Taking a Vow of Finance: Progress on the rocky road to LGBT retirement security

LGBT people face barriers preventing them from fully participating in the workforce as well as inequalities that may deny them full rights to social protection. Change is happening, but financial security in older age is not yet a guarantee. Banner image: Shutterstock/Robert Reed
Taking a Vow of Finance: Progress on the rocky road to LGBT retirement security
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The Forum Network is a space for experts and thought leaders—from around the world and all parts of society— to discuss and develop solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.




Later this summer, my partner Peter and I are taking the plunge and getting married. Even though we have been together for 17 years, it feels important to make a commitment and be there for each other for the rest of our lives. In getting ready for our big day, I am realizing more and more that we are very fortunate to live in a country where we feel included and can look forward to enjoying the same benefits as heterosexual couples in older age. Sadly, that is not a universal sense of security and depends, to a large extent, on where you live.

The pension system in many countries is built on three pillars: government benefits, employer retirement plans, and individual savings. Research by Aegon revealed that people expect 45%, 24% and 31% of their retirement income to come from these sources, respectively. If we are to look forward to some degree of financial security in older age we need to be able to fully participate in all three pillars.

Equal rights to social protections

Society in many countries favours married couples. It is important for those who either cannot, or decide not to get married to make themselves aware of the benefits and privileges they may be missing out on.

An important way to ensure LGBT couples enjoy the same benefits in retirement as their heterosexual counterparts is to legally enact marriage equality legislation.

According to the HRC Foundation, the Netherlands is one of only 31 countries around the world that recognise marriage equality. This number may seem high—but why it is not high enough needs a bit of context. The U.S. Government Accountability Office identified 1,138 federal provisions in which marital status is a factor in determining or receiving benefits, rights and privileges. Society in many countries favours married couples over couples who choose to share their lives together without tying the legal knot. It is important for couples who either cannot, or decide not to get married to make themselves aware of the benefits and privileges they may be missing out on. With this information, they can take steps to financially protect their partner by making a will and update beneficiary designations on their workplace retirement plans.

Workplace equality

Our work is closely linked with our identity. It provides us with our primary source of income and is something in which we invest a lot of our time and energy. It is a win-win when we can be ourselves at work and bring all our talents and creativity to our job: employers see our full potential and we stand the greatest chance of advancing in our chosen careers.

Source: OECD Society at a Glance 2019 special chapter The LGBT challenge: How to better include sexual and gender minorities?

In a report I worked on, the median household income of LGBT people was 8% less than that of their heterosexual counterparts...for LGBT women it was 17% less than heterosexual women and 27% less than heterosexual men.

LGBT people face barriers throughout their career that prevent them from fully participating in the workforce. The OECD’s work on LGBTI+ inclusion reveals that homosexual applicants are about 50% less likely to be invited to an interview, meaning they struggle to get a foot on the career ladder. Once they are in the door, it is disappointing to read a study by the Williams Institute that half of LGBT workers in the United States are not out to their current supervisor, and 26% are not out to any co-workers. Not being out to your colleagues could pose a serious barrier to someone’s willingness to put themselves forward for a promotion, which would provide them with an increase in salary and the ability to save more for their retirement.

When I was working at Aegon, we wrote a report, LGBT: Retirement Preparations amid Social Progress. We found that the median household income of LGBT people was 8% less than that of their heterosexual counterparts, and that LGBT women were a group where gender and sexuality intersect: their median household income was 17% less than heterosexual women and 27% less than heterosexual men.

Addressing Gendered Ageism: A better retirement for all women by Paula Rochon & Surbhi Kalia and Paul Higgs

The good news is that we continue to make social progress. Last year, Switzerland became the third country to bring in marriage equality by popular vote and as of 1 July this year, same sex couples will be able to get married. Progress is also being made in the workplace, as the majority of Fortune 500 companies support their LGBT employees by offering inclusive benefits.

These changes in society and the workplace go a long way to helping LGBT people achieve long-term financial security and prepare for their retirement—but we still have a ways to go to ensure that these wins are enjoyed by people in all countries.




See the latest OECD work on LGBTI+ Inclusion, recommendations and policy advice focusing on the solutions to the challenges faced by LGBTI+ individuals

See the latest OECD work on LGBTI+ Inclusion, recommendations and policy advice focusing on the solutions to the challenges faced by LGBTI+ individuals

Read the OECD Pensions at a Glance 2021 for an overview comparing pension policies of OECD countries and recent reforms, including a special chapter focusing on automatic adjustment mechanisms

Read the OECD Pensions at a Glance 2021 for an overview comparing pension policies of OECD countries and recent reforms, including a special chapter focusing on automatic adjustment mechanisms