This note highlights the fact that the pension gap between men and women is caused by differences in the legal retirement age, life expectancy and labor market conditions. The application of unisex mortality tables would reduce this gap in a limited way (women’s pensions would increase by 4%, at the expense of a reduction in the pensions of men), but would also have unexpected negative effects:
- Female beneficiaries of survival pensions would be affected by the drop in the pensions of male originators.
- Lower-income members and pensioners, who have lower life expectancies, could be harmed.
- This will impoverish the pension product, due to less freedom to choose the pension mode and the provider. In order to implement the unisex tables, programmed withdrawal would have to be eliminated, and the types of life annuities that retiring members could opt for would have to be restricted.
- Higher costs and risks for insurance companies offering annuities, which could result in price increases.
- Lower economic efficiency, because if the insurance companies do not differentiate between pensioners by different risk levels, the signals and incentives provided to savers and pensioners regarding the most appropriate levels of protection for them, would be weakened.
- Voluntary pension savings for men and their use for improving pensions would be discouraged, due to the transfer of resources to women.
An alternative proposal to the unisex tables, which corrects the pension gap and avoids unwanted inequities that would be generated with the unisex tables, consists in providing a monthly subsidy to women equivalent to the difference between the amount of the pension calculated using tables differentiated by gender, and the amount calculated using unisex tables.
