Introduction
There has been national and international concern over the impact of ageing populations, growing economic dependency ratios and rising pension deficits. At the same time there has been much debate about how to improve provision for the poorest pensioners, many of whom are women (DWP, 2005, 2006; Pensions Commission Reports 2004, 2005). Women are highly represented among those entitled to means-tested benefits in retirement and under-represented among those with access to occupational pension provision (Walker and Foster, Reference Walker and Foster2006a). The Government has pledged to put ‘fairer outcomes for women at the heart of our consensus for a long-term solution to the pensions challenge’ (Blunkett, 2005: 1) and its response to the Pensions Commission's proposals, the White Paper (DWP, 2006), stated that it was guided by the principle of ensuring that policies give women and carers better opportunities to accumulate adequate pension provision.
Despite these claims and the introduction of women on to the pensions agenda there is still considerable concern about the future of women's pensions (Davies and Ward, Reference Davies and Ward1992; Ginn et al., 2001; Ginn, Reference Ginn2003a). In 2004/5 the average gross income of a single male pensioner was £220 a week compared with £186 for women (DWP, 2006) and 35 per cent of women do not currently belong to a pension scheme compared to 25 per cent of men. However, it is not just those without access to more prestigious forms of pension provision that are causing concern. There is evidence of a lack of research which concentrates on those women who have access to occupational pension schemes and as such represent the privileged minority (Ginn and Arber, Reference Ginn and Arber1993, Reference Ginn and Arber1996; Gough, Reference Gough2004; Groves, Reference Groves, Glendinning and Millar1992). This is despite the fact that men are more likely to contribute to occupational pensions than women and as such women receive less income in retirement from this form of pension than men (PPI, 2003; Rowlingson, Reference Rowlingson2002). For instance in 2005/6 pension income figures of all single pensioners showed that single males received on average £68 a week from occupational pensions while females only received £47 a week from this source (DWP, 2007). Single male pensioners also received a higher personal pension.
Pensions are related to prior experiences, rights built up throughout the life course being an important way of safeguarding a secure financial future. Therefore any pension scheme analysis must take into account an individual's work history (Hannah, Reference Hannah1986; MacNicol, Reference MacNicol2006). People's ability to contribute to a pension during their working lives depends on a number of factors, not least the pension offered by their employer, their capacity to put more aside for retirement in the face of their immediate financial situation and pension requirements in place at a given time. Hence, the capacity of individuals to save for the future is not a uniform experience for different groups.
This article uses a case study approach to add to the debates about the gendered nature of pensions and occupational pensions in particular. Interviews with twenty retired female teachers belonging to the Teachers' Pension Scheme (TPS), the second largest Public Sector Pension Scheme in England and Wales with over 1.4 million members, were conducted to ascertain whether men and women in the teaching profession have traditionally had different labour market experiences, which, in turn, affect their pension acquisition. By using a life course perspective embedded within the political economy approach this paper considers whether the characteristics that determine teachers’ pension entitlement inherently favour a typically male pattern of employment, thus echoing the disparities in retirement incomes between men and women found more widely.
Initially this article outlines some of the different experiences men and women encounter in building up occupational pension entitlements. These include the prevalence of caring responsibilities, periods out of employment and part-time work among females and their affect on pension accumulation. It then focuses on the reasons for using the TPS, a defined benefit (DB) pension scheme. Using observations from the interviewees the key characteristics which differentiate between male and female teachers’ labour market experience are considered, and the impact these characteristics have on the TPS are examined. Finally this is linked to differences in occupational pension acquisition in general.
Occupational pensions
Occupational pensions are crucial in determining an individual's income in retirement. They are ‘the main reason why many pensioners do not live in poverty’ (Field, Reference Field and Deacon2002: 10). Designed predominantly for middle class men's pattern of continuous full-time employment, they serve to translate women's labour market disadvantages (lower earnings, shorter working hours and gaps in employment) into low income in later life Ginn, Reference Ginn2003b).
