July 31, 2021

Why the statutory pension is much better than its reputation

Good morning, dear readers,

in the spring of 1986 secured Norbert Blüm a place in the collective memory of the republic. Equipped with a smock and glue brush, the then Minister of Labor and Social Affairs presented the slogan on Bonn’s market square: “Because one thing is certain: the pension.”

Until his death a year ago, Blüm remained his “The pension is safe “-Mantra faithful. And accepted to be smiled at and criticized a lot for it.

Having fun at work: Former Minister Norbert Blüm (source: dpa)

Of course, a system that pays more than 300 billion euros a year to over 20 million retirees has, too error. And for sure they will Problems in view of the foreseeable demographic development not smaller.

But what is also true: The statutory pension has proven to be astonishingly robust over the past few decades. The contribution rate remained largely stable, as the following graphic by my colleague Heike Assmann shows.

And that, although a lot has happened since Blum’s promise. Among other things, through the reunion many people get benefits from a system and sometimes still do so, into which they have never or only very briefly paid. In addition, the pensions always flowed – regardless of whether the Unemployment rose (which has been the case for a long time) or the Stock prices fell (which happened several times).

Have at the moment Doom scenarios for the statutory pension boom again. Scary Studies That diagnose “suddenly increasing financing problems”, lead to apocalyptic headlines like “Terrible pension ruin” (“Bild” newspaper). The message is almost always the same: we will all have to work a lot longer, pay a lot more into our pensions – and yet in the end it won’t be enough in the front and back. Everything very, very, very terrible. It is the real pension lie.

It is well known that forecasts are particularly difficult when they concern the future. To better classification therefore sometimes a look back helps: Which part of the way we have already covered? And what actually happened predicted in the past for the present?

There are quite interesting answers to these questions. For example that beginning of the In the sixties there were six contributors to one pensioner. The fact that there are now only around two also means that it is System already adapted to an enormous demographic development hat.

What also makes future developments appear in a somewhat brighter light are predictions from the early days of Angela Merkel’s chancellorship. Every year the government publishes a pension insurance report. And one can assume that she has an interest in portraying the situation a bit too positively rather than too negatively. And nevertheless: In 2006 the government forecast for 2020 one Contribution rate of up to 20.7 percent. Even in the optimistic scenario, it should be 19.6 percent.

In fact, it has been significantly lower since 2018: at 18.6 percent. And contrary to what you might think, this development did not come at the expense of the level of care. Those who have earned an average of 45 years recently received more pensions than predicted in 2006.

Lower premium, higher benefit – that’s not the worst performance for an insurance company. Sure, the retirement at 67 was not finally decided in 2006. It has relieved the system. However, at that time various additional burdens such as the maternity and basic pension were not yet law.

So it doesn’t always get worse than you think, but sometimes better. Even with the pension.

From the surprisingly positive development Lessons for the future derive. Perhaps the most important: The best pension policy is a successful labor market and economic policy. There may be many reasons why the forecasts for the current contribution rate were so wrong. An essential one, however, is that no expert is the Boom foreseen that Germany experienced until the outbreak of the corona pandemic.

The Number of people in employment increased to always new record values. And more importantly: there were more and more employees subject to social security contributions. The number of people who keep this country going through their compulsory social security contributions, increased from a good 26 million in 2005 to around 33.5 million in 2019.

The most promising way to stabilize the pension is the to slow down the foreseeable decline in the number of employees as much as possible. About one higher participation of women in the labor force and more skilled immigration. The more consistently these goals are pursued, the less it will be necessary to turn the other adjusting screws in the system (later retirement, lower pension level, higher contribution rate, more money from the budget).

And of course it should finally tackled a few fundamental reforms with which the pension can be stabilized in the long term. Be it that in the future too Civil servants and self-employed deposit. Or that the messed up Riester pension through a efficient system of funded old-age provision is replaced.

Nevertheless, the more attractive Germany is as a location and creates additional jobs for all those who are already here and also welcomes many of those who would like to work here, the easier it is to mitigate the consequences of demographic development.

Then the system can do its job prove considerable adaptability in the future. Perhaps in 2036, on the 50th anniversary of Norbert Blüm, who was happily sticking to posters, many people will say: He was not that wrong with his “Pension is safe”. But not even the government can predict what will be in 15 years. Your predictions in the latest pension insurance report only go through 2034.


