As of: March 5, 2024, 5:23 p.m
By: Markus Hofstetter
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Pension package II is intended to stabilize the statutory pension system.
But Bert Rürup, former chairman of the Economists, sees several weak points in the reform.
Berlin - Demographic change is presenting the German pension system with major challenges.
The number of contributors is decreasing and the number of pensioners is increasing.
One of the federal government's answers to this dilemma is Pension Package II, which Labor Minister Hubertus Heil (SPD) and Finance Minister Christian Lindner (FDP) want to present shortly.
In principle, it is already known that the pension package II will legally set the pension level at 48 percent well into the 2030s and introduce a so-called stock pension, also known as a “generational chapter”.
But even before the official presentation there was criticism of the plans.
Rürup criticizes pension package II: pensioners help finance pension increases
Bert Rürup also expressed doubts about the effect of Pension Package II.
In an interview with the
Tagesspiegel
, the former chairman of the Wirtschaftsweise and namesake of the Rürup pension said that Minister Heil wanted to use the 48 percent guarantee to protect pensioners from sharing in the costs of population aging.
However, this will only be successful to a limited extent.
“The pension system is not a cow that is milked on earth but fed in heaven,” says Rürup.
Bert Rürup heavily criticized the pension package II (archive photo) © Tobias Kleinschmidt/dpa
The adjustment screws of the statutory pension system are contribution rate, pension level, standard retirement age, tax subsidy and retirement age.
“If you fix one or even more of these adjustment screws, it becomes increasingly difficult to finance the system sustainably without serious distortions,” says Rürup.
One consequence would be a higher subsidy from tax revenues into the pension fund, which would increasingly be co-financed by pensioners.
The background is that the taxation of new pensions will gradually increase to 100 percent by 2040.
Rürup criticizes pension package II: stock pensions come much too late
Rürup therefore advocates reactivating the sustainability factor.
This takes into account, among other things, the development of life expectancy and the ratio of contributors to pensioners.
A smaller number of contributors in relation to pensioners leads to a smaller increase in pensions.
“The real costs of aging cannot be eliminated; they can only ever be distributed,” says Rürup.
Rürup believes that the announced stock pension is right, but it comes far too late.
This is because funded systems are based on the compound interest effect.
“It takes an accumulation phase of at least 15 years before such a system generates significant returns.
But then our demographic problem is largely over,” says Rürup.
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Rürup criticizes pension package II: Politics is faced with an implementation problem
In addition, according to Rürup, pension policy faces an implementation problem.
Because we are confronted with an overall economic crisis and a massive budget problem, but at the same time we are recording record employment.
As a result, voters hardly felt the crisis.
“This makes it difficult to organize majorities for unpleasant but potentially advisable steps.”
Criticism of pension package II also comes from Wolfgang Steiger.
In the Tagesspiegel,
the General Secretary of the CDU Economic Council described
the fixing of the pension level at 48 percent as an “attack on intergenerational equity”.
Instead, he calls for the abolition of the mother's pension, the basic pension and the pension at 63.