2024-09-08 01:34:42
Economist Stefan Kooths is sharply critical of Chancellor Olaf Scholz, who had previously criticized Germany’s pension experts.
Stefan Kooths, head of economics at the Kiel Institute for the World Economy (IfW), has sharply criticized Chancellor Olaf Scholz for his choice of words in relation to the planned pension reform. “It is never good for the debate – especially on such an important topic – to denigrate those who deliver unwelcome messages,” Kooths told t-online. In an interview with the “Tagesspiegel”, Scholz rejected the objection that the second pension package would primarily burden younger generations.
This is “the opinion of an exclusively establishment-oriented expert community that has its ducks in a row,” said Scholz. This is also shown by the dispute over the pension without deductions after 45 years of contributions. “A lot of academics are against this, who start working and paying contributions at the earliest at 25 or 26 and never reach 45 years of contributions themselves.” For him, this has “a bad aftertaste.”
IfW economic chief Kooths now said in Scholz’s direction: “The accusation of representing the interests of an ‘establishment’ only fuels an already excessive polarization that does not solve any problem.” And further: “It certainly cannot refute the objections to the second pension package.”
Kooths, however, is clearly critical of the planned pension reform of the traffic light government. “The second pension package only manages the shortage and shifts the burden unilaterally onto the actively insured,” said the economist. “Generational capital does not change that.” This has no factual connection to pension insurance.
The second pension package, which has already been agreed upon by the government, is intended to ensure that pension levels do not fall below 48 percent of an average wage in the years up to 2039. In addition, a share pension is to be introduced using the generation capital demanded primarily by the FDP.
Kooths also criticizes the second pension package because the sustainability factor is to be repealed. This is part of the pension adjustment formula, i.e. the formula that calculates how much the pension increase will be in the middle of the year. The factor currently reflects the ratio of pension recipients to contributors – thus ensuring that pensions remain affordable in the long term and that the pension adjustment does not place an excessive burden on the pension fund.
If the sustainability factor is now reversed, says Kooths, “the contribution rates will have to be increased more sharply, which from the perspective of the actively insured will act more like a tax and thus reduce incentives to work.”
The result: “In particular, Germany is weakening its position in the competition for the world’s talent, which the location urgently needs.” Qualified immigrants are “not coming here to finance higher pension entitlements for retirees, but to build a livelihood here,” Kooths continued.
His suggestion instead: “An alternative to Pension Package II would be to raise the statutory retirement age while at the same time making disability pensions more generous.” Taking individual performance into account, this would “stabilize the pension system more effectively than additional increases in contribution rates,” explains the expert.