As of: February 14, 2024, 11:00 a.m
By: Amy Walker
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Experts are increasingly warning politicians against continuing to do nothing when it comes to pension provision.
Both statutory and private pension provision must be reformed.
Berlin – “Politicians must act now.
It would be fatal if another legislative period were to pass without reforming private pension provision.”
With this emphatic sentence, Thomas Richter, general manager of the BVI fund association, tries
to make the seriousness of the situation clear to the pension portal
ihr-sorge.de .
The pension must be reformed so that it is future-proof.
This applies to all forms of retirement provision.
The background is demographic change, which is slowly but surely leading to fewer and fewer working people compared to more and more pensioners.
In order to protect the population from poverty in old age, new ways of financing pensions must be found.
And private provision must also take on a new importance.
Pension package II announced by the traffic lights
The traffic light government has already set itself the goal of reforming pensions, but the focus is more on statutory pension insurance.
Labor and Social Affairs Minister Hubertus Heil (SPD) wants to present Pension Package II in the coming weeks, which aims to secure the pension level at 48 percent and put financing on a new footing through a stock pension.
But according to experts, even that is far from enough.
In their most recent report for the federal government, the so-called “economic wise men” once again recommended tackling more far-reaching changes: abolishing early retirement for those who have been insured for a particularly long time, adjusting the retirement age to life expectancy and reorganizing company and private pension plans are among the recommendations made there.
Private pensions urgently need to be reformed to combat poverty in old age.
© Zinkevych/Imago Images
In an interview with Ippen.Media,
pension expert and economist Martin Werding
also welcomed an idea from the CDU to make funded private pension provision mandatory for all insured people.
“If such provision had existed across the board since 2001, the financing problems with pensions would be much less pressing today.
Although there are various forms of supplementary pension provision, such as private pensions, company pensions, real estate, etc., almost 20 percent of employees subject to social insurance contributions are currently not using any of them,” says Werding.
Focus group on private pension provision presented recommendations
Accordingly, the focus group on private pension provision, which was commissioned by the federal government in summer 2023, also recommends making the options for private pension provision more flexible.
The focus group recommends more options, particularly when it comes to paying out pensions: “In addition to lifelong annuities, higher partial payouts, payout plans and investments in self-used property should be possible in the future,” says the recommendation to the Federal Ministry of Finance.
It should also be examined whether the assets saved in private pension insurance could also be used to improve the statutory pension - for example by purchasing pension points.
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Thomas Richter from the German fund association BVI criticizes the fact that nothing has been done since these recommendations were presented.
Time is of the essence when it comes to pension provision and many of the suggestions could be “implemented quickly and with minimal effort,” he says, according to
ihr-sorge.de
Whether there will really be a reform of private pension provision remains to be seen.
The pension package II, which was actually expected in the summer of 2023, has been a long time coming.
Despite all the urgent appeals, politicians will probably not allow themselves to be put under pressure.