January 2023
18Jan

German government to set up foundation with up to €150bn for first-pillar pension reform

The German government plans to build a foundation under public law called Stiftung Generationenkapital to manage up to €150bn in assets in the long term for an equity fund to turn the first-pillar pension system into a partially funded platform based on the Aktienrente concept. The government will start to build the equity pension fund this year with starting capital worth €10bn, setting up a foundation that will “be anchored in law and independent from politics” to stabilise the first-pillar...

January 18, 2023
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06Jan

German Employers’ Associations call on government to act on pension reforms

The Confederation of German Employers’ Associations (BDA) is pressing the government to proceed swiftly towards reforming the country’s pension system this year, knocking down incentives to retire early. BDA president Rainer Dulger said that “2023 must be a year of action. Germany needs real and sustainable reforms. Now is the time to put the necessary reforms into practice, without any mental restrictions”. He also addressed labour market figures published on 3 January. According to the figures published by the federal employment...

January 6, 2023
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December 2022
27Dec

Germany. Companies Introduce Social Partner Model For Pensions

At first glance, the interest is extremely low: Of the 1,900 companies that the Federal Chemical Employers’ Association (BAVC) wrote to, only 50 had decided in favor of the new “Nahles pension” by the beginning of December. A rate of 2.6 percent. Nevertheless, Klaus-Peter Stiller, general manager of the association, is anything but disappointed. After all, the companies currently have other concerns in the energy crisis than adjusting their pension systems. “In this respect, the 50 companies that have...

December 27, 2022
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14Dec

Germany. Scholz wants to limit early retirement to weather German labour crisis

While Germany's chancellor Olaf Scholz has called for policies to discourage people from taking early retirement, the FDP is looking to Sweden for inspiration, considering the economic benefits of a more flexible retirement policy and how it may help plug the country’s labour shortage. Scholz calls for cutbacks in early retirements Germany’s chancellor Olaf Scholz has made an appeal to people over the age of 60, calling on them to delay their retirement. The SPD politician said that pension-age people delaying...

December 14, 2022
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November 2022
17Nov

Germany. Social partners move forward to implement pure DC plans

German employer and employee representatives are taking the first steps to implement the social partner models for pensions signed up recently, under a new legal framework, with other candidates planning to offer pure defined contribution (DC) schemes. The investment strategy under the social partner model set up by energy company Uniper with unions is taking shape, with a social partner advisory board – Sozialpartnerbeirat – constituted last week, that has decided on asset class allocation, and the upper limit of...

November 17, 2022
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16Nov

Germany prepares to reform all three pension system pillars

The German government is targeting a comprehensive reform of all the three pension system pillars during what it considers a turning point in history – Zeitwende – with high inflation, possible recession, changes in economic policies and demographic pressures. Speaking at the Handelsblatt occupational pension forum in Berlin today, Florian Toncar, parliamentary state secretary at the Ministry of Finance, said that the government will strengthen the capital funded components in all three pension system pillars, with the first pillar having...

November 16, 2022
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08Nov

German pensions to rise in 2023 with contribution hikes on the horizon

As usual, pensions in Germany are set to go up next summer, according to a new report seen by Bild am Sonntag. As Germany struggles to retain the sustainability of its pension system, contribution rates are set to remain stable for next four years, but hikes are on the horizon. Pensions in Germany are adjusted every year in line with wage development. Although the increase in 2023 isn’t enough to offset the rising cost of living in Germany - and...

November 8, 2022
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October 2022
25Oct

Number of pensioners in poverty on the rise in Germany

The aim of the pension system in Germany is to ensure that anyone who has spent a good portion of their life working can draw upon decent pension benefits when they retire. But according to a new report, for a rising number of people, the old-age pension is not enough to live on. 628.000 pensioners in Germany drawing basic subsistence benefits A growing number of pensioners in Germany are being forced to rely on basic subsistence benefits, as well as...

October 25, 2022
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07Oct

German cabinet approves €300 energy relief payment for pensioners

The German cabinet has approved a one-time payment in December for pensioners to provide relief for rising energy bills. The €300 payment is to be paid out by December 15th, Labour Minister Hubertus Heil, of the Social Democrats, said on Wednesday following the cabinet meeting. The cabinet also decided on a higher upper limit for people with so-called midi-jobs, which is a type of marginal employment in between a mini-job (which is generally exempt from taxes and social contributions) and...

October 7, 2022
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03Oct

Germany. Pension levels in the east are still well below the west level

More than 30 years after reunification, the pension level in East Germany is still well below the level in West Germany. In 2021, for example, pensioners in eastern Germany received an average of EUR 1,329 after 45 years of contributions, compared to EUR 1,527 in western Germany. This emerges from a response from the Federal Ministry of Labor to a written request from Left Party member of the Bundestag Sören Pellmann on the Day of German Unity, which was...

October 3, 2022
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