2023-08-10 17:00:36
According to leading economists, the further expansion of statutory pensions planned by the SPD, Greens and FDP can only be financed in the long term if the coalition decides to make some sensitive cuts at the same time. In a warning letter to Economics Minister Robert Habeck (Greens), the Scientific Advisory Board at the Federal Ministry of Economics is now suggesting that only seniors with lower incomes should benefit from the intended acceleration of annual pension increases. In a letter to Habeck available to the FAZ, Eckhard Janeba, Chairman of the Advisory Board, writes that access to the “pension from 63” without deductions for long-term insured persons should also be restricted to a narrow group of particularly needy people.
Without such limitations, the pension insurance, which is already under pressure, would face such a sharp increase in spending that “in the 2040s more than half of the federal budget would flow into pensions,” warns the Mannheim economist, who has headed the respected advisory body since May. “There is a great danger that this will crowd out the financing of future tasks, such as the socio-ecological restructuring of the economy, but also increased efforts in education and the expansion of public infrastructure.” The advisory board therefore asks Habeck, “in the upcoming discussion, the long-term to emphasize the macroeconomic perspective”.
The traffic light government’s pension package II is taking shape
In fact, the traffic light’s plans for a “Pension Package II” are now taking concrete shape. As can be heard from the governing coalition, the labor and finance ministries have agreed on a finished draft law which, after these two ministries have presented themselves, could soon be adopted by the federal cabinet. Stronger annual pension increases for the period up to 2040 are to be enshrined in law by means of a new “pension level stop line”. At the same time, an element of capital cover is to be built into the pension, the so-called generational capital.
The stop line would partially undermine the previous generational balance in the statutory pension: With it, the retirement age of the baby boomers would have led to the annual pension increases slowing down. Instead, the planned stop line stipulates that pensions must always rise at least as much as wages until 2040. In a detailed report from 2021, to which Janeba is now referring, the Advisory Board of Economists had already warned that the financial requirements would increase very quickly by double-digit billions per year – and therefore completely advised against this stop line. However, since this is no longer politically realistic, he now advises at least limiting the extent of the additional costs.
According to the traffic light plans, however, generational capital should help to cushion the burden on taxpayers and contributors. Specifically, a share-based state pension fund with up to 200 billion euros is to be created through additional borrowing in addition to the federal budget, in order to later make additional support payments to the pension fund from its earnings. Regarding the details of the draft drawn up by Finance Minister Christian Lindner (FDP), it can be learned that a steady increase in “generational capital” is planned: starting with 10 billion euros this year, 12 billion euros in 2024 and then amounts increasing by 3 percent annually. In addition, the injection of equity from shareholdings by the federal government is planned. This should be enough to pay 10 billion euros annually to the pension fund from 2035, according to the calculation.
However, the following can also be heard about the part of the package for which Labor Minister Hubertus Heil (SPD) is responsible: The statutory minimum reserve for pension insurance is to be raised from 0.2 to 0.3 monthly expenses. This means that new income must be provided more quickly when the pension fund empties – whether with increases in contributions or more federal grants. If the buffer is too small, however, there is a risk that the pension fund will run into liquidity problems before such measures take effect.
Experts take a critical view of generational capital
However, it is unclear for the time being whether the “Pension Package II” can really be approved by the Federal Cabinet at the end of August as planned. Because even regardless of the warnings from science, the Greens have problems with it: They basically don’t think much of “generational capital” and object that the increase in funds provided for in the draft is not covered by the coalition agreement. As can be heard, Last week Habeck vetoed within the government against the initiation of the departmental vote on the pension package; this would be the last step before the cabinet decision.
But science also has criticism of generational capital; this also sounds in the letter to Habeck. Advisory board member Axel Börsch-Supan, head of the Munich Research Institute for the Economics of Aging, explains it like this: “The goal of ensuring more capital cover for old-age security is absolutely correct,” he told the FAZ of company pensions is the better way.” The bottom line is that the approach of credit-financed generational capital does not lead to any real relief for the younger generation and is in this respect even “economic nonsense”.
Patricia Andreae Published/Updated: , Recommendations: 1 Ole Kaiser, Eching/Neufahrn Published/Updated: , Recommendations: 54 Daniel Meuren Published/Updated: , Recommendations: 10
However, this is only one side of the criticism, as the researcher emphasizes – because it would be even more damaging if the lack of funding for the planned pension level stop line was lost sight of in the dispute over this project. “The whole fuss about the so-called generation fund is basically a completely marginal matter compared to the challenges faced by the statutory pension insurance system,” warns Börsch-Supan. And these would be “much bigger” with the stop line.
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