2024-02-29 17:48:46
As a rule, pensions increase on July 1st every year. But now a professor is suggesting a zero round. How realistic is the idea?
There is one date of the year that Germany’s pensioners should particularly look forward to: July 1st usually marks the day on which statutory pensions are increased. According to an initial estimate by the federal government, there should be an increase of 3.5 percent in 2024. But now a professor is bringing a zero round into play in order to relieve the burden on the household budget.
t-online explains whether pensioners now have to worry, when the pension adjustment will finally be determined and under what conditions a zero round is even possible.
Zero round for pensioners: How realistic is that?
It’s a statement that has made waves: “The pension increase for this year should be suspended. That would save more than ten billion euros in the pension fund within a year,” the Freiburg professor of finance, Bernd Raffelhüschen, told “Bild”. . However, the chances of this proposal becoming reality are zero.
Because the answer came promptly, and it came from the top. As government spokesman Steffen Hebestreit said, Chancellor Olaf Scholz (SPD) rejected the proposal as unrealistic. The idea is economically absurd, socially wrong and socio-politically fatal.
According to Hebestreit, Scholz assessed the proposal as evidence of the extent to which the world of a professor cannot be reconciled with the realities of 20 million pensioners. Saving on pensions in the current situation with a lot of reluctance to buy would also make economic sense, says Hebestreit.
And Labor Minister Hubertus Heil (SPD) finally made it clear: “The pension increase on July 1st will come. Pensioners in Germany are entitled to it.”
When will there be a pension increase?
Wage developments determine whether there is a pension increase or not. Because the pension is based on the so-called pay-as-you-go system, the amount of the current pension depends on the income of the current employees. Employees subject to social insurance contributions pay for statutory pensions with their contributions. If contributions increase because salaries increase, the salaries of the 21.3 million pensioners also increase.
Good to know
Pensions do not necessarily rise as much as wages. This is due to the so-called sustainability factor in the pension formula (more on this here). This takes into account the ratio of the number of contributors to pensioners. If society ages so much that the number of contributors decreases and the number of pensioners increases, the pension increase will be smaller.
When can there actually be a zero round?
If the economic situation does not allow increasing the pension because gross wages have fallen. The amount of pension payments then remains the same. It is not allowed to decrease due to a special protective clause.
However, the so-called catch-up factor means that increases in subsequent years are smaller. The theoretically necessary reduction in pensions is offset against later increases. You can read more about the catch-up factor here.
When will the pension increase be finalized?
Exactly how high the increase will be will be determined in the spring based on the exact dates that will then be determined. Labor Minister Heil recently pointed out in an interview that the pension increase would probably be above the inflation rate again.