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Employers move to rectify female pensions gap

DENMARK - The pensions gap between Danish men and women has widened in the last five years, as men now contribute an average of 54% more than women, suggest figures from the Danish Insurance Association.

However, recent labour market agreements indicate employers may be willing to help redress the imbalance.

Data from the association (Forsikring & Pension) shows men paid an average of DKK51,000 (€6,834.44) into pension schemes in 2006, up from DKK31,000 in 2001, while in the same period, women's contributions have risen to just DKK33,000 from DKK23,000.

This means contributions from men were just 35% more than women's in 2001, but were 54% more five years later. The figures are for all pension schemes with pension funds, life insurance companies and banks.

That said, the number of working women who pay into a pension scheme has increased, and gone some way to catching up with the figure for men, data showed. In 2006, 77% of men contributed to a pension compared with 74% in 2001, while 73% of women contributed - up from 67%.

Men paid more into their pension in particular because they generally had more stable careers and still earned higher salaries than their female colleagues, the association said.

"To even out the differences, what would be required is for women to keep paying into their pension while on maternity leave," said Anne Seiersen, deputy director of the association.

"And if they cut their working hours, then pension contributions should not fall accordingly, if women's pension contributions are to match those of men," she continued.

However, Seiersen pointed out some of the recent collective agreements in Denmark's labour market have included agreements that employers will continue pension contributions on behalf of women on 10 of the 14 weeks of maternity leave.

"We do see some movement towards that in the labour market," she said.

Since another factor behind the pension savings difference is the pay gap, said Seiersen, addressing this problem would be another precondition for closing the pensions gap.

Separately, the Danish Insurance Association said pension contributions in Denmark are up between 11% and 12% this year, according to its estimate, to just under DKK115bn.

In 2006, Danes paid DKK102bn in tax-deductible contributions to insurance companies, pension funds and savings institutions.

The high level of employment is one of the factors behind the rise, it says, because many people had a pension scheme as part of their employment.

Commenting on the figures, Seiersen said the continued increase in pension contributions proved Danes supported the supplementary pension schemes.

"The pensions sector is a classic example of how, over the long-term, it is possible to implement welfare reforms that take the pressure off the public sector," she said.

Aon Consulting recently produced a report on national pensions regimes which suggested Denmark's is the best in Europe, in part thanks to the pensions surplus generated by employer and employee contributions. (See earlier IPE story: Sweden and Netherlands climb European pension ranks)

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