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The Impact of Occupation and Gender on Pensions from Defined
Contribution Plans

David Blake, Andrew Cairns and Kevin Dowd

We present simulation results for the likely pension outcomes (measured in
terms of the distribution of the pension ratio of actual pension to some fraction
of final salary) for different defined contribution pension plan members
distinguished by occupation and gender. Whilst our results suggest that key
differences between outcomes depend on the strategic asset allocation
strategy chosen (and hence on the rate of return on assets in relation to the
growth rate in earnings), we also find that DC plans benefit most those workers
who have the highest career average salary relative to final salary or whose
salary peaks earliest in their careers. Thus low-skilled workers and women do
relatively well from DC plans: the largest pension difference between occupations
is 34% (for men) and 38% (for women), while the largest pension difference
between women and men in the same occupation is 45%. We conclude that key
aspects of plan design (in particular contribution rates) should be occupation- and