Germany: prospect of obligatory pensions for the self-employed (in brief)

Hubertus Heil (SPD), Germany’s labour minister, announced this weekend his intention to draft a law by the end of this summer that would oblige all self-employed persons (independent professions, small traders, entrepreneurs, as well as self-employed platform workers, parcel deliverers, IT experts, etc.) to set up a pension, either by subscribing to a private pension insurance plan (a so-called "Rürup" pension), paying into a dedicated old-age insurance fund (as is done by doctors, lawyers, etc.) or by joining the legal pension plan. The minister estimates that around 3 million self-employed people do not have a retirement provision, of some 4.1 million self-employed individuals in Germany. These numbers have risen sharply in the wake of the labour reforms under chancellor Gerhard Schröder, which encouraged the creation of micro-enterprises, but also as a result of increasing digitalisation. According to the minister, the issue is one of fairness, since when self-employed people reach retirement age without pension savings, they are aided financially by the state, despite not having paid contributions. The future law has a strong chance of being introduced from this year, since the bill – included in the coalition agreement – has the support of conservatives in Germany.