Expensive pension plans: Pension should be safe – but at what price?

Pension: stable. This is the message that Union and SPD want to set with their coalition agreement. The pension level is to be secured by 48 percent by 2031, employees can retire prematurely after 45 years of work as before and the retirement age 67 is not increased further. An “early start pension”, an “active pension” and better mother’s pensions for women with births before 1992 should be added. But does it all fit together – and is it enough?

Where does the criticism of the pension plans come in?

“Now there is a significant increase in contribution rate to 20 percent during this legislative period,” warns the general manager of the employers’ association BDA, Steffen Kampeter. Today it is 18.6 percent. “This means even higher labor costs for employers and even less net for the employees,” says Kampeter of the German Press Agency.

Social expert Jochen Pimpertz from the employer’s research institute IW also warns: “The new coalition heads into serious financing difficulties.” From the perspective of the economy Veronika Grimm, the coalition agreement gives the opportunity to “make the statutory pension insurance in the long term”, as the “Augsburger Allgemeine” said.

The criticism of the left is completely different, but no less sharp. A pension level of 48 percent is “nothing more than an update of poverty in old age,” criticized left-wing parliamentary group leader Heidi Reichinnek. Every fifth pensioner is already living in poverty. “Instead of cementing this misery, the pension level must finally be increased to 53 percent again,” she demands.

What does securing the pension level mean at 48 percent?

The pension level is only an abstract arithmetic size. It describes the ratio of average income and a “standard pension”. What the plans of the future coalition partners mean, explains Gundula Roßbach, President of the German Pension Insurance,: “The pensions will continue to follow wage development by 2031 – without a demographic deduction.” Roßbach also expresses itself positively “about the clear commitment to the strongest pillar of old -age insurance” in the coalition agreement.

But the aging of society puts the system under pressure. In the coming years, fewer and fewer employees will be deposited into the pension fund – more and more people will receive age references. According to official calculations, the pension level would decrease to 46.9 and 2045 to 44.9 percent without changing today. In other words, the pensions would increase less compared to the income of the employed. The SPD prevailed that it is not going down further. Your argument: The pain threshold is reached at the pension level.

But if – as planned – a higher level of pension is given by law, the government must re -enact every year in the next pension increases – so that the pension keeps up with wages. The pensions are then a bit higher than without the intervention.

What do the plans mean for contributors?

The stabilization of the pension level costs many billion euros a year. However, these should not come from the pension fund: “We compensate for the additional expenses that result from this,” says the coalition agreement.

The pension contribution of 18.6 percent paid by employees and employers half paid today is still likely to increase. In the “Wirtschaftswoche”, economist Martin Werding calculated that the sentence would increase to 19.7 percent without additional costs in 2027 and to 21.2 percent by 2035. If the securing of the pension level was paid at 48 percent from the pension fund, the contribution rate 2035 would be again 0.4 points higher according to his calculations.

What does the improved mother’s pension cost?

Additional costs of around five billion euros a year are expected from the planned improvement in the mother’s pension. And this money should also come from the state treasury. It has been announced that women with births before 1992 receive three full pension points per child – just like women with births after this year. Affected pensioners could therefore get a little more money as soon as the coalition plan has been poured in the legal form.

How does it continue in the long term?

The long -term financing of the pension remains vague in the coalition agreement. “Only a growth -oriented economic policy, a high employment rate and adequate wage development make it possible to finance this permanently,” it says.

IW expert Pimpertz is skeptical. “Financing the pension plans through growth and more employment through additional revenue is likely to be difficult”. Rather, the researcher fears a “negative spiral” in which the high expenditure load inhibits economic dynamics and thus the need for tax and contribution allowance is all the higher. In 2029 Schwarz-Rot wants to check the development. Before that, a pension commission should take a close look at the entire system by around 2027.

What is the “early start pension”?

“For every child from the sixth to the age of 18, which attends an educational institution in Germany, we want to deposit ten euros per month into an individual, capital -covered and private sector organized retirement depot,” says the coalition agreement. “Early start” should start in 2026. From the age of 18, you can save yourself up to an annual maximum amount by private deposits. The income from the capital should be tax -free until the retirement. It is then paid out when the standard age limit is reached. The AfD criticizes the plan as a “alibi project”. There is too little money together over time, says social politician Ulrike Schielke-Ziesing. However, higher deposits would be expensive for the state.

What about the “active pension”?

The aim of the Union and the SPD is that older people remain working as long as possible: If you reach the statutory retirement age and continue to work voluntarily, you should receive your salary of up to 2,000 euros a month. According to the plans, the additional earning options for the survivor’s pension are also improved.