Women’s Pensions Are ‘Another Glass Ceiling’

Twenty-five million working women have no pension plans, and those women who have them can expect to receive less than half the benefits men get, Labor Secretary Robert Reich said Tuesday.

He called it “another glass ceiling.”

“For the most part, the problem of pension inequity is the product of women’s career patterns and the realities they face in the working world,” Reich told the 77th annual conference of the Business and Professional Women.

On average, women earn less money than men, which means their earnings-based retirement coverage and savings are less. Two-thirds of working women are in jobs with the lowest pension coverage rates, and approximately half work in small companies much less likely to offer pension plans.

Reich said a significant factor is that women must move in and out of the work force, to rear children or care for elderly parents, cutting into the years of service used to calculate pension benefits.

“She can pay a steep price when retirement day rolls around,” he said. “Changing jobs can mean that pensions are left behind, and vesting requirements can prevent her from receiving any benefits at all. As a result, elderly women are twice as likely as elderly men to be living in poverty.”

The Senate passed a bill last week best known for raising the minimum wage. But it also contains provisions aimed at raising pension security by broadening coverage in small businesses, services, retail, schools, hospitals and social service agencies, sectors of the economy that employ many women.

“Even more needs to be done,” the labor secretary said. He urged that pension plans be audited to prevent such abuses as employers putting money into self-serving investment schemes.