TPR reports gender pay gap improvements, but ethnicity pay gap worsens

The Pensions Regulator (TPR) has confirmed plans to develop a longer-term Diversity and Inclusion Strategy and Action Plan, after its latest data on pay gaps revealed mixed progress on addressing pay gap issues.

In particular, TPR's data revealed that whilst the ethnicity pay gap has worsened over the past year, there have been improvements in terms of gender, with a 2.4 percentage point decrease in the median gender pay gap to 6.3 per cent.

In addition to this, the regulator reported a 4.7 percentage point decrease in the mean gender pay gap to 6.4 per cent, with further analysis identifying three primary contributing factors for the change in the mean and median gender pay gap metrics.

This included an increase in the proportion of women in the highest paying quartile to 47.5 per cent, combined with a decrease in the proportion of women in the lowest paid quartile by 7.7 per cent.

There was also a change in the grade bands which the female starters joined and compared to 2018/19, which showed a relative increase of 10.5 per cent in the number of women entering the organisation in higher paid roles graded five to eight, and less women, relatively, being externally attracted to lower paying grades and roles.

Alongside this, there was a higher proportion of women moving roles internally and being promoted, with TPR data revealing that the female population has been more mobile and taken promotions at a much higher rate than men.

Progress has also been seen in the mean gender bonus gap, which fell 6.1 percentage points over the past year, from 11.1 per cent to 5 per cent, in favour of men.

The median bonus figure decreased "significantly" by 9.6 per cent, resulting in a 0.1 per cent lean in favour of women, which TPR highlighted as evidence that it is moving closer to parity with regards to the gender bonus gap.

There was also a reduction in the disparity between the relative number of men and women receiving a bonus, with the percentage of women receiving a bonus 3.3 per cent higher than the amount of men, compared to 5.7 per cent in 2018/19.

These changes were attributed to the “significant” increase in the volume of awards made in 2019/20 compared to 2018/19, as well as a decrease in the financial value of the awards, both of which were in turn due to the introduction of a new lower ‘special' bonus category in the 2019/20 period.

In addition to progress around the gender pay gap, the regulator reported a 6.7 percentage point increase in the median disability pay gap since 2019, rising to 24.8 per cent in favour of those declaring a disability.

However, TPR also revealed a widening in the ethnicity pay gap, reporting a a 5.5 percentage point increase in the median ethnicity pay gap to 11.7 per cent, in favour of White staff.

Furthermore, whilst the percentage of BAME employees receiving a bonus increased by 10.9 per cent, this was less than the 14.1 per cent increase seen amongst white staff, with a total of 26.9 per cent of BAME staff receiving a bonus in 2020, compared to 38.5 per cent of White staff.

The data also revealed a 8.3 percentage point increase in the median sexual orientation pay gap to 15.1 per cent, in favour of heterosexual staff, and a 4 percentage point increase in the mean sexual orientation pay gap.

Despite this, the percentage of LGBO staff receiving a bonus increased over the past year by 15.6 percentage points to 41.2 per cent, slightly higher than the 37.1 per cent reported for heterosexual staff.

The regulator emphasised that these figures are preliminary, “not least” because TPR needs to improve the rates of those declaring these demographics and explore the contributing factors to the pay gaps to enable it to be addressed.

The data will be used in developing the regulator's longer-term Diversity and Inclusion Strategy and Action Plan, which will include a new gender pay action plan.

TPR emphasised that it continues to moderation meetings to guard against discrimination or favouritism and to ensure that performance ratings and bonus decisions are fair and consistent.

It has also outlined a number of plans to deliver the actions in its existing gender pay gap action plan, emphasising that whilst it is “encouraged” by positive progress, it is aware that there is “more work to do”.

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