pension
Fund boss: Generational capital should go into stocks
“Due to the return requirements, the equity share should go towards 80 percent,” says Anja Mikus, chairwoman of the sovereign wealth fund for financing nuclear waste disposal (Kenfo). photo
© Jörg Carstensen/dpa
The federal government wants to set up a billion-dollar fund to support statutory pension insurance in the future. It will be set up by experts from an existing sovereign wealth fund.
The so-called generation capital will probably have almost no bonds. “Unlisted investments are also likely to play a role moving forward.” According to reform plans by Labor Minister Hubertus Heil (SPD) and Finance Minister Christian Lindner (FDP), a new capital stock of 200 billion euros is to be created on the stock market by the mid-2030s in order to gradually create a more sustainable basis for future pension financing.
“We don’t gamble”
The money should come from the federal government. The generation capital is to be managed as a permanent fund by a new foundation. According to the Federal Ministry of Finance, the structures of the existing sovereign wealth fund Kenfo will be used for the development. This was created to finance nuclear waste disposal.
Mikus emphasized: “We don’t gamble.” It’s not about investing money in the short term and selling the securities again quickly. “We invest the funds entrusted to us in a long-term and globally diversified manner in order to make the best possible use of the return potential.”
Germany’s excellent credit rating
She rejected criticism that the state should also take out loans for this. “Private investors have to pay the borrowed money back to the bank at a certain point in time. If the prices fall shortly before that, it can cost their existence. The state, on the other hand, can always replace old debts with new ones.”
Mikus argued that you also benefit from Germany’s excellent credit rating and therefore from much lower interest rates than would be offered to private investors. “In our forecasts for generational capital, we conservatively expect an annual return of an average of six percent and an interest rate of three percent – currently we only have to pay 2.5 percent. The bottom line is that an average return of at least three percent remains.”