There have long been two main forms of occupational pension schemes, defined benefit (DB) and defined contribution (DC), which have characteristically been used in personal pensions and, more recently, have become increasingly common in occupational pension schemes. DB schemes typically operate with a one-60th principle for each year of service up to a maximum of 40 years, with a maximum income from this form of pension of two-thirds of final salary in retirement, indexed to inflation up to 5 per cent per annum (Blake, Reference Blake2003). They most commonly take final pensionable earnings as the best year of pensionable earnings in the last three years before leaving service (Government Actuary's Department, 2003). Women's typically flatter earnings profile yields a poorer return on their contributions as the return is maximised for those whose earnings rise with age and who remain in the scheme until retirement. DB's work best for an individual promoted to a high income prior to retirement and for those with longevity of service, which is less likely to be secured by women due to domestic and family responsibilities.
The pension resulting from a DC scheme on the other hand depends solely on the fund accumulated at retirement. This is then used to buy a life annuity, although up to 25 per cent of the fund may be taken as a tax-free lump sum on retirement. The same size of fund buys an annuity for a woman that is about ten per cent less than a man's, as a result of actuarial calculations which reflect women's greater average longevity (Mann, Reference Mann2001).
A DC scheme makes the financing of benefits explicit but leaves the cost of the outcomes or benefits unclear. Recently falling equity prices and declining annuity rates mean that a larger DC fund is required to provide a decent retirement income (Simpson, Reference Simpson2003). Occupational pensions have become increasingly significant with the decline of state pensions, linked to prices rather than earnings since 1980, and increases in means-testing. This is likely to magnify the pension penalties arising from earlier domestic and caring roles, creating increasing income disparity among women in older age according to their marital, fertility and employment history (Ginn and Arber, Reference Ginn and Arber1999).
Methodology
The TPS was chosen for several reasons. As it is a notional funded scheme where no real investment is placed on the stock market, this means that teachers make real contribution payments in exchange for a government promise to pay a DB on retirement. In theory this results in those with equal employment histories and pay benefiting from an equal pension entitlement on retirement regardless of gender. Furthermore teaching has a high level of female involvement, resulting in a large number of recently retired female teachers available for interview about their labour market and pension experiences. This meant that their experiences were not the result of their under-representation and minority status within the profession.
Non-random sampling was used to locate respondents who fitted the criteria: female, retired from pensionable work and a former teacher. Several participants were located through a family member in the teaching profession and other teachers I knew were also asked to assist in finding potential participants. In other instances a snowball effect occurred with respondents finding other retired female teachers. This provided a good range of respondents from different types of school and I interviewed nine primary school teachers, five secondary school teachers, three who had taught in both types of school, one special schoolteacher, one further education teacher and one hospital schools teacher. By locating such a variety of teachers who all had access to the TPS it was hoped that differences in terms of pay and pensions may emerge between the different types of schools.
Given the focus of the research, this provides an insight into the retirement conditions of those women whose pensions were likely to be as good as, or better than, average. So a large number of people, largely women, who are disadvantaged by a combination of domestic and childrearing responsibilities and employment experience (low wage employment characterised by temporary or short-term contracts), were excluded from this research, as were any individuals in more complex and potentially risky DC schemes.
Teaching as a suitable career for women
As long ago as 1835, Catherine Beecher explained that women, as the ‘guardian of the nursery, the companion of childhood, and the constant model of imitation’ are the natural teachers of young children (Cross, 1965 cited in Smulyan, Reference Smulyan2004: 514). Teaching came to be defined as a female profession, acceptable and appropriate for women as an extension of their work with children in the home. This was particularly relevant in primary teaching which is often perceived as suitable to the skills of female teachers with men better equipped to deal with older children. Mavis, a retired special schoolteacher emphasised this:
Women were the ‘child minders’. Fathers didn't rear children. They didn't have as much hands-on experience of rearing children. The woman was the one who looked after the children, so I suppose teaching younger children they thought it was fit for a woman.
Secondary school teaching was seen as more ‘male’, requiring a ‘hard-nosed disciplinarian’ approach.
