PENSIONS expert IFG Corporate Pensions says that not enough consideration is given to the long term financial impact of having a family on the retirement provisions of many women in the workforce. A recent study by IFG Corporate Pensions found that women fared even worse than was previously assumed when real life comparisons models were run.
The study aimed to look at what effect absence from the workforce will have on a typical pension fund. The results revealed that a mother who chooses to stay at home for five years from ages 35 to 40 would end up with a pension fund worth €194,316 less than if she had uninterrupted service, when she finally retires at age 68.
Samantha McConnell of IFG Corporate Pensions commented, “Latest statistics from the CSO have revealed Limerick as having a birth rate for 2011 of 13.7 in the City and 18.2 County births per year per 1,000 population. With this in mind we believe it’s imperative that women and families alike in Limerick are cognisant of the fact that they might suffer a reduction of almost one third of their target pension fund.
“While obviously we’re not saying that this loss to a pension fund should be a deterrent to having a family we would advise that families put alternative financial measures in place to ensure that both spouses have enough money in retirement”.
This will have an effect on the amount that the women and their employers contribute to their pension upon returning to the workforce. Also upon returning to work a woman’s period of service up to retirement age will probably be shorter as the pressure of dual roles takes its toll. This shorter period, combined with the career break will inevitably result in an even lower fund.
It’s also interesting to note that 45 per cent (CSO 2004 figures) of all Irish women aged 15 to 64 are currently not officially in the workforce and therefore have no official earnings.
Samantha McConnell concluded, “The crux of the matter is that women actually need more money than their male partners at retirement as longevity statistics would indicate that women who reach retirement age can now expect to live until 88, compared to men’s life-expectancy of 85”.
