The Gender Pensions Gap: What Is It And What Can We Do About It?

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The gender pensions gap refers to the average difference in pension wealth between men and women. There are different ways to measure it. For example, looking at how much pension is built up at different ages.
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The gender pensions gap refers to the average difference in pension wealth between men and women. There are different ways to measure it. For example, looking at how much pension is built up at different ages, or pension income in retirement. A report by the UK government in June 2023 found that in the UK, on average, women have 35% less private pension wealth than men at minimum retirement age (currently age 55), based on 2018-2020 data.

By contrast, the average gender pay gap for employees in the UK was much lower, at 14.3% in April 2023. Although the gender pay gap has an impact, there are additional factors that contribute to the gender pensions gap. These include historic pension inequalities, the impact of workplace pension requirements on part-time workers, and pensions being left out of divorce settlements.

The Government's report suggested the gap has decreased over time and we hope that trend will continue. However, it can take a long time for policy changes to have an impact. Pensions are built up over a lifetime and changes do not normally apply retrospectively. This means that the pension of someone retiring today could be impacted by inequalities in the 1980s or earlier.

Reporting on the gender pay gap is now well established in the UK, with employers with 250 or more employees required to disclose their gender pay gap under regulations introduced in 2017. While there is no requirement for UK employers to disclose their employees' pensions gap, the Government has committed to reporting this information each year going forward. We hope that this leads to better awareness and understanding of the issue so that more work can be done to address it.

The survey responses from our pensions expert group highlight the different ways this issue is being addressed across jurisdictions, with the gap more significant in some countries than others. Common themes include important work to address underlying inequalities like the gender pay gap, such as in Cyprus, the Netherlands and Finland. Reforms to state pension systems also have an impact, such as in Mexico, Chile and Romania. We can expect further change in this developing area in the years to come.

How is the gender pensions gap being addressed in various countries?

