Ironically, when it comes to pension policy, the traffic light coalition seems determined not to look at reality. There are at least four pension truths that should no longer be kept secret.
“Politics begins with looking at reality.” Hardly any other sentence is quoted by politicians of all parties as much as that of the social democrat Kurt Schumacher.
But in pension policy of all things, the traffic light coalition seems determined not to look at reality, at least not exactly. Otherwise, the SPD, Greens and FDP would not have put themselves in chains when they agreed in the coalition agreement that the contribution rate should not exceed 20 percent by 2025 and that the statutory retirement age would not be raised.
In this self-restraint, the Social Democrats and the Greens were the driving forces. The Free Democrats took part because they were granted a share pension as compensation for pain and suffering. In 2023, for the first time, ten billion euros will be made available in budget funds that will be invested in the capital market. With the returns achieved there, the pension insurance should be relieved.
But even Finance Minister Christian Lindner (FDP) admits that a three-digit billion sum would be necessary “so that the income from the share investment can have a noticeable effect on the stabilization of pension contributions and the pension level”. To put it another way: stock rent is initially nothing more than symbolic politics.
Viewed soberly, pension policy resembles a vehicle driving straight ahead at top speed in dense fog. The three partners at the wheel know that the pension system will not be able to withstand the demographic imbalance for much longer. There are currently around 50 pensioners for every 100 contributors, and in 15 years there will be 100 contributors for every 70 pensioners.
In order to be able to maintain the current pension level, the pension contributions would have to rise significantly. Many employees could not shoulder that. It would also cause difficulties for many companies, since the employer always has to pay half of the pension contribution of his employees.
Or the working life would have to be extended. Most economists and the Bundesbank are in favor of this. But the SPD and the Greens in particular don’t want to hear anything about it, because a later retirement age is anything but popular with today’s voters and tomorrow’s pensioners.
All this is nothing new. Governments tend not to impose anything unpleasant on people. Reforms are only tackled when there is no other way. Then, however, as with delayed diseases, a stronger, more bitter medicine is required to avert even greater damage.
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How about the rulers finally being honest about pensions? In their Sunday speeches, politicians like to quote the writer Ingeborg Bachmann with the statement that “the truth is reasonable for people”. So why not on the subject of pensions?
There are at least four pension truths that can no longer be kept secret:
Basically, we need a turning point in pension policy. The first and quickly effective step could be to reverse the early retirement without deductions. That would amount to the abolition of the pension at 63. More than two million workers have made use of this since 2014, almost 270,000 in 2021 alone.
Of course, nobody who has already retired after 45 years of contributions can and should be forced to go back to the office or the workbench. However, one could abolish this regulation, which mainly benefits skilled workers who are usually well supplied anyway. Not overnight, but only after a transitional period. After all, tens of thousands have already prepared to take early retirement in the coming months.
Interestingly, Chancellor Olaf Scholz (SPD) spoke out against the increasing trend towards early retirement. He said literally: “It is important to increase the proportion of those who can really work until retirement age.” Scholz did not say how he wanted to achieve this. But ending retirement at 63 would be the surest way to achieve that goal. He would just have to muster up the courage to say so – regardless of the expected storm of protest from his own left and the unions.
Perhaps the pension politicians of all parties should take a sentence from Abraham Lincoln to heart: “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the times.” Loosely translated: You can always fool some people on retirement, or you can fool everyone for a short time. But you can’t fool everyone forever that everything is fine with their pension.