As we continue working towards gender equality, women's retirement security is an important part of the conversation
HOOPP partners with Abacus Data annually to survey Canadians about their views on pensions, retirement, and their personal finances in the context of the broader economy. The research we release helps to raise awareness around the value that good pensions like HOOPP bring to our members and the communities they live and work in.
This year, we found that women tend to start saving for retirement later than men, and they generally have less money in savings. Unretired women are also more likely to feel unprepared for retirement and to experience anxiety, fear, and frustration because of their financial situation.
There are a number of factors at play here: women make less money than men, with an average annual income gap of 29 percent in 2022 (meaning women made $0.71 for every dollar made by men), and they’re also more likely to work part-time or to take time off work in order to have a child or care for their family. These social and structural inequalities, alongside the rising cost of living, leave women in a much worse position at retirement.
When preparing for retirement, it is best to save often and save early. For many women in Canada, that is easier said than done. If you are struggling to afford childcare or to put food on your table, saving for retirement is not top of mind. Unretired men tend to be ahead on saving for retirement from an early age, with 57 percent of men between the ages of 18 and 34 having set aside money for retirement, compared to 45 percent of women in the same age range.
That’s where pensions come in. In fact, defined benefit (DB) pension plans, like HOOPP, can play a crucial role in bridging the gaps caused by gender inequality. As a guaranteed source of income during retirement, a pension can provide peace of mind to members, leading to lower levels of financial stress.
The 2024 Canadian Retirement Survey found that almost half (49 percent) of unretired women with a pension feel prepared for retirement, compared to just 29 percent without a pension. Our research also shows that access to a workplace pension plan enables Canadians to save more efficiently – just 29 percent of those with a workplace pension report having less than $5,000 in savings, compared to almost half (48 percent) of those without.
Pensions, especially those that follow the Canadian pension model, deliver significant value to their members. When women have access to these kinds of pensions, they’re able to benefit from things like risk pooling, professional investment discipline, and fiduciary governance – a few of the key drivers that result in a higher pension income for less cost than other retirement savings vehicles.
This research makes the value of good workplace pensions clear: they enable women (and all Canadians) to save more efficiently and help them feel more prepared for retirement. What’s more, Canadians are willing to pay to get a pension. Despite the current high cost of living, a majority of Canadians (70 percent) would trade salary for a pension or an improved pension.
Better access to pensions is key to improving retirement outcomes for women and all Canadians. But pension plans also play a fundamental role in ensuring women have a more equitable pension experience.
For example, more than 80 percent of HOOPP’s active members are female, and our plan is designed to work for them – through all of life’s planned and unplanned changes. HOOPP members can continue to contribute to their pension during a leave of absence, like a maternity leave, taking time off work during a family emergency or if they need to reduce their hours. In fact, almost a third of active HOOPP members currently work part-time, building a secure financial future one shift at a time. By offering similar supports for members, more pensions can help bridge the gap for their female members.
In an uncertain economy, Canada model pensions like HOOPP continue to provide members with something invaluable: stability. And that’s something all Canadians deserve. By improving access to pensions and introducing better supports for members through all of life’s changes, we can create a more equitable and stable future for all.
Ivana Zanardo is the head of plan services at the Healthcare of Ontario Pension Plan (HOOPP). HOOPP serves Ontario’s hospital and community-based healthcare sector, with more than 670 participating employers.
