Page 4 - IDEA Studie 13 Vliv materstvi na starobni duchod

Study 13/2016
The Impact of Motherhood
on Retirement Benefits AUGUST 2016
JIŘÍ ŠATAVA
Summary
 The average initial monthly retirement benefits paid to women are nearly one-fifth lower than those paid to men. The difference stems both from different career history in men and women and from the method of calculating retirement pensions. Factors contributing to the discrepancy include different levels of education, career choices, parenthood and rearing children, as well as different retirement age for men and women. On the other hand, differences in retirement benefits are partially reduced by some social security system provisions.
 In our analysis, we have attempted to quantify the negative impact of motherhood and parenthood on women’s retirement benefit amount, which is linked to the impact ofmotherhood on the mothers’ wages and employment. We have calculated that motherhood and parenthood reduces women’s retirement benefits by an average of several hundred Czech crowns per month. This is caused both by lower employment and lower earnings due to parenthood. However, the average reduction in women’s retirement benefits due to parenthood never exceeds 8 percent, even if the impact of parenthood on women’s career were twice that shown in the data.
 The average amount of mothers’ initial retirement benefits is also negatively influenced by the fact that women’s retirement age drops based on the number of children they have brought up. Lowering the retirement age for mothers of one and/or two children by one or two years respectively reduces the initial retirement benefits by an average of a few hundred Czech crowns per month. However, this negative impact will gradually cease to exist as the male and female retirement age becomes equal regardless of the number of children raised.
 The differences in retirement benefits caused by parenthood are significantly mitigated by the provisions of the Pension Insurance Act. Specifically, it is important that the time spent on parental leave is both the so-called excluded periods and a part of the insurance period. Without these, the initial retirement pension of an average mother would be reduced by CZK 971 to 2,065 (i.e. by 10 to 20 percent of the average retirement benefit amount).
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