First Brussels, then Geneva

Visiting friends: US President Joe Biden in Brussels (source: dpa)Visiting friends: US President Joe Biden in Brussels (source: dpa)

Meets at noon US President Joe Biden representative of the European Union. Among other things, the EU-US summit will also deal with the relationship with China. The FDP external expert Alexander Graf Lambsdorff said my colleague Tim Kummert: “Chancellor Angela Merkel has to prove at the summit that she is interested in a real transatlantic renewal. So far the German government has been sending the wrong signals.” According to Lambsdorff, reports that Merkel even led the front against the US infrastructure initiative “Build Back Better World” at the G7 summit, instead of supporting it as a western and value-based alternative to the Chinese Silk Road initiative, worried him.

After the meeting, Biden continues to travel to Geneva. The will take place there on Wednesday Summit between him and Russian President Vladimir Putin instead of. It remains to be seen whether “the best comes at the end” really applies.


The enemies of democracy

At 10 a.m., the Minister of the Interior Horst Seehofer (CSU) with the President of the Federal Office for the Protection of the Constitution, Thomas Haldenwang, the Constitutional Protection Report 2020 in front. It will also provide information on how much the number of enemies of democracy has increased in the corona pandemic.


Now the EM really starts

What are the German chances ?: Matthias Sammer (r.) In conversation with t-online editor David Digili (source: t-online)What are the German chances ?: Matthias Sammer (r.) In conversation with t-online editor David Digili (source: t-online)

A DFB selection has never lost its first game at a European Championship. The record in twelve opening games since 1972: seven wins, five draws. Will the series hold up against world champions France? Around 14,000 spectators in the stadium in Munich and millions of fans on TVs, cell phones, tablets, etc. will find out from 9 p.m.

You can of course also be part of our live ticker. In addition, my colleagues will keep you informed about everything important and interesting before and after the game.

You can already hear my colleagues Florian Wichert and Robert Hiersemann’s discussion about the Read up on the problems of the German opponent at the start. My colleague David Digili also has Matthias Sammer who won the European Championship with the national team in 1996 and asked him about his chances for the title in 2021


What else do you read and watch?

Then let's get started: Angela Merkel at the NATO summit in Brussels (source: dpa)Then let’s get started: Angela Merkel at the NATO summit in Brussels (source: dpa)

On Monday they have Heads of State and Government of NATO in Brussels conferred. My colleague Bastian Brauns, who is on site, analyzed the meeting for you in the video. He also came across a surprising aspect: of all things, the military alliance now also wants to take care of climate protection. You can find out what’s behind it here.

The NATO members have also initiated a reform process. But is the alliance still needed? How big is that Threat to Germany and Europe 30 years after the end of the cold war? My colleague Saskia Leidinger spoke to experts – and not really getting reassuring answers.


Fewer and fewer new infections, more and more vaccinated people: In some regions, the corona situation seems to be more relaxed than last summer. But the mask requirement should therefore be lifted nowas politicians are demanding? Discuss this mine Colleagues Liesa Wölm and Florian Wichert in a pro & contra.


Which amuses me

You can endure it here: Geneva is waiting for the big summit (Source: imago images)You can endure it here: Geneva is waiting for the big summit (Source: imago images)

The author Wladimir Kaminer, who writes regularly for us, attended the summit between the US and Russian presidents in Geneva on Wednesday also made his thoughts.

Kaminer, who was born in Russia, believes former KGB agent Vladimir Putin would have preferred to meet elsewhere:

“Unfortunately, the meeting cannot take place in the GDR because of the absence of the German Democratic Republic. But Geneva is also possible if necessary, thought the Russian colleague, breakfast is included and the fitness area is open 24 hours. The swimming pool there has already been approved by Russian security experts checked, the water was partly drained (all pools in which the Russian President goes swimming must not be deeper than 1.50 meters). “

Better not dive in today!

Tomorrow Florian Harms will write for you again at this point.


Sven Böll
Managing Editor t-online
Twitter: @SvenBoell

What do you think of the most important topics of the day? Write it to us by email t-online-newsletter@stroeer.de.

With material from dpa.

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