By Azka Ali, David Knox, Yvonne Sonsino

• The gender pension gap is a problem in most retirement income systems around the world.
• The causes and compounding effects are related to employment and pension design as well as socio-cultural issues.
• These issues need fixing at a multi-stakeholder level by HR and pension leaders, governments and women themselves.

The gender pension gap exists in virtually every retirement income system around the world. The range is remarkable, with Japan having an almost 50% gap whereas Estonia’s gap is less than 5%. By today’s values, on an average wage this gap can represent $8,400 per year in the US and £6,000 per year in the UK.

Causes of the gender pension gap
1. Employment related
There is a direct relationship between the pensions arising from occupational pension schemes and employment patterns. Women’s pensions are lower for the following reasons:

• Shorter careers due, on average, to a slightly later start in the labour force and/or career gaps for childbirth, and earlier retirement.
• More part-time work, which might be choice driven but is often to cover the requirements of the parent and/or caregiver role.
• The long-term effects that limited employment for a number of years has on promotion opportunities and pay progression.
• Lower average salaries for full time women workers, despite 72% of organisations globally reporting that pay equity is part of their compensation strategy.
  The average wage in women dominated industries, such as as hospitality, health and education is lower than in industries dominated by men.

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