BERLIN (dpa-AFX) – The Federal Government’s Pension Commission is proposing a further increase in the retirement age – by half a year per decade from 2042. According to information from the German Press Agency, corresponding media reports are correct. In addition, the pension level should be stabilized and even increased slightly through a new capital pension, according to Commission circles. Pension contributions are expected to continue to rise.
The Pension Commission wants to hold its final meeting on Monday and officially present its proposals on Tuesday. It was already announced on Thursday that the Commission had agreed on 30 proposals. As the dpa learned from circles within the committee, the commission usually deliberated in large groups for a total of around 150 hours. Several media outlets also reported on the results in advance, including ZDF, “Bild am Sonntag”, “Zeit” and “Frankfurter Allgemeine”.
New capital pillar
In the future, part of the pension contributions will be invested in the stock market. Only one percent of gross wages should flow into this contribution-financed capital pillar, half of which should come from employees and half from employers. This would be financed on a parity basis, just like the current pension contribution. This contribution for the capital pension should then increase to two percent. The income is intended to stabilize the pension level in the system in the long term. Until this desired effect occurs, there should be a tax-financed so-called transition factor to support the level of pension security.
Back to the sustainability factor
The currently suspended “sustainability factor” is expected to take effect again in 2032, when the regulations of the most recent pension reform expire. The annual pension increase should therefore be adjusted to the development of contributors. This means that pension and contribution increases are lower than without the factor. According to the commission’s recommendations, the capital-based stabilization should return to a pension level of 48 percent for new pensioners in the long term.
Due to the sustainability factor, the level decreases over the years of retirement. This minus should be absorbed by the new capital pension. In 2040, the overall level of pension insurance (contribution and capital pillar) would rise to 50 percent by 2050.
End of “retirement at 63”
According to the Commission’s recommendations, early retirement without deductions after 45 years of contributions (known as “pension at 63”) should be eliminated. However, there should be a new regulation for people with health problems after stressful work histories. According to dpa information, non-contributory mini-jobs should only be possible for students. This should provide an incentive to increase weekly working hours.
Politicians pay into the pension fund
In the future, politicians will also have to pay into the pension fund. These would be, for example, members of the Bundestag and the state parliaments. Self-employed people and CEOs of stock corporations should also pay into the pension fund. In the long term, civil servants should also pay into the statutory pension, according to sources.
Measures already decided by the federal government such as Mother’s pension and securing pension levels until 2031 were not put up for discussion by the Commission, despite the Commission’s skepticism. According to the commission, those affected should make greater use of basic security in old age to combat growing poverty in old age; to this end, the committee supports proposals already submitted by another government commission for welfare state reforms.
Reform package is taking shape
The pension reform is perhaps the federal government’s largest reform project. The recommendations of the commission should become the basis. Chancellor Friedrich Merz (CDU) said a few days ago: “I am confident that we will get good suggestions.” The message is: “We want to reform our country so that future generations, young generations, also have the chance to live in freedom, to live in peace and to live in prosperity.”
Further elements of the planned reform package of the black-red coalition should concern the labor market, income tax and the reduction of bureaucracy./vs/bw/bg/DP/zb