Data shows that the gender wage gap continues, with women earning less then men. A new study illustrates how that gap impacts retirement possibilities for women. Some public officials hope new legislation can create shifts. Plan sponsors can mind the gaps too.
Wage Gap: Compounded
The COVID-19 pandemic has been particularly disruptive to women—and their finances, but the retirement prospects for women have been impacted since long before the pandemic hit. 401k Specialist reports:
It was the National Women’s Law Center that found the average woman loses more than $400,000 over a 40-year career due to pay inequality, requiring women to work for almost a decade longer than their male counterparts to make up the gender wage gap.
Recent data from Human Interest, a 401k provider for small and medium-sized businesses (SMBs), found that after 40 years of earning the average salary for their gender, a man would end up with a 401k balance that breaks down into a $2,200 payout every month for the rest of his life whereas a woman would have 30% less—only $1,500 a month.
“Just like savings can compound, the wage gap can compound, too, into something much bigger—and in this case—more financially devastating by the time a woman reaches retirement,” said Human Interest CEO Jeff Schneble.
Retirement Plan Adjustments?
Pension industry experts observe that changes in how retirement plans are set up and administered can contribute to closing the gap. Legislative efforts under consideration, could, for example:
• Strengthen consumer protections to safeguard retirement savings by expanding existing spousal protections for defined benefit plans to defined contributions plans to prevent one spouse from making decisions that might undermine a couple’s retirement resources without the other’s knowledge and consent.
• Ensure more part-time workers are offered retirement savings plans by expanding the minimum participation standards for part-time workers—most of whom are women.
• Increase access to information about retirement and savings tools by providing grants for community-based organizations to help provide information and financial tools to women who are of working or retirement age.
While regulations continue to evolve, it’s wise for plan sponsors to assess plan design possibilities to meet the need of all employees, as well as to refresh themselves on fiduciary responsibilities. Especially in times of shift, it’s important to remember that as fiduciaries, plan sponsors continuously risk personal exposure for breach of fiduciary duty. Imagine the time and money that defending yourself against even an allegation would cost? ERISA law experts cost about $600 per hour! Why take chances? At Colonial Surety, you can affordably obtain fiduciary liability insurance and get peace of mind that your personal assets are protected from a breach of responsibility in the administration or handling of the employee retirement plan. With an annual premium that is less than what you would pay for just one hour with an expert ERISA lawyer if disaster strikes, Colonial’s comprehensive packages for plan sponsors offer the greatest value and provide protection for the plan, the sponsor and the company. Choose your Coverage Package for Plan Sponsors Here.
Equal Opportunity?
Enforcement of workplace law is on the rise. For example, Exigent has reported that the Equal Opportunity Commission (EEOC) recovered a record-breaking $535.4 million on behalf of alleged discrimination victims in 2020. Defense against allegations of wrongdoing can of course be ruinous—costing money, time and reputation. In addition to keeping up to date with best practices and regulations in the human resources sector, small businesses across the country are coming to Colonial Surety for Employment Practices Liability Insurance (EPLI).
When you are protected with Colonial’s EPLI, if an employee or group of employees sues your business over an alleged violation of rights or unfair practices, EPLI can help pay your legal costs and monetary damages. EPLI covers you against a wide range of employment-related lawsuits, including discrimination, benefits mismanagement wrongful termination, breach of employment contract, retaliation, and more. Once you are covered, if legal issues arise due to your workplace practices, you’ll have access to employment law experts and dedicated claims personnel who work with top lawyers across the country to quickly and efficiently resolve claims.
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Rated “A Excellent” by A.M. Best Company and U.S. Treasury listed, Colonial is a leading, national, direct writer of insurance and bonds for businesses of all kinds. Founded in 1930, we proudly use our experience—plus technology—to provide direct, digital and affordable coverage. Making protection possible for every business? That’s Colonial!