The disparity in average retirement pensions between Czech men and women has shown a promising reduction, marking a positive trend towards greater gender equity. At the close of last year, female pensioners received around one-fifth less than their male counterparts, but this gap has now shrunk to just 13 percent as of June this year.

Statistics from the Czech Social Security Administration (CSSZ) reveal that, during the first half of this year, the average pension provided to senior citizens was 21,520 Czech crowns. However, the average pension for senior women was still approximately 2,500 crowns less.

This year, an educational allowance of 500 crowns per child was introduced, automatically increasing the pensions of 1.4 million women, benefiting their three million children. This innovative approach is aimed at eventually replacing the inclusion of hypothetical income and deductions for childcare in the calculation of new pensions.

Presently, CSSZ provides old-age pensions to around 949,000 men and 1.41 million women. From December last year to June this year, the average pension for senior women saw a boost of 2,554 crowns due to indexation and the new educational allowance. In comparison, the average pension for senior men increased by 1,765 crowns over the same period.

The gap in pension amounts between men and women has notably decreased from about 20 percent to the current 13 percent, signifying a notable step forward in addressing gender-based pension disparities.

The root cause of the gender pension gap lies in lower earnings. Studies indicate that women often gravitate towards lower-paying sectors and roles, even within the same positions as men, resulting in an approximate ten percent difference in earnings. Additionally, research conducted by the Institute of Sociology of the Academy of Sciences of the Czech Republic reveals that around 30 percent of this earnings discrepancy is attributable to motherhood and childcare responsibilities.

The introduction of the child-raising allowance, proposed by the Social Democrats before the end of the previous parliamentary term, has marked a positive shift. Approximately 19 billion crowns are allocated for disbursement this year, with expenditure projected to rise in the coming years.

The Czech government’s draft pension reform changes, presented in May, outline a future transition to new pensions that replace the educational allowance with a notional contribution based on average wages for caregiving responsibilities. This forward-looking approach aims to further enhance pension equality between men and women, aligning with broader societal efforts towards gender parity.

Article by Prague Forum