Thank you for having me.
My objective today is to provide you with some background about women's pension security, based on the research that I've been doing for several years. Specifically, I want to give you a picture of how retirement incomes have changed over the past decade, how women are currently faring relative to men in retirement income, and how we might expect retired women to do in the near and distant future.
The past 10 years have seen some dramatic changes for women entering retirement. This starts with a group of women who were born in the 1940s. This is the first group of women to have had full access to the birth control pill. They are much more educated than their mothers. They have fewer children and they've spent a lot more time in the labour force. When you take these changes into account, the nature of their retirement is also very different from their mothers' retirement.
First, the most recent women who are retiring have had longer and more stable careers than those of earlier generations. This has led to more retirement-age women having both Canada or Quebec Pension Plan benefits and employer-sponsored pension plan benefits.
I want to put some numbers on this. In 1996, 25% of senior married women received some sort of RPP income. In 2006, 43% of these women received RPP income once they were over the age of 65. For senior men, there was also some increase in the likelihood of receiving a pension as seniors. But the increase is not nearly as large. It goes from 66% of senior men in 1996 to 74% of men in 2006.
The increase that we saw in RPP receipts for women has benefited all women—those from low-income families, middle-income families, and high-income families. Everyone seems to be benefiting. When we combine it with the increases that we've seen in men's pensions, we can explain a very large portion of the general increase in seniors' income over the past decade.
There is also better access to the Canada Pension Plan. In 1996, only 56% of senior women picked up CPP. It's hard to say exactly how many were eligible and just didn't pick it up. In 2006, 73% of these older married women picked up CPP, and this raised their family income. What makes this a bit different is that the changes in the CPP receipt drove income increases for lower- income and middle-income seniors, more so than for those with higher incomes.
What might we expect for the upcoming retirees? Here we're thinking of the baby boomers as a large group that is currently entering retirement. If you look at the population as a whole, the percentage of paid workers that have pension plan coverage is generally decreasing. Most of that decline happened in the 1990s. From 1992 to 2007, overall pension coverage among paid workers fell from 45% to 38%, which obviously does not bode well for our future retirees. That falling trend, however, has been driven mostly by men and not by women.
There are a few numbers here to think about. In 1992 and 2007, roughly the same number of men, about three million, were members of registered pension plans. The number of female members increased from 2.2 million in 1992 to 2.9 million in 2007. The percentage of women covered by an RPP has remained fairly constant since the early 1990s, roughly around 34%. Keep in mind, we have more women participating in the labour force. The percentage of female paid workers, all employees with pension coverage, fell from about 42% to 39% over this period. That's a much smaller decline than we've seen for men.
One important thing I think to note when you're looking at women in the labour force is that, proportionally speaking, more women have pensions than men. Overall, the data suggests that the retirement future for women now looks better than it does for men.
There are a few other gender differences that I think are worth mentioning. First, women who are members of pension plans, private pension plans, are more likely than men to be in the public sector, and they're much more likely than men to have defined benefit pension plans. That usually goes with the public sector plans. Of course, these are the plans that provide people with security during a recession. You're not as concerned about stock market fluctuations with these plans.
Men, on the other hand, are much more likely to be in defined contribution plans in the private sector, and these are subject to general fluctuations in stock prices. Effectively, a defined contribution plan can be thought of as the same as investing in stocks and bonds yourself, and having to deal with the market. Here again we have some indication that women appear to be in a better position than men when entering retirement in the near future.
The only real difference that remains a concern is in the dollar amount that men and women are contributing to their pensions on an annual basis. Typically men have higher salaries and they're saving more in dollar amounts, even though they have the same savings rate if you look at the portion of their income that goes towards their pensions.
I would expect that the gap in pension contributions will close in the near future, just as we've seen the gender gap in wages slowly closing over time. If you look at wages right now, the average wage of a woman today is roughly 85% of a man's, and that's largely due to differences in the types of occupations that women have been entering historically. We see women's attachment to the labour force improving and increasing. In part this trend could be due to the availability of longer parental leaves, such as the Employment Insurance maternity and parental benefits, and in part it is due to the fact that men are taking on more household responsibilities. As this trend continues, we should expect the gap in wages to close, which I think will lead to the gap in pension contributions closing over time as well. Overall I think we have reason to be very optimistic.
To summarize all this with a blanket general statement, in recent years women retirees are faring very well relative to earlier generations of women. We should expect this trend to continue for some time. I think the evidence is there to give us reason to believe that. Furthermore, when we compare women to their male counterparts, I think women retirees are faring relatively well.
Thank you.