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No pension reform for three years? Traffic light plans for retirement contradictory and “destructive”

2024-02-24T19:13:21.873Z

Highlights: No pension reform for three years? Traffic light plans for retirement contradictory and “destructive”. 127.3 billion euros are planned for pensions as early as 2024. Labor Minister Hubertus Heil wants to set the pension level at at least 48 percent by the end of the 2030s. The German Economic Institute (IW) in Cologne expects that the plans in their current form will inevitably lead to higher contributions. There remain many open questions that the government has not clarified, according to the IW.



As of: February 24, 2024, 8:02 p.m

By: Amy Walker

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Press

Split

The federal government is currently planning pension package II, which will be presented soon.

But the coalition is entangled in contradictions with its plans.

Lindner also wants a break in the increases.

Berlin – The federal government is currently working on a draft law that is intended to put statutory pension insurance on a solid footing.

Labor Minister Hubertus Heil (SPD) wants to present Pension Package II in the coming weeks, with the aim of securing the pension level at 48 percent in the long term.

But the SPD's plans are encountering resistance in the economy.

The German Economic Institute (IW) in Cologne expects that the plans in their current form will inevitably lead to higher contributions.

Because there will hardly be a higher subsidy from the federal government with Finance Minister Christian Lindner (FDP).

He even wants to completely freeze spending on pensions and citizens' money.

Pension package II: Too many unanswered questions

“Federal Labor Minister Hubertus Heil has announced that he wants to set the pension level at at least 48 percent by the end of the 2030s.

Heil does not want to change the standard age limit of 67 years.

In mathematical terms, the contributions must rise sharply,” writes the IW in a statement on Friday (February 23).

The pension contribution rate is currently 18.6 percent and is expected to rise to a maximum of 21 percent by 2037.

But according to the IW's calculations, that doesn't work.

“If the federal government wants to guarantee a 48 percent security level, the contribution rate must increase even more.”

The traffic light government's plan, on the other hand, is: The stock pension - called generation capital - is intended to provide the pension fund with the necessary money so that the calculations work out.

However, it is not at all clear how much money the federal government wants to invest in pension insurance in the next few years.

A first installment of 12.5 billion euros is planned for the 2024 budget.

What happens next remains unclear.

According to IW, it is therefore completely unclear whether the money for the government's plans according to Pension Package II will even be there.

There remain many open questions that the government has not clarified, according to the IW.

If neither contributions are to increase significantly nor the retirement age is to be raised - which Hubertus Heil clearly rejects - then the federal subsidy for pension insurance must actually increase again in order to keep the pension level at 48 percent.

But the finance minister thinks very little of this.

127.3 billion euros are planned for pensions as early as 2024.

Lindner wants to freeze social spending

On Thursday on the ZDF program “Maybrit Illner” he discussed a three-year moratorium on social spending, subsidies and other benefits.

The background is also the federal government's commitment to NATO to achieve defense spending of at least two percent of gross domestic product (GDP) for the first time this year.

There will actually be a pension increase for pensioners soon.

© Imago/HalfPoint Images

Lindner then followed up again on Friday.

For a long time in the Federal Republic it was a kind of “sport” to repeatedly launch new programs for the economy and agree on subsidies or higher social benefits.

This must now come to an end.

As a slogan for the federal government, he said: “With what we have, from citizens' money to pensions, we have to get by for three years.” The regular increases due to increases in wages and costs are okay, emphasized Lindner.

But new ideas, such as retirement at 63 a few years ago, now require a “three-year break”.

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The statement was met with widespread criticism.

“There will be no clear-cutting of the welfare state with the SPD,” said the budget policy spokesman for the SPD parliamentary group, Dennis Rohde, to the

Rheinische Post

(Saturday edition).

“It would be extremely dangerous to make savings now for the weakest in order to increase funds elsewhere.

Our democracy only works in the triad of external, internal and social security.”

The general manager of the Paritätischen Wohlfahrtsverband, Ulrich Schneider, called Lindner's proposal “destructive” for social cohesion.

He referred to the

Funke

media group to “over 14 million low-income people in Germany” and to child poverty.

With material from dpa

Source: merkur

All news articles on 2024-02-24

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