The Department of Labor promises a lavish increase.
(Photo: obs)
Pensioners in Germany can look forward to a substantial increase in their retirement benefits this year. Pensions are set to increase by 5.35 percent in western Germany and 6.12 percent in eastern Germany by July 1. This was announced by the Federal Ministry of Labor on Tuesday in Berlin. The news portal “The Pioneer” had first reported on it.
The adjustment is “good news for the people who have kept the shop running for years through their work,” said Federal Labor Minister Hubertus Heil (SPD). “Especially in view of the current challenges – be it rising prices or the international crisis – it is important to see that our pension system is working.”
The pension adjustment is substantial, although the federal government – as agreed in the coalition agreement – has already taken into account the planned reinstatement of the so-called catch-up factor.
The pensions are based on wage developments. However, since pension cuts are excluded by law, the catch-up factor ensures that pension cuts that are actually due when wages fall are subsequently offset against pension increases. However, the grand coalition temporarily suspended the catch-up factor.
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SPD, Greens and FDP now want to reinstate him. The corresponding law is to be introduced together with improvements for pensioners with reduced earning capacity that were also promised in the coalition agreement.
According to the Ministry of Labour, the wage increase relevant for the pension adjustment is 5.8 percent in the old federal states and around 5.3 percent in the new federal states. “The development of pensions must not be decoupled from the development of wages,” stressed Heil.
However, the strong increase is also due to the adjustment of a statistical revision effect. The effect of this was that last year the wage development relevant for the pension adjustment was about two percent too low, but this did not affect the amount of the pensions due to the pension guarantee.
The pension guarantee decided by the grand coalition stipulates that the pension level must not fall below 48 percent by July 1, 2025 and the contribution rate must not rise above 20 percent. According to the Ministry of Labour, the pension level after the calculated pension adjustment is 48.14 percent.
It does not say anything about the actual level of old-age pensions, but indicates how high the pension of a retiree who has worked for 45 years at the respective average wage is in relation to the current average wage.
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