Auto-enrollment, digital tools could help narrow women's retirement savings gap, says Sun Life's Oricia Smith
By the time women reach retirement, women hold 27 per cent less in workplace savings than men.
That's the central finding from a recent Sun Life report that analyzed attitudes, behaviours, and actual plan data from about 1,900 working Canadian plan members. But the number that matters more, according to Oricia Smith, president of Sun Life Global Investments (SLGI) Asset Management and senior vice president of Investment Solutions for Sun Life Canada, is what happens when the right tools and plan features are put in place.
“While there is a retirement gap for women, it isn't inevitable," she says. "Confidence and plan design can reverse it. We found that confidence is a strong driver of the savings behaviour and a stronger driver than financial knowledge. High confidence savers put away 64 per cent more of their income than less confident peers so that really punched out a lot. Individuals with higher financial literacy saved higher but only 12 per cent more than those with lower literacy. So it really was confidence that made a big difference.”
According to Smith, the savings gap isn't the product of any one cause. It builds over time as women step away for caregiving, shift to part-time work, or navigate health challenges – all while feeling less supported in their workplace plans.
Yet the biggest driver, she argues, is missed employer matching. Women underutilize their match at nearly every income level and career stage, with the widest gap in the 35-to-44 segment, where 57 per cent of men maximize matching compared with just 39 per cent of women.
"They're not just missing on the extra dollars today. They're missing out on years of compounded growth," said Smith. "And that early gap just compounds over time and significantly widens retirement outcomes by the end of their career."
The confidence gap also tracks closely with gender, particularly as women make up 34 per cent of those identified as both low confidence and low literacy, compared with 21 per cent of men. In the high-confidence, high-literacy group, it flips to 21 per cent women and 35 per cent men.
Both men and women rate their financial literacy at similar levels, yet women are far less likely to act on features like employer matching. That disconnect, Smith argues, is where plan design, communication, and tools can close the gap.
"The retirement system is based on steady, uninterrupted careers and predictable earnings. It doesn't necessarily match with many women's working lives today," she said. “When workplace plans are designed to build confidence through clarity, digital tools, automation and access to advice, we saw women's financial outcomes improve dramatically.”
Smith believes employers can still align retirement planning with today's workforce. When both women and men have access to the right tools and guidance like auto-enrollment, flexible contribution options and digital planning resources, they are more likely to save and maximize available benefits.
To that end, she breaks effective plan design into four practical moves: simplify, automate, incentivize, and promote. The first is reducing complexity so members can clearly see which actions matter and how today’s contributions affect future outcomes.
The second is automation, through features like auto-enrollment and auto-escalation, which keep savings moving even when workers are busy or dealing with disrupted life stages. She argues that these default settings matter most early in a career, when missing years of compounding can do the most damage.
The next lever is incentives, particularly employer matching. According to Smith, matching only works as a real advantage if employees can access it easily and understand how it works. That puts pressure on plan design, communication, and tools to make the benefit harder to miss.
The fourth is promotion through digital tools and educational resources, which can help members take more control of their finances and build confidence through self-serve support and clearer planning.
If employers can make only one change, Smith’s pointed to automation. She sees auto-enrollment and auto-escalation as the most effective fix because they remove the friction of getting started, reduce decision fatigue, and keep contributions on track without requiring constant effort from employees. Automation doesn’t strip workers of choice as they can still adjust their contributions or opt out. It just simply makes saving the default, she noted.
Smith believes in the effectiveness of digital planning, highlighting the research on confidence. She argues these tools cut through the complexity of workplace plans by giving members clarity on how contributions translate into future income, real-time tracking that builds momentum, and the choice to either self-serve or access one-on-one guidance from financial consultants at no additional cost.
That combination also changes behaviour.
"When women get clarity, flexibility, and support, behaviour shifts," she said. "They engage more, make adjustments, and are more likely to capture the full value of things like employer matching."
Additionally, in some groups, the research found that pairing digital tools with human advice reversed both the contribution gap and the maximization gap — and women came out ahead. Smith sees the combination of those two elements as particularly powerful.
Smith underscored that the retirement gap isn’t a one that can’t be solved. When workplaces work together and when plans are built to foster confidence, women save more and close the gap faster. She acknowledged the value in research that pairs survey findings with actual plan data, giving the industry a clearer picture of how members behave within workplace savings plans.
"I do think there is a great focus on good plan design, removing friction, and building confidence," she said. "And I think it'll lead to some really good outcomes for all Canadians."
