Austria sees slow closure of first pillar gender pension gap

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Self-employed women in Austria are far worse off when retiring than employed women, new research shows. There is still a gap of around 30% between women and men in their pension account – ‘Pensionskonto’ – just before retirement.

This is shown in data collected by the Austrian Economic Chamber (WKO) in cooperation with the Finanzjournalistenforum, an initiative to boost media knowledge on social statistics.

This gap is much wider when considering only self-employed women including health care workers and personal carers, where women’s pension is almost 60% lower than that of men.

This discrepancy can be mainly explained by the fact that self-employed women work in much less well-paid jobs than self-employed men, the data showed.

“I see this as one of the undiscovered social problems in Austria,” Eric Samuiloff of the WKO noted at a press conference in Vienna. He added that among self-employed women, the number of those who would have to get top-up payments from the state to boost their pension might increase.

In addition, the figures still show a significant mark-down in pension savings, as part of people’s income, from the age of around 45, when still many women start working part-time after having children or stay home.

One of the main differences between now and 20 years ago, was the introduction of the ‘Pensionskonto’. For most people born before 1955 their best 15 years, i.e. the ones with the highest income, were used to calculate their first pillar pension.

Now, each month for which people pay in is counted and they are being paid interest which is annually calculated. However, in most cases this does not make up nearly the same amount as under the old regime – especially with part-time work increasing.

For women, the pension gap could shorten with the increase of their retirement age to 65 which is currently being adjusted by half a year annually. However, the Austrian Trade Union (ÖGB) noted that a lot of women have to retire before the current statutory retirement age of 60 for health reasons. Or indeed, they cannot work until that age because they have to care for others – and these care jobs only count towards their pension if they report it to the social insurance in time.