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Pensions in Europe: Keeping women poor in old age?

Pension reforms in Europe: Keeping women poor in old age?
Press Release - Education International

Are pension reforms reinforcing the gender wage gap and extending it past women’s working lives and in to retirement? What policies can help minimize the differences between men’s and women’s economic wellbeing in old age? These are among the questions examined in a new study by Education International (EI), the global union federation representing teachers and education workers across Europe and around the world.

Pension Reforms in Europe and Their Impact on Women was written on behalf of EI by Vanja Ivosevic, a University of Zagreb specialist on gender perspectives in education policy. The EI study aims to show how pension reforms may affect the gender disadvantages facing women once they are dependent on retirement income. Proper attention to key features of pension redesign discussed in this study can make a vital difference in improving the circumstances of retired women.

Ivosevic based her analysis on an independent survey of 48 EI-affiliated teacher unions in 33 countries in the Pan European region, and provides an unprecedented overview of the gender implications of pension reform throughout Europe. The report can help reform proponents and critics alike become aware of the diverse picture of retirement incomes across Europe, and understand how their own countries and unions compare within the broader picture.

One concern highlighted is the widespread, cost-driven retreat by government from social insurance ideals. As government financial support declines proportionally, the result has been to link total retirement income more closely to employee pension plan contributions, which in turn leads to employment pay differentials being carried over into retirement incomes. A decline in policies that bring more equality into retirement incomes, such as guaranteed minimum incomes, flat rates, and income ceilings, is also associated with government cost-cutting. Thus, the retreat of the state increases gender differentials in total pension benefits.

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It is therefore important that pension reform should mitigate, or at least not further exacerbate, these gender differences in retirement welfare, Ivosevic reports. The EI study points to certain key points. Pension calculation formulas can affect gender differences through the selection of the base interval of earnings years and through the acceptance or rejection of gendered life expectancy tables. Access criteria to full pension rights are similarly influential in the way they deal with part-time work and career interruptions, in setting levels of minimum and regular contribution requirements, and in allowing or penalizing earlier retirement.

By showing what is being done across a wide range of European jurisdictions, EI aims at empowering unions to evaluate pension reform proposals and to advocate for appropriate changes. In addition, by indicating the nuances and complexity of different national situations, this study makes a strong case for the necessity of comprehensive gender impact assessment in pension plan reform.

You can download the EI study on Pension Reforms in Europe on the EI website: www.ei-ie.org/gender/ .

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