2024-03-07 22:22:19
The traffic light has presented its new pension package, but concerns about poverty in old age are still great. Economics Minister Habeck wants to motivate pensioners to stay in working life.
In the debate about the future of pensions in Germany, Federal Economics Minister Robert Habeck (Greens) spoke out in favor of more financial incentives for people who continue to work after retirement age. “In this way, the employer’s unemployment and pension shares could be paid out as an additional fee,” said Habeck on the RTL/ntv program ” Frühstart “. “Then it would become even more financially rewarding to work longer and everyone would get more out of it.”
Employed old-age pensioners are exempt from pension insurance – but today employers pay the same amount of pension insurance contributions for them as for employees subject to pension insurance. When it comes to unemployment insurance, there is also insurance and therefore freedom from contributions once you reach the standard retirement age. However, the employer also has to pay his share of the contribution here.
Habeck suggests an additional fee
Habeck said that by paying out employer contributions as an additional fee, those who wanted to work longer would be able to “earn a lot.” The experience of these people would be retained in the labor market. “We can really use that at the moment and nobody loses anything,” said Habeck.
However, Habeck does not want to lead a debate about a changed retirement age. The retirement age is politically clearly regulated and will not be changed. “There are also professions (…) where you are broken after many years, and you shouldn’t put pressure on yourself to have to work longer,” said the Economics Minister. Where there is willingness, it should not be punished but encouraged.
Habeck and Lindner argue about working life
There are different views on working life in the coalition. Labor Minister Hubertus Heil (SPD) recently emphasized when presenting the government’s pension package on Tuesday: “There will be no reduction in pensions and no further increase in the retirement age.” Finance Minister Christian Lindner (FDP) said with regard to demographic change: “Financing pensions is and remains an ongoing task.”
According to the FDP leader, working life must be extended, “but that should not be discussed and decided here and now.” The head of the ifo economic research institute, Clemens Fuest, had also called for a longer working life, based on the increase in life expectancy. Germany’s employers have been pushing for such a step for a long time.
Increase in contributions and stable pension
With their reform plans, Heil and Lindner want to respond to the expected transition of the baby boomer generation into retirement. In order to prevent pensions from sinking despite more and more people receiving them and fewer people paying in, the pension level should be fixed. In addition, a 200 billion euro capital stock is to be built up from federal funds, the income from which will be used to mitigate the future increase in contributions. The pension package should now be decided by the cabinet and then passed by the Bundestag before the parliamentary summer break.
Without reform, pension spending would roughly double from the current 372 billion euros to 755 billion euros by 2045 due to demographic change. Due to the planned fixing of the pension level at 48 percent, they are likely to rise to around 800 billion. Despite the planned contribution brake through generational capital, the contribution rate is expected to rise from the current 18.6 percent to 22.7 percent by 2045.
Heil: No contribution funds for generational capital
Heil countered fears that contribution money could be used for the new capital stock. “No contribution funds from pension insurance are used for generation capital, but rather loans from the federal budget and the federal government’s own funds,” emphasized Heil in the “Tagesspiegel”. “It is important that the statutory pension is a guaranteed benefit that is not subject to speculation.”
The pension insurance company had warned that no contribution funds could be used for generation capital. She was also skeptical about the effect. A significant capital build-up and thus noticeable relief is “hardly to be expected” given the relatively short time horizon, the pension insurance company said in a statement.
Lindner wants to feed the system with government debt that is not counted towards the debt brake – this year only 12 billion euros. In addition, federal assets are to be transferred. From the mid-2030s onwards, ten billion euros a year will flow from stock market earnings to the statutory pension insurance system.