Thank you for inviting us to present at today's meeting.
There are many issues, in fact, that we can discuss under the general theme of women and pension security, ranging from the high poverty rates among women living on their own to the longer average life expectancy of women compared to men. However, in light of the time restrictions, we will focus on the issue of employer-sponsored pension coverage in Canada, and particularly on the difference between men and women working in the private sector.
We note that while statistics indicate that the percentage of women covered by a private pension plan has increased over time, there is still a substantial gap between women and men. As we'll discuss, we believe this gap is caused by a combination of the industries women tend to work in and the percentage of women working part time. We believe there is a need to take steps to increase pension coverage levels for women, and for Canadians as well, and we have some suggestions on how to accomplish this.
Many studies have shown that the number of women covered by employer-sponsored pensions has been rising over time. In 1978, less than 15% of the female working-age population were active members of workplace pension plans. The number has increased to over 20% in 2008. This trend is driven both by increasing participation of women in the labour force and by revisions to pension legislation that require employers with pension plans to include part-time workers.
At first glance, the gap between men and women has narrowed substantially over the past three decades. Indeed, the 2008 numbers from Statistics Canada show that the overall coverage is very similar for male and female workers. However, if we exclude the public sector and focus only on the private sector, the coverage among women, at 23%, remains significantly lower than among men, at 32%.
There are two main reasons. First, female employment in the private sector tends to be more concentrated in the service sector, which consists of a lot of small firms without pension plans. In contrast, a larger proportion of male workers are employed in the goods-producing sector, which tends to have larger and more heavily unionized employers, who are, therefore, more likely to offer pensions to their employees.
The second reason, perhaps a surprising one, is the difference between male and female workers within industries. To give you an example, in 2008, 42% of men working in the manufacturing sector had pension coverage, compared with only 33% of female workers in that sector.
In sum, to increase pension coverage among women working in the private sector, we need to answer two fundamental questions. First, how can we increase pension coverage in small and medium-sized companies in the service sector? Second, what type of pension system would be most helpful to non-standard and part-time workers?
I will now turn things over to Martine, who will discuss some possible solutions to increase coverage in light of the situation I have just described.