Would abolishing the so-called pension at 63 alleviate the traffic light’s budget problems? At best, a coalition partner warns that the price will be high.
The Greens in the Bundestag have strictly opposed abolishing the so-called pension at 63. Abolishing the deduction-free pension after 45 years of contribution payments would be a mistake, said the pension expert of the Green parliamentary group, Markus Kurth, to the German Press Agency in Berlin. “Such a reform would by no means restore the 2025 budget in the short term, but would instead lead to a massive loss of trust,” warned Kurth.
In a fact paper, Kurth argues that only a very short-term abolition could have an impact on the budget for 2025. “Very few of those affected could react so quickly with a change in their behavior.” Instead, many are likely to retire early with discounts. The savings for the statutory pension insurance would therefore be quite small.
From Kurth’s point of view, even a less abrupt end to the type of pension would often run counter to the plans of employers and employees. “Anyone who has firmly planned to be able to retire without any deductions after 45 years of insurance may have divided their workforce in such a way that it will only last until then,” said the MP. “If the goal is to keep as many workers as possible in the labor market for as long as possible, we must invest in prevention and rehabilitation measures and enable flexible transitions to retirement.”
Kurth also pointed out that there are already attractive monetary incentives for older workers: for every year that retirement is delayed, there is a surcharge of six percent on the total pension amount. Additional earnings limits have been removed. “Every euro you pay in increases your pension.”
The FDP had called for the abolition of the so-called pension at 63. FDP leader and Finance Minister Christian Lindner told the Funke media group that there are many approaches to retirement at 63. “For example, experts have suggested making health problems a prerequisite. In any case, 22 percent contributions must be averted in the 2030s.” At the moment, however, he wants to concentrate on upcoming decisions, said Lindner, referring to the pension package that is to be decided in the course of May. The SPD doesn’t want to know anything about abolishing pensions at 63.
Savings of three billion?
Overall, the question of how expensive this type of pension is is difficult to answer, said Kurth. It is not clear how many people will retire early, even with discounts, and how many would postpone the start of retirement. A study by Prognos for the employer-related initiative Neue Soziale Marktwirtschaft eV estimated the annual savings potential for the tax subsidy for the pension fund if it were immediately abolished at 1.7 to 3 billion euros – but based on unverifiable assumptions about the behavior of those affected.
Most recently, there were well over two million users of this type of pension. When it was introduced in 2014, the legislature assumed around 200,000 applicants annually. But year after year the forecasts are exceeded. As with the regular old-age pension, the entry age for this type of pension is also gradually increased. This year it is 64 years and 4 months and is expected to rise to 65 years.
Source: Stern
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