Bad prospects for future retirees

The level of pensions is safe – but only for those who are already retired or who will be retiring by 2025. For the youngest, the Federal Minister of Labor expresses the intention to also fix them a high pension level after 2025. But that he succeeds in this legislature is debatable. Because the pension commission will submit its proposals only in the spring of 2020. After that, there will not be much time left in this legislature for a new legislative initiative. The theme of pensions should instead become the dominant theme of the campaign in 2021. And that Hubertus Heil or the SPD belongs to a future federal government, is a scenario rather unlikely.

The double stop line that the Coalition for Retirement and the pension contribution rate has brought together by 2025 is a policy to the detriment of the younger generation. To deny it, as do salvation and other members of the federal government, is dishonest, because they know it better. As in the debate Hartz IV, the debate on pensions should finally focus on the interests of those who should guarantee social security in the future. Without them, everything is nothing.

The federal pension report shows how much the pension level will decline after 2025 – less than 45% by 2032. This is a good figure compared to previous forecasts. But even after that, the decline in the level of security will hardly be halted because of the aging process. At the same time, the contribution rate should rise to 22.5% by 2032. Taken together, these two developments are ominous for the younger generation: the legal pension secures less and less future generations of pensioners more young people, while suggesting the prospect of a level of employment as high as today, due to rising wage costs.

With its recent pension decisions, the coalition has reduced the chances of a high pension level even in the future. Because the increase in pensions of the mother and all other elements of the pension package weighs annually on 10 billion euros on the pension fund, even after 2025 with an upward trend.

The government mentions the strong increase in participation of the 60 to 64 age group in the labor force since 2007, which is gratifying. But this development should be self-evident. Finally, the legal retirement age has been gradually raised since the red-green pension reform. This should be in 2018 among new retirees actually already at 65 years and seven months. In fact, seniors retired on average in 2017 at 64.1 years. Much more needs to be done to ensure that more seniors work longer in the future and that the legal retirement age actually works.