Canadians, their employers, and the economy. One of these research initiatives is the 2024 Canadian Retirement Survey, which examines how Canadian individuals are preparing for retirement and their ability to save under the prevailing economic conditions. The results, summarized below, show that while many Canadians struggle to prepare for retirement, women in particular are more disadvantaged.

Findings.

  • Around half of Canadian women reported having less than $5,000 in savings, compared to only one third of men.
  • 64% of Canadian women say they are unable to set aside some of their income towards savings, compared to 52% of men.
  • Canadian employers with at least one woman at the executive level were 19% more likely than employers with no female executive to agree that eliminating the gender pay and pension gaps is important to Canadians’ social and economic wellbeing.
  • Employees with a defined benefit pension plan experience 10% lower financial stress and 9% higher financial well-being than those without a workplace pension.

Solutions. Small, but important, considerations in pension design can help close the gender pension gap and promote equality for all plan members. Examples include:

  • Removing pension waiting periods and other eligibility restrictions for part-time workers, since women are more likely to work part time than men.
  • Allowing members to buy back past service and creating more comprehensive disability benefits, since women are more likely to take time off from work for family care or due to disability or illness than men.
  • Providing reliable pension inflation protection, since women tend to live longer than men and often receive less retirement income, exposing them to an increased risk of declining purchasing power in retirement.
  • Large sector-wide pension plans generate economies of scale in pension administration, which makes it feasible to offer these additional provisions.