The Pension Protection Fund (PPF) has reported a 23 per cent median ethnicity pay gap and an 11 per cent bonus pay gap, whilst its gender pay gap has also widened to 15.7 per cent, according to its Diversity Pay Gap report.

In light of the ethnicity pay gap, the PPF has committed to increasing Black, Asian and Minority Ethnic (BAME) representation across the organisation to 30 per cent by December 2023.

This includes a specific target to increase Black representation to 9 per cent, compared to current level of 6.7 per cent, and will equate to 25 BAME new starters over three years.

Alongside this, the PPF has committed to increasing BAME representation within senior manager roles to 25 per cent by December 2023, equal to six new or promoted BAME employees, and to include 4.4 per cent identifying as Black, compared to the current 1.5 per cent.

The specific increase in Black representation was included as this was the most underrepresented group within the BAME population, with the PPF noting that 6.7 per cent of its employees are Black, despite 20 per cent of residents in the local area around its head office in Croydon identifying as Black.

The group’s median gender pay gap has also increased from 13.4 per cent in 2019 to 15.7 per cent in 2020, while the bonus gap has remained unchanged at 31 per cent.

In addition to this, the gender mean pay gap recorded an increase to 25 per cent, compared to 22.5 per cent in 2019, whilst the mean bonus gap was 65 per cent, a slight fall on the 66 per cent recorded in 2019.

However, the PPF argued that the gender pay gap reflected “gender imbalances inherent in the sector”, noting that there was a high concentration of men in highly paid roles in functions that are "currently overrepresented by men in the industry", including investment, risk and IT teams.

Furthermore, although the gender pay gap had grown over the past year, the PPF stated that this was a result of recruiting more women into junior roles as part of a broader effort to build on its “female talent pipeline”.

Indeed, the PPF is a signatory of the Women in Finance Charter and has set a target to have 45 per cent of female representation at senior management level by 2023, having achieved its previous goal of 40 per cent two years ahead of schedule in October 2019, subsequently reaching 42.4 per cent in August 2020.

Similarly, the group also warned that the ethnicity pay gap could widen before it narrows, as a result of initiatives designed to improve diversity in junior roles.

“Building an inclusive, representative organisation is very important to us," commented PPF chief people officer, Katherine Easter.

“We recognise that we need to make improvements to ensure we attract and retain the widest, most diverse, talent pool possible. We’re committed to doing this through monitoring and measuring our progress against set targets."

She continued: “Our ethnicity report highlights that there is clearly a problem we need to fix. In a step towards addressing this, we’ve set targets for ethnicity representation which ensure we hold ourselves accountable to improving race equality, particularly in senior level roles.

“We’re disappointed that our gender pay gap has widened slightly this year, but this was something we expected would happen in the short-term as we recruited more women into junior roles so we could build on our female talent pipeline.

“While we’re pleased with our progress on increasing female representation at senior levels, gender imbalance remains and this is reflected in male-dominated functions such as investment, risk and IT.”

The PPF's publication of its ethnicity figures also make it one of the first organisations in the pensions industry to announce the difference in the hourly rates of pay and bonus pay between BAME employees.

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