Increasing Retirement Savings by Working Women: Understanding Gender Disparities in Wisconsin Deferred Compensation Program Account Balances

Abstract

The purpose of this study is to increase understanding of the sources of observed gender disparities in Wisconsin Deferred Compensation Program (WDC) account balances. With this information, the WDC hopes to increase the usefulness of information provided to potential and current WDC account holders. The WDC is a supplemental tax-deferred voluntary retirement savings program offered to individuals holding jobs covered by Wisconsin’s public pension system. Because women and men employees are equally likely to participate in WDC, account balance differentials must come from different contribution levels, investment strategies, continuity of coverage, or withdrawal behavior. First, this paper reports on what administrative data reveal about the reason for gender differences in WDC account balances and contributions. Second, the paper shares conclusions drawn from four focus groups of female WDC account holders about other factors that may influence the decisions regarding WDC participation, contributions, and investment choices. A subsequent paper draws conclusions from a survey of both WDC account holders and non-participants about WDC participation and contribution decisions within the broader context of family savings decisions.