Belgium In terms of statutory pensions, there are so-called 'minimum regulations' in place that contribute to narrowing the gender pension gap in Belgium. Recent statistical research from the Belgian Federal Planning Bureau (2024) has shown that without these minimum regulations, the gender pensions gap would increase from 31% to 37%. They are: The minimum pension aims to ensure a minimal pension buildup for retirees in all three pension systems (employees, self-employed workers and public servants) who meet certain career requirements. The minimum right per career year provides that if the annual salary used in the pension calculation is below a certain minimum salary, then this minimum salary will be used for the pension calculation (provided that the total pension after applying this rule does not exceed a certain ceiling). This is aimed at providing better social protection in the context of part-time work and atypical jobs, among others. In addition to the minimum regulations, several other measures contribute significantly to narrowing the gender pension gap for statutory pensions: The system of pension credits ensures that certain periods of inactivity during which no professional income was earned (e.g. sickness, disability, career breaks, certain types of part-time work) still count towards pension accrual. According to the Bureau's research, the gender pensions gap would increase from 31% to 43% if the system of pension credits did not exist. A surviving spouse who was married for at least one year and who has reached a certain age (in 2024: 49.5 years) is entitled to a survivor's pension upon the death of their spouse. Without the survivor's pension, the gender pension gap between widows and widowers aged 65 years and older would increase significantly from 6% to 67%. In the event of divorce, the career of the former spouse during the years of marriage can create a right to a divorce pension upon retirement. In short, if the state pension built up during the years of marriage is lower than 62.5% of the state pension built up by the former spouse during those years, a divorce pension will be paid to bridge the gap. (This has no impact on the pension of the former spouse, and no social security contributions are due for entitlement to the divorce pension.) Without the divorce pension, the gender pension gap between divorced men and women aged between 65 and 74 would increase from 15% to 22%. In occupational pensions, despite strict gender discrimination prohibitions, a gender pension gap persists since occupational pension accrual is a derivative of salary and working time. Cédric Bruyninckx , Jan Van Gysegem - Claeys & Engels
Chile In 2008, the government introduced the 'Pilar Solidario' which allows low-income individuals, especially women, to access a pension or supplement their self-financed pension. Additionally, the law provides the following benefits to women: (i) a pension bonus for birth or adoption, and (ii) economic compensation in the form of a transfer from the spouse's self-financed pension account in the case of divorce. In addition, in 2023, a universal guaranteed pension for individuals 65 and older went into effect. This pension is fully funded by the State and entails providing them with a monthly amount if they meet the requirements stipulated in the law. These reforms primarily benefited women to a greater extent, as they tend to have less access to a self-financed old-age pension and receive smaller amounts if they have one. A study by the Undersecretary of Social Security found that in September 2022 only 54.3% of retired women had the right to a pension, compared to 73.8% of men. Moreover, men's pension income was more than five times greater than that of women. Currently, a bill is also under discussion in congress to strengthen the measures implemented by previous governments and to create a mixed pension system financed by employers with a 6% new contribution. These changes should benefit women, especially since they incorporate measures that seek to compensate for pregnancy, maternity leave, and care work that is disproportionately carried out by them. Romina Gálvez A. and Marcela Salazar F. - Munita & Olavarría
Cyprus This issue has not yet been specifically addressed by the Cyprus government, and no reporting requirements have been established as of yet. However, there have been certain legislative developments promoting gender equality in the workforce which could result in limiting the pension gap. These are newly acted legislation that encourages flexible working arrangements and remote work, extending maternity leave (including in cases of adoption and surrogacy), and introducing caretaker leave and a statutory parental leave allowance. These reforms explicitly provide that the exercise of these rights will not in any way affect employees' rights or benefits, and that any relevant period of absence will be regarded as period of employment. These developments support women's participation in the labour market without interruptions, which in turn helps women accumulate more/higher pension. Nadia Tryfonidou - George Z. Georgiou & Associates LLC
Finland In Finland, a significant gender gap in retirement benefits remains. This gap cannot be fully addressed solely through pension policies, as poor gender wage equality prior to retirement is the root cause. Key measures therefore have included, for example, reducing segregation in the labour market, improving wage equality, improving pay transparency in accordance with the new EU Pay Transparency Directive, and promoting a more equal distribution of parental leave between parents in connection with a recent family leave reform. Matias Tamlander - DITTMAR & INDRENIUS
Germany In Germany there is a significant gender pension gap, which results in particular from women's disproportionate use of parental leave and part-time work. The amount of the statutory pension, for example, is largely determined by the amount of income-related contributions and the number of years of those contributions. Part-time work also often leads to lower benefits in many occupational pension schemes, particularly the widespread defined-contribution plans, where the employer makes annual income-related contributions to the company pension scheme. The measures to reduce the gender pension gap in Germany have been rather limited to date. Child-raising periods of up to three years are treated as contribution periods for purposes of the statutory pension. Moreover, German divorce law divides pension entitlements acquired during the marriage (whether statutory pensions or company pensions) equally between the spouses. In this way, especially women who were not employed or were employed only part-time during the marriage are still entitled to participate in their husband's pension. Jochen Saal - KLIEMT.HR Lawyers
