Ministerial round meets: Stable pension level: Kabinett brings law on the way

Ministerial round meets: Stable pension level: Kabinett brings law on the way

Ministerial round meets
Stable pension level: cabinet brings law to






It is the first reform step: the pension level should no longer drop by 2031 and get millions of mothers. However, the big future issues of retirement provision remain open for the time being.

The law for a stable pension level by 2031 and better pensions for millions of mothers is on the way. The Federal Cabinet approved a draft by Minister of Social Affairs Bärbel Bas (SPD), which the Bundestag should decide by the end of the year. Although the improvements with tax money are to be paid, employees and employers also have to adjust to somewhat higher costs according to the draft law: from 2027, the pension contribution should increase from 18.6 to 18.8 percent today – a little more than expected.



The pension law is the first of several planned reform steps. The pension level should be kept at 48 percent by 2031. This means that the pensions are a bit higher than without the reform. In addition, instead of two and a half from 2027, parents receive three years of education for children who were born before 1992. The bill also includes the innovation that older people in retirement age may continue to work for their employers. In addition, the reserves of the pension funds are to be increased from 20 to 30 percent of a monthly output in order to have a little more buffer.

“Message in uncertain times”


“Especially in uncertain times, the 2025 pension package sends a clear message to all generations: the pension remains stable and fair,” said Minister of Social Affairs BAS after the cabinet decision. The changes had been announced in the coalition agreement. However, further reforms of old -age security are open – a pension commission should make suggestions from 2026. Because the Union and SPD are disagreed.




In the ZDF “Morgenmagazin at a distance to a proposal by Minister of Economic Affairs Katherina Reiche” (CDU), the retirement age was increased. A general pension at 70 would be a pension cut for many people who could not work for so long, said the Minister of Social Affairs. The coalition makes it easier for those who want to continue working with their employer in old age. “It is not forbidden to work longer,” said Bas.


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CDU politician agrees with deep reforms

At the same time, she repeated ideas for employment insurance. “Our problem is that not everyone deposits into this system,” said the minister. She also called the self -employed and officials. With a similar advance, BAS came across criticism weeks ago.





Union faction vice Mathias Middelberg was open to the debate on the early start of the early start at RTL/NTV. “Ms. Bas’s proposal is at least one that can be discussed,” said Middelberg. “It is another question whether he really contributes to the solution.” The CDU politician placed the population on drastic reforms in the pension system. “We have to tackle painful reforms,” he said.

Billions of billions for taxpayers

The pension level is only a calculation size. After 45 years of contributions, she puts average earnings in relation to the current average wage. That says nothing about your own pension, but is an orientation value. The Ministry of Social Affairs, however, calculated in concrete terms: “By stabilizing the pension level at 48 percent, a pension of 1,500 euros, for example, is around 35 euros per month higher. That is an increase of 420 euros a year.”





For the reform, billions of billions from the federal budget should also flow into the pension funds. According to estimates by the Ministry of 2029, the so -called stop line at the pension level initially costs around 3.6 billion euros. The sum increases in 2030 to around 9.3 billion euros and in 2031 to around 11 billion euros. The financing of the better mother’s pension costs taxpayers around five billion euros a year from 2027.

So far, three full years have been taken into account for the upbringing of children born in 1992. For children who were born before, it has only been two and a half years. This should be adjusted to three years with the reform. According to the government, around ten million people, especially women.





The draft law also causes the fact that the contribution rate for pension in 2027 is expected to increase to 18.8 percent of gross wages. According to applicable law, an increase to 18.7 percent would have been expected. In 2026 the sentence is expected to remain stable.

The draft suggests a connection with the increase in the reserves of the pension fund: “By raising the minimum reserve, a higher contribution rate can be necessary in one year,” says the cabinet template. The federal government, on the other hand, should not pay for refilling the reserve: “The resulting direct effects on the federal benefits are excluded to general pension insurance.”

The fact that the contribution rate will increase from 2027 was expected – this is related to the increasing expenditure of pension insurance and the fact that more older people retire and gradually deposit less younger. According to the bill, pension expenses including health insurance for pensioners increase from EUR 394.4 billion this year to EUR 476.3 billion in 2029.

dpa

Source: Stern

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