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Shades of Grey: Law and Aging in the Contemporary Workplace , April 28, 2012, Toronto, Ontario

GENDER RISK AND EMPLOYMENT PENSION PLANS Elizabeth J Shilton Senior Fellow, Centre for Law in the Contemporary Workplace, Queen’s Faculty of Law. Shades of Grey: Law and Aging in the Contemporary Workplace , April 28, 2012, Toronto, Ontario.

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Shades of Grey: Law and Aging in the Contemporary Workplace , April 28, 2012, Toronto, Ontario

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  1. GENDER RISK AND EMPLOYMENT PENSION PLANSElizabeth J ShiltonSenior Fellow, Centre for Law in the Contemporary Workplace, Queen’s Faculty of Law Shades of Grey: Law and Aging in the Contemporary Workplace, April 28, 2012, Toronto, Ontario

  2. Pension Plans as Risk Management Tools:The Risks of Retirement • Healthrisks • Investmentrisks • Generationalrisks • Genderrisk

  3. WHAT IS GENDER RISK? The riskthatwomen’s retirement incomeswillbelowerbecause of theirgender Outline of Presentation: • How well do women fare within the current employment pension system? • What accounts for gender differences here? • What could we do about it?

  4. How well do womenfarewithin the employment pension system?

  5. Pension Plan Coverage: Employees

  6. Benefits: Gender Impact Varies fromPillar to Pillar

  7. Female to Male Pay Ratios, Statistics Canada

  8. Why does this happens?

  9. Somehistorical and legalfacts about employment pension plans • Why do we have employment pension plans? • Becauseemployerswantedthem • Recruitment and retentiondevices • Linked to mandatory retirement

  10. Legal Framework • The legalframeworkenables employer control • Employer decides: • whether to offerthem • whether and when to terminatethem • whattheirbenefit structure willbe • Legalrulesguarantee employer autonomy, subject to regulatory minimum standards and collective bargaining

  11. Gendered profile of pensionedemployee Employeewith DB pension Women Shorter total time in labour market Breaks in service, more job turnover ‘Time out’ early in career to bear and care for smallchildren Earlier retirement Lowerwages and flatter wagecurves • Long time in the labour market • ‘Career job’: Lengthy and continuous service with a single employer • Higherwagelevels and steeperwagecurves

  12. Gender Impact in defined contribution plans • Size of DC accountat retirement isdirectlyrelated to labour marketearnings and time in the labour market • Earningsearlier in a career are more valuablethanearningslater in a careerbecausethey have more time to attractinvestmentincome • No guaranteed pension – exposure to longevityrisk has greater impact on women

  13. What could we do about it?

  14. GenderEquality and Pension Reform • 1960s : improved pension security for ‘male breadwinners’ • 1980s: ‘family’ approach (mixed-sex couples) • Antidiscimination provisions • Survivorbenefits • Pension/creditsplitting

  15. Pooled Retirement Pension Plans (PRPPs): StepBackward for Women • No guaranteed pension • No longevityriskpooling • Loss of gender correctives in pension regulatorystatutes • No requirement for employer contributions • Will employer abandon better plans in order to embracePRPPs?

  16. A final thought…. Pension design choices have ‘far-reaching normative, political and tangible economic implications for women (and men)’. Bernd Marin in Women’sWork and Pensions: Whatis Good, Whatis Best? DesigningGender-Sensitive Arrangements (2010)

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