Pensions under scrutiny: this is what pensioners and employees can expect in 2023
Created: 12/28/2022, 1:11 p.m
By: Lisa Mayerhofer
In the new year, the government sets the course for pensions.
What does this mean for pensioners and employees?
Will the retirement age be raised?
Berlin – In the new year, pensions are about the future.
Federal Minister of Labor Hubertus Heil (SPD) wants to present a pension package II in the near future to secure the pension insurance.
"The challenges that now lie ahead of us from 2025 onwards are undeniably huge," said Heil in December.
Germany's employers are alarmed.
"Pension is becoming a brake on the economic future of our nation," warns Employer President Rainer Dulger.
He calls for a gradual increase in the retirement age.
How dramatic is the situation – and what are the options?
The problem: the baby boomers are retiring
Heil explained in December to representatives of the pension insurance: "The baby boomers will continue to retire in 2025, the baby boomers, those born before 1964." So there are more and more recipients of benefits.
The president of the pension insurance, Gundula Roßbach, says: “The birth rate in Germany is between 1.5 and 1.6 children per woman.
In order to keep the number of people living in our country constant, you would need a birth rate of around 2.1.” So how can Heil achieve his goal of stabilizing the statutory pension as a basic old-age security and at the same time securing the level of pensions over the long term?
Dulger warns: “More and more state funds have to flow into the pension funds.
In addition, the contributions threaten to rise more and more.” The more money companies and the state have to put into the social security funds, “the less there is for investments in the future”.
The employer president refers to the more than 100 billion euros a year that currently flow from the federal budget into the pension fund.
The baby boomers will soon be retiring.
(Iconic image) © Hauke-Christian Dittrich/dpa
Current situation: The pension fund is full
The pension fund is currently well stocked.
"Despite multiple crises, the labor market in Germany is stable," says Roßbach.
As a result, premium income increased by 5.5 percent from January to November.
"That is very positive." The expenses were also lower than estimated a year ago.
Corona has led to an increase in mortality - one reason for a slower increase in life expectancy.
Instead of the originally feared deficit of 6.5 billion, according to Roßbach, the pension insurance posted a surplus of 2.1 billion euros at the end of the year.
In July, pensions are expected to rise by around 3.5 percent in western Germany and by more than 4 percent in eastern Germany.
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forecasts for the coming years
Roßbach refers to the official estimates: According to this, the contribution rate will remain at 18.6 percent until 2026 – and will increase to 20.2 percent by 2030.
"At the end of the 1990s, the contribution rate was already higher than that now forecast for 2030," says the pension president.
At that time it was 20.3 percent.
The pension level, which indicates the security power of pensions in relation to wages, is likely to remain above 48 percent until 2024.
After that, a legal stop line is expected to take effect to stabilize the level.
But by 2036, it would drop to 44.9 percent, according to estimates.
Reform demands: linking of life expectancy and retirement age
Verdi boss Frank Werneke sees aging in Germany as "a development in society as a whole".
He demands: "Therefore, additional financing from tax revenues needs to be strengthened."
Employer President Dulger has very different demands.
"We need to talk about the retirement age," he says.
"We have a growing average life expectancy in this republic, and therefore we will not be able to avoid gradually raising the retirement age."
Linking life expectancy and retirement age creates an “automatism that is definitely going in the right direction”.
However, the SPD, Greens and FDP had promised in the coalition agreement: "There will be no pension cuts and no increase in the statutory retirement age."
Labor market factor: there is hope for immigration
Pension President Roßbach counters gloomy scenarios: "There will be no bankruptcy and no collapse of the pension system, but there are lines of development that can be shaped."
"The women, the elderly and especially the immigrants should be mentioned here in particular." Heil had already declared that the planned new law for more immigration of skilled workers should also contribute to more stable pensions.
Reform options: New capital stock for pensions from 2023
According to Roßbach, it is still politically open whether the contribution rate for the pension should be subject to certain limits in the future.
"This will be used to measure how this is flanked by tax revenue or other measures." From 2023, the government also wants to build up a new capital stock for pensions.
With initially 10 billion euros, profits are to be achieved on the capital market ("stock rent").
According to statements from the pension insurance, however, such systems would need much more scope to bring real relief in the contributions.
Early retirement under scrutiny
Dulger calls for an end to the early retirement pension without deductions after an insurance period of 45 years in its current form.
"The chancellor himself has already recognized that the pension from 63 is not up to date, although his party pushed it through at the time," says the employers' president.
Before Christmas, SPD Chancellor Olaf Scholz had said that in future more people than before should actually work until the applicable retirement age.
Roßbach explains that the utilization of early pensions with or without deductions was 60.4 percent in 2015 - 58.2 percent in 2021.
"It always fluctuates.
A wave of early retirement cannot be derived from this.” Within 20 years, the proportion of employees aged 60 to 64 has even “increased significantly” – from 12 to 47.5 percent.