The German Pension System is based on an intergenerational contract. Younger people in work pay for the pensions of older pensioners. But this contract is coming under pressure because of an ageing population. More and more pensioners face a smaller number of contributors. In the 1960s there were 19 pensioners per 100 tax-payers in work, now there are 34. It is predicted that there will be 50 per 100 by 2030 and even 65 per 100 in 2060.
Pensions have taken on a kind of symbolic importance. A generational conflict could break out or there could be a fair agreement. The increasing financial burden cannot be borne by one generation alone, neither by younger alone nor older alone. All generations should share the burden when unfavourable demography makes financing the system increasingly difficult. The FRFG advocates an intergenerationally-just pension policy which shares the burden as equally as possible among the young and the elderly. Today’s pension system in Germany is in urgent need of reform. The system has to secure justice between (intergenerational justice) and within (social justice) the generations.
We have six key demands:
1. Any deficits in the pension system should be covered by both the working tax-payer and pensioners themselves.
2. Sustainability must be the key principle of the pension system and changing demography must be taken into account.
3. The age at which you can get your state pension should start automatically rising with life expectancy by 2031.
4. The Federal Government must cover outgoings which exceed contributions coming in. This should be done transparently.
5. Private pensions should be made more attractive through measures like tax-relief or matched contributions so that fewer people have to rely on nothing but the state pension.
6. Bring in contributory pension schemes for ALL Germans. Civil servants and members of the Bundestag and regional parliaments included.