HUGH Reid, general manager of JN Life Insurance, has urged employers to consider automatic enrolment of employees in a pension scheme to improve the circumstances of their workers, especially women in retirement.
According to Reid, there are several factors that leave women more vulnerable than men to old-age poverty, such as living longer and being more likely to be caregivers for others at that age.
He adds that an automatic enrolment policy would ensure that many are protected from poverty when they retire.
“Automatic enrolment is when an employee who meets certain requirements is made a member of a workplace pension scheme without needing to ask to be part of it,” said Reid
“Auto enrolment ensures that savings occurs alongside the pay cheque, and significantly simplifies the process for identifying and starting a retirement savings account. At the same time, the opt-out option maintains individual choice and responsibility for the decision to participate in the plan.
“If employers considered auto-enrolment it would definitely go some way in protecting those who will be vulnerable, especially women from certain economic backgrounds. It will also reduce the burden on the State because, as we know, the monthly payment from the National Insurance Scheme is not enough to provide for someone in their golden years — and ultimately the State and taxpayers will be called on to fill any gaps. Therefore, we need to have a serious conversation about retirement planning,” added Reid.
He was supported by gender and development advocate Ruth Howard who pointed out that women are more vulnerable to old-age poverty and that more, therefore, needs to be done to protect them during their ‘golden years’, especially those working in the informal economy.
She said in those informal economy cases, women earn less than men although they are doing the same work. The gender specialist pointed out that women also make up the majority of the lower categories of the workforce and so command less pay.
“The Jamaican dollar of today doesn’t carry the same value as the Jamaican dollar in the 1970s and 80s. So, women living off already-low pensions from contributions made during the 70s and 80s face a very real challenge of surviving with today’s rising inflation and sliding dollar,” said Howard.
“If we really want to help women be better prepared for retirement then we need to address the issue of low pay for women. We have to stop undervaluing women’s work and pay them [equally] to their male counterparts,” Howard added.
Citing a Pension Industry Association of Jamaica (2022) Concept Paper on Auto Enrolment in Jamaica, Howard pointed out that many women are also likely to have the burden of caring for their family members who are most vulnerable.
“Many households in Jamaica are female-headed, which means it is women who are supporting and providing for their families. That’s happening in a context where most of the care burden for children, the elderly, the disabled, or the indigent falls on women.
“So we end up with a situation where these women’s already meagre resources are being stretched to take care of more dependents — meaning less money to contribute to pension savings, and also meaning less pension savings to cover the cost of living and the care roles that these women often continue to play well past retirement age,” added Howard.
The Pension Industry Association of Jamaica (2022) Concept Paper on Auto Enrolment in Jamaica notes that because women live longer than men they are more likely to be affected by old-age poverty.
The concept paper notes that women are 23 per cent less likely to have economic opportunities than men. It adds that women earn only 63 per cent of their male counterparts’ income despite doing the same job in many instances.
It also states that the situation is exacerbated by the fact that more women leave tertiary institutions than men and are sometimes saddled with student loan debt. It notes that the situation has taken on more significance since the COVID-19 pandemic because many women are expected to be stay-at-home caregivers. It adds that with many people not having enough retirement savings, even more will be required to work beyond age 65.