Experts are less relaxed about future pension developments.
(Photo: dpa)
Frankfurt Only just under half of Germans can secure their standard of living in old age with the statutory pension. This is the result of a study by the financial scientist Bernd Raffelhüschen from the University of Freiburg, carried out on behalf of the Union Investment fund company.
“We have to put an end to illusory claims. We need a pension that is performance-based, generational, sustainable and secure. We are a long way from that, ”said the expert at the presentation of his“ Precautionary Atlas Germany 2021 ”on Wednesday in Frankfurt.
Both he and Union Investment boss Hans Joachim Reinke are calling for reforms. The topic is also part of the coalition negotiations in Berlin. “What comes out in the end is unclear,” said Reinke.
If the pension level was maintained, the contribution rate would reach 23 percent in the next decade – and then have to rise further. “It cannot stay that way, because this system will have an acceptance problem with future contributors,” said Raffelhüschen. Twice as many retirees can be expected by 2045. The scientist is therefore calling for a “strict contribution plan to 20 percent”.
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According to him, the current political discussions about capital coverage in old-age provision are “a joke, because we would have needed something like this 30 years ago”. Raffelhüschen compares: “You would not prescribe medicine to a sick person that only works after he is dead.”
The standard of living cannot be maintained
He sees the discussion about a state provision fund in a similarly drastic manner: “It would be like throwing two bones at a dog and telling him: One is for tomorrow.” His confidence in the state is low here.
The data collection presented on Wednesday provides an overview of the future situation of old-age provision in Germany based on the current framework conditions for the first, second and third pillars.
Today’s 20- to 65-year-olds receive an average of 47 percent of their last gross income when they retire through the statutory pension – based on today’s purchasing power, this corresponds to 1449 euros per month. This value is well below the limit of 60 percent, above which, according to Raffelhüschen, the usual standard of living can be maintained.
Every third undersupplied
With the integration of the second pillar such as company pension schemes or Riester pensions, the share increases from 47 to 63 percent. “That is an average and therefore means that about a third of the population does not achieve the proportion required to secure the standard of living,” explained Raffelhüschen.
With the additional private savings efforts in the third pillar, with monetary and real estate assets, the rate increases to 80 percent according to his calculation. For example, regular payments into equity funds are popular here.
Union Investment boss Reinke also sees a need for overarching reform: “The generation contract will fall if nobody acts,” said Reinke. The backlog of reforms and the consequences of the coronavirus led to even greater funding gaps in the statutory pension. In addition, there is the problem of low interest rates, which necessitates adjustments in all three pillars of provision.
More returns with more stocks
In the second pillar and thus also with the Riester pension, according to Reinke, it makes sense, for example, to lower the contribution guarantee. This means that more money can flow into high-yield investments such as stocks.
The new government’s wish list would also include a simpler approval process and an expansion of the sponsorship group. These proposals from the fund, insurance and building society sectors were already on the table in the last legislative period.
Reinke defended the Riester pension. “It starts in the right place in terms of social policy, young people and women save a lot here.” Low-wage earners are also well represented. 16 million Germans have a Riester savings contract. Union Investment has 1.8 million. DWS gave up this business in the summer due to its complexity, and Deka no longer advertises it. But Union Investment, as the largest player in the fund segment in this field, wants to continue to operate. Despite all the political discussions about the future viability of the model, Reinke believes that the concept will survive.
More: How company pension schemes can be strengthened