The FDP politician wants to start with stock pensions in the coming year.
(Photo: dpa)
Berlin Federal Finance Minister Christian Lindner (FDP) is driving the share pension project. The Federal Ministry of Finance (BMF) outlined the cornerstones of the project on Friday in a paper entitled “Basic Concept for Stock Rent”. According to government circles, the stock pension will be part of the traffic light coalition’s second pension package, which will be presented later this year. The work on the legal text is “in full swing”.
At the same time, the financing is already being prepared: In the budget for 2023, which will be discussed in the budget committee of the Bundestag in the coming week, ten billion euros are to be set aside for the stock pension in the short term.
The budget holders of the traffic light groups could incorporate a corresponding template from the Ministry of Finance. However, there should still be talks about this, because there are reservations in the Green Group.
The share pension has no effect on the leeway in the household. In order to build up the capital stock, the federal government would also take on the ten billion euros as debt.
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However, since the money is not spent but invested, it is a financial transaction that is not subject to the debt brake. The credit leeway in the federal budget will not be reduced by the ten billion euros.
The federal government could contribute shares to state holdings
“The federal government’s loans to the share reserve are subject to interest at the level of their refinancing costs,” says the concept paper. Nevertheless, the share investment for the pension insurance should be worthwhile.
Background: The federal government can borrow cheaply due to the good credit rating. In this respect, the income from the capital investment should be higher, so that profits remain even after the interest payments to the federal government.
>> Read here: The way out of the pension trap? Economists back Lindner’s plans
The aim of the share reserve is to “use the return opportunities of the global capital market in order to better prepare the financing of statutory pension schemes for the challenges of the future,” writes the Ministry of Finance. “Empirical studies show that, on average, higher returns can be achieved by investing in the capital market in the long term than the costs incurred through credit financing.”
“Empirical studies show that, on average, higher returns can be achieved by investing in the capital market in the long term than the costs incurred through credit financing.” Federal Ministry of Financeo
The profits from the investments are intended to support the statutory pension, which is under pressure due to demographic change. According to the old-age provision roadmap, the income from the capital stock should contribute to stabilizing the development of the contribution rate for statutory pension insurance from the mid-2030s onwards. As a result, at least that is the hope, the subsidy from the federal budget to the pension fund could rise less sharply.
>> Read here: “Investing is the new saving”: Young adults rely on stocks and funds for their old-age provision
However, the ten billion should not be enough for a noteworthy effect. That is why there is a desire in the BMF to regularly transfer money, for example ten billion euros a year, to the equity fund in the future. There is still no agreement on this in the federal government. This must now be clarified when the law is drafted.
With the share pension, the federal government wants to improve the financing of statutory old-age provision.
(Photo: imago images/Future Image)
In addition, the federal government could also top up the equity fund in other ways. “In order to provide equity backing, non-cash contributions are to be transferred to the capital stock over the course of 2023 – also without affecting the debt rule,” says the concept paper. These contributions in kind are not specified therein. However, it would be conceivable, for example, to transfer shares belonging to the federal government, such as shares in Deutsche Post.
Management of the fund: KENFO instead of the Bundesbank
The management of the capital stock is to be transferred “as a permanent ‘fund’ in accordance with the coalition agreement to a newly founded, independent public body,” says the paper. In the meantime, there had also been discussions about entrusting the Bundesbank with administration. Apparently that has now been abandoned.
Instead, the “fund for financing nuclear waste disposal” (Kenfo) should serve as a model. This was filled with contributions from nuclear power operators and now manages 24 billion euros to finance the interim and final storage of radioactive waste.
“With the Kenfo Foundation, the federal government has an institution that has already made professional active and passive investments,” the paper says. “The share reserve should benefit from the experience and expertise of Kenfo as an asset manager.”
More: By 2030 there is a risk of an increase to 45 percent – expert opinion warns of an explosion in costs for social security contributions