The federal government has been accessing pension insurance funds for years. Billions of euros are being misused. Now the FDP is making the procedure public and calling for reforms.

The federal government has been using funds from the German Pension Insurance (DRV) for general purposes for decades, although pension contributions should actually only be used for pensions – and are urgently needed for that. This is reported by “Wirtschaftswoche”, citing information from the FDP. The describes this practice as problematic and calls for the so-called non-insurance benefits to be separated from the pension insurance.

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The expenses of the German pension insurance amounted to around 374 billion euros in 2023, a significant amount compared to the federal budget, which estimated a total budget of around 476 billion euros in 2024. Although the federal government makes significant tax subsidies to the DRV every year in order to prevent it from being overwhelmed, it still burdens the system with costs that are not directly related to the pension. These include, among other things, the recognition of periods spent raising children, special rules for disability pensions or pensions for emigrants from the former Eastern Bloc.

As the “Wirtschaftswoche” reports, the equivalent value of these non-insurance benefits is estimated at 63 to 112 billion euros. However, there is no clear and transparent definition of these benefits. Despite repeated criticism of this practice by the Federal Audit Office, the Federal Ministry of Social Affairs claims that no pension insurance funds are being diverted.

However, according to the DRV, there is definitely a financial gap. In the worst case scenario, the federal government diverted 37 billion euros from the contribution fund in 2020 alone. This means that the tasks that were actually to be financed with taxpayers’ money cost the DRV 37 billion euros more than the federal government made available for them with tax money. According to “Wirtschaftswoche”, pension expert Fritz Teufel has calculated that this amount has amounted to a total of 988.7 billion euros since the introduction of the dynamic pension in 1957 by 2022.

A spokeswoman for the Federal Ministry of Labor told “Wirtschaftswoche” that the federal subsidies had always fulfilled a “general security function for the statutory pension insurance”. In addition, they are a flat-rate compensation for benefits not covered by contributions. She made it clear: “This flat-rate compensation means that benefits that are not covered by contributions are not specifically billed and then reimbursed to the pension insurance.”

However, FDP pension expert Anja Schulz argues that it is wrong to use the term federal subsidy in this context. In their opinion, it is rather a reimbursement that is not even complete. Schulz emphasizes: “It cannot be the case that tasks for society as a whole have to be handled by the collective of contributors.” In short: costs are shifted to contributors that should actually be borne by society as a whole.