Greece In Greece, there have been no targeted interventions aimed at addressing the gender pension gap. In fact, following major pension system reforms after 2015, favourable provisions for women, such as early retirement options for mothers, have been gradually phased out. Given the gender pay gap, and the fact that many women have worked part-time or taken extended career breaks to care for children or elderly relatives, they often struggle to accumulate sufficient pension benefits or even establish pension rights. A report from the Greek Ministry of Labour's Single Payment and Pension Control System highlighted that in 2021, 873,597 women received an old-age pension, compared to 997,618 men. The report also suggests that women in Greece are more likely to receive pensions through indirect entitlements, such as widowhood. Konstantinos D. Kremalis, Eirini Chamiti, Katerina Dipla, Theodora Ntentopoulou - KREMALIS Law Firm
Hong Kong Women in Hong Kong generally enjoy careers that are as long as their male counterparts, and the gender pension gap is not significant. This is due in part to long-standing equal opportunity legislation. Thus, the Hong Kong Government does not see an immediate need to address any pension gap issue by introducing specific policy or legislation. Kenneth Leung - Lewis Silkin
Hungary According to the 2023 pension report of the Hungarian Central Statistical Office, there is an approximately 15% difference between the pensions of men and women. The amount of the state pension in Hungary depends on the average salary and the length of service (insurance period). Women also have an early retirement option: with 40 years of service, which includes childcare periods, they can retire with a full pension, regardless of their age. The pension gap between men and women is thus due primarily to two factors. One is the difference in the length of service (according to 2019 statistics, men retire with an average of 38.2 years of service, while women have an average of 33.5 years). The other is the pay gap between men and women. While direct gender pay discrimination is prohibited by the law, there are currently no pay transparency measures in place. The main factors that contribute to the gender pay gap include (i) the standard use of contractual non-disclosure clauses regarding pay, (ii) wages that are set by individual negotiations rather than collectively, (iii) low coverage by collective agreements, and (iv) the absence of mandatory or customary pay audits and gender pay gap reporting. The EU directive on Pay Transparency has not yet been adopted in Hungary. Once adopted, it will hopefully have a direct impact on the pay gap and will lead to better awareness. However, the impact that it may have on pension inequalities will show only after a very long term. Hedi Bozsonyik - Bozsonyik-Fodor Legal
Israel Pension contribution rates are the same for men and women. However, gender pension gaps exist because of the factors discussed below. Efforts are being invested with regards to these factors; however, especially with regard to the first factor, there is an on-going debate as to whether it indeed supports women.     1) Earlier voluntarily retirement age: The mandatory retirement age is the same for men and women (67). However, there is a difference in the voluntary retirement age, whereby female employees may choose to retire at an earlier age than men. While this age has been increasing in recent years, it is still earlier than for male employees (65/67). There is an ongoing debate regarding the advantages and disadvantages of increasing this voluntary retirement age for women.    2) Fewer years in employment: According to statistical data, women work fewer years than men on average. There are various programmes aimed at increasing women's participation rates. There are also various statutory protections to support this, for example statutory termination restrictions while on parental leave. 3) Lower wages: In 2022, a legislative amendment to the Equal Pay Law came into effect, aiming to reduce gender wage gaps by imposing a requirement on large private sector employers to annually and publicly disclose information about gender wage gaps. In future this obligation is expected to be broadened to apply to additional employers. Liat Shaked-Katz - Herzog Fox & Neeman
Italy The gender pension gap is very high in Italy, where currently, on average, women have 36% less mandatory pension income than men. Moreover, in recent years, women have been given access to early retirement (seven to eight years earlier than ordinary access), and while this could be an advantage, it entails a significant cut of the pension allowance. The gap also exists in the supplementary pension system. In 2019, the relevant Italian authority issued a resolution requiring all supplementary pension funds to adopt provisions on equal treatment of men and women, and any discrimination (direct or indirect) between men and women is prohibited. In any case, the gender pension gap is also the consequence of the long-lasting gender pay gap, so the problem should be addressed at its root. In this respect, starting from 2022, public and private employers with more than 50 employees are obliged to draft a biennial report (not a pay gap report, but a gender equality report), which acknowledges the working conditions applied to male and female employees, as well as any differences in treatment both during the hiring phase and during the employment. The EU Pay Transparency Directive will integrate the legal framework, imposing further transparency and disclosure obligations on the employer. Laura Mancini - Toffoletto De Luca Tamajo e Soci
Kazakhstan Due to differences in the retirement age between men and women, there are unequal amounts of pension payments accumulated in the state pension fund at the time of retirement.  Men have a later statutory retirement age than women (63 years versus 61 years), allowing them to accumulate more funds for the years of work.  In 2018, there were changes in the retirement age policy aimed at reducing the retirement age gap and, accordingly, in the amount of accumulated pension payments. Amendments were introduced into legislation, under which the retirement age for women (which was 58 years at that time) was supposed to increase progressively each year and reach the retirement age for men by 2031. However, in 2022, the President of Kazakhstan initiated a moratorium on raising the retirement age for women, and the retirement age for women was frozen at 61 years until 2028. Only time will tell if there will be further development of the situation. Dias Zakirov - AEQUITAS Law Firm
