The conference organized by the Belgian Presidency of the EU in Brussels, on 8 February 2024, on the subject of the gender pension gap, featured as a speaker Deputy Minister of Labor and Social Security, Panos Tsakloglou.

Appropriate policies at Member State or EU level to address the gender pension gap

Speaking at the conference, Mr. Tsakloglou emphasized that in most member states the pension systems are mainly distributive. As he said, “in such systems, wage differences translate into pension differences. Therefore, any kind of policy that encourages women’s participation in the workforce helps to reduce the pension gap. In addition, women’s unemployment rates are typically higher than men’s, and women are underrepresented in managerial positions and in entrepreneurship.

Policies that can mitigate these impacts include:

– availability of high-quality nurseries and kindergartens covering the entire population, as well as full-day school activities,

– promotion of flexible forms of work,

– encouraging and promoting female entrepreneurship, – adopting policies, with the aim of breaking the “glass ceiling” and

– provision of social security contributions during periods of maternity leave, unemployment and caring for disabled or elderly family members’.

According to Mr. Tsakloglou, “even though in most countries the participation rate of women in higher education is higher than that of men, women are still underrepresented in STEM schools (natural sciences, engineering, etc.), which offer high salaries.

Therefore, there should be:

– Encouraging women to participate in STEM fields. In addition, pension policies can play an important role in closing the pension gap.

– Removal of incentives for early retirement which are mainly aimed at women.

– Elimination of gender differences in statutory retirement age.

– Promotion of pension systems incorporating a “national” pension, paid directly from the budget or a minimum pension.

In all Member States, funded pension systems play an increasingly important role, but women’s “financial literacy” is typically lower than men’s.

Consequently, the promotion of financial literacy programs is desirable, given that some countries are in a better position than others in some of the above areas, which is the exchange of information and best practices at EU level, but also the issuance of appropriate Community directives to the States- members, such as the one for reconciling professional and family life”.

Proposals for monitoring the gender pay gap and pension differences

Also, Mr Tsakloglou noted that no single indicator can provide a complete picture of all aspects of the gender pay gap or pension gap. Therefore, a variety of indicators should be used to monitor them.

“To get a complete picture of gender differences in the labor market, information on the difference in average wages and average wages per hour worked should be combined with corresponding information on gender differences in labor force participation rates, unemployment rates, part-time employment rates and gender gaps in managerial positions.

Regarding the gender gap in pensions, the most commonly used indicator is the percentage difference in the average pension of men and women for certain age groups of pensioners. To get a clear picture of whether differences in pay translate into differences in pensions, it is very useful to compare at the level of people receiving only old-age pensions.

In addition, estimates of the replacement rates for both sexes, but also estimates of the rates of return of their insurance contributions, can provide useful additional information for the assessment of the existing situation, but also for the design of effective policies. However, since widow’s pensions are lower than old-age pensions, focusing on pensioners receiving only old-age pensions is likely to provide additional valuable information. Gender differences in replacement rates can also shed light on the nature of the gender pension gap.

Finally, governments and European institutions should be encouraged to support studies that examine specific aspects of gender equality, especially in a comparative context between EU member states,” underlined the Deputy Minister of Labour.