Social
Employers describe pension package as unaffordable
The pension increase is good news for all pensioners in Germany. But also for employers? photo
© Marijan Murat/dpa
Pensions in Germany will rise by 4.57 percent on July 1st. The Federal Association of German Employers’ Associations takes a critical view of this.
Germany’s employers have planned this Government pension package criticized as unaffordable. “The planned pension package II would be the most expensive social law of this century,” says a statement from the Confederation of German Employers’ Associations (BDA).
The pension package is one-sidedly on the side of pension recipients. “You are guaranteed the pension level, while the contribution rate can increase indefinitely in the future,” criticizes the BDA. “Since the coalition has already ruled out raising the retirement age, all future burdens from aging will fall on the contributors.”
In their statement, the employers warn of what they see as unaffordable costs. “As early as 2035, additional pension expenditure would be around 30 billion euros higher than under current law,” says the BDA. Over the next 20 years, the additional expenditure would be half a trillion euros.
“On the one hand, contributors would be overwhelmed because their total burden of social contributions would rise to around 50 percent by the end of the next decade,” the employers explain. “It is also unclear how the federal government intends to bear the growing financing burden for the federal subsidy.”
Big financial gap
According to the latest pension insurance report, federal subsidies would increase by over half to 137 billion euros by 2035 under current law. According to the draft, the federal government would have to raise an additional 7.2 billion with the pension package. “Where these additional items should be taken from remains completely open.”
Employer President Rainer Dulger said: “Again, benefits are being promised that will not be affordable in the long term. Does this federal government actually know that we are on the verge of the biggest aging surge in German history?” With ever higher social contributions, Germany is finding it even harder to emerge from the “economic standstill”.