Luxembourg In Luxembourg, the gender pay gap stood at only 0.7% in 2020, while the pension gap remained high at 44%. To monitor the economic situation with regard to pensions, income issues (including analysis of the income of older generations) has been added to the scope of the Observatory for Equality between Women and Men. The Observatory was set up by the Ministry for Gender Equality and Diversity to provide a set of objective data to help those working in the field of equality to make the right choices in terms of gender equality policies. Nina Thiery - Castegnaro
Mexico Mexico's government data reveals that in the National Retirement Savings System, 48% of the accounts and 63% of the total funds belong to men, while only 36% of the accounts and 34% of the total funds are held by women. On average, women have MXN 67,700 in their accounts, compared to MXN 92,200 for men. These disparities stem from factors such as fewer hours worked by women, career interruptions, gender pay gaps, and differing labour market participation between genders. However, significant efforts are underway to address the gender pensions gap. The first effort involves an increase in the minimum pensionable wage for women, implemented since 2021. This adjustment impacts the calculation of pensions by modifying the base salary contribution registered with the Mexican Social Security Institute, resulting in a positive effect on pension amounts. Mexico also implemented a pension system reform in 2020. The reform reduced the required total weeks of work for pension eligibility (which gave more women access to a pension), increased retirement fund contribution levels from employees and employers, and lowered the commissions charged by retirement fund administrators. Additionally, the Mexican Constitution was amended to provide pensions to all individuals aged 65 and above, regardless of their work history, which gives access to women who did not contribute through formal employment for some or all of their working lives. Additionally, the Life Annuity Units of Scheduled Withdrawals offer an average additional percentage of 0.88% to women compared to men in the age range of 60 to 80 years. David Puente-Tostado , Gabriela Guadarrama Garcia, Daniela Hidalgo, Santiago Villanueva - BASHAM, RINGE Y CORREA, S.C.
Netherlands In the Netherlands, recent research shows that women have more than 40% lower pensions after retirement than men, while the average gender pay gap in hourly wage is approximately 16%. The pension gap can partly be explained by historical trends. Before 1973, women could be fired due to marriage or pregnancy, and up until the early nineties, women and part-time workers (who were mostly women) could be excluded from pension schemes. Other factors persist today. One such factor is that Dutch culture is still quite traditional in terms of dividing childcare roles. Most of the time it is the woman who cuts back in hours to be the primary caretaker. This impacts salary and also causes valuable pension years to be lost. The new Dutch defined-contribution pension system exacerbates this issue, as premiums invested at a young age lead to a higher expected return. Working less during that period impacts pension accrual more than under the previous defined-benefit schemes. The Dutch government aims to limit the gender pension gap. Among other things, rules have been adopted to create more equality in work and childcare duties, such as paid parental leave for partners. Tax advantages for lower incomes were introduced in 2024. An almost fully government funded childcare is on the table, but the initiative has been postponed. The government further sees opportunities to use the introduction of the new pension system to create more awareness about the pension accrual issues associated with the division of work and childcare duties. Corine Hoekstra - Blom Veugelers Zuiderman Advocaten
Romania For 2023 in Romania, Eurostat reported an average gender pension gap of 20% for those aged 65 and above, a gap that appears to be narrowing over time. Disparities in pension amounts likely arise from women typically earning less (e.g. being overrepresented in lower-paid sectors such as cleaning, childcare, and secretarial work), and contributing fewer years to their pensions compared to men (due to existing pension conditions). The Romanian government is taking steps to equalise retirement ages for both men and women. Currently (as of May 2024), women retire at 62 years and 2 months, with a full contributory period of 32 years and 7 months, whereas men retire at 65 years, with a 35-year full contributory period. The retirement age for women is gradually being increased to 63 years by 2030, with a full contributory period equal to men (35 years). And a new law effective 1 September 2024 will set a retirement age of 65 for both genders by 2035, among other measures aimed at reducing disparities. Nevertheless, efforts to recalibrate pensions under the new law are hindered by income disparities and by the historical differences in contribution periods. Achieving gender parity in pension amounts will take time as changes are phased in until both men and women face identical retirement conditions. Flavia Dancieulescu - Nestor Nestor Diculescu Kingston Petersen SCA
Turkey Currently, there is no new legal regulation on this issue. However, under the principle of equal treatment set out in labour law, gender discrimination is prohibited, and lower wages cannot be paid for a job of the same or equal value due to gender. The prohibition of discrimination based on gender is further regulated in the Constitution and the law on human rights and equality. On the other hand, private companies and institutions can carry out studies to determine the current situation regarding gender-based wage and pension inequalities, to calculate the gender-based wage and pension gaps, and to determine and implement policies for closing those gaps. Nazlım Meriç - Bener Law Office
Ukraine In the Ukrainian pension system, the key factors in determining the amount of a pension are the length of service and the salary earned. Pension rights only accrue based on formal employment, and only on wages that are subject to insurance contributions. Women in Ukraine receive, on average, lower pensions than men because they are more likely to work in lower-paid industries and in unskilled jobs, and to take leave to care for children and people with disabilities. In 2021, the average woman's pension in Ukraine was equal to UAH 3,031 (USD 77). This is 29% less than the average pension for men. In 2023, this disparity increased to 31%. Thus, the gender pension gap in Ukraine persists and is even growing. Accordingly, there are still gender issues in the Ukrainian pension system that need to be solved.  Anna Odynokova - VASIL KISIL & PARTNERS

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