East offers women a €357 pension advantage over the West

East offers women a €357 pension advantage over the West

In 2023, a significant disparity in pension payments between women in eastern and western German states persists, stemming from historical, economic, and employment patterns that took root during and after German reunification.

The former East Germany, with its socialist system, guaranteed near-universal employment for women, leading to high female employment rates. This resulted in women in the east accumulating more continuous years of employment credits, directly increasing their pension entitlements. In contrast, the male breadwinner model was more prevalent in West Germany, leading to many women working part-time or leaving the workforce for family reasons, resulting in fewer years of employment and lower overall pension contributions.

The Prognos Institute and the German Insurance Association (GDV) have calculated these averages, revealing that nationwide, male retirees in the district of Bottrop have the highest pensions, with an average of 1,686 euros per month. At the opposite end of the spectrum, the district of Waldshut in the Black Forest has the nationwide lowest male pension of 1,201 euros.

Among men, the pension gap between the east and west is minimal, with 1,430 euros in the west and 1,416 euros in the east. However, the picture is different for women. In the Rhineland-Palatinate district of Bitburg-Prüm, women receive the nationwide lowest average monthly pension of 668 euros. On the other hand, women in Potsdam have the highest average monthly pension of 1,314 euros.

In the east, women's employment rates have historically been higher than in the west, resulting in women contributing less to pension funds and retirement savings, leading to them being financially worse off in old age than men. Despite this, the ongoing pension equalization process is reducing, but has not yet eliminated, this regional disparity. By 2025, eastern average pensions are expected to be about 90–92% of western levels.

Moritz Schumann, deputy CEO of the GDV, has made a statement about the pension gap between men and women, highlighting the need for greater awareness and action to address this issue. It is crucial to note that, within both regions, women generally receive lower pensions than men, but the gap is less pronounced in the east due to the aforementioned employment patterns.

In summary, the main reason for the significant difference in average pensions for women between east and west German states in 2023 is the legacy of the GDR’s full employment policy, which resulted in eastern women having longer periods of employment and thus higher pension entitlements, despite lower average wages. In contrast, western women often had interrupted careers and shorter contribution periods, leading to lower average pensions, even though overall pension levels are higher in the west. The ongoing pension equalization process is reducing, but has not yet eliminated, this regional disparity.

[1] Prognos Institute and German Insurance Association (GDV) reports, 2023.

1. The socialist system in the former East Germany, with its near-universal employment for women, has resulted in a higher accumulation of employment credits and therefore higher pension entitlements for women in science and health-and-wellness sectors, as they are contributing more consistently to their pensions.
2. In the west, where the male breadwinner model was prevalent, many women have worked part-time or left the workforce for family reasons, leading to fewer years of employment and lower contributions in finance and business, resulting in lower pension payments.
3. To address the pension gap between women in eastern and western German states, it is crucial to promote policies that encourage continuous employment for women, assisting them in their retirement years and ensuring equal treatment in womens-health and wellness matters, as well as financial stability in their post-working life.

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