Significant shift in German retirement benefits systempolicy
The German government, led by the Union parties, has announced a wide-ranging plan to strengthen all three pillars of old-age provision in the country. The focus is on reforming private, state-funded old-age provision, with a goal to make it more efficient, transparent, and attractive.
At the heart of the plan is the introduction of a standard old-age provision product for all employees, which will be the default option, requiring active opt-out. This new product is proposed to be offered without setup costs. In addition, both state-organized old-age provision products with and without guarantees are planned, each with an attractive state subsidy.
The Union government also aims to increase private old-age provision, expecting more people to do so through their measures. A new form of capital-based old-age provision is planned for the future. The program aims to introduce a mandatory old-age provision for self-employed individuals not already covered elsewhere.
In the second phase, a concept for occupational old-age provision for all will be developed to make the bAV more attractive. After the election, criteria for a standard old-age provision product will be defined.
The intergenerational pension, which builds up old-age provision from birth, is considered a good building block for the new old-age provision. It is stated that the intergenerational pension will be examined for a design with a monthly state contribution to be invested in a pension fund with protection against state access. CDU politician Kai Whittaker specifically mentions investing 4,000 euros per child in stocks for the intergenerational pension.
However, not everyone is in agreement with these plans. Martin Klein from the intermediary association Votum criticizes the goal as showing a "naive misunderstanding of reality". The search results do not provide specific information about which person or institution will be responsible for planning and implementing the new form of capital-based pension planned by the CDU, including the possibility of monthly state contributions to a pension fund and protection against state access.
Affected individuals will have the choice between statutory pension insurance and other insolvency-proof and protected old-age provision options. The Union government plans to introduce a state-organized standard old-age provision product if the private provision is not sufficient.
This comprehensive reform to old-age provision in Germany is a significant step towards securing the financial future of the country's aging population. The plans, while ambitious, will require careful planning and implementation to ensure their success.
