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Action needed to close retirement savings gaps

02 August 2022 Allan Gray

Women typically reach retirement with far less saved than men.

This stark reality for many women in South Africa comes into sharp focus this month as the country observes Women’s Month.

“Unfortunately, this is not a positive picture worthy of celebrating. Important conversations and urgent action are now more necessary than ever to equalise the playing field so that we can close the retirement outcomes gap between men and women,” says Saleem Sonday, head of group savings and investments at Allan Gray.

Sonday is particularly concerned by the overall lack of retirement savings pot in South Africa. “We know that only 6% of South Africans can afford to retire. By adding a gender lens, the picture becomes scarier,” he says.

There are several contributing factors to this problem, including the persistent gender pay gap, which is when contributions to the workplace are equal in value, but men are paid more.

According to an article published by the University of Stellenbosch Business school, originally derived from a paper entitled Gender pay transparency mechanisms: Future directions for South Africa, the country has various pieces of legislation aimed at preventing gender discrimination in the workplace. Yet, South Africa has a stagnant median gender pay gap of between 23% and 35%, affecting women in the middle and upper wage bands the most. The research further suggests that around 38% of households in South Africa are headed by women, and female-headed households are approximately 40% poorer than those headed by men.

When it comes to the rest of the world, South Africa is not alone. Research recently conducted by UK financial services provider Legal & General of more than 4.5 million savers in the UK, found that the gender pension gap was 16% at the beginning of women’s careers, reaching 55% at the point of retirement. It found that the gap widens as women reach their forties due to the impact of career breaks, as well as unequal caring responsibilities.

But what can be done to solve the gender pay and resultant retirement savings gap?

To debate this question and address the large gaps in gender pay, knowledge and regulation, which inhibit the ability of many South Africans to retire securely, Allan Gray is hosting its second retirement benefits conference on 16 and 17 August 2022.

Free to attend for anyone with a stake in the world of work, this virtual two-day event will bring leading local and international thought leaders together to share ideas that can challenge the status quo and begin to bridge and close societal gaps.

Headline speakers include world-renowned economist, Dr Mariana Mazzucato, and Daniel Susskind, senior research associate and University of Oxford Fellow in Economics. Some of the key issues that the event will tackle include how to close the gender pay gap, whether the world of work really has changed, what the future of compensation in the world of work looks like and evaluating the post-pandemic shifts in the benefits landscape.

Stakeholders who will benefit from attending include policy makers, CEOs, decision-makers, business owners and employers, human resources executives, financial advisers and retirement funds, boards of trustees and administrators. To register, click here: https://allangray.zoom.us/webinar/register/WN_ByQmKADDRLqLJPojkK7UKQ

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