Gender Risk and Employment Pension Plans in Canada

Current policy debates about Canada's retirement income system have failed to consider "gender risk" - i.e. the risk that Canadian women will bear a disproportionate share of welfare loss in old age. This paper argues that the continuing gender disparity in retirement income reflects Canada's heavy reli- ance on private pension instruments generated and shaped by labour markets. The author begins by looking at the relationship between gender and Canada's three-pillar retirement income system, noting that while public pensions distrib- ute benefits based on explicit policy goals, private pensions distribute them based on the "hidden hand" of market principles. She then considers the differential impact of employment-based pension plans on men and women as a function of the distinct patterns of male and female engagement in the labour market. Noting the close relationship between pension design choices and gender outcomes, she goes on to discuss the pension reforms introduced by Canadian governments in the 1960s and 1980s, in which those governments saw gender inequality as an issue to be addressed primarily by mandatory public plans rather than by voluntary private plans. Ultimately, the author contends, the gendered impact of Canada's pension system flows from the complex interaction between women's paid employment and their reproductive and caregiving work. A gender-equal pension system would recognize the unequal burden borne by women in labour markets and in families, and would pool and share the welfare risks which that inequality entails. Voluntary employment-based pension plans shaped by market imperatives at the enterprise level will not address these issues, in the author's view, nor will the type of individualized pension contemplated by the federal government's recent PRPP legislation providing for pooled savings vehicles to which employers do not contribute. What is needed, she argues, is a broad- based collective risk-sharing vehicle such as the CPP/QPP.