Pension: Bundesbank sees linking the retirement age to life expectancy as an advantage

Created: 06/20/2022, 13:20

Symbol picture Rente.jpg © Martin Wagner via IMAGO

The federal government wants the pension level to be kept stable at 48 percent in the long term.

According to the Bundesbank, greater consideration should be given to the increasing life expectancy of the population.

Frankfurt/Main - Linking the retirement age in Germany to life expectancy could, according to the Bundesbank, stabilize the statutory pension system in the long term.

In many countries of the European Union, the retirement age is now increasing with life expectancy, according to the Bundesbank in its monthly report for June, which was published on Monday.

"It is not just the retirement period that is extended, but also the contribution periods."

According to the central bank's economists in Frankfurt, this noticeably reduces the pressure of constantly having to adjust other parameters such as the contribution rate and the tax-financed federal funds for the pension fund.

"The coupling noticeably reduces the pressure on the contribution rate and the federal budget."

Also, the retirement age would not have to be debated regularly.

The SPD, the Greens and the FDP have made it their mission to ensure that the minimum pension level - i.e. the ratio of the pension to the average wage - is "permanently" 48 percent.

The traffic light partners ruled out pension cuts or an increase in the retirement age.

Instead, they promised to save new capital for the German pension fund: as a permanent fund, professionally managed and globally invested.

The age limit for drawing the statutory pension has been gradually raised from 65 in 2012 to 67 in 2031.

In 2019, the Bundesbank in Frankfurt had fueled the debate about a further increase in the retirement age to almost 70 years.

In its current monthly report, the Bundesbank confirms: “The simulations up to 2070 show that the pressure on pension finances will ease noticeably if the retirement age continues to increase gradually after 2031.

It is true that the contribution rate and federal funds are still increasing significantly.

In the long term, however, they will increase less than if the retirement age remains the same.”

In general, the Bundesbank advises the federal government to be as transparent as possible about what a certain level of pension costs people in Germany in old age: “Despite all the estimation uncertainty, there is a lot to be said for taking a much longer period as a basis than in the current pension insurance reports.

Because the calculations should also offer orientation for those who are currently at the beginning of their working life.”