Women are less likely to receive a pension in old age and, if when they do, they get less

UN Report: The country may boast of better gender equality, but when it comes to social protection, Bhutan is no exception, with women having less access to social security, like retirement benefit schemes.

Among the working-age population, six percent of Bhutanese women, compared to 12 percent of men, contribute to a pension scheme, a UN Women report on progress of the world’s women 2015-16 launched last week states. The report states that active pension scheme contribution rates are very low overall and gender gaps exist.  Women are less likely than men to receive a pension in old age, and where they do, their benefit levels are usually lower.

This has been largely attributed to persistent gender gaps in labour force participation and pay, women trapped in low paid jobs and women’s disproportionate state of unpaid care work limiting their opportunities.

The report also states that women participate less in the labour market and are more likely to be unemployed or to work informally or on a part-time basis.  Women’s lower labour force participation, therefore, results in large cumulative gaps in lifetime income between women and men contributing to women’s disadvantage in pension income post retirement.

Although pension schemes in Bhutan are not gender biased, records with National Pension and Provident Fund (NPPF) show that about 24 percent of women have access to retirement benefit scheme.  In all, there are 51,032 civil servants, armed forces personnel and employees of government-owned corporations availing pension scheme with NPPF. Of the total, about 75 percent are men.

There are 2,943 male pensioners and 113 female pensioners, as of yesterday.

In terms of retirement benefit scheme that contributes to social security, the head of NPPF’s civil pension and provident fund division, Sonam Yeshey, said there was no discrimination against women, unlike in some countries, so long as women contribute to a pension scheme. “For some countries, there is discrimination in terms of retirement age and benefits which doesn’t exist in our case,” he said.

As part of the provident fund (PF), employees contribute 11 percent from their monthly salary and employers, an equivalent amount.

For private employees and other corporations, the Royal Insurance corporation of Bhutan (RICBL) and Bhutan Insurance ltd maintains their pension and PF scheme.  However, records with RICBL show that since the pension and PF scheme started in 2013, a total of 23,760 employees contribute PF of which 21 percent are women.  Of the 874 private and corporate employees, who are entitled pension benefits, about 41 percent are women.

Despite the private sector employing over 70,000, RICBL officials said employers were the main deterrents to the retirement schemes, owing to affordability issues.  Private employers and employees contribute a minimum of five percent to 11 percent PF, depending on the profile of the company.

“We’re trying to promote the schemes as far as possible,” RICBL’s general manager of finance security and services department, Ugyen Tshewang, said.

NPPF’s Sonam Yeshey said women workforce enjoys more social security today compared to the past.  Going by the trend, Sonam Yeshey said there were no female workers contributing to a pension scheme in 1976, which today stands at 12,311. “Female workforce has been increasing rapidly over the years, while for male, it has remained stagnant, which is a good indication,” he said.

While Bhutan has made tremendous progress in narrowing gender gaps through empowerment, issues remain.  Female unemployment rate in 2013 increased to 3.7 percent from 2.2 in 2012, while for men, it increased to 2.2 from 1.9 during the same period, the labour force survey states.

The Bhutan Gender Policy note states that quality of jobs for Bhutanese women was still an issue.  The report states that although there was little gender disparity in terms of overall employment quality of jobs performed by women was an issue.  About 72 percent male and 59 percent of the female population were employed as of 2013.  However women were generally found employed in low-paying agricultural jobs and those employed in non-agricultural sector earned almost 25 percent less than males.  Apart from being paid less, it was also found that jobs held by women were less secure or lead to poverty.

The UN Women report highlights the need to strengthen women’s income security throughout the life cycle, policies to transform labour markets and pension policies, among others.

“With the unequal employment opportunities and predominance in low-paid occupations, women are particularly vulnerable to economic insecurity and financial dependence,” the report states. “Old-age pensions can be powerful tools to reduce poverty, redress women’s socio-economic disadvantage and guarantee their right to an adequate standard of living.”

In Bhutan’s context, although the workforce has been increasing steady for both men and female, social security has not moved at the same pace.  With urbanisation, there is growing urge among employees for retirement benefit schemes as financial independence takes priority.

“Unlike in the past where one could go back to their ancestral home or depend on their children, things are not going to be the same anymore,” an NPPF official said, emphasising the need for laws and a legal framework to facilitate the working population with retirement benefit schemes.

By Kinga Dema