Update on LGPS Gender Pensions Gap Report

The earlier Gender Pensions Gap report for LGPS identified a substantial difference between the average level of LGPS pension benefits accrued by male and female scheme members. The difference between men and women as to their accrued benefits in the Local Government Pension Scheme is 34.7% for benefits in the reformed CARE scheme and 46.4% for benefits in the legacy final salary scheme. For benefits in payment the difference was even greater (49%).

While this potentially indicates some progress towards equality, the Board asked the Government Actuary’s Department (GAD) to explore these gender gaps in more depth, focussing on:

• Career patterns – in particular, evidence of recent and past part-time working
• Differences relating to employers or categories of employers
• Comparing our analysis with the LGA’s 2019 gender pay gap report

This further report sets out GAD’s findings. Essentially there is no simple answer and there seems to be a complex interaction between the types of work women do, their career patterns (in terms of part-time working and gaps in service) and their ability to progress their careers after having taken on childcare or other caring responsibilities. The report shows, for example, that:

• Part-time working patterns are closely related to gender pension (and pay) gaps for LGPS members. Controlling for differences between men and women in terms of both current and historic part-time working patterns reduces, but does not eliminate, these gender gaps. Possible explanatory factors include length of service and employer differences.
• Pay and pension gender gaps can be attributed to both differences for males and females working for the same employer (‘within employer’) and differences in the proportions of males and females working at higher or lower paying employers (‘between employer’) as well as between different categories of employers.

There is as yet no settled approach to data and methodological issues that would allow detailed comparisons to be drawn between gender gaps with different public sector pension schemes. The Board has therefore proposed that GAD put in place a common reporting framework for all of the public sector schemes, potentially working this into the quadrennial scheme valuation process. Similarly, we believe that the relationship between gender pay and pension gaps reporting needs to be addressed to allow for greater transparency and understanding.

Of course, the main question is what does the Board do with this information? The Board has decided to up a small working group to consider next steps. For example:

• Are there any in-scheme changes that would help address the levels of inequality (e.g. around the ability to buy back service)
• Can we direct employers to best practice in managing the career paths of those who take time off for caring responsibilities
• How do we communicate with members to ensure they are informed about the potential pension implications of the career choices they make
• How can we mainstream this kind of analysis so we can properly evaluate “what works” and how much is left to do.

If you are interested in taking part in the working group, then please contact the SAB Secretariat directly.

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