On 25 November, after a meeting of the parties which form Germany’s coalition government – the CDU, CSU and SPD –, Andrea Nahles, of the SPD and minster for social affairs, presented an outline of her plans to reform the German pension system. She describes the reform as “the largest” that has ever been undertaken to alleviate the poverty suffered by elderly people in the country. The governing parties have agreed to create a new tool which is geared towards making company retirement plans at small and medium-sized enterprises more attractive, and which will give social partners a central role. The grand coalition has also agreed to bring pensions in the east and west of the country into line, through a seven-step process, by 2025. Meanwhile, the minister was unable to convince her colleagues to set a limit when it comes to pension payments as a percentage of final income. Ms Nahles hopes to establish a minimum legal level of 46% of income by 2045 and cap the level of old age pension contributions at 22% by 2030 and at 25% by 2045.
Rebuild confidence in the pension system. Andrea Nahles, when introducing the reform, acknowledged that the decline in the size of pensions had “fairly” led many people to worry about how much they would receive when the time comes. To restore confidence for all generations, the minister has drawn up a reform which strengthens the three key pillars of Germany’s retirement system: pay-as-you-go pension schemes, funded pension schemes and company pensions.
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