Germany's pension plans draw praise and outrage
A 30-point plan to reform Germany's pension system has drawn praise and criticism in almost equal measure. Centrist politicians have called it a good compromise
A 30-point plan to reform Germany's pension system has drawn praise and criticism in almost equal measure. Centrist politicians have called it a good compromise, opposition parties on the left and right are unhappy. The 30 pension reform proposals put forward by a specially-convened commission of experts and politicians have met with praise from conservative political groups and outcry from opposition parties and trade unionsin Germany. The 13-person commission's detailed report is due to be officially released on Tuesday, but the main proposals were leaked to the German media this weekend, drawing a flurry of reactions. Government circles in Berlin say the Cabinet is expected to agree on a plan based on the reforms in the near future. Speaking to the public at a federal government open day event in Berlin on Sunday, Chancellor Friedrich Merz insisted that reforms were the only way to ensure that Germany's expensive pension system would be affordable in future. Federal Labor Minister Bärbel Bas, of the center-left Social Democratic Party (SPD) also defended the need for reforms. "We are now putting measures in place for the younger generation so that they will have higher pensions," she said. "And we need to make sure that fewer people take early retirement." Germany's coalition government split over reform agenda To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Key pension reform proposals The proposals — which are being presented earlier than initially planned, partly due to pressure from the government — contain a mix of compromises and some long-expected ideas.
Legal pension age hitched to life expectancy Germany's legal retirement age is to be made dependent on life expectancy, which would, according to the commission's calculations, mean that it would reach 67.5 in 2041, 68 in 2051, and 70 by 2091. This has drawn criticism from left-wing voices. Philipp Türmer, head of the Jusos, youth organization of the Social Democratic Party (SPD), told public broadcaster DLF that it would have been fairer to hitch the retirement age to the number of years one contributes to the system. Jan Scharpenberg, pensions expert at the financial advice company Finanztip, said that this idea made sense, although given current life expectancy prognoses it wouldn't make that much difference in the near term. No early retirement at 63 This proposal would cut the option of going into early retirement at 63 without losing any benefits, if one has paid into the system for 45 years. This idea was particularly criticized by the industrial trade unions, who say that their workers are particularly affected by physical and psychological stress. Christiane Benner, head of the IG Metall union, told DLF that this proposal "completely ignored" the life and work situations of industrial workers. Scharpenberg said that this would indeed be felt as a "bitter cut" by some. "It is probably necessary, but it is certainly a tough cut," said Scharpenberg.
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