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.

 

Read our position paper on pensions  (in German)