Administration

Combatting the Wage Barrier with Retirement Planning

Plan sponsors and advisers play critical roles in addressing the gender pay gap and motivating women to save for retirement.

By Amanda Umpierrez editors@plansponsor.com | April 03, 2017
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As progressive, societal reforms are implemented every day, one issue seems to remain a constant in our modern world: the gender pay gap.

While the wage difference is tightening in each passing year, women still need to shell out more of their checks than their male colleagues—all just to accumulate an equal amount of savings.

But, why?

According to the NerdWallet report, “Pay Gap Closing but Women May Face Retirement Shortfall,” the problem behind the gap isn’t necessarily due to gender, but instead, the higher chance men have in gaining upper management positions, and as a result, earning more than their women colleagues. Life factors that lead to career breaks, including women aiding as caregivers and requesting maternity leave, serve as influences to this shortfall.

“When you add that to the fact that women are living longer than men on average, and then also taking career breaks to raise children or to care for family members, elderly parents and things like that, all of those add up a retirement savings gap,” says Arielle O’Shea, investing and retirement specialist at NerdWallet.

In order to combat these challenges head on, Transamerica Center for Retirement Studies released a study on “Seventeen Facts About Women’s Retirement Outlook…and Eight Steps to Improve It,” listing statistics that add to the wage barrier. Survey findings were selected from their annual Retirement Study of American Workers.

Facts presented included figures on women understanding retirement-based information, the future of Social Security, and 401(k) and other benefit options for part-time workers, among others. 

According to the report, while 68% of women are offered a 401(k) or other type of employee-funded plan, 26% of women surveyed are part-time workers, and therefore, less likely to obtain workplace benefits.

“Women are more likely to work part-time than men, and as we all know, part-time workers are less likely to have success in retirement benefits,” says Catherine Collinson, president of Transamerica. To combat this, Collinson says plan sponsors may look to expanding eligibility for part-time women workers, instead of solely offering the benefit to full-timers. “If there is any way to extend eligibility to their part-time workers, that could be very helpful to women,” she says.

NEXT: Making savings easier for women

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