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Women’s Pensions and PovertyWomen’s Pensions and Poverty

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A European IssueA European Issue Jasna A. Petrovic – President of the Women’s Committee

of FERPA/European Federation of Retired and Elderly People

NPC Conference, London, 27 September 2008

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TRUTH

Europe is one of the most wealthy regions

in the world. Nevertheless, recent Eurostat

data on income poverty highlight the fact

that wealth continues to be unevenly

distributed among the EU Member States

and – within those countries – among its

citizens.

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The worning facts

• By 2050 the proportion of people aged

over 75 living at risk of poverty could

be 30% or more in all but a handful of

EU Member States, with older women

worse off than men.

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Why are women poorer?

1. This applies particularly to women due to their traditional lower representation within paid work and to the fact that their opportunities to accumulate full pension rights have often been much lower.

In the EU15, 10% of those working less than 30 hours a week are at riskof in-work poverty, whereas the number declines to 5% for thoseworking longer than 30 hours a week. It is well-known that part-time workis predominantly a characteristic feature of female employment: 36.2% ofwomen in the EU15 worked part time in 2005, compared with 7.7% ofmen. It is later reflected in their pensions…

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Why are women poorer?

Motherhood and other unpaid caring work        - breaks in employment        - gender pay gap        - part time hours        - occupational status

2. This reflects societal gender roles and is compounded by a lack of opportunities in both training and education, contributing to lower incomes in work and higher levels of poverty in retirement amongst women.

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Cruel facts: differences

Difference in work patterns:

• 80% of part timers are female

• 60% of mothers work part time, vs. 4% of fathers.

• More than ¼ of women aged 45-64 provide unpaid care for elderly or

disabled people.

• Almost 1/3 of women reduce their labour market activity as a direct result of caring.

Women are likely to live alone during retirement:• Over 40% of women aged 65+ are widows• More than 2/3 of women aged 80 or older are widows. • 60% of women over 75 live alone. • High probability on reliance on survivor benefits. • Increased risk of dependence on means tested benefits

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At highest risk?At-risk-of-poverty rate after social transfers

65+

Hungary 9 Malta 21 Netherlands 6 Austria 16 Poland 8 Portugal 26 Romania 19 Slovenia 20

Slovakia 8Finland : 22 Sweden 12UK 28 Turkey 21 /2003/Iceland 10 Norway 18

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• 16% of EU citizens are at risk of poverty, say the latest Eurostat figures, but only after social transfers /15% men, 17% women /. Before social transfers there are  26% EU citizens at risk /25% men, 27% women/. 

• Half the countries that joined the EU in 2004 do a better job protecting their • citizens from poverty than the average for the EU-15 /especially in Czech

Republic, Hungary and Slovenia/.

• In the majority of countries, the poverty risk is clearly higher for

elder women: in EU15 - 21% and in NMS10 - 10%! 

Higher differentials: Sweden, Austria, Germany, Finland, Ireland; Latvia, Lithuania, Estonia, Slovenia and Cyprus. Low differentials: Netherlands, Luxembourg, Denmark, Portugal and Slovakia.

It is about social model…

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UK hidden poverty?

• One in five of the UK's population lives below the poverty line - generally defined as living on an income which is less than 60% of the national average.

• Of the 12.5 million people living in poverty, just under a third were single, working-age people without children, 29% were children, 22% were adults with children - among them 900,000 single parents - and 18% were pensioners.

• The report, Poverty in the 21st Century, concluded the nature of poverty was becoming more complex with extremely poor people now more likely to be female and either divorced, widowed or separated.

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But…

In UK: The proportion of pensioners living in lowincome households has been fallingthroughout the last decade, from 29% of allpensioners in 1996/97 to 17% in 2005/06.Congratulations!Still: Single female pensioners and older

pensioner couples are the most likely to be in low income.

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Worning! Some figures for thought• The UK has a higher proportion of its

population in relative low income than most other EU countries: of the 27 EU countries, only 5 have a higher rate than the UK (Latvia, Greece, Spain, Lithuania, Italy)

• The proportion of people living in relative low income in the UK is twice that of the Netherlands, and one-and-half times that of both France and Germany.

• Mothers’ employment rate is 29% less. Mothers’ full time employment rate is 60% less.

