Canadian HR Reporter

CanaDian hr reporTer november 3, 2014 18 FeaTures COST: $69 + applicable taxes LIVE WEBINAR TIME: 12:00 - 1:00 p.m. ET REGISTER ONLINE: www.HRReporter.com/CPDCentre For more Live and On-demand Webinars, visit us online. ACCOMMODATING DISABILITY IN THE WORKPLACE: THE TRIALS AND TRIBULATIONS Know the right questions to ask and the best practices for the sensitive task of accommodating employee disability PRESENTER: Daniel Chodos | Whitten & Lublin DATE: November 12, 2014 WEBINAR SERIES OCCUPATIONAL HEALTH & SAFETY — A TIME OF CHANGE IN ONTARIO A roadmap for the signicant changes to Ontario OH&S legislation over the past 12 months — and what's coming. PRESENTERS: Jason Beeho and Ryan Campbell | Rubin Thomlinson LLP DATE: On Demand Jason Beeho Daniel Chodos PensIons Minding the pension gender gap Female employees are saving less than their male counterparts By Tom Reid r esearch has become an indispensable tool in the retirement savings busi- ness as we seek new insights to help plan members and em- ployers create better retirement outcomes. and the research can occasionally yield unexpected results. One of the biggest surprises is the difference between men and women in terms of saving for re- tirement. From savings expecta- tions to financial knowledge to total account balances, there is a significant gap between the sexes, with men demonstrating better behaviours on all counts, accord- ing to Sun Life research. ese numbers are even more surprising considering female em- ployment and education has been steadily rising for some time. e 8.1 million women working in 2009 (58.3 per cent of women) represented more than double the number of women employed in 1976, according to Statistics Canada. And, as of 2011, more than 59 per cent of all university degree holders aged 25 to 34 were women. While there can be a number of reasons for a gender retirement savings gap, plan sponsors may want to consider a deeper look at their own plans to determine if other factors are at play. Analysis is past year, Sun Life undertook a detailed analysis of capital accu- mulation plans in Canada, with data drawn from more than 5,200 plans and more than one million plan members. In looking at whether there were differences in account bal- ances and contributions between men and women, the results were startling: Men have average and median balances that are 40 to 45 per cent higher than those of women — and average and me- dian contributions that are 31 to 49 per cent higher. In addition, a separate study conducted by Sun Life Financial showed that when employees are leaving employer-matching con- tributions on the table, two-thirds are likely to be female. While these differences are closing slowly — the average account balance for women is growing at a slightly faster rate than that of men — the gap re- mains significant. Some of the differences in ac- count balances and contributions can be attributed to the fact that the average wage for women trails that of men. (It's about 70 per cent of male full-time wages, according to Statistics Canada.) But there may be other factors at play. A 2013 Sun Life survey about retirement education revealed a significant knowledge difference between men and women. When asked in which areas people lack sufficient knowledge to help with retirement planning, the top three results were: •51.5 per cent of women said they lack sufficient knowledge about how much retirement income they would need (versus 40.5 per cent of men). •43 per cent of women said they lack sufficient knowledge about how taxes affect retirement sav- ings/income (versus 36 per cent of men). •37 per cent of women said they lack sufficient knowledge about government programs (such as Canada Pension Plan, Quebec Pension Plan and Old Age Secu- rity), versus 31 per cent of men. In addition, women are nearly twice as likely as men to say they don't know what the financial as- sets of their households are, and more likely than men (41 per cent versus 32 per cent) to be dissatis- fied with how much they are sav- ing for retirement. Women also have lower expec- tations for their savings in retire- ment. On average, they expect to save less than men for retirement and they expect a greater propor- tion of retirement income to come from the sale of their home (50 per cent versus 40 per cent for men). While the nationwide wage gap between men and women is beyond the control of individual plan members and sponsors, the gap relating to financial knowl- edge and retirement income ex- pectations is not. For this reason, targeted education about the need to save and the benefits of increas- ing contributions may be a good starting point if a gap exists in your group plan. Gender-check your plan Times have changed significantly and women need to be the authors of their own financial security in retirement. In 1976, just 8.5 per cent of op- posite sex couples had a female spouse with the higher income. By 2010, that number had risen to more than 31 per cent, accord- ing to Statistics Canada. Women are also more likely to lead lone- parent families, with eight in 10 of such families female-led, ac- counting for nearly 13 per cent of all families in Canada. Even in situations where a spouse might reasonably rely on his partner for retirement income, financial security is no sure thing. e Canadian government esti- mates almost 41 per cent of mar- riages will end in divorce before a couple's 30th wedding anniver- sary, with all of the splitting of as- sets and additional costs that that entails, according to Employment and Social Development Canada. The need for plan members of both sexes to save for their re- tirement is a real one. Employers should be mindful of any gender- related knowledge or contribu- tion gaps that may exist in their retirement programs. If a gap does exist, the group plan provider can help assess the need for education or outreach to improve financial literacy and increase ongoing con- tribution rates. Tom Reid is senior vice-president of group retirement services at Sun Life Financial. For more information about the Designed for Savings re- port, or to learn more about Sun Life's Group Retirement Services, visit www. sunlife.ca. $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Female Male AVERAGE ACCOUNT BALANCE BY GENDER AND ACCOUNT GROWTH 2010 2011 2012 2013 6% 11% 16% 4% 9% 13% total annual contributions averaGe/MeDiann Male female PlAn MeMBeR Average $5,610 $3,775 Median $3,400 $2,590 PlAn sPonsoR Average $4,600 $2,245 Median $3,365 $3,140 AnnuAl Contributions by gender Source: Sun Life Source: Sun Life

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