How can the pension gap be closed?

On 8 February, the High Level Conference of the Belgian Council Presidency on the "Gender Pension Gap" took place in Brussels. The gender pension gap describes the differences in retirement income between women and men. The question of how this pension gap can be reduced in future was discussed by high-ranking politicians with experts from the European Commission and the Member States, including the Belgian Minister of Pensions and Social Integration, Karine Lalieux, the Belgian Minister for the Self-Employed and SMEs, David Clarinval, and the German State Secretary of the Federal Ministry of Labour and Social Affairs, Dr Rolf Schmachtenberg.

Reflection of employmen histories

The gender pension gap reflects the differences in the employment histories of men and women. This includes, for example, the unequal distribution between paid employment and the unequal distribution of unpaid care work between men and women, such as childcare or care for the elderly, but also family support, home care or help among friends. In addition, women work part-time more often than men and take more frequent and longer breaks from work for family reasons. In addition, women's earnings are still significantly lower than those of men (gender pay gap).

However, the gender pension gap should not be interpreted as an expression of a precarious income situation for women in old age. The income situation of women in old age depends on the income situation of the household in which they live. Other sources of income are also included, such as capital income, income from leasing and rentals or from employment of other household members. The gender pension gap therefore not only encompasses women's independent retirement income, but also their economic dependency.

Changing role models

The pension gap mainly relates to women who are retired today, meaning those whose working lives predominantly began before 1970. At that time, more traditional partnership models, in which only the man was employed, for example, were much more common than they are today. However, role perceptions and life plans have changed considerably. This is also reflected in the steady increase in female labour force participation, which has risen by almost twelve % in the European Union (EU) and by a good 14 % in Germany since 2002.

Structuring the pension systems

In addition to the employment history, the design of the pension systems also has a direct influence on the gender pension gap, thus on its reduction. At the conference organised by the Belgian Council Presidency, this was illustrated by way of best practice examples.

Susan Kuivalainen from the Finnish Centre for Pensions presented an easily accessible pension calculator that enables Finnish insured persons to find out the consequences of a reduction in their employment on their future retirement income. Dina Frommert from the German Pension Insurance explained pension splitting, which divides pension entitlements acquired during marriage in the event of divorce. Giselda Curvers and Dries van der Bosch also explained the positive impact of the basic pension on women in Belgium. Three different measures that benefit women and can reduce the gender pension gap.

A matter of access

Over the course of the event, it also became clear that reducing the gender pension gap can only be achieved through equal access to the labour market and to social protection. The same applies to an equal distribution of paid work and unpaid care work between men and women. In addition, access to company and private pension schemes must be given greater consideration. For example, the gender pension gap for occupational pensions is significantly higher than that for statutory pension insurance.

Call for a Gender Pension Gap Network

Analogous to the European Minimum Income Network for the evaluation of minimum incomes in Europe, Lalieux and Schmachtenberg proposed the establishment of a Gender Pension Gap Network. The European statistical office Eurostat and the indicator group of the European Union's Social Protection Committee have created comprehensive statistics and analysis tools. This should be utilised systematically, in order to gradually close the pension gap.