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UK /and many other countries’ Sad Side Story

The poor remain unseen because many come from backgrounds where we

don't often expect poverty to exist and don't come forward to ask for help.

The complexity of the means-tested pensions support issuch that people are not claiming what they are owed.

It has been estimated that only around 2.7million of the 4 million pensioner households who areeligible for these easy-to-understand benefits actually

bother to claim them.

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• In all countries women aged 75+had a notably higher poverty risk.

• One out of every three women aged 75+ had experienced a poverty risk in Austria, Finland, Belgium, UK, Greece, Portugal and Ireland.

• Germany and Italy had little or no poverty differential for women in two age groups.

Older - poorer!

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Legal minimum pension

*source SPC Special Pension Study, minimum income provision for older people and their contribution to adequacy in retirement, December 2006, EC Social protection website

0

200

400

600

800

1000

1200

1400

1600

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Average wages

* Source EUROSTAT, gross data

** Gross data

0

500

1000

1500

2000

2500

3000

3500

4000

4500

m

f

gen

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Average pensions

0200400600800

100012001400160018002000

mfgen

* Gross **Net

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BELGIUM: 24% of retired 65+ women live in poverty AUSTRIA: 230 000 65+ people SPAIN:149 000 men, 1 697 000 women CROATIA: 40% of the population living in poverty risk

zone (10% bellow poverty line), as earning less than 260 Euro

HUNGARY: 50% of the retired people, as receiving less than 244 Euro per month

IRELAND: 27.1% of the retired people, 3.3% in constant state of poverty

UK: forecast by 2050: 50% of future pensioners may receive incomes below the official poverty level

ITALY: 5 million at risk of poverty, of which 3 million women

65+living below the poverty line

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Retired 65+ people at risk of poverty

0

10

20

30

40

50

60

70

m

f

gen

Percentage of 65+ retired persons at risk of poverty. Data Integration 2007 EC, EUROSTAT

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Key findings

1.Labour market conditions and the final outcomes of pensions systems are clearly related.

2.Especially in the case of women’s poverty, the issue of ‘care credits’ (recognition of periods of time out of paid work for caring responsibilities – such as looking after children or elderly relatives) is becoming increasingly important.

3.The wage gap between genders is something that should be looked at, as is gender segregation of the labour market.

4.There appears to be a trend towards providing less generous basic pensions, but covering a higher percentage of the population.

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What is “guilty”

WAGE GAP leads to PENSION GAP

• The main factor behind the current pension gender gap is the lower remuneration of female workers, due to widespread sectoral and occupational segregation. Women’s average insurable income is 85% of men’s and about 89% of the national average.

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• Retirement age and length of pension contributions - gradual increase in retirement age reached 63 years for men in 2006 and will reach 60 years for women in 2009 – to be challenged!

• Pension formula – pension reforms widen gender pension gap – to be challenged!

• Gender wage gap – part-time working, career patterns and discriminating types of occupation and employment – to be challenged!

• Women represent in the EU 59% of all tertiary graduates but they still do not reach the best positions in the economy for several reasons!

• Work/life issues: women still take the burden on private and family responsibilities. – to be challenged!

Food for thought

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Remember. Act.

1 October - International Day of Older

Persons

What you are going to do?

17 October – International Day for the

Eradication of Poverty

What you are going to do?

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THANK YOU!

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REPRESENTATION OF WOMEN IN FERPA AFFILIATES

PYRAMID OF DISCRIMINATION

• Out of 10 surveyed organisations from 8 countries, 8 of them have a women's structure and responsible person. As majority of the organosations did not reply, it is possible that majority of these organisations have no women's structure and lack of gender sensitivity.

• On average women make 46% of the FERPA membership.

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REPRESENTATION OF WOMEN IN FERPA AFFILIATES

• Pyramidal phenomenon is visible: women make almost half in the membership, but only 28% in the „parliament-like“ highest body and only 22% in the „government-like“ decision making body.

• Average representation level indeks for the surveyed organistions - which could be considered gender-sensitive /as they have replied to the questionnaire/ - is only 54, which means that out of each ten seats for women, male colleagues take almost five, plus their ten seats.