June: I have heard parents say things like, ‘My Johnny is . . . unruly or his behaviour is bad and Mrs Smith is hopeless, she's much too soft with him. He'll be much better when he gets into Mr Smith's class because Mr Smith is a man and he'll be able to control him and sort him out’.
This disciplined authoritarian conceptualisation is also seen as suitable for management. The fact that men involved in primary schools are disproportionately represented in managerial positions (38.2 per cent) compared to their overall involvement in primary school teaching (16.9 per cent) (DfES, 2004) may be partly a result of traditional ideas about appropriate male and female roles and the association of men with management skills. These gender differences in managerial positions reflect trends of male dominance in senior positions in employment more generally and have an adverse impact on women's pay in comparison to their male counterparts (Babb et al., Reference Babb, Butcher, Church and Zealey2006). In final salary schemes such as the TPS, the pension is dependent on the salary prior to retirement. Lower wages associated with a lack of promotion opportunities for women have a negative impact on their pensions.
Women's under-representation in headship positions seems to be associated with the level of applications rather than their quality (Coffey and Delamont, Reference Coffey and Delamont2000). Gender roles and family commitments may actually be used as convenient and stereotypically acceptable excuses to conceal more powerful deterrents to apply for promotion. In research carried out by the Women and Equality Unit (2003) it was suggested that men and women differed in their confidence when applying for more senior jobs and that men would do so despite less experience. This relates to the findings of this research:
Valerie: A woman never applies for a job until she is perfectly sure she can do it, whereas a man reckons he can learn it on the job.
For women to proclaim their achievements or ‘sell themselves’ contradicts conventional gender norms (Collinson and Hearn, 1996). Denise, who remained a classroom teacher throughout her career, said she would also not have felt comfortable rejecting traditional gender roles and being in a position of power over men.
I can't think that I ever wanted to be head of department in the comprehensive school . . . And I suppose partly that's a sexist thing, that I wouldn't have felt comfortable . . . with several men underneath me. Perhaps I haven't got the confidence that these men have.
The deficit model has embraced a perceived lack of motivation and aspiration along with certain management skills and qualities associated with masculinity to account for women's under-representation in school management. However, studies of senior women teachers’ careers have also revealed the need for a supportive ambience and networking as necessary strategies for change (Boulton and Coldron, Reference Boulton and Coldron1998). The lack of support from heads and other staff could be a powerful barrier in preventing women from achieving promotion and its associated pay and pension benefits (NUT, 2001).
Childcare
Women's tendency to perform an unequal share of domestic and childcare responsibilities has a negative impact on their pay relative to men's and consequently their pensions entitlements (Ginn and Arber, Reference Ginn and Arber1993). However, teaching may be perceived to be an attractive form of employment for a number of women due to the hours (for those with childcare commitments) and the nature of the work. ‘In a country such as Britain, where after-school, half term and holiday day-care is almost non-existent, this ‘fit’ is of considerable importance in enabling women to work full-time’ (Glover, Reference Glover1994: 88). The respondents in this study generally agreed with the assertion:
Mavis: With the hours matching the children's hours and the holidays matching the children's holidays it was a particularly apt one. And I think having children contributed to the ability in the classroom really.
However, this view fails to accommodate the extra hours required for training meetings, parents’ evenings, detention duties and after-school activities, which are regarded as crucial to promotion prospects. A teacher is required to work ‘such additional hours as may be needed to enable him to discharge effectively his professional duties’ (DfES, 2002: 36). These demands grow with seniority.
Ruth: As a teacher . . . you have to spend a lot of time in the evening at meetings . . . particularly when you're a head. I think you have to be very motivated, as a woman, to want to do it, and you have to have a supportive husband.
Therefore women may be disadvantaged in their ability to apply for promotion.
June: I think it's easier for them (men) to take on promotion because they haven't got all the things at home to worry about . . . Women still go home and have to do the majority of the household things . . . and therefore if there's a male applicant I think they stand a better chance of getting the job . . . and they would be a lot more willing to take on the extra responsibilities of being a head than a woman would.
