Pension insurance has released new figures, and as is so often the case when it comes to measuring retirement provision, these figures also contain not only good news but also less good news. The pension insurance company reports that the average duration of pension payments has increased in recent years: from 18.5 years in 2010, it was 20.2 years in 2020. That’s good for retirees who have something for longer of what they have earned for many years. But because the German pension system is designed as a pay-as-you-go system, it changes the statics when people live longer, receive pensions longer and at the same time do not increase more contributors accordingly, that is- that is, active employees.
The fact that things have gone better so far than feared is due to the boom in the labor market. But the basic problem, the demographic evolution, the baby boomers who will soon retire, that remains. The red-green federal government drew the conclusion from the situation with the pension at 67 (“You don’t have to be a mathematician. Sauerland primary school is enough”). This did not prevent subsequent governments from drawing very different and much less plausible conclusions. The pension at 63, the mother’s pension, new stop lines that are used by retirees, but so far have led contributors to the contribution reductions actually indicated:, so that the pension reductions effectively due are no longer compensated.
A review of election manifestos shows that, on the whole, parties do not intend to deal with pension policy issues in the next legislature either. On the contrary. When economists advising the Federal Minister of Economics warned of huge medium-term cost issues, leading politicians were outraged not by poor retirement policy decisions made in recent years, but by the experts.
Most parties bet on a new start with the Riester pension
The guiding principle of the party retirement programs was obviously: it won’t be so bad. SPD chancellor candidate Olaf Scholz, for example, has now systematically rejected warnings on the grounds that the labor market and therefore premium income has developed much better than expected in the past. The CDU, meanwhile, is working on an “old age security advisory board” in its platform, as if someone had listened to previous pension commissions, and is trying to get a vague idea of government subsidies. state savings for every child. The Greens, on the other hand, seem to believe that pension stability is not a problem if only more women work full time, more immigrants arrive, and wages rise properly. These factors, while alleviating the problem, do not solve it.
Of course, the parties also make sensible, even urgent, proposals. Most are banking on a fresh start with the Riester pension, many want a standard, low-cost managed product, a fund that can invest the contributions paid into the capital market in a return-oriented manner. The FDP, which wants to transfer part of the compulsory contributions to such a fund, is going particularly far. A precautionary obligation for the self-employed is also found in many programs, which is sorely needed in view of new working models.
In principle, however, all parties reject a link between retirement age and longer life expectancy – the biggest feeling is to make retirement more flexible. But how should the level of pensions and contribution rates remain in a fair relationship when the baby boomers retire and the Germans live longer? Models such as linking pensions only to inflation rather than wage developments are not even discussed.
Retirement will not dominate the election campaign, the climate and Corona are too much in the foreground for that. But the challenges are real. And as with climate change, time is running out.