Coalition creates share reserve for pension

Berlin Federal Minister of Labor Hubertus Heil (SPD) is committed to long-term pension security Germany now also on the capital market. Before the eagerly awaited presentation of his second pension package, Heil told the German Press Agency in Berlin: “In order to make long-term provisions, we are creating generational capital in the form of a share reserve for the statutory pension insurance.”

With the share reserve, the traffic light coalition wants to break new ground in the history of the Federal Republic. So far, the pension has only been financed by contributions and taxes.

The FDP had already promoted a share pension before the 2021 federal election, with part of the pension contributions going directly to a fund. Quit in the coalition agreement SPD, Greens and FDP then a capital stock of initially 10 billion euros. Heil emphasized: “It is important that the money is invested well, securely and for the long term.”

The Social Association Germany (SoVD) expressed fundamental criticism. The CEO Michaela Engelmeier told the newspapers of the Funke media group: “The SoVD is convinced that good pension policies cannot be made on the stock market! People need for their retirement provision Security. The pay-as-you-go system of statutory pension insurance is the best option for this.

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Minister Heil confirmed that a pension package II will be launched in the next few weeks and that the level of pensions will be permanently secured. The pension level describes the security power of pensions in relation to wages and is currently 48.1 percent. Last year had the coalition decided on their first pension reform, which, among other things, improved the situation for people with reduced earning capacity. According to Heil, it is now a matter of “stabilizing the statutory pension (…) in the long term”.

Baby boomers before retirement:

The problem that the traffic light alliance wants to tackle: From 2025, the baby boomers will gradually retire. Fewer depositors then come to more pension recipients – had pension cuts SPDGreens and FDP excluded.

Against this background, Heil supports a possible further expansion of the planned capital reserve, as he made clear. “This is money well spent in the long term to support the contribution in the thirties,” said Heil. The income from the securities should strengthen the pension from the mid-2030s.

Federal Minister of Finance Christian Lindner (FDP) admitted in an interview in December that a three-digit billion sum would be needed for financial investments in the long term, so that the income could be used to stabilize pension contributions and the level. There are already ideas for financing such high sums, Lindner said at the time, without being specific. Lindner wants to comment on the subject in Berlin this Friday.

No contribution limit:

A new stop line for pension contributions is not under discussion. Such an upper limit of a maximum of 20 percent for the contribution rate will apply until 2025. “If the pension contribution rate increases, the federal subsidy also increases automatically,” said Heil.

He pointed out that the contribution rate has been stable at 18.6 percent since 2018. “The contribution rate will also remain stable longer than some scientists have predicted,” he said. Heil referred to the bubbling contribution income from record employment. “Today we have five million more employees who are subject to social security contributions than ten years ago.” For stable pensions, further successes on the labor market are necessary – for example in securing skilled workers, employing women and more qualified immigration.

Three sources of pension:

In the future, the statutory pension will then be financed “from three sources”, according to the Labor Minister. In the long term, the income from “generational capital” would be added to the contributions and the tax subsidy. “These are the three pillars for a modern and stable statutory pension.”

Heil had already described the demographic challenges as “huge” in December. Employers and trade unions were alarmed at the turn of the year. Employer President Rainer Dulger referred to the more than 100 billion euros that the federal government already transfers to the pension fund every year. The pension will become a “brake pad for the economic future of our nation,” warned Dulger. earnings had, however, insisted on significantly more tax revenue for the pension to avoid contribution jumps.

Retirement at 67 remains:

Heil smashed employer demands to link the retirement age to increasing life expectancy. “The statutory retirement age has increased significantly in the past,” he said. “An increase beyond the age of 67 would be alien to life and would mean a de facto reduction in pensions for many people who can no longer work at this age.”

However, Heil spoke out in favor of bringing the actual retirement age of around 64 statistically closer to the statutory one. Chancellor Olaf Scholz (SPD) had already said in December: “It is important to increase the proportion of those who can really work until retirement age.”

Appeal to employers:

Heil explained that the proportion of people between the ages of 60 and 64 in employment has risen from around 20 percent in 2000 to 61 percent today. “So we are on the right track. If we manage to bring this rate to 70 percent, that would mean 700,000 more skilled workers and thus more contributors,” says Heil. More health protection is needed. “We have far too many people who get sick in the workplace and therefore have to retire early.”

Heil called on companies to give older workers opportunities. “To do this, we need the willingness of companies to hire employees over 60 who have become unemployed.” Heil rejected a move away from the possibility of a pension without deductions after 45 years of insurance.

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