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Report: Women's pensions one-fifth smaller than men's

The gender wage gap and long periods of child home care increase the disparity between men’s and women’s pensions.

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In 2085 women's pensions will still be 15 percentage points lower than men's. Image: AOP

Men's pension income continues to outstrip women's in Finland, according to a new report commissioned by the Social Affairs and Health Ministry.

The report found that on average, women’s pensions are one-fifth smaller than men’s. While the gender difference in pensions has narrowed over the past two decades, progress has been slow, the authors noted. On a European scale, the gender-related pension gap in Finland is quite large, the report added.

Nowadays, there is no major difference between men and women in terms of average employment rates, career duration or retirement age. However there is a notable disparity in earnings, particularly on a global scale.

Pension reforms make little difference

According to the authors of the report, the gender wage gap is a central factor influencing the pensions divide between men and women. The unequal division of parental leave between men and women as well as especially long periods of child home care leave also play a role in increasing the gender-related pay and pension gap in Finland.

Although having a family often causes a major disruption to a woman’s professional career, after caring for youngsters, women are generally able to return to good jobs. Finland is the only European country where employment rates among 60-year-old women is higher than among men of the same age.

The report pointed out that the rules of the Finnish pension system are the same for men and women. At the same time, recent reforms to the system do not appear to have had any material impact on the gender pensions gap.

It is estimated that by the year 2085, women’s median pensions will still be 15 percentage points lower than men’s. Changes in labour markets and earnings levels as well as the impact of pension system reforms will only be seen years or even decades in the future.

EU worried about poverty among elderly women

In Europe, more attention is being paid to discussions about the adequacy of pensions, wage parity and the gender-related pensions gap. The European Union has expressed concern about poverty among elderly women.

The report noted that the risk of poverty among aged women is double that faced by men. Retirement now accounts for a significant period of life and for elderly people, pensions are the most important and sometimes the only source of income.

National and guarantee pensions are still key for many female retirees since moves to balance them out benefit women in particular.

Low income is a strongly gendered phenomenon, especially among older age groups, the report said. The gender pension difference is also about equality as well as income and social justice.

From the perspective of an individual’s livelihood, pension income disparity becomes even more significant as life expectancy grows and people live longer as pensioners. Nowadays, the time spent in retirement accounts for about a quarter of an individual’s life span.

The report was produced as part of a two-year gender gap in pensions project partly funded by the European Union. The goal of the project is to generate discussion about the difference in men’s and women’s pensions and to increase awareness about the factors behind the phenomenon.

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