Are other political projects lagging behind due to the repercussions of the war in Ukraine? The government wants to stick to the retiree’s plans.
Berlin (dpa) – Federal Labor Minister Hubertus Hill (SPD) wants to set a long-term path for the future of Germany’s pensions by the end of the year.
“With the second pension package, we will implement two central pension policy projects from the coalition agreement this year,” Hill told DPA. According to Hill, these are promises about the level of pensions and capital formation in the case of pensions.
“Capital Stock Creation”
First: We ensure that the pension level remains stable at 48% in the long term. And secondly: We are putting pension financing on a broad basis by building a capital stock,” the SPD politician said. Hill pointed to another retirement law that had already been introduced in the Federal Cabinet before Easter. “Both packages – the first and second pension packages – are important foundations for the future of elderly security,” he said.
The SPD, the Greens and the FDP announced in their coalition agreement that they wanted “permanent insurance” at the minimum pension level of 48 percent. The pension level expresses the ratio of pensions to wages and therefore the security strength of pensioners’ pensions. Traffic light partners ruled out pension cuts or increased retirement age.
Instead, they promised to provide new capital to the pension fund – as a permanent fund, professionally managed and invested globally. A capital of ten billion euros of budget funds should be the first step in 2022.
The FDP’s deputy leader, Johannes Vogel, said the project remains central. “We all have to accept our main challenges and find solutions, including a system of aging care that is fair for generations.” Given the demographics, long-term stability of the pension system can only be achieved through structural reforms. “That’s why it’s so important to have the stock annuity.”
“The central concept is stability.”
There were mixed reactions to the coalition’s plans. German pension insurance indicated the limited scope of planned capital formation. Its president, Gondola Rosbach, told dpa: “It is clear that a ten billion euro contribution can only support the financing of pension insurance in a simple way. We have an annual budget of 340 billion euros.”
The company’s president, Rainer Dolger, had warned against implementing a 48 percent long-term pension plan. Then, according to Dulger’s assessment, higher contributions or more tax benefits threaten. More than 100 billion euros are already flowing from the federal government into the pension fund.
In Hill’s view, the planned law is about permanent security. “The central concept is stability,” he said. The pension level should remain constant “well beyond 2025”. “We know this is a huge challenge because the baby boomers will retire from 2025.” He emphasized that stability also means securing the basis for financing pensions in the labor market. That is why we need a high level of workforce participation and adequate wage development. “
No downsizing in retirement plans
As for the additional capital stock of tax money now being prepared, the minister promised: “We will invest it reasonably.” In general, the second pension package stabilizes the pension level and strengthens the long-term statutory pension insurance.
Today, the strongest groups are between 55 and 60 years old – so they are often in the middle of working life. In 2035, the strongest groups will be about 70 years old – after which they will usually be among the recipients of transfers from the Pension Fund.
Hill emphasized that he did not want to curtail pension plans, even if they were fraudulent before Russia’s attack on Ukraine, which had dire consequences. The crisis resulting from (Russian President Vladimir) Putin’s terrible war in Ukraine is forcing us to reorient our policies. He said that the tipping point we were going through did not allow for an easy transition to the agenda. But one thing is clear: We are not compromising our values because of this. We are not playing armaments for pensions.”
“We will do more for external security and at the same time for social peace and cohesion in this country,” Hill said. This is why the coalition is carrying out what is planned. With Pension Package 1, disability pensions for people who have been withdrawing for a long time will also be improved. “And in the second half of the year, we are laying the foundations for the long-term stable provision of aging.”
© dpa-infocom, dpa: 220419-99-958110 / 5