What does the economic crisis resulting from the corona pandemic mean for the pension fund? According to pension insurance estimates, the reserve will decrease by a tenth by the end of the year. Looking further into the future is currently not possible.
Berlin (dpa) - As a result of the Corona crisis, the pension fund's reserve is falling, according to an estimate by the pension insurance. However, the insurance company sees limited effects from the crisis, since contributions to pension insurance would also be paid while receiving short-time work benefits and unemployment benefits.
According to the German pension insurance, according to initial estimates, the reserve will decrease by around a tenth to around 36 billion euros by the end of the year.
However, given the current economic developments, these values are still subject to great uncertainties and could still change. Reliable forecasts beyond 2020 are not yet possible.
The current estimate is based on key figures from the spring projection of the Federal Government. It is expected to see a decline in gross domestic product of more than six percent this year - and thus the worst recession since the post-war period.
At the end of 2019, the so-called sustainability reserve was still around 40.5 billion euros. It is intended to compensate for fluctuations in premium income that occur during the year.
According to economists, the pension fund is heading for a major financial hole. The causes are the rapid increase in short-time work and growing unemployment, which will reduce premium income. Since the pensions must not be cut and the federal government wants to limit the amount of the contribution to a maximum of 20 percent, according to the pension expert Axel Börsch-Supan, the federal government will have to fill the gap.
"Federal grants will probably have to increase in the double-digit billion range by 2022/23," said the director of the Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy recently.
A lot of money is already flowing out of the tax fund: The federal government had to inject a total of 72 billion in 2019 so that all pensioners got their money. Pension insurance expenditure totaled EUR 319 billion in 2019.
The pension contribution is currently 18.6 percent, and the grand coalition wants to keep it stable until 2024. Because in 2019, with the exception of industry, large parts of the German economy were still going well and wages rose, on July 1, despite the crisis, the pension for the approximately 21 million pensioners in Germany rose: by 3.45 percent in the west, by 4 in the east 20 percent. Conversely, this coupling does not apply: because of the pension guarantee, pensions cannot fall after severe recessions - as would otherwise be the case.
The pension faces problems in the medium and long term because fewer and fewer contributors come to more and more pensioners. When today's "baby boomer" age groups from the mid-fifties to mid-sixties retire, there are huge gaps in the cash register. The Bundestag has decided on a pension package for the period up to 2025. It fixes the level of pensions - i.e. the ratio of a standard pension after 45 years of contributions to wages - at at least 48 percent. Until then, the contribution rate should not exceed the 20 percent mark. It is now 18.6 percent.
A commission has submitted proposals to the Federal Government for the period after 2025. She recommends a reform package, but not a fundamental change, for example with a higher retirement age. Labor Minister Hubertus Heil (SPD) announced his own proposals by autumn.
Income and expenses from pension insurance