Closing the Gender Pension Gap – The Path to Parity

It is widely known that the gender pension gap disproportionately affects women. The general reasons for this are gaps in employment for maternity leave, reduced working hours required to facilitate childcare duties and subsequent lack of representation in senior roles. This disparity is further compounded due to women’s life span being, on average, almost 4 years longer than men, and factors such as women’s perceived confidence when handling finances and investments.

In this blog, we will review three recent changes in legislation and how they are expected to affect the outlook for retirement planning for women.

1. Gender Pay Gap Information Act 2021

Pay Equality is fundamental to ensuring equal retirement planning for women. The principle of equal pay for male and female workers is set out at an EU level under Article 157 of the Treaty. In 2019, the CIPD found that only 32% of employers were calculating their gender pay gap. The Gender Pay Gap (GPG) Information Act was introduced in 2021, and the implementation of this legislation and associated regulations from 31 May 2022 now requires employers to report their Gender Pay Gap. Employers in organisations with over 250 employees are required to take a ‘snapshot’ date of their employees in June 2022, and subsequently report on the hourly gender pay gap for those employees on the same date in December 2022. The scope will narrow to 150 employees in 2024 and employers with 50 or more employees in 2025. These reports are to be published on the employer's website in a manner that is accessible to all employees and the public, and a central website is due to be established in 2023 to which employers will be required to upload their report.

Currently, Ireland has a GPG of 14.4%, compared with a European Union average of 14.1%. The above legislation is in its early stages of implementation but the move towards salary transparency will go a long way in ensuring women are more equally remunerated in Ireland. Revenue’s pay gap report for 2022 can be viewed here as a sample. As an organisation, Revenue have reported greater numbers of women in their workforce but still have a mean gender pay gap of 4.9%. These results are not surprising, but most importantly they encourage organisations to acknowledge and address disparities and take steps to ensure such imbalances are rectified.

2. Finance Bill 2022

Women are more likely to face gaps in employment during the earlier years in their careers, due to maternity leave and subsequent parental leave. While this time out of the workforce may be small proportionate to total career length, gaps in pension contributions at this stage can have a cumulative impact on the growth and value of a pension pot over time. Company pensions carry maximum funding rules based on factors such as age and salary, and contributions can only be made while an individual is taking a salary from the company. Such funding rules can also have a negative impact on women who subsequently have a lower salary than their male counterparts.

The Finance Bill 2022 made an amendment to the tax treatment of employer contributions made to PRSAs, meaning such contributions are no longer treated as Benefit in Kind (BIK). The PRSA is a very flexible pension product, which can accept personal, employer and employee contributions as well as AVCs. Contributions limits within the PRSA currently apply for non-employer contributions only and are based on age and salary. For employer contributions, the removal of BIK now opens up the ability to inject additional funds to a PRSA on a tax efficient basis. This provides a major opportunity for women in the workforce who are looking to maximise contributions either in advance of, or following, a gap in employment.

3. Automatic Enrolment Retirement Savings Systems Bill 2022

The CSO report on Pension Coverage 2022 found that, for women who don’t currently have pension cover, 34% outlined the reason being that they never got around to organising it. The government’s proposal to introduce an auto-enrolled pension plan aims to combat this inertia and ensure pension provisions are in place for all eligible workers. Under the plan, individuals aged 23 to 60 who earn over €20,000, will be automatically enrolled in the pension scheme. While employers will match employee contributions, the State will a top-up of €1 for every €3 put in by workers.

However, as raised by Irish Life executives in the Oireachtas earlier this year, the introduction of Auto-Enrolment (AE) as it is currently proposed has the potential to exacerbate the pensions gender gap rather than improve it. The Auto-Enrolment proposal as it stands is inflexible for members who wish to increase their contributions, meaning that women who have faced time out of the workforce will struggle to make up for such gaps in employment. Additionally, the ‘opt out’ Auto-Enrolment model will only apply to individuals earning €20,000 or more. For women on maternity leave or working part time who may not meet this minimum earning threshold, it appeared that the option of making contributions to an auto-enrolment plan will not be available during such periods of lower income.  To combat this, it is proposed that the inclusion of an ‘opt-in’ feature will lessen the risk of unintentional exclusion of women and other minority groups.


It is clear from the above referenced legislation that steps are being taken to reduce the gender pensions gap. While the responsibility is on our government to ensure such legislation is enforced, employers will also play a key role in ensuring pay parity and salary transparency. For women, it is crucial to remain informed and maximise pension contributions when and where possible.


Eve Nolan
ITC Business Development Manager















*Please note this content is the view of the author and not of Independent Trustee Company