The National Association of Headteachers (1998) reported that female heads are less likely than male heads to have dependent children. This echoed Glover's (1994) research that parenthood can be detrimental to the promotion prospects of female teachers. An NUT Survey, Women and Senior Management (2001) found that the challenge of maintaining a work–life balance made more than a third (38 per cent) of women reluctant to apply for promoted posts. ‘Family responsibilities either for young children or for ageing parents were most often cited as operating to restrict women's capacities to make the kind of contribution to the life of the school which they saw being demanded’ (Mahony et al., Reference Mahony, Hextall and Menter2004: 141). Women who do leave the classroom for other positions in education tend to do so after a large number of years of teaching, and possibly after raising a family (Smulyan, Reference Smulyan2004). Teaching, for women, has typically been seen as a second-income career often interspersed with childrearing. Therefore for those women with partners their pension is likely to be of secondary importance to that of their partners.
The TPS has traditionally made assumptions about the breadwinner ideology through the entitlement to family benefits, which were brought in for male teachers in 1972 and for female teachers in 1988. If a teacher finished service before these dates their spouses would not be entitled to family benefits. An assumption by gender was made about who needs these benefits. The fact that the policy was introduced later for women than men implies that men have traditionally not required the pension entitlements earned by their partners as they would have a decent pension in their own right.
Career breaks
Women are more likely than men to have career breaks principally due to family commitments. Most careers follow a staged pattern of advancement and teaching is typical of this. In common with other areas of employment, career breaks for childrearing have an adverse affect on advancement. The promotion structure in schools has been criticised as male-biased as it benefits those with continuous service, which works to disadvantage women who have taken a break from teaching to rear children. ‘Recruiters tend to penalise women for taking a career break by denying them development resources and permanent job opportunities and then further penalise them because of their age’ (Healy, Reference Healy1999: 198). These conditions are exacerbated by the structural impact of the marketisation of local management of schools, where there is a budget advantage of appointing young, cheaper teachers. Therefore, an increasing number of new mothers resume their employment careers after a few months maternity leave. They are undergoing the transition to motherhood, with the responsibilities it entails, while pursuing a continuation of their paid careers. According to several respondents these characteristics represent a generational change.
Rose: The difference with men and women in my experience, was quite simply that we went off and had our children . . . Now in my generation when you had children you gave up and you stayed at home until they went to school, more or less . . . By the time I left we had plenty of people who went on maternity leave and came back.
There is also no guarantee of returning to the same position on their re-employment. In this study Valerie highlighted the negative effect time out of employment had on her career. She went from being a head of department to having children and it took her 20 years to get back to a position of equal seniority. Therefore, the number of years and time out of employment has a significant influence on the capacity to move up the pay spines and effect pension accumulation (DfES, 2004).
Part-time employment
Women are significantly over-represented in the proportion of teachers who work part-time. This applies to nursery, primary and secondary schools. In 2000, over 68,000 part-time teachers constituted a full-time equivalence of 8 per cent of the teaching workforce (Mahony et al., Reference Mahony, Hextall and Menter2004). Part-time employment is typically associated with domestic and childcare responsibilities or with the return to work when these responsibilities lessen. Hence, it may be a temporary short-term form of employment or a more long-term pattern. Part-time workers may be perceived as unable to participate fully in the school environment (for example unable to have a form). Therefore, the culture of precarious employment may create conditions that serve to heighten teachers’ secondary labour market status, including institutional barriers and for part-timers a lack of professional development which relate to pay and pension increases (Healy, Reference Healy1999). However, part-time work may also be perceived as a positive experience, one which enabled women in particular to keep a foot in the door when also bringing up children or a way of easing themselves back into the teaching profession following a time out of employment. For instance, Maggie said:
It eased me in. It gave me the chance to . . . not only still be a good mother in my household which was important to me, but also get into teaching and do a good job there.
However, their ‘contentment’ with their jobs may be attributable to ‘their lack of alternative and weak bargaining position with employers because of having to accommodate domestic responsibilities’ (Ginn et al., Reference Ginn, Arber, Brannen, Dale, Dex, Elias, Moss, Pahl, Roberts and Rubery1996: 170). Women's work strategies are not preconceived blueprints but responses to the opportunities and resources available to them over the life course (Gardiner, Reference Gardiner1997). For instance several women in the study stated that they were required to move if their husband found new employment in a different location and they found career planning difficult. Their work was of secondary importance to that of their male partner.
