Gender Discrimination in Non-Insured Employment Pension Plans: The Impact of EU Directives

The objective of this work is two-fold: first, to ascertain whether the application of European Union laws (Directive 2004/113 and Directive 2006/54) governing defined-benefit employment pension plans and incompletely insured but funded pensions was, in fact, discriminatory in several countries, namely France, Germany, Italy, Spain, Sweden and the United Kingdom. Having found that such discrimination was the case, our second goal is to calculate the cost of that discrimination to the employers. It is found that the discriminating effect emerged regardless of whether same-gender or different-gender tables were used for calculating benefits; furthermore, the level of discrimination was seen to rise in tandem with the retirement age. This phenomenon can be ascribed to the survival rate of women being higher. The actual cost of the discrimination was determined by isolating the effect of the interest rate and creating ad hoc survival charts that would eliminate the bias inherent in insurance-company tables. These two presentations of data are expressed both in terms of annuity per unit and of GDP, projected until 2015.