Potential reforms in government-backed pension funds in Europe might be handing women the short end of the stick, according to a new paper sponsored by Education International, a Brussels-based global federation of teachers unions.
As government financial support for pension systems declines in Europe as a result of cost-cutting efforts, such as linking total retirement income more closely to employee salary or pension contributions, there is an amplified effect of “the (income) inequalities between men and women,” according to the paper, which was published in October. As a result, policies that help spread benefits more evenly between men and women — including guaranteed minimum incomes and flat rate payments — increasingly are abandoned.
“Both tendencies ... lead to the transfer of existing labor inequalities more directly into the pension system,” according to the papers. “This is true not only for women teachers but no less so for every group disadvantaged in the labor market.”
The paper examined teachers' pension data from 33 European countries, and found that when pensions are more closely linked to salaries, women could be worse off in terms of pension benefits by 38% to 55% compared with men in retirement. The reasons include lower wages, longer life expectancy and the higher likelihood that women will work part time or take a career break for family reasons. — Thao Hua