Women, Pensions and Economic Wellbeing

1
Women, Pensions and Economic Well-being

• Developed by Isla Carmichael, Ph.D.
• Pensions at Work, 2005

2
Older Women the Poorest

• In 1997, single women over 65 had an average
  income of about 18,000, just over 75 of the
  income of single men over 65
• Almost a quarter of women (24) over 65 are below
  the low income cut-off, compared to under 12 of
  men. This means that they spend more than 20 of
  their before-tax incomes on food, shelter and
  clothing
• Over half of these women live alone, compared to
  one in three single, elderly men
• Women over 69 may be even poorer

3
The Three Pension Pillars

• The Canada Pension Plan - Q/CPP
• Registered pension plans or workplace plans -
  RPPs
• Registered retirement savings plans (RRSPs)

4
The Canada Pension Plan

• CPP was introduced in 1967.
• Since 1980, low income rates among seniors are
  shrinking.
• Compared to other OECD countries, the costs of
  our income security programs are modest and will
  peak below levels expected in other western
  nations (OECD, 1996).
• Increases in seniors income are at the lower end
  primarily because of the CPP (Myles, 2000).

5
Women Depend on the CPP

• In 1997, 64 of all income received by senior
  women came from government transfers. 60 of this
  was from the public pension system Q/CPP and
  OAS.
• Only 39 of income received by senior men came
  from the same sources since they also have
  workplace pensions and often employment to
  support them.

6
Does CPP Work in Womens Interests?

• Because CPP contributions are based on
• hours of work and wages
• In 1997, 91 of men were collecting benefits
  compared to 76 of women - women may collect up
  to 41 less than men.
• Only 60 of women contribute to CPP compared to
  72 of men and overall, womens contributions are
  lower.

7
Workplace Pension Plans

• Today, almost as many women as men are members of
  registered pension plans, because
• The proportion of men covered has dropped sharply
  in the last twenty years because of the decline
  of the manufacturing and resource sectors and
  decreasing numbers of unionized men.
• The proportion of women with pensions has risen
  because of increasing numbers of women in the
  paid workforce, changes to laws to include
  part-time workers in plans and increasing numbers
  of unionized women in the public sector as well
  as in non-traditional work and in the service
  industries.

8
Workplace Pensions a Collective Approach to
Deferring Wages

• 87 of pension plan members are in defined
  benefit plans (DB) which guarantee a benefit for
  all based on years of service and wage level.
• DB plans can be tailored to specific needs of
  workers including women.
• Defined contribution (DC) plans let the employer
  off the hook for guaranteeing any benefits.
• Unions can bargain for joint trusteeship of the
  plans for more control over benefits and
  investment of the fund.

9
Organizing Pension Funds

• In Canada, public sector unions are leading the
  way in taking control of pension funds through
  joint trusteeship.
• The assets of pension funds in Canada are 540
  billion.
• Control over investment means investing wisely
  for the long term so that our future benefits are
  protected and our jobs remain in a strong
  economy.

10
Pensions and Unions

• It isnt a direct correlation, but if you are in
  a union, you are very likely to have a pension
  plan.
• Since more women (58) than men (36) belong to
  public sector plans, women tend to contribute
  more and have more generous access to benefits.
• However, since women earn less than men and
  accumulate fewer years of service, their benefits
  are predicted to be lower.

11
RRSPs and Private Savings

• The more income you have, the more able you are
  to contribute to RRSPs.
• 40 of women contribute versus 60 of men.
• Few men contribute on behalf of their partners.
• Returns mirror stock market returns since RRSPs
  are largely invested in the markets the
  individual bears 100 of the risk.

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The Bottom Line

• Our CPP benefits are lower because we have lower
  wages and less attachment to the workforce.
• Our pension benefits are lower for the same
  reasons.
• RRSPs alone or defined contribution plans - are
  risky to depend on for retirement.

13
The Wage Gap

• The wage gap brings down our future pension and
  CPP benefits.
• Womens earnings are well below those of men in
  all occupations ranging from 65 - 80 of the
  male standard.
• The gap is very slowly narrowing, mainly because
  the male wage is declining.

14
Job Segregation

• Most women work in female designated jobs. Job
  segregation is the main cause of the female wage
  rate.
• When men do your work it often is at a male rate
  of pay.
• Labour tribunals reinforce job segregation
  through certification of bargaining units
  separating part-timers from full-timers and
  clerical from technical staff classifications.

15
Attachment to the Workforce

• Womens pension benefits are also lower because
  we spend less time in the workforce and more time
  in unpaid work.
• Most women have one full-time job.
• However, the number of women in non-standard jobs
  is growing fast. Many are young women in the
  service sector with no pension arrangements.
• Currently, 41 of working women compared to 29
  of men are employed in non-standard jobs.

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Solutions..

• Get a union
• Raise female wages
• Reduce female absences from workforce through
  shared childcare, eldercare and parental leave
  arrangements
• Strengthen rights and benefits for part-timers
• Strengthen workplace pension plans
• Lobby for a stronger public pension system

17
Organizing Unions

• Almost half of union members are women one in
  three working women belong to a union.
• Unionizing brings higher wages for women - even
  in such low-paid jobs as childcare.
• Women in unions also tend to have pensions and
  benefits.
• Unions are the vehicle to better pensions.

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Strengthening Pension Plans

• Good pension plans are defined benefit (DB) not
  defined contribution (DC).
• Ask your union about a multi-employer pension
  plan that could help women in smaller workplaces.
• Ask your employer when they last took a
  contribution holiday.
• Start a campaign for joint trusteeship of your
  pension plan.
• Ask your union about capital investment
  strategies for pension funds is there a union
  agenda?

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Strategies for Strengthening Pension Benefits

• Inflation protection
• Employee and employer contributions for
  leaves-of-absence
• Credits for some LOAs (sick leave etc)
• Portability of pensions
• Fair credit for part-time work
• Survivor pensions without penalty
• Same-sex benefits

20
Pension Fund Investment

• While women work harder, organize harder and
  bargain harder, our pensions are often invested
  in companies that take us down the road of a low
  wage economy.
• OMERS pension fund has recently invested in
  privatized schools where workers are non-union
  with lower wages and parents have no say in the
  quality of education for their children.
• We need to take more control over our pension
  funds, through joint trusteeship, so that
  sensible investment strategies can complement our
  struggle for better public services, fairer wages
  and better working conditions.

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Finally .

• Make sure that your bargaining committees have
  female representation
• Make sure pension issues are on the bargaining
  agenda
• Make sure that pension education is available at
  all levels of your union