Working mums stand to lose up to €200,000 from pensions
Published 17/03/2014 | 02:30
Working women who take time off to raise a family face losing up to €200,000 from their pension due to what have been claimed are serious inequities in the system.
There is no such thing as a level playing field between men and women when it comes to pensions, chief investment officer with IFG Corporate Pensions, Samantha McConnell, claimed.
She calculated that women who opted out of the workforce could lose up to a third of their pension pot, putting them at a huge disadvantage when they retired.
And she stressed that it was mainly women who were forced to leave work to mind children.
In some Nordic countries, women who work in the home got a pensions credit, she said.
Working mothers who take five years off to raise a family could end up with a pension fund worth almost €200,000 less on retirement than if they had full, uninterrupted service until the age of 68.
This is based on a woman leaving the workforce for just five years.
"It is a lot of money considering that the worker was only away from the workplace for a relatively short part of her overall working life," said Ms McConnell.
Research has shown that women continue to enter retirement with smaller pensions, the pensions expert said.
IFG also pointed to data from the Central Statistics Office (CSO), which showed that women in the Republic receive less than half as much from occupational pensions as men, while their income from private pensions is only 60pc that of men.
Some women opt out of the workforce for up to 15 years to raise children.
IFG said that apart from taking a career break to raise a family, working women may also have a shorter period of service due to the pressures from the dual responsibilities of working and looking after a family.
They were more likely to work part-time, so their capacity to contribute to an occupational pension was limited, even if their employer provided pension schemes, she said.
"When these two factors are combined, it will inevitably result in an even lower fund," Ms McConnell said.