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CDU pension politician Whittaker: "Comparatively cheap investment"
Photo: Christian Spicker / imago images
The CDU social politician Kai Whittaker calls for state start-up funding for future generations to save shares in the statutory pension: "When a child is born, the state invests 4,000 euros in a state fund," suggests Whittaker.
"The money stays in the state fund until retirement, only then can it be paid out," the member of the Bundestag told SPIEGEL.
Whittaker was instrumental in developing the pension concept of the CDU politicians from last autumn. In it he had already formulated the demand for an additional capital fund to be built up in the statutory pension. So far it is still unclear whether both will also find their way into the Union election program, on which the CDU and CSU are still working.
With the demand for an additional funded pillar in the pension, CDU man Whittaker is by no means alone.
The Greens, SPD and FDP also have the establishment of a state fund in their election program.
The SPD and the Greens want it as a voluntary and state-sponsored replacement for the Riester pension and - in the case of the Greens - as a standard option for the company pension.
Like the CDU politicians, the FDP wants to invest around a tenth of the pension contributions in such a state fund in the future and also demands state start-up capital for every newborn child, albeit in the amount of a thousand euros.
Around 200,000 euros after 67 years
The consumer advice center Baden-Württemberg has long been calling for a state pension fund.
It would be administered by a public corporation under the umbrella of the statutory pension insurance or the Bundesbank.
The fund aims to invest the money in a broadly diversified manner in the capital markets at very low management costs.
Such a fund already exists in some countries, such as Norway and Sweden.
"The child pension benefit is effective because of the extremely long term, 67 years as it stands," says Whittaker.
In the past 50 years, for example, the German leading index Dax has had an average return of eight percent per year.
If you take inflation into account, that results in a real average return of six percent annually.
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Pensioners with grandchildren at the Maschsee in Hanover
Photo: Julian Stratenschulte / dpa
If you extrapolate this development, Whittaker calculates that the 4,000 euros paid in at birth would become an amount that corresponds to today's purchasing power of 200,000 euros.
If you take as a basis how long people are currently statistically living after regular retirement - namely 18 years - the monthly payment corresponds to a little more than 900 euros of today's purchasing power.
"That's about the amount that prevents old-age poverty," Whittaker says.
In addition, there would be the payments from the pay-as-you-go part of the statutory pension as well as the company and private pension.
The child pension would cost the state around 3.2 billion euros per year, since around 800,000 children are currently born each year.
"It's a comparatively cheap investment," says Whittaker.
However, this investment would tend to exacerbate the considerable financing problems that most experts believe the statutory pension will face in the coming years: Demographic change will drastically worsen the relationship between contributors and pensioners, especially in the coming decade and a half. Last week, the proposal by government advisers sparked heated debates, which, among other things, provides for a link between the retirement age and increasing life expectancy, i.e. the retirement age at 68 from 2042.
In addition, the experts also expect a reduction in the pension level as well as higher contribution rates - and significantly more tax subsidies.
The child pension would then have to be raised from taxes in the coming years.
Even if a child pension were introduced in the next legislative period, the first pensioners would only benefit from it from around 2090.
Whittaker also sees this as the fact that his demand does not solve the acute problems that lie ahead.
"We will only be able to reform pensions with many small steps; a single measure will not save it."
The CDU politician did not adopt the unpopular retirement age at 68 shortly before the Bundestag election, but did not reject it in principle: Before the entry age was changed, the prerequisites would first have to be created, for example through an expansion of rehabilitation and further training measures and stronger incentives for employees to work longer. Instead of a rigid entry age for everyone, the start of retirement could be linked to the achievement of 47 years of contributions.