The workplace is far from a balanced and unbiased place for women. And there are movements to counteract the sexism that women face. For example, companies have finally started to focus on the gender pay gap and have moved forward to squash this element of sexism in the workplace. However, a component of this problem that often goes undiscussed is the gender pension gap. Recently, Mercer released a call to action focusing on these discrepancies based on research conducted using data from across the European Union. They found that across the continent, women were given a 40% smaller pension in comparison with what was received by the men in their organizations!


Let’s be honest: That’s simply ridiculous. Especially when you consider that the gender pay gap within the workplace is already at 16 percent in the EU.


The pension gap is significantly underreported. A simple Google search for news on the issue shows the lack of discussion around the topic. Within companies, HR and teams overall tend not to focus on it either, and, as the researchers at Mercer describe, the pension gap is grossly “underestimated.”


Though the average is a 40 percent difference, EU countries’ pension gap ranges from 4 percent to 46 percent; with most countries in the EU reporting a difference of at least 30 percent. Mercer discovered that current pension regimes, the lack of women in the workforce and in key positions in companies, as well as women’s aversion to risk while planning for retirement all contribute to maintaining the pension gap. Of course, a 16 percent pay gap doesn’t help anything. There’s also the fact that women live longer than men and are more likely to take time away from work to take care of their family members or children.


Looking deeper into the main reasons for the pension gap, we see that the current inequalities that women face in the workforce contribute to them earning less in their pensions – which results in a higher chance of poverty when they are older. Mercer notes:


  1. The current pensions systems across Europe are tied to a person’s income. Since women already experience a pay gap, this means that when retirement comes, they will be in a lesser position than men financially.
  2. Women at the highest career levels of a company are a rarity. This means that women are often forced to work in supporting roles instead of in senior positions, thus, decreasing their overall income over time which would contribute to their pension plans.
  3. As Mercer reports: “Early on, variation in socialization of boys and girls can contribute to different attitudes towards money and perception of confidence. Even if financial literacy per se is at the same level, the very lack of access to capital or less disposable income can lead to [different outcomes overall].”

But what can be done to solve the Gender Pension Gap?


Governments and companies must both take the lead in eliminating the gender pension gap. The European Commission, Mercer notes, is currently working on policies to decrease and eliminate the gap.


Mercer provides 3 actions that your company can (read: should) implement to fight against the gap.


  1. Work on your company’s gender diversity programs and initiatives. These means incorporating inclusiveness to be more than just a workshop but to ingrain it in the very fabric of the company.
  2. Using a gender lens, reevaluate your benefits plan. This means understanding how the benefits system in your organization is organized and if it is centered on male employees.
  3. Ensure that you and your team are aware of the gap and work to promote education and awareness around it. Education is vital to solving this issue and your company and HR department should be actively and passively educating your workforce how gender inequalities materialize and the harm they do.

At the end of the day, the gender pension gap must be confronted by companies to prevent women from financial insecurity in retirement. The process of eliminating the gap needs a sincere and powerful push to overcome the hurdles already facing women in the workforce.


The benefits of a diverse workforce are well known and include ensuring that your company culture, employee experience, and recruitment strategies provide an inclusive approach to gender from the beginning of the hiring process right up until retirement.