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REPRESENTATION RANKING

1 FNVNetherlands 1072 SPI/CGILItaly 883 SUH/UATUCCroatia 884 FGTBBelgium 635 UILP/UILItaly 366 NPCUK 367 CFDTFrance 358 FNP/CISLItaly 25

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Resolution: Pension gap and poverty

The FERPA Women’s Committee meeting on

11 July 2008 in Brussels adopted the following

resolution:• Older people are often at higher risk of

poverty than their younger counterparts. applies particularly to women; their opportunities to accrue full pension rights have often been much lower because of their traditional lower representation within paid work.

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• Pension systems alone cannot be expected to solve the problems of elderly poverty if the origins of the problems are within the labour market itself. Given the issues of gender segregation and part-time working in the labour markets of various countries, a high employment rate will not per se resolve the problems related to pensions and poverty in old age.

• There is large difference between men and women’s working patterns: While the number of women completing higher education now exceeds men in EU Member States, their employment rate remains 15 percentage points lower than men’s and they continue to face an average pay gap of 15%. At the same time, the unemployment rate for women is still higher than the male rate, and long-term unemployment is still much more common among women than men.

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• Women are also more likely to work part-time: 32% of the female labour force is part-time, compared with only 7% of men, and governments have not yet come to terms with validating this and other atypical forms of working through pension entitlements. 60% of mothers work part-time versus 4% of fathers; more than one-quarter of women aged 45-64 provide unpaid care for elderly or disabled people.

• Almost one third of women reduce their labour market activity as a direct result of caring. Women are likely to live alone during retirement: over 40% of women aged 65+ are widows; more than two-thirds of women aged 80 or older are widows; 60% of women over 75 live alone.

All these parameters reflect on the poverty risk of women.

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The FERPA Women’s Committee therefore calls on the ETUC (European Trade Union Confederation) to make serious efforts to demand that the EU institutions strengthen the role of the EU in reducing poverty, especially of older women, across the continent.

Preventing older people from slipping into poverty and social exclusion and providing adequate welfare for them is becoming a growing concern for the European Union. Some Member States have recognised this and have introduced a number of reforms to strengthen their minimum pension systems by increasing their financing or by introducing or improving benefits. The ETUC should strengthen its policy on older and retired workers.

Women’s poverty and social exclusion in Europe requires specific, multiple and gendered policy responses.

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The FERPA Women’s Committee calls on the ETUC to make a stronger effort to develop a new trade union response to tackling poverty among older women, based on the following objectives:

1. Greater employment during working lives2. Better indexation of pensions in payment

and also adequate survivors’ benefits 3. Strengthening of social safety nets4. Better pension crediting for genuine absences from the labour market5. Altering of social insurance rules and

qualifying conditions to benefit women6. Fixing a minimum living pension for all

older women.

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The FERPA Women’s Committee calls on all its and the ETUC affiliates to alert their governments to the risk of poverty among older women and to undertake a study on the impact of pension reforms on women’s lives in their countries, bearing in mind that the individualisation of pension rights (and social security and taxation systems overall) should encourage women and men to engage in paid work, and thus earn individual economic security; and that mechanisms should be developed which accommodate the employment patterns linked to society's need for the care of children and other dependant persons so that career-breaks or part-time work are considered as full-time work in the calculation of pension benefits.

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CONCLUSIONS

1. The best policy instruments for tackling older women’s vulnerability to poverty are active labour market policies for women, aimed at improving their employment, reducing gender pay gaps through the introduction of equal pay and also supporting their working careers.

2. For those women in employment, access to a decent occupational pension scheme must also be on an equal basis. However, those in part-time, low-paid employment or working at home often have no access to any occupational pension. Private savings schemes offer no guarantee or financial security. This can best be provided by the state.

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CONCLUSIONS

3. Active labour market policies for women should be accompanied by an improvement in the universality of pension rights (e.g., by offering flat-rate residence-based minimum pensions for all women, which are set above the official poverty level).

4. Poverty risks for older women should be specifically targeted, by providing more adequate survivors’ benefits for all widows, and by improving indexation of state pensions and minimum pensions.

5. More research shouldd be undertaken to study the impact of generous childcare credits and of minimum income guarantees on women‘s labour market participation.