When women work on a part-time basis this means that they are often not there enough hours to qualify for promotion opportunities, less able to undertake extra responsibilities and less able to develop the skills and experience required for promotion (Women and Equality Unit, 2003). Therefore, part-time work is often associated with a negative effect on women's pay and pensions build up. Indeed it has only been since January 2007 that part-time teachers are automatically enrolled onto the TPS and have the option to withdraw. Prior to this part-time workers had to choose to opt into the scheme. This represented differential treatment from their full-time counterparts despite the fact that they may be undertaking similar duties.
Is pension accumulation in teaching gendered?
Career breaks and part-time work therefore tend to have a negative affect on pension entitlements in retirement. This represents a duality of discrimination where teachers’ pensions are concerned. On the one hand career breaks and part-time work affect the number of years of pensionable service and on the other they invariably cause the individual to have built up a lower level of pay. The fact that men in nursery, primary, secondary and special schools in the years that may be prior to retirement (55 and over) tend to be located in the higher spine points indicates that men's final salary will be greater than that of their female counterparts (DfES, 2004). Men are also more likely to reach the senior positions at an earlier stage of their career than females partly as a consequence of uninterrupted work histories. When men work on a part-time basis they are generally older than women and are in a pre-retirement transition. For instance, this downsizing may occur in two of the final three years prior to retirement in order not to be detrimental to their pension on retirement.
Given the differences highlighted between male and female teachers’ labour market experience, June concurred that the number of female teachers who have been able to build up a full teachers pension will be extremely limited.
I don't think there's – many women – who have had their pension right from when they first started teaching right through. I would think most women are lucky if they got 25 years.
The average retirement benefit received in 2002/2003 was higher for males than females in all forms of retirement (premature, age, and ill-health). The average annual pension for those retiring at pension age was £12,000 for males and £7,700 for females (DfES, 2004). This indicates that the structure of teaching and pensions provision are detrimental to women's prospects of achieving an income equal to that of their male counterparts in retirement, although it also indicates that they are a relatively prosperous section of the pensioner population.
Further contributions
Men and women may enhance their retirement pension through further contributions. This may be through purchasing Additional Pension, paying Additional Voluntary Contributions (AVCs), paying Free-Standing Additional Voluntary Contributions (FSAVCs), Past Added Years (PAY) which are being phased out and/or paying into a stakeholder pension or a personal pension (Teachernet, 2007). Members can elect to purchase Additional Pension provided that they are in pensionable teaching employment. They can do this by either paying a lump sum or having additional contributions deducted from their salary and are able to claim tax relief on the additional contributions. Teachers may choose to contribute AVCs through the in-house AVC scheme or a FSAVC with another provider. These operate in a way that depends on the success of the stock market. They may be popular with teachers with a higher income – those more likely to be able to afford further retirement planning – the majority of whom will be male.
Previously, if a woman teacher had a career break to start a family her pension rights were reduced and these lost years could not be replaced until she returned to teaching in accordance with Inland Revenue rules. It is currently possible to pay a combined teachers’ and employers’ contribution for a limited time so absence can count as reckonable service, in effect reducing the negative impact of career breaks on pensions. This does not alter the detrimental effect it may have on pay and promotion and ultimately pensions. A number of women interviewed also indicated that they had withdrawn the superannuation they had built up prior to their break in teaching.
PAY are arrangements that allowed members to purchase additional service in the TPS. This provision no longer exists but existing contracts are being honoured. These may be perceived as particularly suitable for women due to women's increased longevity compared to men's rather than the more risky AVCs, which are subjected to gendered annuity rates. The value of PAY depends on how long teachers intend to remain in teaching and how quickly they expect their salary to increase in the future. They may be particularly valuable to those who expect substantial future promotion and expect to stay in teaching for a long time. Added years become more expensive with age and salary increases. They require a considerable financial commitment, one which may be beyond the means of many female teachers.
