This article was first published in EFAMA's Fact Book 2026.

Strained public pensions and the gender gap challenge

Europe’s aging population and shrinking workforce are putting public pension systems under pressure and raising concerns about retirement adequacy. On average, public pensions in the EU replace only around 60% of late-career income[1]. Against this backdrop, the gender pension gap remains stark: fewer women qualify for a public pension, and those who do receive on average 24.5% less than men[2]. 

This gap does not emerge at retirement; it is the cumulative result of inequalities throughout working life. Lower pay, more frequent career breaks, and higher rates of part-time work all translate into lower pension entitlements. Pension systems are not neutral in this process. Their design can either absorb these disparities or amplify them.

As Europe increasingly turns to supplementary savings to fill gaps in public pensions, a shift reflected in the European Commission’s Supplementary Pensions Package, the gender dimension becomes more acute. The more retirement income depends on individual contributions, the more outcomes mirror unequal careers.

The Commission’s package promotes supplementary pensions through measures such as auto-enrolment, improved pension tracking, and reviews of the PEPP and the IORP framework. Yet without systematically embedding a gender perspective, these efforts risk widening existing inequalities.

Unequal access, unequal outcomes

Access to supplementary pensions is uneven. Women are less likely to be covered by occupational schemes, in part because they are overrepresented in sectors with lower coverage, such as education, health, and social work[3]. They are also more likely to work in part-time or in lower-paid jobs that fall below eligibility thresholds. 

Even when participating, women tend to contribute less, due to lower earnings and more frequent career interruptions. As a result, gaps in accumulated pension wealth appear early, typically between ages 25 and 34, and widen over time[4]. 

These differences are sometimes framed as behavioural, but they largely reflect structural constraints. Lower and less stable incomes limit both the ability and willingness to contribute or take investment risk. As systems shift towards defined contribution models, outcomes increasingly depend on continuous contributions and long investment horizons, conditions that many careers do not meet.

No easy fixes 

Improving financial literacy and communication is useful but insufficient. Information does not compensate for limited financial capacity. Similarly, tax incentives, a central tool to promote supplementary savings, tend to benefit higher-income earners who can contribute consistently and maximise deductions. In practice, this often advantages men. Policies that appear neutral can therefore produce uneven outcomes. Without addressing underlying design features, expanding supplementary pensions risks reinforcing, rather than reducing, disparities.

The Commission’s Supplementary Pensions Package: progress, but for whom?

The Commission’s package rightly recognises that public pensions alone will not ensure adequate retirement incomes. However, its impact on the gender pension gap is likely to remain modest, not least given the EU’s limited competences.

Among the proposed measures, auto-enrolment stands out as the most promising tool to broaden participation. The recommendation to ensure inclusiveness across diverse career patterns, including career breaks, is particularly important. Good practices include care credits, flexible contributions, and the possibility to pause and resume participation.

Yet impact will depend on national implementation, and only a limited number of Member States have such systems in place or planned. Without wider adoption, access will continue to rely on individual initiative and employer provision, both of which tend to reproduce existing inequalities. Auto-enrolment should be the norm, not the exception.

At EU level, more explicit guidance on inclusive design, such as minimum standards or principles on care credits and coverage, could help promote more consistent outcomes. The planned review of PEPP may improve portability, which is valuable for mobile or non-linear careers, but portability alone does not ensure access. Reliance on voluntary uptake of personal pension products will not address deeper participation gaps.

Addressing structural constraints in pension design

Pension outcomes are shaped not only by labour markets, but by how systems value different forms of work. Unpaid care, still predominantly carried out by women, remains insufficiently reflected in pension design.

While the Commission acknowledges the need for broader participation, mechanisms to account for care-related interruptions are not systematically embedded. If supplementary pensions are to become more inclusive, they must better accommodate non-linear careers.

This requires more flexible occupational schemes, including care-adjusted accumulation mechanisms such as subsidised or matching contributions during breaks, redistributive features, and the possibility of partner contributions. Default options could also play a role, for instance, by maintaining contributions during temporary absences or enabling catch-up contributions afterward.

Growth without inclusion will widen the gap

The gender pension gap cannot be closed through supplementary savings alone. When systems rely more heavily on individual contributions, they also shift more responsibility onto individuals, even when their capacity to contribute is constrained.

Pension systems that rely on continuous contributions and long, uninterrupted accumulation periods, particularly in defined contribution contexts, will structurally disadvantage careers that are fragmented or interrupted.

The success of Europe’s pension agenda should therefore not be judged by how much additional savings it generates, but by who is able to participate and benefit. Expanding coverage without addressing underlying asymmetries risks entrenching the very inequalities it seeks to reduce.

Ultimately, the question is not whether supplementary pensions should grow, but whether they are designed for the careers people actually have.

[1] European Commission, 2024 Pension Adequacy Report – Current and future income adequacy in old age in the EU. 

[2]Eurostat datasets ilc_pnp13 and ilc_pnp13m

[3] OECD, Towards Improved Retirement Savings Outcomes for Women

[4] OECD, Towards Improved Retirement Savings Outcomes for Women

Author: Elodie Labbé