Dynamic compensation. In exchange, the government provides for a compensation system. Thus, as early as 2011, if pension cuts are necessary, subsequent increases will have to be cut by half as long as necessary to make up for the non-realized pension cut. However, according to the government, this new rule shouldn’t be used next year. Indeed, contrary to the main economic institutes, the Grand Coalition still thinks wages are slightly going to increase this year in spite of the crisis and soaring partial unemployment. However, institutes planned a 2% decrease in 2009. Adolf Bauer, president of the German social union (Sozialverband Deutschland - SoVD) strongly criticized this reform, saying that the guarantee offered by the government has a high cost. “It might translate into wage freeze for years.” In 2008, pensions were increased of 1.1% as opposed to 0.54% in 2007. According to the government, on July 1, 2009, they should increase of 2.41% in the west and 3.38% in the east.
is going to be cut in 2010 because of the boom in partial unemployment measures and soaring unemployment in 2009. To reassure these retirees, who represent a decisive electoral group, the social-democrat Minister asked its Ministry to extend the “pension protection clause” (Rentenschutzklausel) contained in the social security code (SGB III).
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