As of: March 26, 2024, 11:51 a.m
By: Amy Walker
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The traffic light government has launched its long-awaited pension package.
But experts don't see this as the major breakthrough that would be necessary.
An expert explains how things could be better.
Berlin – With the pension package II, the federal government has initiated the introduction of generation capital.
This is intended to stabilize pension insurance contributions and secure the pension level at 48 percent.
In return, employees should pay higher contributions.
Robert Peres, the chairman of the Minority Shareholders Initiative, has been campaigning for years, among other things, for the introduction of a real share pension.
In an interview with
Ippen.Media
, he explains why Pension Package II can only be a first step - and advises the younger generation in particular to start private pension provision now.
Traffic light pension package: Generational chapter for pensions is a step in the right direction
Mr. Peres, the federal government wants to create an introduction to funded retirement provision with Pension Package II.
The “stock pension” has become “generational capital”.
However, according to almost all experts, the plans of the traffic light coalition do not go far enough.
Is it still a step in the right direction?
Yes definitely.
It is therefore important that the first step has been taken to ensure that the principle of capital coverage is introduced at all.
Unfortunately, it is initially only a dampening measure for the contribution rates and for the federal subsidy.
But you can build on it.
And in 10 or 15 years we will see that this actually has positive effects.
But not before.
From the mid-2030s onwards, the generational capital should generate a return in order to stabilize contributions.
Can that work?
I don't want to make any predictions about this.
Whether that will really be the case...
Pension contributions will increase in the future: “Some arrow has to go in the other direction”
Well, contributions to the pension fund will still have to increase beforehand, and the government has recognized that too.
Yes, anyone who has been paying attention has noticed that Mr. Heil and Mr. Lindner have secured the pension level at 48 percent until 2039. That means that some arrow must then go in a different direction and that will be the contribution arrow.
The 18.6 percent that we all pay in today can no longer be maintained.
In the medium term this will go to 22 percent and can also go higher.
I think this will deter many depositors and some will move away from pension insurance.
And that is why the state will then try to force other groups into pension insurance, i.e. the self-employed or civil servants.
I think there will be even bigger disruptions.
One can only advise that everyone pays attention to what he or she needs and provides for in old age.
Statutory pensions are becoming less important: Experts recommend private pension provision
Does this mean that statutory pension insurance will become less important?
And private pension provision will then become more important?
Yes, there is nothing else left.
Here, too, the state must do more and make it easier for people to make good private provision.
In the USA, for example, there are the so-called 401k models.
Employers and employees pay together into a tax-optimized fund, which is a separate private account that savers can access themselves.
The money is not managed by the state.
The saver can move stocks back and forth and decide where the money is invested.
He just can't withdraw anything before he reaches retirement age.
And when the time comes, he gets the money without any further taxation.
Something like this should be introduced in Germany, because it creates a greater feeling of responsibility for one's own retirement provision.
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This is similar to the Swedish model that the FDP originally advocated.
The problem here is that we don't have a strong equity culture.
Investing money in stocks for retirement - that scares many people.
So first of all it is important to emphasize that a model like the one in Sweden or the USA is not an obligation.
But many people do it because it makes sense.
In Germany we have a culture that relies on the state.
The state also communicates this: We take care of you.
That's fatal and it's hard to get it out of people.
In addition, there have been some events here that have damaged the equity culture.
There was the collapse of the Telekom share price in 2000 or, more recently, scandals like Wirecard, which of course scares people away.
But this also has to do with the fact that legal protection for investors is very weak in Germany.
Wirecard investors, for example, will probably never see their money again.
That's a problem.
Successful stock pension based on the Swedish model: Participation is “not a one-way street”
Politicians must also set the right course here in order to introduce a successful stock pension based on the Swedish model.
This is only possible in line with greater legal certainty?
Exactly, participation in the stock market can be a two-way street.
The USA can also be a role model here: there is the possibility of a class action lawsuit, i.e. a class action lawsuit, if a case of fraud occurs.
We only have the model procedures here, and that will be a very lengthy procedure.
At Telekom, after 24 years, it is still partly unclear who will be compensated.
Robert Peres is chairman of the Minority Shareholders Initiative and also advocates for stock pensions.
© Daniel Biskup
In the past there have also been attempts to promote funded private pension provision more.
Let's think about the Riester pension...
Yes, the Riester pension was another half-hearted project.
The mistake was to hand the whole thing over to the financial industry and they then offered products that were far too expensive and thus eat up the returns.
It may be better than nothing, but the Riester pension has essentially failed.
So you have to say that so clearly.
Skepticism about stock pensions and proposal to increase pension contributions: “Money is mine”
And probably another reason why Germans are skeptical about stock pensions.
Yes, although our surveys show that things are improving.
Over the last three years, we have repeatedly conducted representative surveys on the subject of stock pensions with the opinion research institute Forsa.
We can see that something has happened: in 2023, 62 percent of those surveyed were in favor of a stock pension, in the previous years it was 56 and 58 percent, i.e. a slight majority.
People obviously realize that we have to do something.
I mean, we all know the numbers: In the 1950s, six employees financed one pensioner.
At the moment, one employee finances just under two pensioners and will go down to 1.3 by 2050.
It is logical that this cannot work.
If you could make one suggestion to the federal government, what would it be?
(laughs)
Yes, well, the Swedish model is the ideal.
The current pension insurance contribution system cannot be abolished, nor do I want to.
However, one could decide to transfer part of the money to private accounts that people can also access when the contribution increases.
Then people also see how wealth accumulates.
And they have the feeling that this money belongs to me, not to the state.
That's not the case at the moment, the money that we all pay into pension insurance does not belong to the contributor.
We all have a right to a statutory pension.
But that's not the same.