Saving for Retirement despite Maternity Leave and Unpaid Work?
Women on maternity leave performing unpaid caregiver work have a hard time building up their pension provision. No company retirement provision is available to them while they are on parental leave. That can cause pension gaps that are hard to close.
Any kind of unpaid work means a pension risk. Their contributions to the first pillar of Old Age and Survivors' Insurance (AHV) are restricted to the minimum, and they accrue no savings in the second pillar of occupational retirement, survivors', and disability pension plans (BVG). However, these two pillars are expected to account for approximately 60 percent of total pension provisions for a large majority of the Swiss population. Pillars 1 and 2 are supplemented by private pension provision under the third pillar.
How do women fill pension gaps from unpaid family work?
Women with no income are presumably unable to contribute any money toward private pension provision. Their entire pension provision is funded from the contributions made by their partners who work full time. However, there is just one thing to keep in mind: The total amount must be enough for two people. It is possible to partially close pension gaps resulting from unpaid caregiver leave or parental leave by purchasing pension benefits (BVG, the second pillar). However, women can do that only if they are employed, have contribution gaps in their pension fund, and have disposable capital to contribute.
Are there any other ways for women to create retirement provisions without an income?
Every woman who goes for an extended period without gainful employment falls behind on her retirement provision. Although certain insurance providers will cover some of the financial consequences, for example, paying benefits in the event of disability or death, there remains a pension gap. The best way for women to close that gap is generally through additional sources of income. Examples include having a partner with a high income or receiving an inheritance.