October 2023
26Oct

Inflation hits occupational pensions in Germany, says Deloitte

Inflation is having a negative impact on occupational pensions in Germany, with both the number of employers interested in, or contributing to company pension schemes declining this year compared with 2022, according to an occupational pensions study conducted by Deloitte. According to the research, 38% of the employers surveyed is “clearly” worried about losses in terms of retirement provision because of the current level of inflation, 14% consider the impact of increasing consumer prices on pensions dramatic, whereas only 14% is...

October 26, 2023
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18Oct

More German pensioners are slipping into poverty each year

For an increasing number of retirees, Germany’s state pension payments are not sufficient to keep up with the rising cost of living. While the Left Party are calling for a 1.200-euro per month pension, the VdK argue that insecure working conditions lie at the heart of the problem. 10 percent more retired people are claiming benefits in Germany A request submitted to the Federal Office of Statistics (Destatis) by the German Left Party has revealed that between June 2022 and June 2023, the number...

October 18, 2023
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August 2023
24Aug

Retirement age in Germany continues to rise, new figures show

Last year the average age for men to access old-age pensions increased to 64.4. This is up from 64.1 the previous year and 62.4 years in 2001. For women, the retirement age also rose, from 62.5 in 2001 to 64.2 in 2021 and 64.4 last year. In a parallel development, retirees in recent years have been receiving their benefits for longer. Among men, the duration of pension benefits has increased from 16.7 to 18.8 over the past decade. Women received...

August 24, 2023
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16Aug

German economist proposes formula to increase retirement age according to life expectancy

A member of the German Council of Economic Experts has proposed a formula to split additional years that a person can expect to live between working life and retirement, triggering opposing political reactions. The mechanism, devised by Veronika Grimm, automatically links a person’s retirement age to their life expectancy, meaning that people would work longer. “The formula [to link the retirement age to life expectancy] in the future could be: ’if life expectancy increases by one year, two-thirds of the year would be...

August 16, 2023
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10Aug

German government moves to boost first pillar equity pension fund to €200bn

The German government is planning to beef up funds for equity investments in the first pillar to €200bn until 2025, according to a report published by Handelsblatt newspaper. The government will contribute to the first pillar equity fund, dubbed Generationenkapital or generational capital, which will turn the purely pay-as-you system into a partially capital-funded system, with €12bn instead of €10bn from 2024. The sum will increase by 3% in each of the following years, to reach a total amount of €200bn by...

August 10, 2023
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04Aug

Germany’s New Pension Reforms: 6 Key Facts to Know

The German pensions system is set for a major overhaul, with a new focus on investments. This move, spearheaded by the traffic-light coalition, is expected to have significant implications for foreigners living and working in Germany. In this article, we will explore the key changes and their impact on expatriates. The current German pensions system is primarily based on a pay-as-you-go model, where current workers contribute to the pensions of retirees. However, with an aging population and increasing life expectancy,...

August 4, 2023
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03Aug

Luxembourg: Luxembourg And Germany Sign Amending Protocol To Their Tax Treaty

Luxembourg and Germany signed an amending protocol ("the Protocol") to the Germany - Luxembourg double tax treaty ("DTT") signed in 2012. The Protocol introduces both amendments to the DTT and amendments to the Protocol to the DTT also signed in 2012 (the "2012 protocol") currently in force. The Protocol mainly extends the tolerance threshold for cross-border workers from 19 to 34 days under the DTT, incorporates into the DTT the options taken by the two countries to implement the Multilateral...

August 3, 2023
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02Aug

German experts endorse equity-geared public fund for third-pillar reform

The German Council of Economic Experts, a body advising on economy policy, has initiated discussions about a public fund investing mainly in equities with an ‘opt out’ option to replace the Riester-Rente in the third-pillar pension system. Martin Werding, member of the Council of Economic Experts, told IPE that its proposal was for a “publicly managed, heavily equity-based fund as a standard/default product in the third-pillar [pension system]”. Savers are automatically assigned to the public fund if they don’t make use...

August 2, 2023
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June 2023
20Jun

Germany set to introduce ‘one of the most modern immigration laws in the world’

What’s going on? Germany's long-debated Skilled Worker Immigration Act aims to make it easier and faster for skilled foreign workers from non-EU countries to come to the country, to help plug the growing labour shortage. The reforms announced in March include loosening Blue Card rules and introducing a points-based immigration system. The urgency for the reforms was made clear in the latest report by the Institute of German Economy (IW) released in April, according to which the skills gap in Germany...

June 20, 2023
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May 2023
26May

‘Earned, Not Given’? The Effect of Lowering the Full Retirement Age on Retirement Decisions

By Mathias Dolls & Carla Krolage This paper analyzes behavioral responses to a 2014 reform in the German public pension system that lowered the full retirement age (FRA) of individuals with a long contribution history by up to two years and framed the new FRA as reference age for retirement. Using administrative data from public pension insurance accounts, we first document a substantial bunching response at the FRA exceeding the control group’s bunching by 83%. Second, we show in a...

May 26, 2023
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