Pension: the concept of the CDU wants to oblige officials to take out pension insurance

Position: 20.11.2020 | Reading time: 4 minutes

CDU social politicians want to vigorously rebuild pension insurance. This stems from a draft of a pension document from the party’s federal committee, which, however, encounters fierce opposition even within the Union. In the future, civil servants and the self-employed will have to pay the compulsory insurance. The age limit must be linked to life expectancy, although a loophole will still allow early withdrawal.

The motto is also: more money in the system. Income other than wages should be subject to contributions and, in principle, people with high incomes should pay much more.

The general elections a year from now are casting their shadow. It is obvious that, in addition to attention, pensions will also be an important issue for the parties, especially since the majority of voters will then be over 55 years old. In the last two elections, the Union marked a popular and at the same time expensive project with the introduction and expansion of the maternal pension.

Because the coalition partner SPD has also caused high additional costs with the pension at 63 and the stop line for the pension level, the financial cushion of the pension insurance is now rapidly melting away in the crown crisis. Therefore, the question of the long-term financial viability of old-age insurance can no longer be postponed.

“We are renewing the intergenerational contract,” says the eleven-page pension document of the Labor and Social Affairs working group of the CDU / CSU parliamentary group, which will be discussed further in the specialist committee next week. Specifically, Union politicians want to link the standard retirement age from 2030 to life expectancy. The regular age limit is then 67 years.

The follow-up rule proposed by the group of specialists stipulates that the longest useful life after 2030 will be divided equally between the years of work and the pension period. This means that the age limit will continue to increase, albeit more slowly than leading economists like Axel Börsch-Supan or economic savants believe is necessary in light of demographic change.

Above all, however, the concept of social politicians in the Union states that a large proportion of employees can continue to take early retirement without any discount. The standard insurance period will be set at 45 years in 2030. In fact, 45 years were already valid at the previous age limit of 65, and logically it would have to be 47 years from 2030 in the course of the gradual implementation of the pension at 67.

Higher ancillary wage costs in higher income brackets

The fact that the Union, instead, wants to continue the 45-year rule ultimately means that baby boomers are safe. Especially since most baby boomers do not want to continue working and therefore unions are pushing hard for follow-up rules for an undiscounted pension at age 63. Anyone who started their professional life early could retire after 2030 without a deduction long before reaching the regular age limit.

Social politicians, on the other hand, have a sour drink in store for high-income employees and their companies: the income threshold, that is, the amount up to which wages are subject to pension contributions, will be significantly increased. or it will even be removed entirely.

Auxiliary wage costs in higher income groups increased considerably. It would also be costly for those with rental income or capital income, because these should also be taxable.

The economic wing of the Union reacted with horror to the advance of social politicians. The general secretary of the CDU Economic Council, Wolfgang Steiger, said that the concept of pensions is neither sustainable nor generational. An attempt is being made to force more people to take out pension insurance who would later have pension rights again.

The abolition of the income threshold will subsequently lead to higher payments. “In short, a zero-sum game, but in the short term the pension insurance seems richer than it is,” complains the head of the economic organization affiliated with the party. “We cannot avoid a clear link between retirement and life expectancy.”

The chair of the working group, Peter Weiß, appeased the critics: “The working draft of the rapporteurs is still far from being a decision.” The advice given by specialist politicians in the federal technical committee will bring significant changes, says the pension expert: “Too early laughter is also in harmful politics.”