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Tuesday, December 6, 2022

Retirement provision: Pension insurance is financially in better shape than expected

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Consequences of war, energy crisis, recession – uncertainty and worries dominate the forecasts for many population groups in Germany. But for a large group, there are pretty good prospects for the time being.

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Despite the expected recession in Germany, the financial forecasts for the 21 million pensioners in the coming years are initially positive. The German Pension Insurance Association confirmed on Wednesday in Würzburg that pensions are likely to rise by around 3.5 percent in western Germany and by more than 4 percent in eastern Germany in the coming year. “We simply have record employment,” said President Gundula Roßbach. Roßbach emphasized that the increase in income from compulsory contributions from employment was particularly significant at plus 5.4 percent this year.

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The chairwoman of the federal board of pension insurance, Anja Piel, said: “Of course we are pleased that this has developed comparatively more favorably than predicted last year.” For the coming years, too, the official estimates assume further noticeable increases in income from the pension fund, as Piel emphasised. The compulsory contributions from gainful employment would increase by an estimated 16.1 percent by 2026.

higher mortality

In addition to the labor market and wage situation in Germany, which is favorable for the pension fund, life expectancy on average is not increasing as much as previously thought, as co-chairman Alexander Gunkel announced. The background is the increased mortality due to the corona pandemic. This tends to have a dampening effect on pension fund expenditure. Immigration to Germany is also having a positive effect, Gunkel said. As a result, more people paid into the pension fund.

However, the representatives of the pension insurance emphasized the uncertainties of the forecasts due to the economic crisis. “The uncertainties in this economic development are certainly as great as they were a few years ago,” said Gunkel. In addition, the pension insurance confirmed that the financial situation of the pension fund is likely to deteriorate in the medium term after the positive developments, since the baby boomer generation is increasingly retiring.

Source: Stern

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