The Netherlands, Sweden and Finland are leading the way: The Ifo Institute advocates that people should work longer in this country as life expectancy increases.
The Ifo Institute advocates linking the retirement age to life expectancy. The Netherlands, Sweden and Finland have already decided this, said Ifo pension expert Joachim Ragnitz.
If life expectancy were extended by three years, the Dutch would have to work two years longer and would receive a pension one year longer. The ratio of pensioners to employed people remains stable at around 40 percent instead of rising to almost 50 percent, the Dresden economic researchers wrote in an essay.
If pension increases were linked to the inflation rate instead of, as is now the case, to wage increases, this would also slow down the increase in pension spending. On the other hand, the Ifo researchers do not believe it makes sense to include the self-employed and civil servants in the contribution payment. In the short term, this would relieve the burden on pension funds. “In the long term, however, the payouts for these groups would be significantly higher, among other things because they would have a longer life expectancy.”
Raise the retirement age to 69 by 2061
In Germany today, 65-year-olds could expect an average of ten to eleven years of “life expectancy in good health”. According to the Dutch model, the retirement age would gradually increase to 69 by 2061.
In the 1990s, there were 20 pensioners for every 100 people able to work. After 2030, there will be 40 pensioners. According to calculations by the Federal Statistical Office, in the mid-2060s there will be more than 45 pensioners for every 100 people able to work. Today’s pension system places a high burden on the working population that finances the pensions.
IG Metall flatly rejected the Ifo pension experts’ suggestions. “An increasing standard retirement age leads to more deductions and less pension. That is the wrong approach,” said board member Hans-Jürgen Urban. Linking pension increases to price increases instead of wages would lead to “social upheaval”.
Source: Stern
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