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What will be the big points of contention in the next federal election campaign in 2021? The future of the old-age provision could be one of them: In the CDU, pension politicians are campaigning for far-reaching reform proposals with which the party could enter the election campaign.
So did the federal technical committee Social security and the world of work the party made a recommendation to abolish the uniform retirement age and create a capital fund in the legal pension. The CDU announced Tuesday.
Both steps would be a far-reaching course: until now, compulsory pension insurance is, on the one hand, pay-as-you-go (that is, current payments to pensioners are financed by continuous payments from the insured) and, on the other hand, a uniform retirement age applies to all professions.
Entrance to the funded pension?
Federal technical committees must contribute to the programmatic profile of the CDU. Days of discussion preceded the decision on the annuity document. More recently, according to the committee, 51 politicians participated in the final discussion.
Part of the time gained must be devoted to paid employment, according to the decision, as a further increase in life expectancy is expected. Therefore, it is convenient to check to what extent the life earned can be balanced between the employment phase and the retirement phase ”.
Experts like the Munich economics professor Axel Börsch-Supan have long been in favor of automatically linking the retirement age to the development of life expectancy. If the life expectancy increases by about three years, the working life would increase, for example, by two years, and thus the retirement age would also be postponed.
Under CDU plans, the standard retirement age should be individualized. The goal is a regulation for an individual transition to retirement rather than a “fixed legal retirement age for all.” This must be achieved in a tiered model with stronger incentives for longer jobs.
CDU talks about double pension
Compulsory pension insurance should also become a mixed system of contributions and capital investment in the long term. The federal government should present a proposal based on the idea of a double pension. A public law company should be established under the umbrella of pension insurance, which creates and oversees a pension fund for capital investments.
The CDU member Thomas Heilmann, spokesman for the field of the »future of work«, told the German press agency that the »planned double pension« creates »a part of Ludwig Erhard in the compulsory pension insurance«. While Chancellor Konrad Adenauer wanted pay-as-you-go funding for pensions in the young Federal Republic of Germany, the then Finance Minister believed the funding was the right thing to do.
The CDU committee wants to regulate private and corporate pension plans more efficiently. For low-wage earners, company or private pension plans should be mandatory from the next election period, and employers must make a “substantial contribution” to this end. Instead of the current Riester pension, the state should offer a standard pension product based on capital investments in the medium term. There should also be products without guaranteed performance, “because there the potential for profitability is greater.” Employees should automatically participate in this protection unless they expressly object. Public officials should also be able to contract the pension product.
