Working for equality
THE GENDER GAP IN PENSIONS in EU countries is alarmingly wide, says Italian researcher Francesca Bettio, who has done research on gender gaps for the EU Commission.
The pension gap is wide in nearly all EU countries, but the problem has been considered to exist only within the family. “Now that divorces are more common and the number of voluntarily single people keeps growing, the gender gap in pensions has become a societal problem,” Bettio states.
Traditionally, women’s lower pensions have been patched up with survivors’ pensions. Lately, many countries have found this system to be too expensive and have stressed that pension accrues from work. Both measures are indirectly unfavourable for women, Bettio argues.
The EU Commission has also tried to encourage supplementary pension saving, but recent research shows that, as women cannot afford to save and invest as much as men, this widens the gender gap even further.
Since the retirement age has risen in many countries, women’s working lives are slowly becoming longer, but women lag behind as far as working hours go. An ever increasing number of women in Europe work part-time, and working life has become unstable.
“Since women spend more time out of the labour force than men do, the third traditional alternative would be for the employer or the state to pay pension contributions for women also during unsalaried periods, such as maternity or childcare leaves. The Commission would like to strengthen this option,” Bettio concludes.
Bettio will be one of the keynote speakers at the international conference on gender inequalities in employment and pensions arranged by the Finnish Centre for Pensions in Helsinki on 19 May 2018.
Rehabilitation pays off
THREE OUT OF FIVE workers who go through vocational rehabilitation return to work. This is the result of improved rehabilitation services.
Earnings-related pension providers and rehabilitation service producers are taking their cooperation to the next level and moving towards partnerships. The aim is to improve the quality of rehabilitation services and ensure smooth rehabilitation processes.
The rising number of persons needing rehabilitation and the changing labour markets demand more versatile and efficient rehabilitation processes that take the individual needs of the rehabilitees into account.
The increasing use of rehabilitation service producers is expensive. For example, of the €140 million spent on rehabilitation services in 2016, €21 million was used to help workers compile the mandatory rehabilitation plan.
Average monthly pension €1,656
WOMEN GET LOWER PENSIONS than men. In 2017, women got an average monthly pension of €1,476 while the average pension of men was €1,874.
“The dispersion in women’s pensions is clearly smaller than in men’s. Women’s pensions are located mainly at the lower end of the distribution while men’s pensions are found throughout the pension spectrum,” explains Tiina Palotie-Heino, Statistics Manager at the Finnish Centre for Pensions.
Nearly 40% of the retirees got a pension that was less than €1,250 per month. Two thirds of them were women. Around 7% got a pension that was higher than €3,000 per month. A clear majority of them were men.
The average monthly pension of €1,656 in 2017 is €20 more than in 2016. The median monthly pension was €1,434, or €30 more than in 2016.
The total pension expenditure in Finland in 2017 was €30.6 billion, of which €27 billion were earnings-related pensions and €2.4 billion Kela pensions.
Gender gap in pensions paid abroad
WOMEN RETIREES LIVING ABROAD get a smaller pension from Finland than men do. The women got an average pension of €390 per month while men got €870 per month in 2017.
Male retirees living in Portugal got the highest monthly pensions from Finland: €4,890. Female retirees living in that country got €1,750 on average. Male retirees living in France were paid an average pension of €3,350 per month from Finland while female retirees were paid only €940. The average total Finnish pension of men living in Spain was €2,540 and of women €1,310.
There is no real gender gap in pensions paid from Finland to retirees living in Sweden, Norway and Australia. The total average pension paid to these countries was €300-400 per month in 2017 for both men and women.
The lower average pension paid from Finland to women living abroad is partly explained by the fact that many of the women have moved abroad at a young age and have not earned much of an earnings-related pension in Finland.