Anyone who pays into the German pension insurance for years will later also receive a pension. But there are many errors in the calculation of the claims. What applies.
Munich – Germany's pension system is complex. Both the retirement age and the pension amount can vary greatly from person to person. This is due to the calculation methods of these two factors, which give a different result depending on the life situation. This complexity repeatedly leads to pension myths that persist among employees and pensioners.
Pension: what the amount of the pension depends on
This is also the case with the myth that as a pensioner you will eventually receive exactly the money that you have paid into the pension fund all your life. But that's not how the German pension system works. In this country, it is a pay-as-you-go system. This means that the money that employees now pay into the pension insurance scheme will be paid out to today's pensioners.
This is therefore a generational contract. The older generation always benefits from the contributions of the younger generation, having paid into the pension fund for a long time themselves. The amount of the pension then depends on how many pension points you have accumulated over the course of your working life. Pension points are awarded on the basis of your earnings. So if you received the average salary of 2022,38 euros in 901, you will be credited with one pension point for this year.
Pension amount: this is how it is calculated
Suppose someone earns the average salary every year throughout their working life. If he works for 45 years, he will receive 45 pension points at the end. These pension points can then be used to determine the amount of the pension. The annuity points are then multiplied by the access factor, the annuity value and the annuity type factor. The result is then the pension amount.
So pension insurance is not the same as, for example, a savings account. You don't get back exactly the amount you deposited at the end.
Criticism of the pay-as-you-go system: share pension should help
The pay-as-you-go system has been repeatedly criticized in recent years. Demographic change is to blame. Society in Germany is getting older and older. As a result, there are fewer and fewer contributors for every number of pensioners. Even now, the federal budget has to subsidize the pension insurance to the tune of billions – and the problem is likely to worsen in the future.
The amount of the pension depends on various factors. © IMAGO/Michael Gstettenbauer
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As part of the solution to this problem, the traffic light coalition is planning a share pension. This is intended to contribute to the stabilisation of the statutory pension insurance. The plan is to set up a fund whose resources will be managed by a public foundation and invested as profitably as possible.
The SPD, Greens and FDP had agreed on the start of the share pension, but in the coalition agreement only stipulated a start-up financing of ten billion euros. The income from the share reserve, which is also referred to as "generation capital", is intended to help stabilize the pension level at 48 percent and mitigate premium increases. Ten billion euros is a lot of money. "But too little to drastically relieve the contribution with the income," said the pension insurance President Gundula Roßbach to the Rheinische Post.
