The Ger­man Pen­sion Sys­tem is based on an inter­gen­er­a­tional con­tract. The work­ing gen­er­a­tion pays for the pen­sions of the retirees. But in the light of demo­graph­ic change, the pen­sion sys­tem is increas­ing­ly expe­ri­enc­ing chal­lenges. More and more retirees are fac­ing a small­er num­ber of con­trib­u­tors. In the 1960s, the ratio of retirees to con­trib­u­tors war 19:100. Nowa­days, the ratio has changed to 34 retirees for 100 con­trib­u­tors. Accord­ing to econ­o­mists, the ratio will changed to 50:100 in the year 2030 and even 65:100 in the 2060.

There­fore, pen­sions have become a sym­bol­ic top­ic: A sym­bol for the ques­tion if the Young and the Old can come to a fair agree­ment or if soci­ety is fac­ing a con­flict of gen­er­a­tions. In view of demo­graph­ic change and unem­ploy­ment, financ­ing require­ments are ris­ing sharply. The bur­den can­not be borne by one gen­er­a­tion alone, nei­ther by the younger ones nor by the old­er ones alone: Both gen­er­a­tions must share the bur­den when the struc­ture of employ­ment and age becomes less favourable.

The FRFG advo­cates for an inter­gen­er­a­tional­ly-just pen­sion pol­i­cy called “divi­sion­al solu­tion”, a pro­pos­al to share the bur­dens of demo­graph­ic change equal­ly 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 them­selves.

The FRFG pro­pos­es an eight-point plan to renew the gen­er­a­tion con­tract and to reform the statu­to­ry pen­sion insur­ance and the Riester pen­sion in line with the needs of gen­er­a­tions:

1. Sta­bi­lize pen­sion lev­els — but also con­tri­bu­tion rates!
2. Link retire­ment age to life expectan­cy
3. Reform the Riester pen­sion
4. Strength­en min­i­mum secu­ri­ty
5. Involve civ­il ser­vants, self-employed and politi­cians in the com­mu­ni­ty of sol­i­dar­i­ty
6. Strength­en dis­abil­i­ty pen­sion
7. Seri­ous­ly counter-finance ben­e­fits not cov­ered by insur­ance
8. The young gen­er­a­tion has lost con­fi­dence in retire­ment – A gen­er­a­tion sum­mit is need­ed!