According to Stellenbosch University’s “Women’s Report 2022: Women and Fiscal Policy”, the gender retirement equality gap in South Africa means that women can expect around 26% less retirement income than men when they retire.

This reality is referenced by Lindiwe Sebesho, Exco member at the South African Reward Association (SARA) who says: “The various factors that disadvantage women must be addressed so they too can enjoy a dignified retirement and greater security in their twilight years.”

Unfortunately, while legislation protecting equal pay for men and women is ample, its effective enforcement appears to be lacking.

Sebesho notes several factors contributing to the problem.

On average, women live longer than men, so they need more savings to sustain themselves during retirement. The average retirement age in South Africa is 63,28 years – and most workers, particularly women, reach this age before they have saved enough for retirement.

Also, despite protective legislation, the gender pay gap in South Africa continues to grow. A recent United Nations University study conducted by the SA-TIED programme indicates that women were paid 89 cents for every rand earned by men in 2008, but only 78 cents in 2021.

The UN Gender Pay Gap and Labour-Market Inequalities in South Africa further indicates that the raw gender pay gap in South Africa is 32,5%, when considered at the monthly level – and 20,1%, when considered at the hourly level. Gender pay gaps exist even for the limited number of women who make it to top management jobs.

Employment patterns per Stats SA’s Quarterly Labour Force Survey, also see fewer women (54,3%) being employed than men (64,9%), with women often taking lower paying jobs in industries like wholesale, retail, or community services. If these are temporary positions, they enjoy no employer-supported retirement funding scheme.

Women are also more likely to take career breaks for maternity, childcare, or family support such as caring for sick family members. The cost of these duties is often higher for women than men, meaning women experience more short-term cashflow pressures that affect their long-term savings decision-making.

According to a 2023 Employee Benefits study, only 58,5% of employers pay their employees in full during maternity leave. This means that for those that do not get full pay during maternity leave, their employer-sponsored retirement contributions may be reduced or cease completely.

Such employment interruptions can also hinder women’s accumulation of skills, experience, promotions, career growth, and exposure to higher paying opportunities.

These – and other pressures – lower womens’ lifelong income and their ability to save as effectively as men towards retirement.

Sebesho offers several solutions for consideration:

* Increase efforts to enforce equal pay laws with continued focus on achieving gender specific employment equity targets and equal pay for work of equal value objectives.

* Improve financial literacy among women to empower them to make informed decisions about managing their short-term needs, career decisions, and retirement planning.

* Adopt gender-neutral flexible work arrangements and policies to help women balance and share work and caregiving responsibilities.

* Explore ways to maintain or supplement retirement contributions during maternity leave or any other career breaks, ensuring that women do not face significant setbacks in their retirement savings.

* Enforce retirement funding systems that treat men and women equally and take into consideration their unique life experiences and needs.

* Strengthen social safety nets to provide for vulnerable populations, – including retired women.

Sebesho says SARA advocates for a well-governed, effective remuneration system that promotes fair, equitable, and responsible remuneration for all employees in South Africa.

The association also supports a living wage for the most vulnerable employees in our society, including women, to foster job creation, economic growth, and a sustainable economy.

“We therefore encourage all reward professionals to enable their organisations to consciously structure and implement total reward strategies that aim to address any current and potential inequities – including the gender retirement equality gap,” says Sebesho.