Achieving Retirement Equality for Women

Feb 28, 2020 / Amanda Chase, Horsesmouth Assistant Editor

Globally, only 21 percent of women workers (25 percent U.S.) believe they are on course to achieve their retirement income needs, according to a new report, The New Social Contract: Achieving retirement equality for women, based on an annual survey of 15 countries spanning Europe, the Americas, Asia, and Australia. It is a collaboration between Aegon Center for Longevity and Retirement (ACLR), and nonprofits Transamerica Center for Retirement Studies (TCRS) and Instituto de Longevidade Mongeral Aegon. “Women’s workforce participation and access to career opportunities have soared in recent decades,” said Catherine Collinson, CEO and president of nonprofit Transamerica Institute and TCRS, and executive director of ACLR. “However, the gender pay gap persists. Combined with women taking time out of the workforce for parenting and caregiving, it undermines their ability to achieve a financially secure retirement and increases the risk of living in poverty.”

Only 26 percent of working women across the globe (26 percent U.S.) are extremely or very confident they will be able to retire with a comfortable lifestyle. The Aegon Retirement Readiness Index (ARRI) measures preparedness on a scale of 0 to 10. In 2019, women globally had an ARRI score of 5.8, up from 5.5 in 2014. In the U.S., the ARRI among women increased from 5.8 in 2014 to 6.1 in 2019.

At a corporate level, the gender pay gap has taken up increasing headline space. As a result, some of the world’s largest companies, such as Starbucks, Apple, Salesforce, Intel, and Adobe have full gender pay parity. Additionally, there has been progress in the opportunities for women in senior leadership positions and as of 2019, 87 percent of global businesses had at least one woman in a senior management role. Despite these global strides, many of the issues explored in the 2014 report remain true today—the most basic of these being that women are less prepared for retirement than men. Globally women earn on average 63 cents for every dollar earned by men. Since 2006, the Global Gender Gap Report, published by the World Economic Forum (WEF), has tracked progress in closing gender gaps. WEF estimates that, based on today’s status and the trend observed over the past twelve years, it will now take 202 years to close the gap entirely. The result of this lifetime inequality between men and women means women are less prepared financially for their later years.

In developed and emerging nations, the gender gap in educational attainment is almost closed. Household welfare, childcare, and caregiving are clearly an important part of societal well-being. Women are shouldering far greater responsibility than men in this often invisible and unpaid workload. A study from the International Labour Organization5 (ILO), representative of 95 percent of the global population, shows that both women and men identify the biggest challenge for women in paid work as being the struggle to balance it with family responsibilities. Additional factors identified by the study, such as the lack of affordable childcare, lack of employer flexibility, unequal pay and unfair treatment only add to the challenges women face.

You can find the full The New Social Contract report here.

 

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