I was just going to say that I have looked at some of the testimony of previous witnesses and I think they have given you a very comprehensive view of both the pension system and the statistics relating to women in particular. So rather than repeat what they have said or give you another version of that, what I'd like to do is concentrate on what I think are the key issues relating to women and pension security.
I should say here that I'm an independent consultant and a researcher on social policy issues. And although I'm a research associate with the Canadian Centre for Policy Alternatives, the CCPA does not take a position on women and pension security, so what I'm going to say represents my own views and not those of the organization.
There are three key reasons why women's concerns about pension security are different from those of men.
First of all, women's average earnings are generally lower than those of men. And that means that pensions that replace a small percentage of earnings are probably not going to be adequate for an income in retirement. For example, as you know, the Canada Pension Plan provides a retirement pension that's equivalent to 25% of the contributor's average annual lifetime earnings, up to a maximum of $908.75 a month. But the average monthly retirement pension being paid to men who retired in May 2009 was $564, and for women it was only $391. In other words, women are getting less than 40% of the maximum benefit. That difference, of course, reflects the fact that many women have spent less time in the paid workforce over their lifetimes than men have, but in particular it shows that women have lower earnings than men.
While it would certainly help women, improving the replacement rate of the CPP--which you've just heard from the FTQ representative and probably from others--would still be an earnings replacement plan. That means that those with lower earnings would receive lower pensions from the plan.
Secondly, women have a different pattern of paid and unpaid work than men do, and this has to be taken into account in the design of retirement income systems. The first tier of the retirement income system—that's OAS and GIS—is intended to do that, but unfortunately, the maximum benefit that an individual can receive from OAS and GIS combined is well below the poverty level.
The objective of this part of the system is to provide pensions for those who have had only limited involvement in paid employment as well as to supplement earnings-related benefits for those who have inadequate employment-related pensions. OAS is paid to individuals. It doesn't depend on labour force participation and it doesn't depend on the earnings of a spouse. It gives women a pension in their own name and it respects women's economic autonomy.
Let me just say here that l'm struck by the fact that some witnesses who have appeared before you have suggested that the way to solve the pension security issue for women is to improve benefits for women in their so-called traditional roles as wives and mothers. In other words, the implication is that women could achieve pension security only through attachment to a man. I think that's a problematic approach.
Some witnesses have suggested giving women higher pensions when their husbands die, and they've proposed that women who don't participate in the paid workforce should somehow be squeezed into the earnings replacement part of the public pension plan, the CPP, even though they don't have any earnings to be replaced.
The so-called “pensions for homemakers” proposal has actually been around for more than 30 years. At the time of the last great national pensions conference in 1981, better pensions for women was a key item on the agenda, pushed at that time by Monique Bégin, who was Minister of Health and then responsible for pensions, and pensions for homemakers was a hot topic then. But the world has changed, as we all know, and I think we need to base proposals on today's reality and not what it might have been 30 years ago.
The reality today is that 82% of women in the main child-bearing years--that is, ages 25 to 44--now work outside their homes. The design of the CPP ensures that women are not penalized if they take time out of the workforce to have children or to remain at home or even to work part-time while their children are young, because the CPP rules allow them to exclude those years when they had a child under the age of seven from the calculation of their average earnings on which their retirement pension will be based. But we need to extend the same consideration to those women who are forced to retire early to care for frail elderly or family members with disabilities. What I think we need here is the implementation of a caregiver dropout, which would accommodate the unpaid work that those women do, because they need better pension security too.
The third point is that women tend to live longer than men. That means that the funds they need to accumulate to provide a lifetime income will be larger than those of men and that inflation indexing to protect them against the erosion of their benefits is particularly important. Some of the proposals that have come up in the past have suggested getting rid of indexing. It would be particularly difficult for women if that were done.
As I think you've heard, only 38% of Canadians—that's 38% of men and 39% of women—belong to a workplace pension plan. As well, only 31% of people who are eligible to contribute to RRSPs actually do so. Currently--these are 2007 figures and slightly different from the ones you heard from the FTQ just now--women seniors get 28% of their income from the first tier of the pension system, which is OAS and GIS. Senior men get 18% of their income from that source. In fact, more than 48% of the income of women aged 65 or older comes from government transfers. Clearly the public pension system is vital for the financial security of women in their old age, and I don't expect that to change.
As we all know, more women than ever before are in paid employment, but perhaps what some of us don't always recognize is that 40% of women's jobs are what we call “non-standard jobs”—that is, they are part-time, contract, and seasonal work, employment through temporary help agencies, self-employment working on their own, or multiple jobs with a series of different employers to make ends meet. Many of these jobs are poorly paid, without benefits such as pensions, and there is little or no job security. Women's lower incomes make it difficult to save for retirement on their own through RRSPs. All of this, of course, is going to be reflected in the kinds of incomes women can expect to get when they finally leave the paid workforce.
So it seems to me that the best hope for improving pension security for women lies in looking at improvements in the first two tiers of the retirement income system—that is, public pensions such as OAS, GIS, and the CPP.
Thank you.