Criticism was not long in coming: as soon as the Pension Commission unveiled its proposals for future pension provision, it was not only public associations and trade unions that began to oppose it: accusations that these proposals were “socially unfair” and “unbalanced” were among the best formulations.
Self-employed people and politicians must pay statutory pension
In fact, the reform proposals are tough: pension levels should be secured in the long term through a new capital pension, and the retirement age should be gradually raised over the next few decades. Pension contributions will also continue to rise. Early retirement without deductions after 45 years of contributions should be eliminated. The latter is also popularly known as the “retirement at 63”. And: The capital component, financed by contributions, should make possible higher pensions for young people in the future than under current law.
In addition, self-employed people and politicians must pay a statutory pension. In the medium term, this measure could reduce the contribution rate by 0.5 percentage points. However, in a few decades, freelancers, entrepreneurs and sole traders will also receive a pension, reducing the effect in the long term or causing it to disappear. Many experts believe that increasing the number of depositors by expanding compulsory insurance makes sense. The move will ease the burden on pension funds at a particularly difficult time when most baby boomers will retire in the coming years.
Overall there should be fewer civil servants
However, the commission avoided requiring civil servants to pay into compulsory pension insurance, as in Austria. Even young professionals will still not have to pay pension contributions and receive an old-age pension. However, German civil servants are not immune from reductions in pension provision: experts recommend transferring the upcoming pension insurance reforms to civil servant pensions with the same effect. Accordingly, the level of pensions for civil servants should be reduced to the same extent as the general level of pensions.
In addition, federal, state, and local governments should hire government employees much less frequently in the future. However, another requirement of the Commission may prove very expensive for civil servants: in the future, the decisive factor for pensions should no longer be the salary two years before retirement, but the interval of five to ten years.
The Civil Service Association is critical of part of the reform
Rainer Nachtigall, head of the Bavarian Civil Service Association (BBB), sees light and shadow in the reform. He is confident that civil servants should continue to remain in the pension system. Ultimately, if reform were to occur, the costs to federal, state and local governments would be high in the coming years, the BBB chairman says. BSZ-Conversation and adds about the role of his federal association: “In the end, we did a good job of persuasion.”
He certainly demonstrates an understanding of parts of the reform. “If everyone has to retire later, civil servants won’t be able to stay away.” However, he categorically rejects the planned new calculation model based on a five- to ten-year interval. “This violates the constitution,” Nachtigall is convinced.
The pension commission, chaired by academic administrator Constanze Janda and former head of the Federal Employment Agency Frank-Jürgen Weise, met for about 150 hours. According to the committee, there was broad consensus on the results. The proposals are designed to help ensure a standard of living in old age, especially for low- and middle-income people, through legislative, corporate and private measures.
The black-red coalition wants to prepare a package of reforms for the summer holidays, which will affect the labor market, pensions, income tax and reduction of bureaucracy. Now the government wants to put its foot on the accelerator on implementation.
Various discounts for Bavarian civil servants
In recent times the position of civil servants in the Free State has become more awkward. Many civil servants are unhappy that the Black and Orange raise their salaries only six months later than the salaries of public sector employees. The Civil Service Association is also concerned about other reforms. (Tobias Lill, based on materials from the dpa news agency)