As of: March 1, 2024, 12:38 p.m
By: Lisa Mayerhofer
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The traffic light coalition has rejected the “retirement at 70” idea.
But more and more experts fear that an increase in the retirement age is inevitable so that the pension system does not collapse.
Berlin – For the traffic light coalition it is a taboo topic: increasing the retirement age.
But more and more experts are calling for a reform of the pension system by raising the entry age.
Otherwise the rising contribution rates would place an excessive burden on the younger generations.
Labor Minister Heil: “I won’t have a pension at 70”
The statutory retirement age is already increasing – gradually to 67 by 2031.
Anyone who wants to retire without deductions in 2024 must be 66 years old.
Anyone who has a particularly large number of years of insurance can even retire a little earlier without any deductions - colloquially known as “pension at 63”, even though the age is also being gradually raised to 65.
The traffic light coalition does not want to change this: Federal Labor Minister Hubertus Heil (SPD) recently spoke out
against a further increase in the retirement age in an interview with the newspapers of the
Funke media group.
“There will be no retirement for me at 70,” said Heil.
Chancellor Olaf Scholz (SPD) is also against increasing the retirement age.
In the coalition agreement, the traffic light government also opposed pension cuts and an increase in the statutory retirement age.
When does retirement come at 70?
More and more experts are in favor of increasing the retirement age.
(Symbolic photo) © IMAGO / Andreas Prost
Instead, Heil wants to present the new pension package II next week.
The pension level should be stipulated and the so-called stock pension should be introduced.
The pension level should not fall to less than 48 percent of average wages in the long term.
At the instigation of the FDP in particular, a capital stock is to be created with the help of new debt, with which a return is to be generated on the capital markets, which is intended to relieve the burden on pension insurance contributions from the mid-1930s.
When does retirement come at 70?
Economist calls for raising the retirement age
But experts don't go far enough - they warn of the consequences if the pension system is not sufficiently reformed.
The economist Martin Werding recently criticized Labor Minister Heil's stance on retirement age.
“If you raise false expectations by saying you never want to talk about the topic again, you will inevitably have to disappoint people at some point,” Werding told the newspapers of the
Funke
media group.
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As a member of the Expert Council for assessing overall economic development, he referred to the committee's recommendations that the standard retirement age should be raised by one year every 20 years.
“Then we will no longer be talking about retirement at 67, but at 68 and then at some point at 69. We would only reach a retirement age of 70 around 2090 if life expectancy continues to increase as previously assumed.” So that is quite a long way off Distance.
“So you should be careful how you communicate about such proposals, which are actually comparatively moderate.
Because they simply fit the demographic scenarios we are facing.”
Study on pensions: Contribution rates could soon place a massive burden on younger generations
This is also illustrated by a new study commissioned by family entrepreneurs and young companies.
It suggests that social security contributions will rise massively if fundamental reforms are not passed.
Accordingly, the total contribution rate for pension, health, nursing care and unemployment insurance could rise from the current around 40.9 percent to more than 50 percent by 2050 if nothing is done.
The problem: The tipping point will already be reached in 2030, according to the experts Christian Hagist and Stefan Fetzer.
From this point on, the welfare state as we currently know it will be neither financeable nor reformable.
This is due, among other things, to the pay-as-you-go system on which the German pension system is based: those now in employment pay the pensions of older people.
However, due to demographic change, the number of employed people is falling compared to the number of retirees, meaning more and more people are receiving money while less and less is being paid in.
In the 1990s, there were 20 pensioners for every 100 people able to work. After 2030, there will be 40 pensioners. According to calculations by the Federal Statistical Office, in the mid-2060s there will be more than 45 pensioners for every 100 people able to work.
The current pension system therefore places a high burden on the working population that finances the pensions.
As a result, economists fear that contribution rates will rise so much that the young generation will unilaterally terminate the generational contract - either by emigrating or switching to undeclared work.
They are calling for quick reforms - and are proposing, among other things, linking the retirement age to life expectancy.
Economist on reforming the German pension system: “We need the courage to be farsighted”
The renowned ifo Institute also advocates linking the retirement age to life expectancy.
The Netherlands, Sweden and Finland have already decided this, said ifo pension expert Joachim Ragnitz in January.
If life expectancy were extended by three years, the Dutch would have to work two years longer and receive a pension one year longer.
The ratio of pensioners to employed people remains stable at around 40 percent instead of rising to almost 50 percent, the Dresden economic researchers wrote in an essay.
If pension increases were linked to the inflation rate instead of, as is now the case, to wage increases, this would also slow down the increase in pension spending.
In Germany today, 65-year-olds could expect an average of ten to eleven years of “life expectancy in good health”.
According to the Dutch model, the retirement age would gradually increase to 69 by 2061.
In the
Tagesspiegel,
economist Ruth Maria Student from the Cologne Institute for the German Economy concludes: “We don’t need a turning point for the statutory pension.
We need the courage to be far-sighted in order to make the German pension system resilient to demographic changes.
A dynamic adjustment of the standard retirement age to life expectancy would be a step in this direction.”
With material from Reuters and dpa