No more unequal pensions for men and women

Today, an average retired woman in Europe receives a pension almost 40% lower than a man. This difference reflects yesterday’s differences in the labour market and pension systems. An alarmingly high number of women lose their independence when entering retirement.

This is why the EPP Group laid down a basis for a comprehensive EU strategy to address the existing imbalances in pensions. While fully respecting the role of national governments in designing pension systems, we focused on areas where EU cooperation can bring added value, such as by providing better financing to care facilities or developing statistical tools to better understand the root causes of gender inequalities in pensions. We were also instrumental in passing new legal rules on work-life balance which will provide for a better sharing of responsibilities between men and women and will allow women to be more economically independent.

Pension gaps reflect differences from the past that have consequences all through life: part-time employment, longer and more frequent career breaks, reduced salary for the same job, unequal responsibilities of family care. Women are victims of many small inequalities.

The EPP Group has called on the leaders of EU countries to mobilise to fight against these differences. Addressing root causes such as different employment levels, uneven possibilities to pay higher pension contributions or lower hourly wages make the difference for European women. High-quality employment and employability among women is the answer to the pension gap issue.

Higher working flexibility

The EPP Group called for an EU law to set up minimum rules for flexible working arrangements that would need to be put in place by Member States. These would open more doors to women who wish to combine their working and family lives without compromising any of them. Thanks to the EPP Group, the law of work-life balance will in the future allow parents and carers to better balance their professional and family life. European fathers will be entitled to 10 days leave (at sick pay level) when their baby is born, and women will have the right to a minimum of 4 months parental leave (of which 2 months will be paid at an ‘adequate’ level and will be non-transferable) without damaging their career opportunities. We have also created a 5-day carers’ leave which will allow employees to stay at home without putting their job and financial situation on hold. For the EPP Group, making sure men can more easily participate in an equal distribution of care between parents would allow women to return to the labour market faster after having a child. This is one of the paths for women to be economically independent and decrease the pension gap.

Adequate care facilities

Accessible and quality care facilities is another precondition for women in order to be able to continue their working lives if they wish to. The EPP Group was the only political Group which asked to take a wider look, at EU level, at the state of care facilities in the Member States. Thanks to the studies we initiated, huge gaps between countries in care facilities for children before the age of four, for the elderly and, most of all, for disabled people were discovered. A lack of quality facilities has an impact on women’s access to the labour market. We believe the EU can provide added value in addressing this issue.

More needs to be done

Our blueprint for the EU strategy to address the pay and pension gap includes a series of other recommendations. The EU needs to enforce already-existing anti-discrimination rules. Pay disparities and their 'inexplicable' component resulting from discrimination at the workplace should be addressed. For the EPP Group, it is unacceptable that women have to pay more for insurance, for example, just because of their gender. Access to financial services has to be non-discriminatory and based on unisex actuarial criteria.

With more studies on the effects of the gender gap on pensions and financial independence of women, we could better show the far-reaching impact of this issue to the public. With more data to show the problem, the fight against the gender pension gap does not stay on paper but becomes a publically-accepted commitment.

There is no one-size-fits-all solution. While some countries have a gender pension gap of less than 4%, others reach almost 49%. The key is therefore to share best practices and engage more decision-makers and women to find custom based solutions fitting labour markets and societies with different needs.

We fight for equal pensions for a dignified elderly life. Addressing imbalances in the working lives of men and women represents a holistic approach towards eliminating poverty in old age. A pension is the main source of income for one out of four people in the EU. And the expected significant increase in the number of pensioners will result in the doubling of that figure by 2060. Owing to their longer life expectancy, women are likely to require more pension income than men to cover their retirement. As pension schemes are a Member State competence, the EPP Group believes that the EU must focus on anticipating the gender pension gap by preventing it, which is an area where the EU can act. We have therefore recommended the creation of an indicator that would help assess the situation in Member States and fight against the gender pay gap, taking into account three criteria: the total of years worked, the intensity of the work and the difference in pay already in place.

Europe: a place of dignity for the elderly

We want Europe to be a place of dignity for our elderly, not a place of poverty. Gender inequalities in pensions in the EU remain very wide, with women on average receiving pensions that are approximately 40% lower than men’s. In fact, this number reflects wider inequalities as it mirrors cumulative disadvantages experienced by women in the labour market throughout their working lives. We need to act now in order to reduce these cumulative disadvantages. What we do today about the labour market developments and pension system reforms will contribute to fighting the gender pension gap of tomorrow.