The Teachers' National Stakeholder Pension Scheme (TNSPS) is designed to supplement the benefits of the main scheme by providing teachers earning less than £30,000 with another way to top-up their TPS benefits. It may be of particular benefit to people who started their teaching career at a later age and will not be able to build up an entitlement to a full occupational pension (currently 40 years service), therefore it may be particularly suitable for women (TUC, 2001).
However, many of the retired teachers interviewed were unaware of the possibilities. This lack of knowledge and advice was commonly cited by respondents as severely impinging on their prospects of building up a bigger pension fund.
Alice: My biggest gripe really is nobody advised me . . . that was probably my own fault I should have probably done something about it. But you don't think that retirement's looming, you sit there, you're doing your job and you forget that time's going on.
In addition to these pensions, teachers qualify for the basic state pension. However female teachers suffer similar disadvantages building up the Basic State Pension, as they are unlikely to have made the same amount of NI contributions as men due to time out of employment. The average amount of entitlement to state pension in 2005 was £60.85 a week for women compared to £74.05 a week for men (PPI, 2006).
Conclusion
Despite teaching being considered a particularly suitable career for women they encounter a number of disadvantages similar to those experienced in other forms of employment. Using a series of interviews with retired female teachers a number of features were elucidated which explain women's disadvantageous position in teachers’ pension provision. These include the balance between career and family life, including a potentially unequal distribution of childcare and domestic responsibilities between men and women which impinge on career prospects, possible gender differences in style and character such as issues surrounding discipline, confidence and ambition, and a pensions system based on a male-centric pattern of employment. Furthermore their work strategies were often far from planned, rather they were responses to the opportunities and resources available to them throughout the life course.
Women are disproportionately represented in managerial positions in teaching and more likely to have interrupted career histories and be employed in part-time posts. They remain clustered in lower, un-promoted positions. The 2003 School Workforce Survey (DfES, 2004) shows that whilst constituting fewer than 43.6 per cent of classroom teachers, 68.4 per cent of head teachers were men in secondary schools and in nursery and primary schools the ratio was even greater with 11.9 per cent of classroom teachers and 38.2 per cent of head teachers being male.
The fact that the government is currently shifting more responsibility for pensions to individuals and the private sector while employers are placing more emphasis on individual contributions may hit women hardest given their lesser involvement in private pensions. The greater the move towards individual provision for retirement through occupational and personal pensions as the major source of income in later life, the greater will be the income inequality between older women and men, and between those who have had an intermittent or low paid employment history and those with an advantaged position in the labour market (this also has a class element (Walker and Foster, Reference Walker, Foster, Vincent, Phillipson and Downs2006b)). Therefore, women's ability to contribute to private forms of pension provision such as the TPS has an increased significance as it can make the difference between a retirement characterised by a low income and means testing and one of relative prosperity.
Women's career patterns may be becoming more suitable for the design of occupational pension schemes with younger women more likely to have continuity in their labour market experience, remaining in employment after marriage and childbearing (Ginn and Arber, Reference Ginn and Arber1996). Women teachers may be at the forefront of this pattern since teaching has traditionally been associated with shorter hours and longer holidays attracting highly qualified women intending to combine a teaching and mothering career (Healy, Reference Healy1999).
However, these changes may be exaggerated as women in society, not just in the teaching profession, continue to experience disadvantages in the workplace associated with their gender. Therefore, it is not just those women in low paid, temporary forms of employment that need consideration, but also those women who have access to occupational pension schemes yet still fare less favourably than their male counterparts. The fact that these highly qualified individuals are unable to achieve parity with their male colleagues in the teaching profession indicates that there is something seriously wrong with the way in which the British pension system works.
Acknowledgements
The analysis reported in this article was part of the author's doctoral research at the Department of Sociological Studies at the University of Sheffield which was supported by an ESRC grant (Award number PTA-030-2003-00205). Appreciation is extended to my former supervisor, Professor Alan Walker for his advice and support.
