The Federal Cabinet wants to stabilize pension levels for a long time. The plan has been met with sharp criticism from employers and the head of the “economic experts”.
Before the cabinet decision on pension reform, employers and the head of the “economic experts”, Monika Schnitzer, reiterated their sharp criticism of the plans. The German Social Association, however, warned the traffic light coalition against adopting the plan in its current form, in view of criticism from the FDP. Schnitzer criticized in the “Rheinische Post” that the second pension package was not fair for all generations “and certainly not the big step needed to stabilize the pension system in the long term.”
The chairwoman of the Council of Economic Experts said that the concessions to pensioners were entirely at the expense of the younger generations, “who will soon be burdened with rising social security contributions for nursing and health insurance.” “Instead of permanently fixing the link between pension levels and wage developments, pension increases should be limited, for example by no longer linking pensions to wages but to inflation,” demanded Schnitzer.
The President of the Confederation of German Employers’ Associations, Rainer Dulger, told “Spiegel”: “The younger generation will pay the price. They will be burdened with the costs of demographic change.”
Social Association: Settle internal coalition dispute
The German Social Association, on the other hand, insists that it is important that the package is passed by the Bundestag in its current form. “I call on all those involved to settle the dispute within the coalition,” said association head Michaela Engelmeier to the Redaktionsnetzwerk Deutschland (RND).
The planned stabilization of the pension level at 48 percent is extremely important. At the same time, however, this is not enough to effectively combat poverty in old age. “In order to ensure a reasonable standard of living in retirement, we need a pension level of 53 percent in the long term, as well as an employment insurance scheme into which everyone pays.”
What Heil and Lindner’s pension package provides
The Federal Cabinet wants to set the course today for securing pensions in the coming decades. To this end, the ministerial round wants to launch the pension package proposed by Labor Minister Hubertus Heil (SPD) and Finance Minister Christian Lindner (FDP).
The reform aims to keep the pension level at 48 percent at least until 2039. The aim is to ensure that pensions do not grow at a lower rate than wages in Germany in the future. The pension level indicates what percentage of the current average wage someone who has worked for exactly 45 years at the average wage will receive as a pension.
At the same time, a capital investment worth billions is to be created on the stock market. The interest income is to be used to dampen the expected future increase in pension contributions.
Source: Stern
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