It is important “that we keep the pension stable – for all generations,” says the SPD minister.
(Photo: dpa)
Berlin Labor Minister Hubertus Heil (SPD) spoke for a good ten minutes when he explained his department’s budget in the Bundestag’s budget debate on Friday. Of course it’s about the Ukraine war, about the refugees, about a new setting of priorities. But it is precisely in this crisis that it is important to strengthen social cohesion, says the minister: “We must not play off pensions against armaments.”
And yet there are fears that a pension issue that is particularly important to the liberal coalition partner could recede into the background in view of the new situation: entry into a funded pillar within the statutory pension system. Because the starting capital stock of ten billion euros, which is to be reserved for the project according to the coalition agreement, is not yet provided for in the budget draft.
The chairman of the Union faction in the Bundestag Committee for Labor and Social Affairs, Marc Biadacz (CDU) sees this critically. “The traffic light federal government has announced the mini stock pension as a big hit, but now it will be deleted from the budget without replacement,” he says. “The announced ten billion euros will become zero euros.”
During the election campaign, the FDP advertised the idea of a share pension based on the Swedish model. Part of the pension contribution of currently 18.6 percent of gross wages – we were talking about two percentage points – should not flow into the pay-as-you-go system, but into a new opportunity-oriented and funded pension scheme that is managed independently as a fund.
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The aim was to arm the pension system for the retirement age of the baby boomers. However, the liberals could not assert themselves with their far-reaching ideas in the SPD and Greens. What was left in the coalition agreement was the creation of a capital stock of ten billion euros, although it is unclear how the money will be managed and what exactly it will be used for.
>> Read here: Pension expert Axel Börsch-Supan: “Neither party dares to say what needs to be said”
Like the opposition, the BVI fund association, which represents the interests of 116 fund companies and asset managers, misses the start-up financing in the federal budget. “Entering partial capital coverage in statutory pensions is urgently needed in order to reduce the pension system’s growing dependence on tax subsidies in the medium term,” says BVI Managing Director Thomas Richter.
Experts: Don’t promise too much when it comes to retirement
In the budget of the social department totaling 160 billion euros, 116 billion euros are reserved for pension insurance and basic security in old age and in the case of reduced earning capacity. Pension experts warn against promising too much to citizens when it comes to pensions. This can only be at the expense of taxpayers.
If politicians were to permanently stabilize the pension level at 48 percent and the contribution rate at 20 percent, more than half of the federal budget would have to flow into pensions in 2045, the scientific advisory board at the Federal Ministry of Economics calculated last year. Chancellor Olaf Scholz (SPD), who was still a candidate for chancellor at the time, then denied the advisors the expertise.
CDU MP Biadacz criticizes that the traffic light coalition is leaving it open as to how it wants to make pensions future-proof in view of the demographic challenge. “The issue of intergenerational equity remains unresolved.” BVI Managing Director Richter warns that the introduction of a share pension in the first pillar “must not be delayed”.
The FDP is certain that this will not happen: “The share pension is coming,” says their labor market and social policy spokesman Pascal Kober. “The financing will be found in the federal budget until the budget is passed.” At the beginning of June, the Bundestag should finally discuss the draft.
Labor Minister Heil touched on the subject only indirectly in his speech on Friday. It is important “that we keep the pension stable – for all generations”.
More: “Share pension” of the traffic light: President of the pension insurance sees “many question marks”