Bundestag members listened to experts and associations today, after which limits on pension levels and maternal pensions could be ratified in the next few weeks. Unless something else comes up.
The stage is set, the roles are assigned, the script is predictable – but surprises can never be ruled out in politics: In the Paul-Löbe-Haus, one of the office buildings next to the Bundestag, pension reform is starting to enter its current domestic stage. In room E.200, the Labor and Social Affairs Committee discussed pension reform plans with experts and associations.
What will be discussed can be found on the Bundestag website. Statements are stored there. The German Federation of Trade Unions, for example, supports the reform and demands even more: “Pension levels must be permanently increased by at least 50 percent.” Compared internationally, Germany has below average pension rates, but pension insurance contribution rates are also very low, according to the DGB.
In Germany the figure is 18.6 percent – the DGB argues that in Italy the figure should be more than 30 percent and in many other large European countries more than 25 percent. Finally, the DGB sent greetings to the Unity faction: It accused the youth group in the CDU/CSU faction of carrying out “a new variant of the granddaughter’s trick”: “This is raising fears and creating immediate pressure for action.”
The younger generation is worried
The Youth Group leader must have read it: “We are sticking to the coalition agreement,” said Pascal Reddig. He agreed to stabilize pension levels at 48 percent by 2031. The Young Group disagreed that the current bill would have an impact after 2031. As a result of the bill, pension levels would permanently be about one percentage point higher than without the reform. Reddig estimates follow-up costs at up to 15 billion per year after 2031. “Improvements to the bill are needed here,” he said. Nothing has changed about that.
This is what the Federal Association of Employers’ Associations (Federal Association of Employers’ Associations) wanted to convey, which was also invited to the session. He spoke of “the most expensive social law of the century” – costing more than 200 billion euros over the next 15 years. The opposite of the planned steps is needed: reforms to reduce spending. The BDA suggests that at least the formula for calculating pension rates should be updated. He would like to expect 47 years of service for the retired corner, not the current 45 years. After all, the retirement age has also been increased by two years, but this step is not yet reflected in the calculation formula.
“We have to be able to afford it”
“I don’t agree with that!” said SPD pension expert Bernd Rützel. As a result of these changes, retirement rates will be mathematically higher than before. Rützel talks about “proposals with corner pensioners through the back door” – for most employees, this is de facto a pension cut. People will need legitimate pension funds so they can live. The German system is well positioned and there is no cost explosion: “We should be able to afford it.”
Marc Biadacz, social policy spokesman for the Union faction, had to mediate the position. He is behind the pension package, but of course MPs will have the final say. After the hearing, the community discusses new ideas and then finding a compromise point is important. And finally, a pension commission will also be formed soon. “You have to paint a bigger picture.”
The Youth Association applied pressure
Is that enough for the kids in Union? Junge Union is currently focusing on pension issues and calling for “renewal of the social security system”. The main proposal for the German Day at the Junge Union in mid-November contains ten measures, including: linking retirement age to life expectancy and pensions to inflation, again factoring sustainability or demanding higher deductions from those who wish to retire earlier.
For the young representatives of the CDU/CSU, what is important is not only the future of the intergenerational contract, but also the future of their credibility. With today’s hearing, adoption is getting closer. It is likely that ultimately a coalition committee will have to decide on the details before the debate over the pension package in the Bundestag ends.
