"Robust" labor market: Pension President expects stable contributions

The Corona crisis and the war in Ukraine can do little to harm the German labor market.

"Robust" labor market: Pension President expects stable contributions

The Corona crisis and the war in Ukraine can do little to harm the German labor market. This has a clear impact on the pension fund, which in turn eases the burden on the development of contributions.

Despite the corona pandemic and the Ukraine war, the President of the German pension insurance, Gundula Roßbach, assumes that the pension contribution rate will remain stable until the end of 2024. "Above all, we are a mirror of the labor market, and it is incredibly robust - despite the corona pandemic and the war against Ukraine," Roßbach told the "Rheinische Post". There is a record level of employment subject to social security contributions.

"Compared to the previous year, pension insurance recorded a plus of six percent in contributions in the first five months of the year," said Rossbach. "According to the forecasts that the government and we are based on, we have a constant contribution rate of 18.6 percent for the next two years," she added.

In June, the number of unemployed in Germany rose by 103,000 to 2.363 million. According to the Federal Employment Agency, the increase can be explained above all by the fact that people who have fled Ukraine are now being recorded in the job centers and are therefore visible in the labor market statistics for the first time. Compared to June last year, the number of unemployed is even lower by 251,000.

The traffic light coalition wants to set the pension level at 48 percent beyond 2025. In the debate about a pension reform, the pension president spoke out in favor of a new "stop line" for the contribution rate from 2025. "If there is a stop line for the pension level, you should also think about a stop line for the contribution rate. That is also the case for the years up to 2025," emphasized Roßbach.

Most recently, the Federal Statistical Office announced that more and more pension benefits are subject to income tax. Last year, almost 65 percent of statutory, private or company pensions were taxable income - a total of 227 billion euros. The share has thus increased by 9.7 percentage points since 2015. In 2021, 21.9 million people received benefits of around 350 billion euros from statutory, private or company pensions.