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Share capital: Greens brace themselves against growing capital stock for pensions

2023-01-22T08:19:55.058Z


Share investments should in future contribute to securing the statutory pension. The FDP would like to significantly expand the planned capital stock. At the traffic light, however, there is resistance.


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Elderly people in a spa park in Bavaria

Photo: Karl-Josef Hildenbrand/ picture alliance/dpa

The Greens in the Bundestag are fighting against a rapidly growing capital stock to secure long-term pensions.

"Our pension system cannot be made fit for the next few decades through stock speculation," said the Greens' social expert in the Bundestag, Frank Bsirske.

With the share reserve, the traffic light coalition would like to go into partial capital cover in view of the retirement of baby boomers.

This should serve to stabilize the pension level and contribution rate in the long term.

However, the governing parties could only agree on forming a capital stock of initially ten billion euros in the pension insurance system for investment in the capital market.

According to model calculations, this sum should not even come close to suffice to noticeably relieve the pension fund.

Bsirske now made it clear: “The Greens stand by the coalition agreement to allocate a capital stock of 10 billion euros to the pension insurance system.

We are opposed to growth.«

The Liberals are campaigning for more share-based pensions, like Sweden, where part of the gross wage is mandatory for individual, funded pensions.

According to Federal Finance Minister Christian Lindner (FDP), something like this is “the final stage of development”.

In mid-January he presented the plans for »generational capital«.

"We need a capital stock in the three-digit billion range in the pillar of the statutory pension insurance," said Lindner of the "Börsen-Zeitung".

The ten billion are “just the beginning”.

Minister of Labor Hubertus Heil (SPD) had backed the creation of "generational capital" and called for a safe and long-term investment of the money.

However, the SPD has traditionally been critical of investing pension capital in shares.

Capital stock of 350 to 570 billion euros would be necessary

The long-time Verdi boss Bsirske said: "In order to avoid an increase in the pension insurance contribution by 1 percent with the income from investments in the long term, you would need a capital stock of 350 to 570 billion euros, depending on the amount of the return." The risk remains big.

"We know it's totally unsafe to speculate in the stock market."

Bsirske warned against diverting pension insurance contributions to the capital stock.

"That would be at the expense of millions of pensioners if the funds from the pension insurance were used for this." Contribution funds should not be used to buy shares.

"In view of the capital required, there is a risk that the capital stock will soon be called for a quantum leap," said Bsirske.

"It's a matter of time before the demand is raised that we have to be big here instead of making a mess." This path was taken years ago in Sweden.

"But that doesn't mean that this is the right path for Germany," he said.

"Secure pension level at least at today's level"

The government wants to pave the way for stock pensions as part of a pension package aimed at securing pension levels.

Bsirske demanded: "We have to secure the level of pensions at least at the current level and strengthen the pay-as-you-go system."

As of today, the pension contribution rate remained below 20 percent until the late 1920s, according to Bsirske.

Increasing contributions would also be stabilized by federal grants.

"I find the fantasies of lowering contributions significantly through speculation on the stock market extremely problematic," said Bsirske.

"We won't go that route."

The Greens politician went on to say: "There are other ways to set the long-term course for the statutory pension - keyword citizens' insurance, keyword higher contribution assessment ceiling, keyword employer-financed minimum pension contribution." These are discussions "that are coming to us for the coming legislative period".

Bsirske demanded that the pension level should not be allowed to drop and that more pensioners should not be allowed to fall into basic social security.

According to the latest figures from the Federal Statistical Office, the number of recipients of basic security in old age has risen by a good 68,000 within a year to 647,515 last September.

In 2015 it was still 527,353.

kig/dpa

Source: spiegel

All business articles on 2023-01-22

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