Pension Commission before the end

As more and more baby boomers are retiring, the German pension system is facing dramatic developments. Now an important working group that should work out proposals for a “reliable intergenerational contract” is threatened with failure.

Those who retire today are often still fit and healthy for decades.

DThe Federal Government’s Pension Commission, which is supposed to present proposals for a “reliable intergenerational contract for the period from 2025”, is threatened with a fiasco: A few weeks before the planned presentation of the final report on March 10, it is uncertain whether the members of the commission – politicians, employers and trade unions as well as scientists – can agree on a common line. A two-day retreat at the beginning of February did not bring any decisive progress.

Commissioner Axel Börsch-Supan, economics professor at the Technical University of Munich, is now venting his disappointment with the work of the commission. “Don’t expect too much,” he said at a pension conference of the Evangelical Academy in Tutzing. “Better not expect anything.”

The committee had decreed silence since it was constituted in the summer of 2018 and has persevered. No internal information leaked out – even if the members found it difficult to agree on a common base of numbers and data.

Financial reserves used up by 2025

Börsch-Supan no longer wants to hide his frustration: “The commission has dug too many pitfalls for itself. The pension policy prohibition of thinking restricts the scope for discussion so that one can no longer move. ”With this, the pension expert, who has already been a member of many government commissions, is playing, among other things, on the requirement of Federal Labor Minister Hubertus Heil (SPD) not to shake the retirement age to 67 years by 2031.

In view of the disagreements in the commission, the likelihood that the coalition will initiate fundamental reform steps for the pension in this parliamentary term is dwindling. However, the financial reserves that the pension insurance still has today are expected to be used up by 2025.

After that, however, there will be dramatic changes to the pension system because the baby boomers will retire without the same number of new contributors. Then, according to current law, the pension amounts will have to increase and the pension level will decrease – that is, the increase in pensions will no longer keep pace with that of wages.

An independent work of the commission was made difficult from the beginning by the fact that it is dominated by politicians of the governing coalition. Headed by the former MPs Karl Schiewerling (CDU) and Gabriele Lösekrug-Möller (SPD), she also includes Union parliamentary deputy Hermann Gröhe and SPD social politician Katja Mast. On the Union side, according to reports, the impression arose that the representatives of the SPD are closely coordinating their position with the German Trade Union Confederation.

The coalition has also narrowed the financial room for maneuver through expensive increases in benefits, such as the pension from 63, the expansion of the mother’s pension and the planned basic pension, which the cabinet wants to bring on the parliamentary route next Wednesday. In addition, there are the “holding lines” for the pension level (at least 48 percent) and the contribution rate (at most 22 percent), which should apply until 2025 – and, according to the will of some SPD politicians, possibly also beyond that.