Planned Pension Reform: Fairer for Everyone or a False Signal?

Abstract

"In the opinion of Hans Fehr, Chair of Public Finance, University of Würzburg, the current draft bill on pension reform sweepingly burdens contributors to the social security system, counteracts the increase in the retirement age introduced in Germany and does little to combat poverty in old age, which is set to rise in the future. Martin Werding, University of Bochum, believes that the grand coalition's reform plans neglect to improve long-term perspectives for pension financing. For Axel Börsch-Supan, Max-Planck-Institut für Sozialrecht und Sozialpolitik, Munich, the decisions by the new grand coalition are 'short-sighted and one-sided: the older generation will feel the benefits, which will have to be financed by future contributors, who will be battered by demographic change in any case.' Alfred Boss, Institut für Weltwirtschaft Kiel, describes the pension reform as a step in the wrong direction, with the losers being the non-beneficiary pensioners and contributors to the social security system. Jörg Asmussen, German Federal Ministry for Labour and Social Affairs, presents the thoughts of the governing coalition. He highlights that the reform represents demographically robust pension insurance, and that the pension package should result in fairer pension entitlements. In the opinion of Enzo Weber, IAB, Nuremberg, and University of Regensburg, not all parts of the pension package fit into an effective overall strategy. The combined financial burdens of the pension reforms make it impossible to lower contributions and represent a squandered opportunity to strengthen employment incentives to work. Markus Kurth, MP, Bündnis 90/Die Grünen, believes that the pension plans will block any scope for key socio-political improvements for years." (Author's abstract, IAB-Doku) ((en))

Cite article

Fehr, H., Werding, M., Börsch-Supan, A., Boss, A., Asmussen, J., Weber, E. & Kurth, M. (2014): Geplante Rentenreform: Größere Gerechtigkeit oder falsches Signal? In: Ifo-Schnelldienst, Vol. 67, No. 5, p. 3-25.