Parliament approves pension plan for children
German lawmakers approve pension savings for children
Germany’s parliament has approved a scheme giving children aged six to 18 a monthly state payment of €10 ($11) toward private retirement savings. The legislation still needs approval from the Bundesrat, which represents Germany’s states.
Lawmakers from the governing conservatives and center-left Social Democrats (SPD) hailed the decision as historic. Michael Thews of the SPD said it would help many people build adequate retirement savings.
Fritz Güntzler, finance spokesperson for the center-right Christian Democratic Union and Christian Social Union (CDU/CSU), said the scheme would also introduce young people to the opportunities offered by capital markets.
Opposition lawmakers argued that it would deepen inequality because parents and grandparents can contribute up to €6,840 ($7,500) a year.
Stefan Schmidt of the environmentalist Greens called it a two-tier system, saying children who won the “parent lottery” could gain far more than a modest start to retirement saving.
The scheme is part of the government’s broader pension reform agenda as Germany’s aging population puts pressure on the state retirement system.
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