The main reason for the significant increase in pension expenditure up to 2035 is the increase in the number of pension recipients in the statutory pension insurance, in particular due to the baby boom generation with high birth rates, according to the budget report. The expenditures for pensions of the statutory pension insurance including rehabilitation allowance will rise from ten percent of GDP (39.1 billion euros) in 2018 to 14.5 percent of GDP in 2060, while the retirement benefits of civil servants will rise from 3.2 percent of GDP (12 , 2 billion) will decline to 0.8 percent of GDP in 2060 in 2018. The shift towards pension expenditure within the framework of statutory pension insurance is due in particular to the fact that more and more contract employees are employed instead of civil servants in the public sector.
Longer calculation periods have a dampening effect
On the other hand, the extension of the calculation period due to the switch to the pension account has a dampening effect on pension expenditure. The pension entitlements of men will be around ten percent lower than in 2018 by 2060, and those of women by around seven percent. The pension-related legislative resolutions of September 19, 2019 are already included in the calculations. The abolition of the discounts for long-term insured persons and the abolition of the waiting period for the first pension increase after retirement have long-term effects on pension expenditure of around 0.5 percent of GDP per year after a transitional phase.
Compared to the last report in 2016, the results in the pension area are less favorable. Starting from a lower base value, in addition to the demographic effects, pension expenditures will rise significantly more rapidly up to 2060, especially due to the most recently passed legislative resolutions (plus 1.6 percentage points compared to plus 0.4 percentage points in the 2016 forecast). Lower productivity growth is also having an impact on pension spending, the budget report said.
In addition to these calculations in the budget report, it must be added that at the end of 2020 some of the resolutions that were taken shortly before the 2019 National Council elections were withdrawn. You can continue to take long-term insurance after 45 years of insurance at 62, but you have to accept discounts again as before. In return, there is a euro bonus for every month that you worked with insurance before your 20th birthday. In the vast majority of cases, the pension increase is reduced or canceled in the first year after retirement.
In this context, it is also interesting that federal subsidies for statutory pension insurance have been relatively stable in recent years. In 2011 they amounted to 9.11 billion or 2.9 percent of GDP, in 2022 they will also amount to 2.9 percent of GDP at 12.5 billion. A similar picture emerges for civil servants’ pensions: in 2011 the state paid 7.8 billion or 2.5 percent of GDP, in 2022 it was 10.5 billion or 2.4 percent of GDP.
Neos locate an “explosion in pension spending and the pension hole”
Neos social spokesman Gerald Loacker locates an “explosion in pension expenditure and the pension hole” on the basis of the 2020 federal accounts. According to this, the pension system in 2050 will lack 1.310 billion euros in contributions that have to be financed with tax revenue from the federal budget. The annual pension gap will thus increase from the current five percent of GDP (2020) to seven percent of GDP (2050).
“The federal accounts show what we have been warning Neos about for years: If we do not fundamentally reform the pension system, the pension gap will get bigger and bigger and the next generations will only be able to dream of a decent pension”, criticizes Loacker. There is simply no balance between the interests of the contributors and the interests of the beneficiaries.
