Women's Pension Rights and Survivors' Benefits
Total Page：16
File Type：pdf, Size：1020Kb
European Network of Economic Policy Research Institutes WOMEN’S PENSION RIGHTS AND SURVIVORS’ BENEFITS A COMPARATIVE ANALYSIS OF EU MEMBER STATES AND CANDIDATE COUNTRIES CHIARA MONTICONE, ANNA RUZIK AND JUSTYNA SKIBA ENEPRI RESEARCH REPORT NO. 53 AIM WP6, TASK 6.4.3 APRIL 2008 ENEPRI Research Reports publish the original research results of projects undertaken in the context of an ENEPRI project. This paper was prepared as part of the Adequacy of Old-Age Income Maintenance in the EU (AIM) project – which has received financing from the European Commission under the 6th Research Framework Programme (contract no. SP21-CT-2005-513748). The views expressed are attributable only to the authors and not to any institution with which they are associated. ISBN 978-92-9079-787-6 Available for free downloading from the ENEPRI website (http://www.enepri.org) or the CEPS website (www.ceps.eu) © Copyright 2008, Chiara Monticone, Anna Ruzik & Justyna Skiba WOMEN’S PENSION RIGHTS AND SURVIVORS’ BENEFITS A COMPARATIVE ANALYSIS OF EU MEMBER STATES AND CANDIDATE COUNTRIES ENEPRI Research Report No. 53/April 2008 Chiara Monticone, Anna Ruzik and Justyna Skiba∗ Abstract his report presents and compares old-age income provision rules with respect to the issue of equality between women and men in the current and future EU member states. The Treport focuses on 25 member states and, to the extent possible, on the recently acceded and candidate countries (Romania, Bulgaria, Turkey and Croatia). The report considers various aspects of the benefits, ranging from entitlement rules to minimum pensions, through to childcare credits and assistance for survivors. Overall, European countries adopt similar measures for ensuring adequate old-age income for women. The elimination of differentiated entitlement rules for standard and early retirement plays a key role in the reduction of the differences between men and women. In particular, this process means a faster increase in the minimum retirement age for women and different methods of encompassing childcare periods in the pension benefit formulas. In the long run, the higher employment rates of women and reduced wage disparities between men and women should lead to better individual pension rights for women, especially in defined contribution schemes, which have recently been introduced in some countries. ∗ Chiara Monticone is a Researcher at the Centre for Research on Pensions and Welfare Policies (CeRP) in Moncalieri (Turin). Anna Ruzik, PhD, is an economist and a Researcher at the Centre for Social and Economic Research (CASE) in Warsaw. Justyna Skiba was a Research Assistant at CASE, in Warsaw. Contents 1. Introduction ........................................................................................................................ 1 2. Types of old-age pension systems...................................................................................... 1 3. Eligibility rules for men and women................................................................................. 2 3.1 Retirement age............................................................................................................. 2 3.2 Contributory periods and residence ............................................................................. 3 3.3 Early retirement ........................................................................................................... 3 4. Minimum pensions ............................................................................................................. 4 5. Annuitisation and mortality tables ................................................................................... 5 6. Pension rights for carers .................................................................................................... 5 6.1 Maternity...................................................................................................................... 6 6.2 Childcare...................................................................................................................... 6 6.3 Care of disabled and ill dependants ............................................................................. 7 7. Survivors’ benefits.............................................................................................................. 8 7.1 Entitled persons............................................................................................................8 7.2 Entitlement rules.......................................................................................................... 8 7.3 Benefit levels ............................................................................................................... 9 7.4 Recent changes regulations for survivors’ benefits ..................................................... 9 8. Other derived rights and entitlements............................................................................ 10 9. Summary and conclusions ............................................................................................... 10 References .................................................................................................................................. 12 Appendix. Comparative Tables of EU Countries................................................................... 13 Table A1. Basic elements of the pension system .............................................................. 13 Table A2. Eligibility rules by gender for standard retirement........................................... 30 Table A3. Eligibility rules by gender for early retirement ................................................ 41 Table A4. Minimum pension entitlement rules and benefits............................................. 51 Table A5. Annuitisation/mortality tables (where applicable) ........................................... 58 Table A6. Contribution equivalents for carers .................................................................. 60 Table A7. Survivors’ benefits for spouses......................................................................... 71 Table A8. Other derived rights and entitlements............................................................... 96 Table A9. Pension and benefit reforms ........................................................................... 102 WOMEN’S PENSION RIGHTS AND SURVIVORS’ BENEFITS A COMPARATIVE ANALYSIS OF EU MEMBER STATES AND CANDIDATE COUNTRIES ENEPRI Research Report No. 53/April 2008 Chiara Monticone, Anna Ruzik and Justyna Skiba 1. Introduction The aim of this report is to present and compare old-age income provision rules that are relevant for the issue of equality between women and men in the current and future EU member states. The report focuses on 25 member states and, to the extent possible, on the recently acceded and candidate countries (Romania, Bulgaria, Turkey and Croatia). Owing to the common features of certain types of pension systems, on some matters the analysis divides the member states into two groups: the 15 ‘old’ member states and the 10 new member states that joined the EU on 1 May 2004. Until the late 1980s and early 1990s, many of the new member states and candidate countries (with the exception of Malta and Cyprus, but including Romania, Bulgaria and Croatia) had a centrally planned economy, dominated by state ownership of industry and services, and mainly state-owned agriculture. Since then, Central and Eastern Europe has been experiencing a transition towards a free market economy. Another relevant difference between the EU-10 and the EU-15 has been the higher labour force participation rates of women of prime working age in the new member states. The higher rates stem partly from the fact that the socialist system promoted full gender equality in labour market activity among other areas, and partly from the common need for two earners in order to provide enough income for a family household. From the start of the transition, however, employment rates – especially at older ages – have decreased. This report considers various elements of women’s pension and survivors’ benefits, from entitlement rules to minimum pensions, and from childcare credits to survivors’ benefits. The short descriptions given in the subsequent sections are complemented by detailed tables in the appendix. 2. Types of old-age pension systems An overview of the countries studied shows a variety of pension systems. Most of these systems cover employees as well as the self-employed and some inactive persons (European Commission, 2006). Among the EU-15 public systems, the pay-as-you-go (PAYG) structure prevails as a funding principle (Table A1). In the majority of countries, a defined benefit formula is used, whereas in Italy and Sweden, notional defined-contribution (NDC) accounts have recently been introduced. In Denmark, Finland, the Netherlands and Sweden, flat-rate benefits are paid based on the length of residence in the country, complemented by an earnings-related or occupational element. In the UK and Ireland, pension benefits are characterised by a public flat-rate component and a component | 1 2 | MONTICONE, RUZIK & SKIBA coming from fully funded schemes (publicly or privately managed), which represents a substantial share of retirement income. The majority of Central and Eastern European countries have introduced a three-pillar system as defined by the World Bank (World Bank, 1994). According to the World Bank, the first pillar is mandatory, managed by the state and based on the PAYG principle. It