Pension concept: Demographic fund to stabilise the pension level

Labor Minister Hubertus Heil presented his pension concept. It is intended to strengthen mothers, low-income earners and reduced employment. Additional cost: 32 billion euro.

Pension concept: Demographic fund to stabilise the pension level
  • Page 1 — Demographic Fund to stabilize pension level
  • Page 2 — contributors must refrain from a reduction next year
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    Federal Minister of Employment Hubertus Heil (SPD) wants to improve financial situation of pensioners with a number of measures. The concept for changes in pension system that he presented is intended to avoid poverty in old age and, above all, to strengn mors, low earners, sickness-related early pensioners and recipients of basic security.

    This is set out in broad terms already in Coalition Treaty of CDU, CSU and SPD: pension level at least to 2025 to 48 percent of average wage, amount does not increase above 20 percent, basic pension 10 percent above Level of basic security. It is also decided that a Commission will develop a concept for period after 2025.

    Labor minister Heil said in presentation of his pension concept, on protection of old age "must be in Germany, and even in future". Pension insurance must remain a mainstay of future. Salvation of so-called pension pact for Germany contains several key elements:

    • In addition to increased federal subsidy to pension fund, a so-called Demographic fund should insure contribution ceiling of 20 percent of wage "even in case of unforeseen developments". From 2021 to 2024, two billion euros are to be invested annually. The state, through an increased subsidy from tax resources, is taking on additional responsibility for stability of pension fund, said Heil.
    • Mors or fars with at least three pre-1992geborenen children receive anor pension for each child, so-called mors ' pension. A pension is currently worth about 30.70 euros per month in Westen32 euro and in east. According to pension insurance, some 2.8 million pensioners would now be budgetsleverage: if y live in West Germany, screening three children in one stroke received around 96 euros more a month. With a cost of 3.7 billion euros a year and a total of around 26 billion to 2025, extension of mors ' pension is most expensive item of reform. However, re are a total of 9.7 million Rentenbeziehermit before 1992 born children. The majority of m hättenichts reform. For this reason, Labor ministers are happy to discuss in advising reform in Bundestag wher proposed improvement for mors with mindestensdrei children should not benefit all children born in pre-1992 by taking a half Pensions. According to bill, DieKosten would be "about as high" as Dienun estimated 3.7 billion euros per year.
    • In future, reduction in pensions should be treated as if y had worked until current retirement age. Because of se people who have to early retirement due to illness, 14.7 percent of basic security (as of 2016) – pensioners are only 2.6 percent. In addition, 170,000 people benefited according to salvation. DieKosten set 2019 with 100 million euros and rise accession year 2025 to around one billion euros per year.
    • low earners want to relieve benefits of social contributions: income limit from which y have to pay full rate of social contributions is expected to rise from 850 to 1,300 euros. According to salvation, three million people benefit from this. At 850 euros, you would have 270 euros more in year. Researchers at German Institute for Economic Research (DIW) Note that Gehe "is at expense of today's contributors with higher earnings" and some of middle-income earners. However, low earners who work part-time but are already living in a wealthy household would benefit. The costs are 200 million euros per year.
    • For first time, federal government wants to provide a guarantee for einebestimmte level of pension level and contribution rate – and to do so if necessary with money from federal budget. This "double holding line" is only valid until ecologically 2025. According to draft, DieserMechanismus first intervenes in year 2022: according to current Prognosenkönnte, pension level n falls without counter-tax to 47.9 percent. 2025, pension level was 46.9 percent. For contribution rate, a ceiling of 20 percent shall apply until 2025. For this, Confederation pays from 2022 to 2025 jährlich500 million in addition to Pension fund. The money may not be used until contribution rate has to be stabilised at 20 percent.

    Date Of Update: 14 July 2018, 12:02

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