The gender pension gap, or the fact that women tend to live on a lower income in retirement than men, is well-known and is usually measured by combining all sources of pension income, whether public or private, pay-as-you-go or funded. However, little is known about the specific contribution of funded and private retirement savings arrangements to this gap. Given the growing weight of retirement savings arrangements in the provision of retirement income around the world, understanding how they may contribute to the gap today and into the future is of paramount importance.

The gender pension gap, or the difference in retirement income that men and women receive, remains substantial at 26 per cent on average in the OECD. It is a clear result and signal of gender inequalities along the life cycle, despite the significant progress made to reduce them in pension systems over the last decades. Retirement savings arrangements are playing a growing role in this gender pension gap.

The gender pension gap observed today is mainly the result of past work history differences between men and women. Differences in labour market participation, part-time employment, wages, and career length translate into different pension outcomes down the road. The transmission mechanism from the labour market to the pension system is direct with retirement savings arrangements, which depend upon putting aside part of individuals’ total earnings to finance their retirement. Given the growing importance of these arrangements in the provision of retirement income, policy settings should at least ensure that their design does not increase the gap, putting women at a further disadvantage.

This chapter assesses the difference in retirement income that men and women receive across OECD countries, and the extent to which retirement savings arrangements may contribute to this overall gender gap. It explores the main drivers of this gap in the labour markets, before looking into other factors that can create a gap in retirement income coming from retirement savings arrangements.

This chapter explores the literature to shed light on some drivers of the gap in retirement income between men and women, beyond those directly linked to the labour market. It discusses some of the cultural and behavioural factors which may play a role in the gender pension gap by affecting individual decisions linked to retirement, and looks at the influence of societal interactions on retirement outcomes by gender.

There is a well-documented gap in retirement income between men and women. Women generally receive less than men from retirement savings arrangements in part because they tend to have earned less and have had shorter careers than men. But a key question is whether these are the only factors that explain the gender pension gap. This chapter uses case studies of three OECD countries to explore which factors drive the gender gap in pension coverage, assets and entitlements in retirement savings arrangements for working-age people, to determine what aspects of pension policy design might explain the gender gap in pensions.

This chapter explores the extent to which the design of retirement savings plans may widen or narrow the gender pension gap. It examines the rules and parameters of retirement savings plans in OECD countries with respect to enrolment, contributions, financial incentives, the accumulation of assets, the pay-out phase, and communication and financial education, to see whether these rules and parameters may affect men and women differently. It also provides case studies illustrating the potential impact of different initiatives to reduce the gender pension gap in retirement savings systems.

This chapter discusses policy options available to address the gender gap in retirement savings arrangements. While the pension system itself cannot correct for all of the factors driving the gender pension gap, its overall design should not put women at a further disadvantage. After summarising the various drivers that directly contribute to the gender pension gap within retirement savings arrangements, the chapter looks at various policy options that can address gender gaps at each stage of preparing financially for retirement.