Grappling with the gap: What employers and trustees need to know about the gender pension gap

1) The Gender Pension Gap - What is it and why does it matter? 

While the gender pay gap (GPG) has long been an area of concern, many employees and employers are now turning their attention to the gender pension gap. The gender pay gap represents the present-day inequalities of pay between men and women, while the gender pension gap (GPNG) refers (depending on the measures used) to the difference between women’s and men’s average pension savings, pension entitlements or retirement income. The GPNG is often exacerbated by the same factors that contribute to the gender pay gap, including salary disparity and periods of unpaid or non-pensionable leave, which on average, impact females more than males.

This gap compounds over decades, resulting in women being at a higher risk of pension poverty. While the recent introduction of MyFutureFund in particular, and the future adoption in Ireland of the EU Pay Transparency Directive are anticipated to play a role in reducing the GPNG in Ireland, there are avenues available outside of legislation that can be used to narrow the gap.

The GPNG is rarely attributable to just one factor. It is usually the cumulative result of pay levels, hours worked, career breaks, pension eligibility, contribution design, employee contribution choices, investment engagement and the length of time over which savings compound. For that reason, employers and trustees should be cautious about looking for a single solution. A practical strategy will combine better data, clearer communications, earlier pension engagement, careful review of leave policies and, where legally permissible, targeted scheme or contribution design changes.

2) The EU Pay Transparency Directive – Will it impact the GPNG?

As noted in our recent update on the EU Pay Transparency Directive (PTD), the Irish Government has missed the 7 June 2026 deadline by which to implement the PTD. The objective of the PTD is to strengthen the broad EU principle of equal pay for equal work or work of equal value, including closing the GPG across Europe, and the PTD recognises that pay inequality can contribute to longer-term economic inequality between men and women. The PTD introduces new rules on pay transparency and reporting requirements. The intention is that by mandating greater transparency on pay structures and pay outcomes, employees will have better information to establish if they are not receiving equal pay, and employers will be encouraged to identify and address unjustified differences.

Certain Irish employers are already required to report on their GPG. However, existing GPG reporting does not include reporting on disparities in pension contributions or benefits between genders, because the relevant ‘pay’ definition for GPG purposes excludes pension contributions and benefits. The PTD defines ‘pay’ broadly as basic wage or salary and other consideration, whether in cash or in kind, received directly or indirectly from the employer in respect of employment. Depending on how the PTD is transposed in Ireland, employer pension contributions may become more visible within pay transparency analysis, particularly where they form part of variable remuneration. The final position should be described by reference to Irish implementing legislation and official guidance once available.

In a pensions context, the obligation on employers to report on disparities in employer contributions to occupational pension schemes may help to shine a light on the GPNG. For example, a female colleague may be entitled to receive the same level of employer matching contribution as a comparable male colleague.  If both employees select the same employee contribution rate, no difference in employer matching contributions should arise and no disparity is reportable under the PTD. However, if the female colleague selects a lower contribution rate, the employer contribution actually paid may be lower. Studies have found that one of the main contributors to the GPNG is a proportionately higher lack of awareness amongst women relative to men on tax and other benefits that come from maximising employee contributions, which can lead to an overall smaller pension pot at retirement. In many cases, that difference may be capable of objective explanation by reference to a gender-neutral matching rule and the employee’s own contribution election. However, employers should still consider whether the data reveals a broader pattern of lower take-up, lower contribution rates or lower engagement amongst women, and whether additional education and communications are appropriate.

However, employers who complete PTD reporting may obtain a clearer data-driven picture of whether they have a GPNG challenge. That data may serve as a trigger to take action to close a GPNG, which might include better support for female colleagues to maximise employer and employee pension contributions.

3) Equal treatment under the Pensions Act, 1990

In terms of existing legislation, Irish occupational pension schemes are subject to Part VII of the Pensions Act which deals with equal pensions treatment. The overarching principle of equal pension treatment is that in respect of the rules of, or access to, an occupational pension scheme, there must not be discrimination (direct or indirect) on any of the nine specified grounds, which include gender and family status. However, the principle of equal pension treatment does not mean that all members must necessarily receive identical pension outcomes. For example, the Pensions Act specifically provides that in a defined contribution scheme, different levels of employer contributions on the basis of gender are permitted, where the purpose is to remove or limit differences between men and women in the amount or value of benefits provided.  

