The contribution rate to the statutory pension insurance should remain stable in the coming years. If there were no lower limit on the contribution rate, this could even be lowered next year due to the good financial position. This said the chief executive of the German Pension Insurance Association, Alexander Gunkel, at the Federal Representative Assembly of the organization.
According to them, the pension contributions could be reduced from 18.6% to 18.3% in the coming year. However, the most recent grand-coalition pension reform, which came into force in 2019, ruled out a reduction below 18.6 percent by 2025. Therefore, the pension contributions remained stable.
The financial year 2019, the pension insurance is expected to close with a surplus of about 2.1 billion euros, Gunkel said. The background is the still good employment and wages situation in Germany.
Increase from 2025
Only in 2025, the contribution rate is expected to rise, but at 19.8 percent, the previously applicable statutory ceiling of 20 percent not reach. By 2035, a gradual increase in the contribution rate to 22.3 percent is to be expected.
The pension level, which shows the ratio of pension to wages, will drop from 48.2 percent to 48.1 percent next year, according to Gunkel. From 2021 then the valid until 2025 stop line of 48 percent will work. Thereafter, a further drop to 44.1 percent is expected by 2035. The pension level thus remains above the lower limit of 43 percent that will apply until 2030.
According to Gunkel, the persistently good financial condition of the pension insurance led the government to implement numerous benefits in recent years. "Apparently, the financial cushion but also led to not properly finance all these measures," criticized the pension insurance chief.
Gunkel warns of "bad financing" in the basic pension
This applies in particular to the further expansion of the so-called maternity pension, which was predominantly made from contributions. Such a "false financing" should not be repeated in the planned basic pension. "We demand that the full tax financing of the basic pension agreed in the coalition committee is now also implemented in the legislative process."
Gunkel demanded the introduction of the financial transaction tax provided for the refinancing of the additional expenditure to succeed. "It must not be that once again the contributors are used to finance a non-contributory benefit."
The grand coalition had agreed in November that low earners, who have at least 35 years of contributions to show, should receive a basic pension above the basic security. The benefit is to be financed by means of taxation.
