The traffic light pension package II is coming! After a crisis summit in the Chancellery, the coalition agreed to push the package through the cabinet in May. Finance Minister Christian Lindner had previously surprisingly blocked the package. What the government is now planning to do with pensions.
The leaders of the traffic light coalition met in the Chancellery on Tuesday. According to a report in the “Bild” newspaper, the long-planned meeting between Chancellor Olaf Scholz (SPD), Vice Chancellor and Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) will be about the federal government’s pension package.
The planned package of measures was originally supposed to be presented to the cabinet on Wednesday. The FDP clearly criticized the plans at its party conference at the end of April and called for further reforms. The package is now scheduled to be voted on in May. FOCUS online summarizes the most important key data of the pension package.
It is divided into three parts: new share capital, permanent security of pension levels and increasing contributions from 2028.
In the long term, contribution increases are not enough to secure pension levels. The federal government wants to invest several billion euros in the capital market through a fund financed by debt. The income from the so-called “generational capital” is intended to reduce the contribution rate by half a percentage point.
The introduction of a capital stock is intended to create a new source of financing for the statutory pension insurance for the first time. To this end, a capital stock of at least 200 billion euros is to be built up by the mid-2030s, as government circles report. The income will be used to provide subsidies to the pension insurance.
To start, the federal government wants to invest 12 billion euros from public loans on the capital market. The money can be borrowed without having to be counted against the debt brake. In the coming years there will be a little more. The additions are expected to grow by three percent annually. In addition, federal assets worth 15 billion euros are to be transferred by 2028.
A total of 200 billion euros is expected to be raised by the mid-2030s. There are expressly no plans for pension contributions to flow into equity funds.
Financial markets are always volatile and speculative – which is why the Greens in particular initially viewed the plans with skepticism. Last summer, Green pension expert Markus Kurth brought forward the example of the existing sovereign wealth fund for financing nuclear waste disposal (Kenfo).
This fund suffered a loss of 12.2 percent in 2022. From the point of view of many social associations, you can’t risk something like that when it comes to pensions. “The statutory pension insurance is extremely unsuitable for speculating on the stock market,” warns Ulrich Schneider, general manager of the General Parity Association, for example.
According to current legislation, the pension level – currently around 48.2 percent – should not fall below 48 percent by 2025.
According to the current pension insurance report, the security level is likely to fall to 45.0 percent by 2037. It specifically states what percentage of the current average wage someone who has always worked and paid contributions at the average wage for exactly 45 years receives as a pension. When pension levels fall, pensions rise less than wages.
The extended stop line finally falls. So far it stipulates that the contribution rate does not rise above 20 percent. The government is thus paving the way for contribution increases. So far, employees and employers have had to pay a total of 18.6 percent into the German pension insurance.
In order to secure pension financing, the government initially plans to draw on the pension insurance reserves and increased contribution payments. The contribution rate is expected to remain stable at 18.6 percent until 2027. An increase to 20 percent is planned from 2028, which is expected to rise further to 22.3 percent by 2035.
It should be emphasized that these figures are preliminary government estimates and may be adjusted depending on future developments. The contribution rate – currently 18.7 percent – is expected to rise to 21.1 percent by 2037 without political intervention.
Basically, politicians are keeping their cards open and are actually considering a later retirement age. “We need to talk about whether, where and how working lives will be extended,” said Finance Minister Christian Lindner last March. In the draft of its basic program, the CDU wants to link the entry age, for example, to life expectancy.
However, an increase in the retirement age is not part of the pension package. The economist Veronika Grimm had already spoken out in advance in favor of making “pension at 63” only possible for people with endangered health. “Early retirement without deductions should be possible if there are health reasons,” the economist told the newspapers of the Funke media group.