Where employers are considering providing greater benefits or contributions to females over males to close a GPNG, it will be important to stress-test if doing so will fall within what is permitted under Pensions Act in order to avoid equal treatment claims being made. This will involve gathering objective data that shows that there are differences in the amount or value of benefits provided between men and women. The PTD may assist with this, but consideration should also be given to other factors that can feed into GPNG, such as females taking time out of the workforce for traditionally female-specific protected leave (in particular, maternity leave) and any other factors that can be objectively shown to disadvantage females over their male counterparts.

It would, however, be critically important to show that the objective cannot be achieved in a gender-neutral manner.  For example, if the same objective can be achieved, in whole or in part, through improved education, clearer communications, encouragement for employees to maximise employer matching contributions, or earlier pension enrolment, those measures should generally be considered before adopting gender-specific contribution or benefit enhancements.    

In relation to periods of qualifying family leave and maternity leave, a pension scheme must ensure a member continues to be a member of the scheme and continues to accrue rights under the scheme as if they were at work and being paid normally during the period of qualified leave. However, where the leave is unqualified or unpaid, there is no obligation to provide the member with pension benefits, which can be a contributing factor to the GPNG. Maternity leave appears to be an area where explicit more favourable treatment for female colleagues to make up (in whole or in part) for lost contributions during leave may well be permitted under the Pensions Act. For other periods of leave that are not exclusive to females (e.g. family leave or parental leave), but where in practice females more often avail of them, any rule to address a perceived GPNG by pensioning or otherwise compensating for loss of pension contributions during these periods of leave should usually be gender-neutral so as not to offend against the Pensions Act equal treatment provisions.

Gender-neutral measures might include continuing employer contributions during specified unpaid family leave for all eligible employees, offering return-to-work pension clinics, or allowing employees to make up missed contributions after leave. Those measures may help address a gendered outcome without drawing an express distinction between male and female employees.

4) What factors contribute to the GPNG?

Research published[1] in 2026 by Aviva Life & Pensions Ireland reported a 31% GPNG between men and women approaching retirement. This is above the last reported GPNG across the EU of 24%[2]. The key contributing factors to this disparity are summarised as:

• Later start: on average, women begin saving for their pensions over 2.5 years later than male counterparts. Combined with potentially longer periods out of the employment workforce, this typically results in a reduced pension savings pot.
• Knowledge: the study found that two-thirds of women were unaware of the tax benefits available under a private pension, compared to 44% of men. Similar knowledge gaps were identified in respect of available pension products.
• Confidence in investment: 29% of women compared to 53% of men reported being confident in making investment decisions in relation to retirement outcomes.
• Advice: at approximately three in five women surveyed were less likely to have availed of specific financial and retirement advice.

5) Trustees and scheme sponsors - What else can be done?

While the PTD and any Irish implementing legislation will be applied to employers on a phased basis, date currently unknown, there may be steps that trustees and sponsoring employers of occupational pension schemes can take now that are not required by legislation.

Trustees and employers alike can contribute to increased awareness and education around the importance of closing the GPNG and show a commitment to genuine equitable outcomes for scheme members.

However, their roles are different. Trustees should focus on scheme governance, member communications and engagement within the scope of their powers and duties.  Employers and scheme sponsors are better placed to review workforce policies, contribution structures, pensionable pay definitions and leave-related contribution practices.

Trustees may wish to review their member engagement policy and communications strategy through a GPNG lens. For example, dedicated communications or FAQ-style resources on the importance of maximising contributions and making additional voluntary contributions (AVCs) for those who are anticipating being out of the workforce for a period or upon their return to work, is one way of addressing a potential awareness gap.

Employers who have not already done so may take time to review their existing policies and practices to see if there are opportunities to mitigate any of the factors contributing to GPNG, including encouraging (or perhaps mandating) employees to start making pension contributions early. Although MyFutureFund should improve participation among eligible employees who are not already in qualifying pension arrangements, it will take time for contribution levels to build meaningful retirement savings. MyFutureFund will not, by itself, repair historic pension gaps, address all low-paid or younger workers, remove the effect of career breaks, or overcome differences in employee contribution choices and investment engagement. Employers may also consider offering employees access to expert sessions on pension investments or tax relief on employee pension contributions.

Employers considering targeted measures providing better pension benefits for female employees than for male employees to address a GPNG should take advice on what is permitted under the Pensions Act. However, employers should ensure that targeted measures do not go beyond what is necessary and achieve an objective that cannot obviously be achieved in a gender-neutral way. Where more targeted measures are contemplated, legal advice should be taken to ensure that the proposed approach is evidence-based, proportionate and consistent with the Pensions Act equal treatment framework.

For expert guidance on the GPNG and related matters, do not hesitate to contact Chris Comerford, Eve Badana or your usual contact on our Pensions team.

Date published: 7 July 2026