ABSTRACT
The fact that women conventionally retired earlier than men was perhaps slightly curious given that women, on average, live longer than men. It followed that women would, on average, be contributing towards pension provision for a shorter period and yet receiving benefits for a longer period than men. As a result, on average, it costs more to provide the same periodic pension for women than for men. In the same way, schemes which accumulate a capital sum which is used on retirement to purchase an annuity which will cover the period between retirement and death will, if averages are used, necessarily lead to a man’s annuity being larger than a woman’s. This use of average behaviour goes against the general thrust of the SDA 1975.3 It is, however, fundamental and essential to the operation of any pension scheme, for the amount of contributions which must be collected depends on an actuarial assessment of the amount of benefits which must one day be paid out, which in turn depends on the average life expectancy of the beneficiaries under the scheme. There is, however, no logical need for a scheme to differentiate between men and women; it might be equally rational to differentiate, say, between smokers and non-smokers. The attraction of differentiation by gender is that it is cheap and, unlike smoking, for example, cannot be faked and does not normally change over time.
