Auto-enrolment could worsen pension inequality - report

report is here

Reports like this really annoy me.

The points I make below relate to averages:

-most retired women live in mixed-sex households with their spouse and share household income from whatever source
-Women live longer than men, and draw down state pensions for longer
-Women outlive their husbands, and get survivors’ pension benefits or remaining ARF tax free
-All assets, pension or otherwise, are tax free transferred to wife on death
-you can get a disregard for time spent caring for children for the contributory state pension. This benefits women.

Dr. Strangelove, you're pointing to factors which suggest that women need greater provision for retirement income than men do (in short; because they live longer) and the NWC Report is pointing out that the auto-enrolment system is designed in a way that will tend to give them less provision for retirement than men get. So, yeah, there is an issue about whether the scheme is optimally designed.

I get that the disadvantage for women may be partly offset, at least for married women, by the factors you point to. But perhaps it would be better if the disadvantage wasn't there in the first place?

Dr Strangelove said:

-you can get a disregard for time spent caring for children for the contributory state pension. This benefits women.

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TomEdison said:

But perhaps it would be better if the disadvantage wasn't there in the first place?

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Over a lifetime women spend more time caring for children and men spend more time in paid employment. On average.

This is true in every human society ever known with a labour market.

This inevitably results that (on average) men having more accumulated financial wealth and quite frankly AE will neither cure nor increase this.

The report fails to show any actual difference in living standards between men and women in retirement.

This is probably because:
-Married women share their husbands’ higher incomes in retirement
-Widows have survivors’ benefits and get their husbands’ assets tax free.

FWIW I live in a typical household where my wife will have a lower pension than I do as she took time out to raise our kids.

The relative contributions of our incomes in retirement will be completely irrelevant as we intend to share it.

The auto-enrolment system is a defined contribution system.
The more you put in, the more you get out.
The longer you live, the more you will need.

So men or women who take time off paid work will be disadvantaged by the system.
Men or women who live longer will be disadvantaged by the system.

What we need is communism in this country. Everyone should get the same salary and same pension irrespective of the work they do.

TomEdison said:

is designed in a way that will tend to give them less provision for retirement than men get.

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The PRSI system offsets this though.

I pay the same PRSI contribution as the woman who sits beside me at work even though statistically she’s likely to live three years longer than me.

Likewise our contributions to our employer’s funded DB pension scheme are the same even though she will probably draw down more from it.