By Stewart Lewis

(September 12 – 12:35 ET) – The financial situation of older women has improved, but the majority of older women, who are on their own, remain poor, says a recent report from the Status of Women Research Directorate. “Many of today’s older women did not work outside their homes and were, therefore, unable to accumulate pensions in their own right,” states the report.

Women who will be old in the future will have spent most of their adult life in paid employment, but their financial security in old age is not assured, the report contends. Coverage of workplace pension plans “is declining, and women’s lower earnings still make it difficult for them to set aside private savings for their old age.”

At the same time, policy makers have been “preoccupied with the cost of public pensions. There is pressure to reduce benefits and even to privatize the public pension system, shifting responsibility on to individuals, who will increasingly be expected to save for themselves and provide their own retirement incomes.”

Federal and provincial governments have a range of pension policy instruments through which they could develop initiatives to reduce the poverty of older women:

  • using Old Age Security to recognize women’s family responsibilities and unpaid work;
  • indexing public pensions to wages rather than prices;
  • extending the child-rearing drop-out in the CPP/QPP to include periods of time spent in other unpaid caregiving work for family members;
  • requiring the mandatory division of CPP/QPP pension credits between spouses at retirement;
  • improving surviving spouse benefits in the CPP/QPP; and
  • increasing the replacement rate of CPP/QPP retirement pensions for low-income workers.

“Pensions provide the main source of income for a significant period of most people’s lives. For women, this often amounts to a quarter of their lifetime. Developing effective pension policies that specifically take into account the needs of women are, therefore, essential to addressing the poverty of older women,” says the SoW Research Directorate.